PROPERTY / SUCCESSION /

OBLIGATIONS & CONTRACTS /

SPECIAL CONTRACTS

Microsoft Office User

[COMPANY NAME]  [Company address]
1
Property, Succession,
PROPERTY instruments, etc immovable for
Art 415 – immovable or real property which may be the utility it gives
1. lands, NATURE = carried on in a to the activity
buildings, roads cannot be carried building or on a carried thereon
and from place to piece of land,
constructions of place which tend
all kinds adhered directly to meet
to the soil INCORPORATION the needs of the
2. trees, plants, = attached to an said industry or
and growing immovable in a works
fruits, while they fixed manner to 6. animal * animals in
are attached to be an integral houses, pigeon these places are
the land or form part thereof houses, included
an integral part beehives, fish
of an immovable ponds, etc, in DESTINATION =
3. everything INCORPORATION case their owner placed in an
attached to an = attached to an has placed them immovable for
immovable in a immovable in a or preserves the utility it gives
fixed manner, in fixed manner to them with the to the activity
such a way that be an integral intention to have carried thereon
it cannot be part thereof them
separated permanently
therefrom (#4) attached to the
without breaking DESTINATION = land, and
the material or placed in an forming a
deterioration of immovable for permanent part
the object the utility it gives of it
4. statutes, to the activity 7. fertilizer DESTINATION =
reliefs, paintings carried thereon actually used on placed in an
or other objects a piece of land immovable for
for use or 8. mines, the utility it gives
ornamentation, quarries, and to the activity
placed in building slag dumps, carried thereon
or on lands by while the matter
the owner of the thereof forms
immovable in part of the bed,
such a manner and waters either
that it reveals running or
the intention to stagnant
attach them 9. docks and ANALOGY =
permanently to structures, classified by
the tenements though floating, express provision
5. machinery, DESTINATION = are intended by of law
receptacles, placed in an their nature and
2
Property, Succession,
object to remain
at a fixed place
on a river, lake
or coast
10. contracts for
public works, and
servitudes and
other real rights
over immovable
property
Test to determine whether personal or
real property:
1. test of exclusion – excluded from 415
= personal property
2. test of description – can be carried
from one place to another, transferred
without any destruction or injury to its
self or the immovable to which it is
attached = personal property
Rights as a consequence of ownership
1. enjoy and dispose of his property (Art
428)
2. recover the property from any holder
or possessor (Art 428)
3. exclude any person from the
enjoyment and disposal of the property
(principle of self-help) (Art 429)
4. enclose or fence his land/tenement
(Art 430)
5. just compensation in expropriation
(Art 435)
6. construct any works or make any
plantation or excavation on the surface
or subsurface of his land (Art 437)
7. own all or part of hidden treasures
found in his property (Art 438)
8. own all accessions to his property (Art
440)
Accession is not a mode of acquiring
property – you must already be the
owner of the property and there are
now accessions to your property
Modes of acquiring ownership:
a. occupation
b. intellectual creation
c. donation inter vivos
d. donation mortis causa
e. tradition / delivery
f. prescription
Principle of self-help – owner or lawful
possessor of a thing has the right to
exclude any person from the enjoyment
and disposal thereof and may use such
force as may be reasonably necessary to
repel or prevent an actual or threatened
unlawful invasion or usurpation of his
property
Requisites:
1. actual or threatened physical invasion
or usurpation
2. invasion or usurpation must be
unlawful
3. owner or lawful possessor the one
defending the property
4. reasonably necessary force to repel
the invasion or usurpation
5. exercised at the time of an actual or
threatened dispossession or immediately
after dispossession
Disputable presumption of ownership:
1. actual physical or material possession
of the property
2. possession must be under claim of
ownership
3. true owner in this case must resort to
judicial process for the recovery of the
property
Tan-Yap vs Hon Patricio – doctrine of
self-help enunciated in this article
3
Property, Succession,
applies only when the person against from the accessory would result in
whom the owner has the right to use substantial injury to either
force (in order to exclude the former 4. he who is in GF may be held
from the latter’s property) is really an responsible but shall not be penalized
aggressor 5. BF of one party neutralizes the BF of
the other so both shall be considered in
Hidden treasure – any hidden and GF
unknown deposit of money, jewelry or 6. no one should be unjustly enriched at
other precious objects the lawful the expense of the other (solution
ownership of which does not appear indebiti)
Right to hidden treasure: finder is …
1. owner of land, All treasure Art 448 – rules when landowner = GF &
building or belongs to him builder, planter, sower = GF
property where Landowner B/P/S
treasure was Right of Right of
found appropriation reimbursement
2. not the owner ½ each after payment of of necessary and
thereof indemnity useful expenses
3. merely No share in the provided in Arts
employed by treasure, but 546 and 548
owner should be paid Right to compel Right to buy the
his wages, unless B/P to pay the land upon which
there is an price of the land the building has
agreement to the and S, the been built or
contrary proper rent trees have been
4. trespasser No share planted
5. treasure is of State acquires EXCEPTION:
interest to them at their just value of the land EXCEPTION:
science or the price; division in is considerably value of the land
arts conformity with more than the is considerably
above rules value of the more than value
building or trees of the building or
(Art 440) Accession – right of the owner trees, hence
of the thing, real or personal, to become Forced lease is forced lease shall
the owner of everything which is the remedy, the result
produced thereby, or which is terms of which is
incorporated or attached thereto either as per
naturally or artificially agreement of the
parties. In case
Basic principles: of disagreement
1. accessory follows the principal = court shall fix
2. union or incorporation must, with the terms
certain exceptions, be effected in such a Right of
manner that to separate the principal retention until
4
Property, Succession,
paid the builder must remove the
*preferential right is given to the construction
landowner
Verona Pada-Kilario vs CA – mere
Art 449-452s – rights of builder = BF & promise to donate the land cannot
landowner = GF convert the builder into one in GF
Landowner Builder
Right of No right except Josefa vs San Buenaventura – lessees
appropriation reimbursement are not builders in good faith. They
without payment of necessary came into the possession of the lot by
of indemnity + expenses for virtue of a contract entered into with the
damages preservation of lessor
land
Right to demand Lessees are estopped to deny their
removal or landlord’s title or to assert a better title
demolition at
builder’s expense Accession natural:
+ damages a. alluvium
Right to demand b. avulsion
price of land or c. abandoned river bed
rent, regardless
if value of land is (Art 457) Alluvium
considerably Requisites:
more than value 1. deposit of soil is gradual and
of building or imperceptible
trees + damages 2. cause if the current of the river
3. river must continue to exist
Spouses Benitez vs CA 4. increase must be comparatively little
- the option is to sell and not to buy the 5. lands where accretion takes place
land and the choice belongs to the must be adjacent to the banks of the
landowner river
- there is no pre-emptive right to buy
even as a compromise and no Effect: soil deposited belongs to the
compulsion to sell on the part of the owner of the land adjoining the river
landowner bank where accretion took place (ipso
facto)
Spouses Alviola vs CA However, you cannot preclude another
- for article 488 NCC to apply the person from becoming an owner by
construction must be of permanent prescription
character, attached to the soil, with an
idea of perpetuity Characteristic of possession in the
- if it is of a transitory character or is concept of an owner – open, public,
transferable, there is no accession and continuous, uninterrupted and possess
within the period prescribe by law
5
Property, Succession,
Daclison vs Baytion – requisites for an
accretion to be considered:
1. deposit be gradual and imperceptible
2. it be made through the effects of the
current of the water
3. land where accretion takes place is
adjacent to the banks of the river
Alluvium mut be the exclusive work of
nature and not a result of human
intervention
Accretion = process whereby the soil is
deposited
Alluvium = soil deposited on the estate
fronting the river bank
(Art 459) Avulsion
Requisites:
1. segregation or transfer is cause by
the current of a river, creek or torrent
2. segregation or transfer must be
sudden or abrupt
3. portion of the land transported is
known or identified
Effect: the owner of the land to which
the segregated portion belongs retains
ownership thereof, provided he removes
(not merely claims) the same, within 2
years from such segregation
Uprooted tree/s – recover within 4 years
and claim within 6 months
Abandoned river bed
Requisites:
1. change in the course of the river
must be sudden so the old river bed
may be identified
2. change in the course of the river
must be more or less permanent
3. change of the river bed must be a
natural one
4. definite abandonment by the
government
5. river must continue to exist
Effect: abandoned river beds belong to
the owners whose lands are occupied by
the new course in proportion to the area
they lost; however, the owners of the
lands adjoining the old bed shall have
the right to acquire the same by paying
the value thereof, which value shall not
exceed the value of the area occupied
by the new bed
Accession with respect to movable
property
1. adjunction – process by virtue of
which two movable things belonging to
different owners are united in such a
way they form a single object
2. mixture – combination or union of
materials where the respective identities
of the component elements are lost
3. specification – giving of a new form
to another’s material thru the
application of labor
6
Property, Succession,
Adjunction Mixture Specification is enforceable only against the defeated
1. involves 1. involves 1. involves party and his privies
at least 2 at least only one 3. not essential that the court acquire
things two things thing but jurisdiction over the person of the
2. as a 2. as a form is defendant
rule, rule, co- changed 4. if brought against one co-owner, it
accessory ownership 2. as a rule, does not constitute res judicata with
follows the results accessory respect to the other co-owners
principal 3. things follows the
3. things mixed principal Who?
joined may either 3. new 1. person who has legal or equitable
retain their retain or object title to or interest in the real property
nature lose their retains or 2. he need not be in possession of said
respective preserves property
nature the nature
of the Prescription:
original 1. plaintiff is in possession =
object imprescriptible
2. not in possession = prescriptible
Test to determine which is the principal
and which is the accessory: principal Sps De Dios vs Romeo Rañola –
is…. (in the order of preference) Requisites:
1. that to which the other has been 1. plaintiff has a legal or equitable title
united as an ornament or for its use, or to or interest in the real property subject
perfection of the action
2. that of greater value 2. deed, claim, encumbrance, or
3. that of greater volume proceeding claimed to be casting a
cloud on his title or interest must be
Special rule: in painting and sculpture, shown to be in fact invalid or inoperative
writings, printed matter, engraving and despite its prima facie appearance of
lithographs, the board, metal stone, validity or legal efficacy
canvas, paper or parchment shall be the
accessory Co-ownership – whenever the
ownership of an undivided thing or right
(Art 476) Quieting of Title – whenever belongs to different persons
there is a cloud/doubt on title to real
property or any interest therein Requisites:
1. pluarilty of owners
Nature of the action: 2. object of ownership is a thing or right
1. quasi in rem – action in personam which is undivided
concerning real property or action 3. each co-owner’s right is limited to his
against a person in respect of the res ideal share of the physical whole
2. judgment therien does not extend
beyond the property in controversy and
7
Property, Succession,
Pidlaoan vs Pidlaoan – mere
construction of a house on another’s Cabrera vs Ysaac – co-owner may only
land does not create a co-ownership, sell his or her proportionate interest in
regardless of the value of the house the co-ownership. A contract of sale
which purports to sell a specific or
Spouses SI vs CA – there is no co- definite portion of unpartitioned land is
ownership when the different portions null and void ab initio
owned by different people are already
concretely determined and separately
identifiable, even if not technically Consent of co-owners required
described 1. action in One co-owner –
ejectment (Art not only against
Rights of each co-owner: 487) a stranger but
1. full ownership of his part even against a
2. full ownership of the fruits and co-owner
benefits pertaining thereto 2. acts of One owner (but
3. may alienate, assign or mortgage his preservation (Art he must first
ideal interest or share 488) notify his co-
4. may even substitute another person owners of the
in the enjoyment of his part, except necessity of
when personal rights are involved repairs
5. right of redemption in case the shares 3. acts of Financial
of all the other co-owners or any of administration majority=
them are sold to a third person (Art 492) controlling
6. to renounce so much of his interest Includes: interest in the
as may be equivalent to his share of the a. do not involve co-ownership
expenses and taxes to exempt himself an alteration
from said obligation b. improve or
7. to demand partition embellish the
thing
Gloria vs Builders Savings & Loan – no 3. may be
judicial declaration of heirship is renewed from
necessary in order that an heir and co- time to time
owner may assert his or her right to the 4. have
property of the decease subject of co- transitory effects
ownership 5. do not give
rise to a real
Anzures vs Spouses Ventanilla right over the co-
- a co-owner cannot be ejected from the owned property
property subject of co-ownership 6. do not affect
- no co-owner shall be obliged to remain the substance or
in a co-ownership. Each co-owner may nature of the
demand partition at any time with thing
respect to his share 4. acts of All co-owners;
8
Property, Succession,
alteration (Art but to recover
491) expenses,
express consent
is required
(Art 494) Acquisition by prescription
GR: no co-owner can acquire the whole
property by prescription
EX: repudiation of the co-ownership
Requisites:
1. he must make known to the other co-
owners that he is definitely repudiating
the co-ownership and claiming complete
ownership over the entire property
2. evidence of repudiation and
knowledge on the part of the others
must be clear and convincing
3. open, continuous, public, peaceful,
adverse possession for the period of
time required under the law
4. period of prescription starts from
such repudiation
Heirs of Reyes vs Heirs of Reyes – in
order that a co-owner’s possession may
be deemed adverse to the rights of the
other co-owners, there must be
unequivocal acts of repudiation
Partition
1. co-owner can demand partition at any
time
2. action is imprescriptible = cannot be
barred by laches, absent a repudiation
of the co-ownership by a co-owner
3. no partition if:
a. prohibited by agreement for a
period not exceeding 10 years
b. prohibited by testator/donor
for a period not exceeding 20
years
c. prohibited by law
d. legal nature of the common
property does not allow partition
e. physical partition would render
the property unserviceable for its
intended use
(Art 498) Legal partition
Requisites:
1. resorted when the thing is essentially
indivisible
2. procedure:
a. give the whole to one co-
owner who will be required to
indemnify the rest
b. if not agreed upon, public or
private sale and its proceeds
divided among the co-owners
Quintos vs Nicolas – partition cannot be
barred by res judicata because no co-
owner is obliged to remain in the co-
ownership, and his proper remedy is an
action for partition which he may bring
at anytime in so far as his share is
concerned
Spouses Marcos vs Heirs of Bangi – oral
partition of land is valid because
partition is the separation, division, and
assignment of a thing held in common
among those whom it may belong
Oral partition is effective when the
parties have consummated it by the
taking of possession and the exercise of
ownership of the respective portions set
off to each
Termination of co-ownership
1. consolidation or merger in only one of
the co-owners of all the interests of the
other co-owners
2. destruction or loss of the property co-
owned
9
Property, Succession,
3. acquisitive prescription in favor of a
3rd person or co-owner who has Possession of Possession of
repudiated the co-ownership movable acquired movable acquire
4. extrajudicial partition or judicial in good faith (Art in BF
5. termination of the period 559) PERSONAL
a. agreed upon by the parties PROPERTY
b. imposed by donor or testator 1. equivalent to 1. not equivalent
c. allowed by law (10 yrs – title to title
contractual; 20 yrs – testacy) 2. owner may
6. sale of the co-owners of the thing to recover:
a 3rd person and the distribution of its a. if he lost the
proceeds among them same or
b. he has been
(Art 523) Possession: unlawfully
1. holding of a thing deprived*
2. enjoyment of a right EX: possessor
acquired the
Classes of possession: movable in GF at
a. in one’s own name or in the name of a public sale,
another hence, owner
b. in the concept of the owner, or in the must reimburse
concept of a holder, or in the concept of the price paid by
both the owner and the holder the possessor
3. in good faith, or in bad faith

Possession as a fact
GR: cannot be recognized at the same
time in two different personalities
EX:
a. co-possessors
b. possession in different concepts or
degrees

in case of conflict/dispute regarding

possession:
a. present possessor shall be preferred
b. if both are present, the one longer in
possession
c. if both began to possess at the same
time, the one who presents or has a title
d. if both present a title, the court will
determine
10
Property, Succession,
11
Property, Succession,
*unlawful deprivation – includes all
cases of taking which constitute a
criminal offense
Doctrine of constructive possession –
possession in the eyes of the law does
not mean that a man has to have his
feet on every square meter of ground
before it can be said that he is in
possession
Usufruct
Obligations of the usufructuary:
a. before
1. make an inventory
2. give security or bond
b. during
1. take care of the property w/ the
DOAGFOAF
2. make ordinary repairs
3. notify owner of urgent extra-ordinary
repairs
4. notify owner of any prejudicial act
committed by 3rd persons
c. after
1. return the object unless there is right
of retention
2. indemnify owner for any loss due to
his fault or negligence
Caucion juratoria
- sworn duty to take good care of the
property and return the same at the end
of the usufruct
- takes the place of the bond or security
Requisites:
1. proper court petition
2. necessity for delivery of:
a. furniture or house for use by
usufructuary and his family
b. implements, tools or other movables
for a vocation or industry in which he is
engaged
3. approval of the court
4. sworn promise
5. but usufructuary cannot alienate or
lease the property for this means he
does not need them
Easement or servitude – encumbrance
imposed upon an immovable property
for the benefit of another immovable
Characteristics of an easement:
1. real right
2. imposed on a real property only
3. imposable only on another’s property
4. involves 2 neighboring estates
(dominant and servient)
5. limitation or encumbrance on the
servient estate for another’s benefit
6. right limited by the needs of the
dominant estate
7. inherent from the servient estate as
such
8. inseparable from the servient estate
9. non-possessory
10. indivisible
11. intransmissible
12. perpetual
12
Property, Succession,
Modes of acquiring easements
A. Continuous and apparent
Example:
Easement of light and view
a. positive, when made:
- on one’s own wall extending over
another’s property
- on a party wall
b. negative, when made:
- on one’s own wall w/c does not
extend over another’s property
B. Discontinuous and apparent
C. Continuous and non-apparent
D. discontinuous and non-apparent
1. by TITLE – means a juridical act or
law sufficient to create the
encumbrance
2. by PRESCRIPTION – 10 years
a. positive – computed from the day the
dominant owner commenced to exercise
the easement upon the servient estate
b. negative – computed from the day
notarial prohibition was made on the
servient estate
by TITLE only
13
Property, Succession,
Easement of right of way – by which
one person or a particular class of
persons is allowed to pass over
another’s land
Requisites of legal easement of right of
way: (LEOROW)
1. immovable (dominant estate) is
surrounded by other immovables
pertaining to other persons
2. no adequate outlet to a public
highway
3. absolutely necessary for use or
cultivation of the enclosed estate of the
claimant
4. isolation is not due to claimant’s own
act
5. established at the point least
prejudicial to the servient estate
6. claimant must be the owner or one
with real right thereto
7. payment of the proper indemnity
Amount of indemnity:
1. passage is permanent = value of the
land + amount of damages caused to
servient estate
2. passage is temporary = amount of
damage caused to servient estate
Extinguishment of the LEOROW:
1. opening of a new road
2. joining the dominant estate to
another which abuts, and therefore, has
access to the public highway
3. such new access is adequate and
convenient to the dominant estate
Acquisition by virtue of title (Art 622) –
juridical act which gives birth to the
easement, such as law, donation,
contract and will of the testator
Cristobal vs CA – it is incumbent upon
the dominant estate owner to establish
by clear and convincing evidence the
presence of all the requisites before his
claim for the legal easement of ROW
may be granted
Alicia Reyes vs Sps Ramos –
convenience is not the gauge in
determining whether to impose a
LEOROW over another’s property
Dichoso Jr vs Patrocinio Marcos – the
true standard for the grant pf the legal
EOROW is “adequacy”
Unisource Commercial and Dev Corp vs
Chung – opening of an adequate outlet
to a highway can extinguish only legal
or compulsory easements, not voluntary
easements
A voluntary easement of ROW, like any
other contract, could be extinguished
only by mutual agreement of the parties
or by renunciation of the owner of the
dominant estate
Effect if the servient estate owners in an
easement of ROW later become the
dominant estate owners? Easement is
extinguished by operation of law
Easement of light and view
GR: no part owner may, without the
consent of the others, open through the
party wall any window or aperture of
any kind
Period of prescription for acquisition:
1. thru a party wall – 10 yrs from the
time of opening of the window
14
Property, Succession,
2. thru a wall on the dominant estate –
10 yrs from the time of notarial
prohibition

Aside from prescription, easements may

likewise be acquired through title. It
refers to a juridical act or law sufficient
to create the encumbrance

Nuisance – any act, omission,

establishment, business, conduct of
property or anything which:
1. injuries or endangers the health or
safety of others
2. annoys or offends the senses
3. shocks, defies or disregards decency
or morality
4. obstructs or interferes with the free
passage of any public highway or street
or any body of water
5. hinders or impairs the use of property
15
Property, Succession,
Classification of nuisance
1. according to a. public - affects a Remedies:
scope/extent of its community or - prosecution under the RPC or
injurious effects neighborhood or any local ordinance
considerable number of
persons - civil action
GR: city or municipal mayor
EX: private person may file the
action if the nuisance is
specifically injurious to himself

- extrajudicial abatement
a. district health officer
determines whether or not it is
the best remedy
b. private person himself
provided:
-nuisance is specially injurious
to himself
- demand is first made upon
the owner or possessor of the
property to abate the nuisance
- demand has been rejected
- abatement be approved by
the district health officer and
executed with assistance of the
local police
- removing or if necessary, by
destroying the thing which
constitutes the nuisance,
without committing a breach of
the peace or doing unnecessary
injury
- value of the destruction does
not exceed 3k
b. private – one which Remedies:
affects only private rights 1. civil action
or produces damage to one 2. extrajudicial abatement
or a few person
2. according to its a. nuisance per se - at all times and under any
nature circumstances, regardless of
location or surroundings
- proof of its existence is
sufficient
16
Property, Succession,
- may be summarily abated
under the undefined law of
necessity
b. nuisance per accidens - by reason of circumstances,
location or surroundings
- proof of the manner of its
conduct, or the act, its
consequences and other like
circumstances, is necessary
- reasonable notice and hearing
on whether or not, in law, it
constitutes a nuisance
17
Property, Succession,
Doctrine of attractive nuisance – one 5. compliance with formalities
who maintains in his premises prescribed by law
dangerous instrumentalities or
appliances of a character likely to attract Onerous donations are governed by the
children in play and who fails to exercise rules on contracts because the burden is
ordinary care to prevent children from imposed upon the donee of a thing with
playing therewith or resorting thereto is an undetermined value
liable to a child of tender years who is
injured thereby, even if the child is
technically a trespasser in the premises

This doctrine does not apply to bodies of

water in the absence of some unusual
condition or artificial feature other than
the mere water and its location

Donation
Includes:
1. act of liberality whereby a person
disposes gratuitously of a thing or right
in favor of another, who accepts it (Art
725) = simple
2. giving to another a thing or right on
account of the latter’s merits or of the
services rendered by him to the donor,
provided they do not constitute a
demandable debt (Art 726) =
remuneratory
3. giving to another a thing or right and
imposes upon the done a burden which
is less than the value of the thing given
(Art 726) = conditional
4. giving to another a thing or right and
imposes upon the done a burden which
is more than the value of the thing
given (Art 726) = onerous

Requisites of a valid donation:

1. donor’s capacity to make the
donation of a thing or right
2. donative intent
3. delivery, actual or constructive
4. acceptance/consent of the done to
the donation
18
Property, Succession,
Inter vivos
Takes effect during the lifetime of the
donor
Made out of donor’s pure generosity
Valid, even if donor survives the donee
Must follow formalities of donation
Must be accepted by done during the
lifetime of donor
Cannot be revoked except for grounds
provided by law
Generally, right to dispose of the
property is conveyed to the donee
Preferred in case of impairment of
legitime
Mortis causa
Takes effect upon the death of donor
Made in contemplation of death without
intention to dispose in case of survival
Void, should donor survive the donee
Must follow formalities of a will
Can only be accepted after donor’s
death
Always revocable before donor’s death
Right to dispose is retained by the
donor while still alive
Not so preferred, hence reduced first if
legitime is impaired
19
Property, Succession,
Del Rosario vs Ferrer – the express
“irrevocability” of the donation is the
“distinctive standard that makes the
document a donation inter vivos”
Void donations: (Art 739)
1. between persons who are guilty of
adultery or concubinage at the time of
donation
2. between persons found guilty of the
same criminal offense in consideration
thereof
3. made to a public officer, to his wife,
descendants and ascendants, by
reasons of his office
4. between spouses, during their
marriage, except moderate gifts during
times of family rejoicing
Tan Queto vs Pombuena – oral donation
of land is void. It cannot be considered
a valid donation inter vivos because it
was not executed in a public instrument;
it cannot also be a valid donation mortis
causa because it did not comply with
the formalities of a will
Grounds for revocation of donation:
1. birth, adoption, re-appearance (BAR)
of the 1st child donor (within 4 years
from BAR)
2. non-compliance with any of the
conditions imposed by the donor (within
4 years from non-compliance)
3. ingratitude of the done (within 1 year
from knowledge of donee’s ingratitude)
Acts of ingratitude as ground for
revocation:
1. commit some offense against the
person, the honor or the property of the
donor or of his wife or children under
his parental care
2. imputes to the donor any criminal
offense or any act involving moral
turpitude, even though he should prove
it, unless the crime or the act has been
committed against the done himself, his
wife or children under his authority
3. unduly refuses him support when the
done is legally or morally bound to give
support to the donor
Calanasan vs Dolorito – ungrateful act/s
should be done by the done
himself/herself
Grounds for reduction of donation:
1. failure of the donor to reserve
sufficient means to support himself or
dependent relative (anytime during
lifetime of donor)
2. failure of the donor to reserve
sufficient property to pay-off his existing
debts (within 4 years from perfection of
donation)
3. inofficiousness (within 5 years after
death of donor) – more than the free
portion
4. birth, adoption, re-appearance of 1st
child of donor (within 4 years)
WILLS AND SUCCESSION
Art 774 Succession – mode of
acquisition by virtue of which the
property, rights and obligations to the
extent of the value of inheritance of a
person are transmitted through his
death to another or others either by his
will or by operation of law
Testate – with will
Intestate – without will
Transmission of successional rights = at
the moment of death
Elements:
1. death – actual/presumptive
20
Property, Succession,
2. property, rights and obligations must
be transmissible
Ferrer vs Sps Diaz – for inheritance to
be considered “future”, the succession
must not have been opened at the time
of the contract
When a will provides for indivision of
property, it is subject to the statutory
limitation that the prohibition to partition
such property in a co-ownership can
only last for 20 years
Opulencia vs CA – lack of judicial
approval does not invalidate the
Contract to Sell, because the petitioner
has the substantive right to sell the
whole or a part of her share in the
estate of her late father
(Art 783) Will – act whereby a person
comply with the formalities of law is
permitted to control to a certain extent
or degree the disposition of his estate to
take effect upon his death
Elements: (SUSACPERVID)
1. statutory right (given by law)
2. unilateral act of the testator
3. solemn/formal
4. animus testandi – intention to make
the document
5. capacitated (sound mind)
6. personal – made by the testator
7. effective mortis causa
8. revocable
9. vitiated consent is absent
10. individual
11. disposes of T’s estate to a certain
extent
Reyes et al vs CA – unless legally
flawed, a testator’s intention in his last
will and testament is its “life and soul”
which deserves reverential observance
Santos vs Manarang – a will is the
testator speaking after death. Its
provisions have the same force and
effect in the probate court as if the
testator stood before the court in full life
making the declarations by word of
mouth as they appear in the will
After-acqiured property:
GR: only the properties owned and
possessed by the testator at the time of
the making of the will shall pass through
the heirs, legatees and devices
EX: if the testator expressly included in
the will that even the after-acquired
property be also given to the heirs,
legatees and devices
Extrinsic validity of wills:
1. as to time = Art 795
- law existing at the time of the making
of the will
2. as to place = Art 17; Art 818/819
- principle of lex loci celebrationis
- Art 815 – filipinos abroad executing a
will follows the place
- Art 816, 817 – foreigner in the
philippines follows his own national
law / domicile / place of execution
Intrinsic validity of the will:
1. as to place = Art 16
GR: lex rei sitae
2. as to what matters: order of
succession, amount of successional
rights, intrinsic validity of the
testamentary provisions of the will =
national law of the testator
3. as to time = Art 2263
21
Property, Succession,
- law at the time of the execution /
death of the decedent
Baltazar vs Laxa – the state of being
forgetful does not necessarily make a
person mentally unsound to render her
unfit to execute a valid will
To be of sound mind, it is enough that
the testator, at the time of making the
will, knows: (NPC)
a. nature of the estate to be disposed of
b. proper objects of her bounty
c. character of the testamentary act
A testator is presumed to be of sound
mind at the time of the execution of her
will and the burden is on the oppositor
to prove otherwise
Supervening incapacity does not
invalidate an effective will, nor is the will
by an incapable person validated by the
supervening of capcity
Notarial Wilsl (Art 804-806)
1. in writing
2. executed in a language known to the
testator
3. every will (other than a holographic
will) must be subscribed at the end
thereof by the testator or the name of
the testator written by some other
person under his direct and express
supervision and in his presence
4. 3 credible witnesses
5. all must sign the will on the left part
(marginal signatures) of the pages
except the last page
6. numbering of pages upper portion of
the will
7. attestation clause must be signed by
the witnesses
8. acknowledge before a notary public
Contents of the attestation clause:
1. number of pages of the will
2. fact that the testator signed the will
at the presence of the 3 credible
witnesses
3. fact that the 3 credible witnesses
signed the will in the presence of one
another and the testator
If the will is not signed at the end but
somewhere else, the will is not valid.
End of the will means that logical end,
not the physical end of the will
True test of “signing in the presence” of
the testator and the 3 witnesses – not
seeing the signing, but the opportunity
to see the signing
Echavez vs Dozen Construction & Dev
Corp – attestation clause and an
acknowledgement cannot be merger in
one statement
Acknowledgement – made by one
executing a deed declaring before a
competent officer that the deed or act is
his own
Attestation of a will – refers to the act of
the witnesses who certify to the
execution of the instrument before them
ad to the manner of its execution
Deaf/Deaf-mute testator (Art 807) –
must appoint 2 persons to communicate
to him his will
Blind testator (Art 808)
Alvarado vs Gaviola – 2 readings
required:
1st = one of the 3 credible witnesses
2nd = notary republic before whom the
will was acknowledged
22
Property, Succession,
Holographic Wills (Art 810-814)
- should be entirely written with date
and signature
- no alteration
- last disposition with date and signature
validates all those invalid disposition
that are signed but not dated
If the will is being contested = 3
competent witnesses must be presented
to verify the handwriting and the
authenticity of the will
As to the validity = Art 810
As to the provisions/disposition = Art
812-814
Witnesses to will:
a. legal age
b. must be of sound mind
c. able to read and write
d. must not be blind/deaf/mute
e. domiciled in the Philippines
f. must not be convicted by final
judgment of
- falsification of document
- perjury
- false testimony
Codicil (Art 825) – supplement or
addition to a will made after the
execution of the will
Purpose:
a. explain
b. alter
c. modify
d. amend
Revocation of wills (Art 830)
1. implication of law
2. overt act
- burning, tearing, cancelling, and
obliterating
- intention to revoke (animus revocandi)
- subjective phase of the overt act must
be completed already
- capacity to make a new will
3. another will (extrinsically valid)
Doctrine of dependent relative
revocation – if the testator revokes his
will with the present intention of making
a new one and as a substitute, if the
new will is not made or even if made, it
fails to take effect for any reason
whatsoever, it will be presumed that the
testator prefers the old will rather than
intestacy
Recognition of illegitimate child (Art
834) – revocation of the will does not
carry with it the revocation of the
recognition of the illegitimate child
Probate of wills (Art 838) – no real or
personal property shall pass to the
heir/legatee/devicee until and unless the
will is submitted and allowed by the
probate court
Questions asked for the will to be
allowed in the probate court:
1. was this the last will and testament of
the testator before he died?
2. was there compliance with the
formalities and solemnities required
under the law?
3. was the testator capacitated at the
time of the execution of the will
4. was there absence of any vice or
defect of consent at the time of the
execution of the will
Proceeding in rem = binding in the
entire world
23
Property, Succession,
In the matter of the petition to approve
the will of Ruperta Palaganas – the will
of an alien who is abroad produces
effect in the Philippines if made in
accordance with the formalities
prescribed by the law of the place where
he resides, or according to the
formalities observed in his country
Ortega vs Valmonte – conflict between
the dates appearing on the will does not
invalidate the document, because the
law does not even require that a notarial
will be executed and acknowledged on
the same occasion
Institution of heirs (Art 840) – only to
the free portion and clearly identified
using the will and other extrinsic
evidence
Heirs instituted w/o designation of
shares inherit in equal parts as a general
rule (Art 846)
Collectively instituted deemed
individually instituted (Art 847)
False clause does not deprive the
instituted heir to inherit what was given
to him/her
Preterition (Art 854) – omission of
one/some/all of the compulsory heirs in
the direct line = annul the institution of
the heirs automatically
A wife/husband cannot be preterited
because they do not belong to the direct
line of the testator
Voluntary/Compulsory heirs who
die/incapacitated/renounce inheritance:
a. voluntary heir = no right of
representation
b. compulsory heir = has right of
representation with respect to the
legitime
Fideicommissary substitution: (Art 863)
- must be expressly stipulated in the will
- there is a 1st heir = fiduciary heir
- there is a 2nd heir = fideicommissary
heir
- 1st and 2nd heir must only be 1 degree
apart in relationship = preserve &
transmit the property
- must not be conditional
- must not burden the legitime
Reserva Troncal (Art 891)
ORIGIN (ascendant, bro/sis where
property came from)
PROPOSITUS (descendant who
acquired property gratuitously)
RESERVOR (ascendant who
acquired property by operation of
law)
RESERVATARIOS (relatives within
the 3rd degree belonging to the
line where the property comes
from)
Similarities:
FS – imposes the 1st heir to preserve
and transmit the property in favor of the
2nd heir
24
Property, Succession,
RT – imposes the reservoirs to preserve
and transmit the property in favor of the
reservatarios

Differences:
FS – there is no right on the part of the
1st heir to sell, alienate, dispose or
encumber the property
RT – the reservoir during his lifetime has
full attributes of ownership subject only
to the resolutory condition that when
the reservoir dies and there are still
reservatarios the property or value of
the property will have to revert back to
the line where the property originally
came from

Propositus must die without any issues

(no descendants, no child, etc) and
without a will

Condition not to marry = VOID

The only condition allowed to be

imposed on the legitime is the condition
not to partition the legitime within a
period not exceeding 20 years

Disposition captatoria (Art 875) = null

and void

Violations: must be a unilateral act of

the testator
25
Property, Succession,
Surviving heir Legitime Intestate Share
Illegitimate children 1/3 1/2
Surviving spouse 1/3 1/2
(remaining 1/3 is free
portion Art 894)
Illegitimate children 1/4 1/4
Surviving spouse 1/8 1/4
Legitimate parents 1/2 1/2
(Art 899 – testator may
freely dispose of the
remaining 1/8 of the
estate)
Illegitimate children 1/4 1/2
Legitimate parents 1/2 1/2
Legitimate parents 1/2 1/2
Surviving spouse 1/4 (taken from the free 1/2
portion) (Art 893)
Illegitimate parents 1/4 1/2
Surviving spouse 1/4 1/2
Illegitimate children alone 1/2 (divided by number of All
illegitimate children)
Remainder is free portion
(Art 901)
Legitimate parents alone 1/2 All
Surviving spouse alone 1/2, 1/3, 1/2 (Art 900) All
Legitimate children (or 1/2 (divided by number of All
their descendants) alone children)
Remainder is free portion
(Art 888)
One legitimate child (or 1/2 1/2
descendant)
Surviving spouse 1/4 1/2
Remaining 1/4 is free
portion (Art 892)
Two or more legitimate 1/2 (divided by the Consider spouse as one
children (or their number of children) legitimate child and divide
descendants) estate by total number
Surviving spouse Equal to the share of one
child
Remainder is free portion
(Art 892)
Legitimate child 1/2
Illegitimate child 1/2 of each legitimate
child (Art 176, FC)
26
Property, Succession,
Remainder is free portion
(Art 892)
Surviving spouse 1/2 (remaining half is free
portion Art 900)
Brothers and sisters Not entitled to anything
(nephews and nieces in since they are not
case of deceased siblings) compulsory heirs; testator
may choose to give them
something out of the free
portion
1/2
1/2 (divided by the
number of brothers and
sisters; nephews and
nieces of deceased
siblings divide among
themselves the share that
should have to their
parents)
Art 1001
27
Property, Succession,
Disposable free portion if no will =
intestate succession
Property left at the time of death
- debts/charges
+ collationable donations .
= net hereditary estate
Arellano vs Pascual – if there is no
compulsory heir, there is no legitime to
be safeguarded. The decedent not
having any compulsory heir, was at
liberty to donate all his property even if
nothing was left to his collateral relative
to inherit
Should the only survivors be bros/sisters
of the full-blood, they shall inherit in
equal shares
Disinheritance
- there must be a valid will
- grounds must be under Art 919, 920,
921
- expressly provided for in the will
- disinherited heir must be identified
- no reconciliation between parties
- disinheritance must be total and not
conditional
Art 919 – causes for the disinheritance
of children and descendants
(legitimate/illegitimate)
1. child or descendant has been found
guilty of an attempt against the life of
the testator, his or her spouse,
descendants, or ascendants;
2. child or descendant has accused the
testator of a crime for which the law
prescribes imprisonment for six years or
more, if the accusation has been found
groundless;
3. child or descendant has been
convicted of adultery or concubinage
with the spouse of the testator;
4. child or descendant by fraud,
violence, intimidation, or undue
influence causes the testator to make a
will or to change one already made;
5. refusal without justifiable cause to
support the parent or ascendant who
disinherits such child or descendant;
6. maltreatment of the testator by word
or deed, by the child or descendant;
7. child or descendant leads a
dishonorable or disgraceful life;
8. conviction of a crime which carries
with it the penalty of civil interdiction
Art 920 – causes for the disinheritance
of parents/ascendants
(legitimate/illegitimate)
1. parents have abandoned their
children or induced their daughters to
live a corrupt or immoral life, or
attempted against their virtue;
2. parent or ascendant has been
convicted of an attempt against the life
of the testator, his or her spouse,
descendants, or ascendants;
3. parent or ascendant has accused the
testator of a crime for which the law
prescribes imprisonment for six years or
more, if the accusation has been found
to be false;
4. parent or ascendant has been
convicted of adultery or concubinage
with the spouse of the testator;
5. parent or ascendant by fraud,
violence, intimidation, or undue
influence causes the testator to make a
will or to change one already made;
6. loss of parental authority for causes
specified in this Code;
7. refusal to support the children or
descendants without justifiable cause;
8. attempt by one of the parents against
the life of the other, unless there has
been a reconciliation between them
28
Property, Succession,
Art 921 – causes for the disinheritance
of a spouse
1. spouse has been convicted of an
attempt against the life of the testator,
his or her descendants, or ascendants;
2. spouse has accused the testator of a
crime for which the law prescribes
imprisonment of six years or more, and
the accusation has been found to be
false;
3. spouse by fraud, violence,
intimidation, or undue influence cause
the testator to make a will or to change
one already made;
4. spouse has given cause for legal
separation;
5. spouse has given grounds for the loss
of parental authority;
6. unjustifiable refusal to support the
children or the other spouse
Ineffective disinheritance = gets a share
of the legitime and not from the free
portion
Reconciliation = awards the inheritance
to the heir
Legacies and devises
Legacies – real property
Devices – personal property
Legacy or devise shall be without effect
if:
1. T transforms the thing – does not
retain its form or denomination
2. T alienates except with right to
repurchase
3. thing bequeathed was lost during the
T’s lifetime or after his death w/o heir’s
fault (physical / legal loss)
Legacy to creditor
GR: creditor gets double (debt and
legacy)
EX: unless specified that legacy will be
used as payment
Legacy for education – lasts until the
legatee is of age, or beyond the age of
majority, in order that the legatee may
finish some professional, vocational, or
general course, provided he pursues his
course diligently
Legacy for support – lasts during the
lifetime of the legatee, if the testator
has not otherwise provided
If amounts of legacies are not fixed by T
= shall be fixed in accordance with the
social standing and the circumstances of
the legatee and the value of the estate
Intestate succession
- blood relatives / spouse / adopted
children
- in default = state (escheat
proceedings)
Rule of the iron barrier – illegitimate
relative cannot inherit ab intestato from
the legitimate relative and vice versa
Double share among collaterals – if
brothers and sisters of the decedent
concur with the nephews/nieces of the
decedent, the nephews and nieces get
only half of the share of the brothers
and sisters of the decedent
Repudiation of inheritance – no right of
representation
29
Property, Succession,
Art 992 – iron curtain/barrier
Legitimate and illegitimate cannot
inherit from one another
Rights of illegitimate children (Art 902)
- illegitimate child can be validly
represented by his/her child/ren
whether legitimate or illegitimate
GR: no demand, no delay
EX: when…
1. obligation or the law expressly so
declare
2. time is of the essence
3. demand is useless as when the
obligor has rendered it beyond his
power to perform

OBLIGATIONS AND CONTRACTS Reciprocal obligations – from the

Obligation – juridical necessity to give, moment one of the parties fulfills his
to do, or not to do (Art 1156) obligation, delay by the other begins

Elements:
1. juridical tie General Milling Corp vs Spouses Ramos
2. passive subject (obligor/debtor) – foreclosure of a mortgage where there
3. active subject (obligee/creditor) was no demand for payment is void,
4. prestation/object because there was no delay

Degree of diligence: ordinary diligence Those who in the performance of their

of a good father of the family obligations are guilty of fraud,
negligence, or delay and those who in
He is one who takes precautions against any manner contravene the tenor
any harm when there is something thereof, are liable for damages
before him to suggest or warn him of
the danger or to foresee it Requisites of a fortuitous event:
1. cause of the breach of obligation
Banking institution = highest degree of must be independent of the will of the
diligence debtor
2. event must be either unforeseen or
Rights of creditor if the obligation is to unavoidable
deliver a: 3. event must be such as to render it
Determinate Generic thing impossible for the debtor to fulfill his
thing obligation in a normal manner
1. compel 1. ask that 4. debtor must be free from any
delivery obligation be participation in or aggravation to the
2. recission complied with at injury to the creditor
3. recover the expense of
damages the debtor NPC et.al vs CA – when the effect is
2. recission found to be in part the result of the
3. recover participation of man, whether due to his
damages active intervention or neglect or failure
to act, the whole occurrence is then
30
Property, Succession,
humanized and removed from the rules
application to the Act of God Doctrine
Kinds of obligations:
a. pure = demandable at once; no
condition imposed except if resolutory
b. conditional = where acquisition of
right or extinguishment or loss of those
already acquired shall depend upon the
happening of an event which constitutes
the condition
Classification of conditions:
1. suspensive – happening of w/c gives
rise to the obligation
2. resolutory – demandable at once but
the happening of an event would
extinguish the obligation
3. potestative – depends upon sole will
of debtor – conditional obligation is void
4. casual – depends upon chance/will of
3rd person
5. mixed – depends partly upon will of
debtor/chance/3rd person
Concept of loss/effect of loss =
determinate object
1. lost w/o the fault of the debtor –
obligation is extinguished
2. lost thru the fault of debtor – debtor
liable for damages
3. deteriorates w/o the fault of debtor –
impairment shall be borne by the
creditor
4. deteriorates thru the fault of debtor –
creditor may choose between fulfillment
or rescission of the obligation, w/
damages in either case
5. improved by its nature/time –
improvement shall inure to the benefit
of the creditor
6. improved at the expense of debtor –
debtor has no other right than that
granted to a usufructuary
Nolasco et al vs Cuerpo – for a
contracting party to be entitled to
rescission based on Art 1191, the other
contracting party must be in substantial
breach of the terms and conditions of
their contract
Substantial breach – fundamental
breach that defeats the object of the
parties in entering into an agreement
Golden Valley Exploration Inc vs Pinkian
Mining Co
GR: power to rescind an obligation must
be invoked judicially and cannot be
exercised solely on a party’s own
judgment that the other has committed
a breach of the obligation
EX: injured party need not resort to
court action to rescind a contract when
the contract itself provides that it may
be revoked or cancelled upon violation
of its terms and conditions
Where parties agree to stipulation
allowing extra-judicial rescission, no
judicial decree is necessary
Without a stipulation allowing extra-
judicial rescission, it is the judicial
decree that rescinds, and not the will of
the rescinding party
Obligation with a period = demandable
only when they day comes
Obligation w/ a resolutory period = take
effect at once but terminate upon arrival
of the day certain
31
Property, Succession,
Debtor binds himself to pay when his
means permit him to do so = obligation
with a period
Period is unknown/uncertain = courts
may fix the duration thereof
Right to a period is lost when the
debtor:
1. becomes insolvent (after the
obligation has been contracted unless
he keeps a guaranty or security of the
debt)
2. does not furnish to the creditor the
guaranties or securities he has promised
3. by his own acts, he has impaired said
guaranties or securities after their
establishment, and when through a
fortuitous event, they disappear, unless
he immediately gives new ones equally
satisfactory
4. violates any undertaking in
consideration of which the creditor
agreed to the period
5. attempts to abscond
Alternative vs facultative obligations
Alternative – debtor alternatively bound
by diff prestation shall completely
perform one of them
Debtor has right of choice unless
expressly granted to the creditor
Facultative – only one prestation has
been agreed upon but the obligor may
render another in substitution
GR: joint obligation (concurrence of
several debtors/creditors)
EX: solidary when:
1. Obligation expressly states so
2. law requires solidarity
3. nature of the obligation requires
solidarity
Solidary: one is liable for the whole
amount of the loan
Suit vs solidary debtor: full amount of
the debt
Joint: obligation is divided into as many
debtors
Suit vs joint debtor: only the
proportionate share of the specific
debtor
In solidary obligations:
1. defense of one is defense of all
except if the defense is personal to him
interposing the defense
2. payment by one is payment by all but
the one who paid is entitled to
reimbursement by the other co-debtors
3. fault of one is fault of all but the
others have a right of recourse against
the one at fault
4. remission secured by one is remission
of the whole debt but the one who
procured remission is not entitled to
reimbursement from the others
Available to a solidary debtor are
defenses:
1. personal to him or pertain to his
share
2. derived from the nature of the
obligation
3. personally belong to the others but
only with regard to that part of the debt
which belong to the others
Manlar Rice Mill Inc vs Deyto – there is
a solidary liability only when the
obligation expressly so states, when the
law so provides or when the nature of
the obligation so requires
32
Property, Succession,
Inimaco vs NLRC – the absence of the
word “SOLIDARY” in the dispositive
portion of the decision renders the
liability joint
Obligations with a penal clause
GR: penalty shall substitute for damages
and the payment of interest
EX:
1. stipulation to the contrary
2. obligor refuses to pay the penalty
3. obligor is guilty of fraud in the
fulfillment of the obligation
Penal clause purpose = ensures
performance of the obligation = proof of
actual damages suffered by creditor is
not necessary (Art 1228)
Judge can equitably reduce the penalty
when:
1. principal obligation was
partly/irregularly complied with by the
debtor
2. even if no performance by the debtor,
if penalty is iniquitous/unconscionable
Nullity of penal clause = does not carry
with it the nullity of the principal
obligation
Nullity of the principal obligation =
carries with it the nullity of the penal
clause
Extinguishment of obligations (PA LO
CON MER COM NO)
Payment
Loss of the thing due
Condonation
Merger or confusion
Compensation
Novation
Payment – not only delivery of money
but also the performance, in any
manner of an obligation
GR: there is no privity of contract
between the 3rd person and a party to a
contract
EX: when:
1. there is a stipulation allowing it
2. the 3rd person has an interest in the
fulfillment of the obligation (codebtor or
guarantor)
PCI Bank vs Franco – one who pleads
payment has the burden of proving it
It is elementary that payment made by
a judgment debtor to a wrong party
cannot extinguish the obligation of such
debtor to its creditor
If a 3rd person paid
1. w/o knowledge or against the will of
the debtor – 3rd person has the right of
reimbursement to the extent beneficial
to the debtor
2. w/ knowledge of the debtor – 3rd
person has the right of reimbursement
and subrogation
3. w/o intention to be reimbursed =
DONATION – needs acceptance of the
debtor and compliance w/ the
formalities required by law
No person shall be beholden to the
charity of another
To whom shall payment be made?
1. the creditor
2. his successor-in-interest
3. any person authorized to receive it
Art 1244 – debtor of a thing cannot
compel the creditor to receive a
33
Property, Succession,
different one, although the latter may 2. check is impaired thru creditor’s fault
be of the same value as, or more
valuable than that which is due Payment shall be made in the:
1. place designated in the obligation
EX: 2. in the absence of stipulation – place
1. obligation is facultative where the thing was at the moment the
2. dacion en pago obl was constituted
3. novation 3. place of domicile of the debtor
4. waiver by creditor/estoppel
Application of payment
Dacion en pago Cession Requisites:
1 debtor, 1 1 debtor, several 1. 1 debtor, 1 creditor
creditor creditors 2. 2 or more debts of the same kind
Debtor not Debtor insolvent, 3. all debts due and demandable
insolvent either partially or 4. amt paid by debtor insufficient to
totally cover all debts
Transfer of No transfer of
ownership to ownership to GR: debtor (right to choose) = time of
creditor upon creditors payment
delivery of thing EX: creditor = gives a receipt
Debtor delivers 1 Debtor delivers *in default thereof = most onerous debt
or some of his all his properties to debtor
properties to to creditors
creditor Art 1233 – a debt shall not be
Obl is Obl is understood to have been paid unless
extinguished to extinguished to the thing or service in which the
the extent of the the extent of the obligation consist has been completely
value of the proceeds of the delivered or rendered
thing delivered public sale
Act of novation Not an act of Art 1253 – if the debt produces interest,
novation payment of the principal shall not be
deemed to have been made until the
Dacion en pago – delivery and interests have been covered
transmission of ownership of a thing by
the debtor to the creditor as an Tender of payment & consignation
accepted equivalent of the performance Requisites:
of the obligation 1. debt is due and demandable
2. prior valid tender of payment refused
Payment of debts in money = legal without just cause by creditor
tender 3. 1st notice to creditor
4. actual deposit with judicial authorities
Delivery of PNs, bills of exchange – 5. 2nd notice to creditor
considered payment when:
1. encashed
34
Property, Succession,
Tender of payment – extrajudicial
Consignation – judicial
GR: prior valid tender of payment before
consignation
EX: when
1. creditor is absent or unknown or does
not appear at the place of payment
2. he is incapacitated to receive the
payment at the time it is due
3. w/o just cause, he refuses to give a
receipt
4. 2 or more persons claim the same
right to collect
5. title of the obligation has been lost
Dalton vs FGR – consignation is
completed at the time the creditor
accepts the same without objections, or,
if he objects, at the time the court
declares that it has been validly made in
accordance with law
Loss of the thing due w/o fault of debtor
& no delay
GR: determinate thing = extinguished
EX: when by law, by stipulation or by
the nature of the obligation, the obligor
is liable even for a fortuitous event
GR: generic thing = not extinguished
Obligation to do = obligor shall be
released from the obligation
a. legally/physically impossible w/o the
fault of the obligor
b. so difficult to be manifestly beyond
the contemplation of the parties
Article 1267 – when the service has
become so difficult as to be manifestly
beyond the contemplation of the parties,
the obligor may also be release
therefrom in whole or in parr
Requisites:
1. event or change in circumstances
could not have been foreseen at the
time of the execution of the contract
2. it makes the performance of the
contract extremely difficult but not
impossible
3. must not be due to the act of any
parties
4. contract is for a future prestation
Mere inconvenience, or unexpected
impediments, or increased expenses do
not suffice to relieve the debtor from a
bad bargain
Art 1260 – condonation/remission of the
debt
Essentially gratuitous = requires
acceptance by the debtor
Private document evidencing the debt –
in possession of the debtor =
condonation by the creditor – presumed
to have delivered the private document
Renunciation of principal obligation –
accessory obligation is extinguished
Waiver of the accessory shall leave the
principal obligation in force
Confusion or merger of rights –
obligation is extinguished from the time
the characters of creditor and debtor are
merged in the same person
Compensation
Requisites:
1. 2 parties who, in their own right, are
principal creditors and debtors of each
other
35
Property, Succession,
2. both debts consist in money, or if
consumables, must be of the same kind
and quality
3. both debts are due, demandable and
liquidated
4. no retention or controversy
commenced by 3rd persons over either
of the debts and communicated in due
time to debtor
5. compensation is not prohibited by law
Legal compensation = takes place by
operation of law
Conventional compensation = takes
place by agreement of the parties
Novation
Requisites:
1. previous valid obligation
2. agreement of the parties to the new
obligation
3. extinguishment of the old obligation
4. validity of the new obligation
Delegacion – new debtor proposed by
old debtor
Expromission – new debtor proposed by
creditor/3rd person
*both needs consent of creditor
Novation is not presumed. Parties to a
contract should expressly agree to
abrogate the old contract in favor of a
new one
Contracts – meeting of minds between
two persons whereby one binds himself,
with respect to the other, to give
something or to render some service
(Art 1305)
The contracting parties may establish
such stipulations, clauses, terms and
conditions as they may deem
convenient, provided they are not
contrary to law, morals, good customs,
public order and public policy
Non-involvement clause – not
necessarily void for being restraint of
trade as long as there are reasonable
limitations as to time, trade and place
Mutuality of contracts – contract must
bind both contracting parties; its validity
or compliance cannot be left to the will
of one of them
Sps Cabahug vs NAPOCOR – it is settled
that a contract constitutes the law
between the parties who are bound by
its stipulations which, when couched in
clear and plain language, should be
applied according to their literal tenor
and the courts cannot supply material
stipulations, which contradict the intent
of the parties
Limso vs PNB – there is no mutuality of
contracts when the determination or
imposition of interest rates is at the sole
discretion of a party to the contract
Art 1331 – the heir is not liable beyond
the value of the property he received
from the decedent
GR: contracts take effect only between
the parties, their assigns and heirs
EX: in case where the rights and
obligations arising from the contract are
not transmissible by:
1. their nature
2. stipulation
3. provision of law
The civil principle of relativity of
contracts provides that “contracts can
only bind the parties who entered into
36
Property, Succession,
it, and it cannot favor or prejudice a 3rd
person, even if he is aware of such
contract and has acted with knowledge
thereof
EX to EX:
1. Art 1311 – stipulation pour autri
If a contract should contain some
stipulation in favor of a 3rd person, he
may demand its fulfilment provided he
communicated his acceptance to the
obligor before its revocation
Requisites:
1. stipulation in favor of a 3rd person
should be a part not the whole of the
contract
2. contracting parties must have clearly
and deliberately conferred a favor upon
a 3rd person
3. neither of the contracting parties
bears the legal representation or
authorization of the 3rd party
4. acceptance of the benefit by the 3rd
person is communicated to the obligor
before it could be revoked
2. Art 1312 – in contracts creating real
rights, 3rd persons who come into
possession of the object of the contract
are bound thereby, subject to the
provisions of the Mortgage Law and the
Land Registration Laws
3. Art 1313 – creditors are protected in
cases of contracts intended to defraud
them
4. Art 1314 – tortuous interference
Any third person who induces another to
violate his contract shall be liable for
damages to the other contracting party
Cause of action: quasi-delict
Contract perfected:
a. Art 1315 – mere consent (consensual
contracts)
b. Art 1316 – real contracts = deposit,
pledge and commodatum = perfected
upon delivery of the object of the
obligation
Contract of adhesion – only one party
prepares or drafts the contract
GR: not void
EX: when the weaker party is
completely deprived of the opportunity
to bargain on equal footing
Requisites of a contract: (Art 1318)
1. consent
2. object
3. cause/consideration
Consent – meeting of the offers and the
acceptance upon the thing and the
cause
The law presumes that every person is
fully competent to enter into a contract
until satisfactory proof to the contrary is
presented = clear and convincing
evidence
Option contract
- when the offerer has allowed the
offeree a certain period to accept, the
offer may be withdrawn at anytime
before acceptance by communicating
such withdrawal, except when the
option is founded upon a consideration,
as something paid or promised
- separate and distinct contract from
that which the parties may enter into
upon the consummation of the option
37
Property, Succession,
The following cannot give consent to a
contract
1. unemancipated minors (voidable if
into a contract)
2. insane or demented persons, and
deaf-mutes who do not know how to
write
During a lucid interval = VALID
State of drunkenness or during a
hypnotic spell = VOIDABLE
Consent if given through mistake,
violence, intimidation, undue influence
or fraud = VOIDABLE
Mistake – refer to:
a. substance of the thing which is the
object of the contract
b. those conditions which have
principally moved on or both parties to
enter into the contract; must be
substantial; serious and important
Violence – serious or irresistible force is
employed
Intimidation – reasonable and well-
ground fear of an imminent and grave
evil upon the person and property of
one of the contracting parties, his
spouse, descendants or ascendants
Undue influence – when a person takes
improper advantage of his power over
the will of another, depriving the latter
of a reasonable freedom of choice
Factors to consider:
- confidential, family, spiritual and other
relation between the parties
- mental weakness
- ignorance
- financial distress of the one alleged to
be influenced
Fraud: Requisites:
1. insidious words or machinations must
be employed by one of the contracting
parties
2. must be serious
3. must induce the other party to enter
into the contract
4. must not have been employed by
both contracting parties or by a 3rd
person
Art 1345 – simulation of a contract
1. absolute – parties do not intend to be
bound at all = VOID
2. relative – when the parties conceal
their true agreement – does not
prejudice a 3rd person and is not
intended for any purpose contrary to
law, morals, good customs, public order
or policy = VALID
Object
1. within the commerce of men –
susceptible of appropriation and
transmissible form the one person to
another
2. real or possible – should exist at the
moment of the celebration of the
contract or can exist subsequently or in
the future
3. licit – not contrary to law, morals,
good customs, public order or public
policy
4. determinate – or atleast possible of
determination, as to its kind
Cause of contracts
1. onerous – each contracting party,
prestation or promise of a thing or
service by the other
38
Property, Succession,
2. remuneratory – service or benefit
which is remunerated
3. pure beneficence – mere liberality of
the benefactor
GR: form of the contract = obligatory, in
whatever form, provided all the
essential requisites for their validity are
present
EX: when the law requires that a
contract be in some form in order to be
valid or enforceable, that requirement is
absolute and indispensable
Formalities required for validity of
contracts:
a. in writing
1. donation of personal property - >5k
2. sale of real property by an agent
3. antichresis – the amount of interest
and principal must be in writing to be
considered valid
4. interest of loan of money
Reformation of instrument
Requisites:
1. there must have been a meeting of
the minds upon the contract
2. instrument evidencing the contract
does not express the true agreement
between the parties
3. failure of the instrument to express
the agreement must be due to mistake,
fraud, inequitable conduct or accident
Interpretation of contracts
a. terms of a contract are clear and
leave no doubt upon the intention =
literal meaning
b. word appear to be contrary to the
evident intention = latter shall prevail
over the former
c. interpretation of obscure words or
stipulations in a contract = not favor the
party who caused the obscurity
Valid contracts:
1. strictly comply with all legal
requirements as to COC (Art 1318)
2. entered into during a lucid interval
(Art 1328)
3. relatively simulated contracts which
do not prejudice a 3rd person and not
intended for a purpose contrary to law,
moral, good customs, public order or
public policy (Art 1346)
4. in divisible contracts, legal terms may
be enforced if same can be separated
from illegal provisions (Art 1420)
Rescissible contracts
1. valid until rescinded (Art 1380)
2. economic/financial injury or damage
to contracting party or 3rd person (Art
1381)
3. not susceptible of ratification
4. may be assailed not only by a
contracting party but also by a 3rd
person injured (Art 1383)
5. mutual restitution of object and cause
a. not applicable if object is legally
in the hands of a 3rd person who
acted in GF (Art 1385)
b. indemnity for damages against
person who caused the loss
6. period to file action for recission – 4
years from:
a. termination of guardianship
b. time domicile of absentee is
known
Voidable contracts
1. valid until annulled:
a. one party incapable of giving consent
to a contract
39
Property, Succession,
b. consent vitiated by mistake, violence,
intimidation, undue influence or fraud
c. state of drunkenness or during a
hypnotic spell
2. susceptible of ratification
a. cleanses contract from all defects
b. retroacts to constitution of contract
c. effected expressly or tacitly
d. effected by a guardian
e. extinguishes action to annul contract
f. needs no conformity of the other
party who has no right to bring the
action for annulment
3. may be assailed only by a contracting
party (obliged principally or subsidiarily)
EX:
a. capacitated party as to the incapacity
of other party
b. those who exerted intimidation
violence or undue influence or employed
fraud (Art 1397)
4. mutual restoration of object and
cause
a. incapacitated person not compelled to
restitute except insofar as he has been
benefited by the thing or price he
received (Art 1399)
b. loss of the thing thru fault of the
person obliged to return the fruits
received and value of the thing at the
time of loss (Art 1400)
c. action for annulment is extinguished
upon loss of object through fraud or
fault of person who has a right to
institute annulment (Art 1401)
5. period to file annulment – 4 years
from:
a. time defect of consent ceases
b. time of discovery of mistake or fraud
c. time guardianship ceases (Art 1391)
Unenforceable contracts
1. cannot be enforced by court action,
unless ratified
a. entered into without authority or
without legal representation or beyond
authority granted
b. did not comply with Statute of Frauds
- agreement not to be performed w/n a
year
- special promise to answer for the debt,
default or miscarriage of another
- agreement made in consideration of
marriage, other than mutual promise to
marry
- agreement for the sale of goods not
less than P500
- lease for more than 1 year or sale of
real property
- representation as to the credit of a 3rd
person
c. both contracting parties incapable of
giving consent to a contract
2. susceptible of ratification (Art 1405)
a. failure to object to presentation of
oral evidence
b. acceptance of benefits
3. may be assailed only by a contracting
party (Art 1408)
Void contracts
1. do not produce any effect
2. one or some of the essential
requisites of a valid contract are lacking
in fact or in law
- cause, object or purpose is contrary to
law, public morals, public policy, good
customs, public order
- absolutely simulated/fictitious contract
- cause or object inexistent at the time
of the transaction
- object is outside commerce of man
40
Property, Succession,
- contemplate impossible service 4. vender has 4. title remains in
- intention of the parties as to principal lost and cannot the vendor if the
object cannot be ascertained recover the vendee does not
- expressly declared by law as void ownership of the comply with the
thing sold until & condition
3. - not susceptible of ratification unless the precedent of
- right of action or defense cannot be contract of sale making payment
waived/does not prescribe (Art 1410) itself is resolved at the time
and set aside specified in the
4. may be assailed not only by a contract
contracting party but even by a 3rd
person whose interest is directly Contract of Sale Contract of
affected (Art 1421) Ageny to Sell
(Art 1466)
SALES 1. buyer receives 1. agent receives
- one of the contracting parties obligates the goods as the goods as
himself to transfer the ownership of and owner goods of the
to deliver a determinate thing, and the principal
other to pay therefor a price certain in 2. buyer has to
money or its equivalent pay the price 2. agent simply
has to account
Contract of Sale Contract to Sell 3. buyer, as a for the proceeds
(exclusive right & GR, cannot of sale to
privilege to return the object principal
purchase an sold
object) 3. agent, if
1. title passes to 1. ownership is 4. seller warrants unable to sell,
the buyer upon reserved to the the thing sold can return the
delivery of the seller & is not to goods
thing sold pass until full 5. buyer can deal
payment of the with the thing as 4. agent does
2. in case of non- price he pleases being not make
performance = the owner warrant for
action for specific 2. in case of non- which he
performance / payment = no assumes
recission by the action for specific personal liability,
injured party performance but for as long as he
only for damages acts within his
3. non-payment authority and in
of the price = 3. full payment = the name of
negative positive seller
resolutory suspensive
condition condition 5. agent, in
dealing with the
41
Property, Succession,
thing received, 2. in case of
must act & 2. buyer can eviction by an
bound according enforce vendor’s innocent 3rd
to the liability in case of person, injured
instructions of eviction party can sue for
the principal damages only

To determine whether sale or barter:

Contract of Sale Contract for a 1st – intent of the parties
Piece of Work 2nd – intent is not clear:
1. thing subject 1. thing a. thing more valuable = barter
of the contract transferred is not b. 50-50 in value = sale
would have one in existence & c. thing less valuable = sale
existed and been which would
the subject of never have Sale Dacion en pago
sale to some existed but for the 1. no pre- 1. there is pre-
other person order of the existing credit existing credit
even if the order person desiring it;
had not been manufactures 2. obligations 2. obligations
given; available especially between parties between parties
to all in the according to the are created are extinguished
general course of order of a specific
business person/entity 3. more freedom 3. less freedom
2. risk of loss in fixing the price in fixing the price
2. risk of loss before delivery is
before delivery is borne by the Concept/principles related to sales:
borne by buyer worker/contractor, 1. policitation – unaccepted unilateral
not by the one promise to buy or sell
3. primary object who ordered 2. option contract (Art 1479)
of a contract is a 3. earnest money (Art 1482) – partial
sale of 3. services payment of the purchase price and is
manufactured dominate the considered as proof of the perfection of
item already contract even the contract sale
existing, even though there is a
though the item sale of goods Earnest money Option money
is installed by involved 1. part of the 1. money given
labor furnished purchase price as distinct
by seller consideration for
2. given only an option
when there is a contract
Contract of Sale Barter (Art 1467) perfected sale
1. consideration 1. consideration 2. sale not yet
is price certain or is another thing 3. buyer is bound perfected
equivalent to pay the
42
Property, Succession,
balance of the 3. optionee is not
price required to buy
4. right of first refusal – innovative
juridical relation
If such right is incorporated in a
contract, it is enforceable by specific
performance. Otherwise, the injured
party can only sue for damages
Option contract – preparatory contract
in which one party grants to another, for
a fixed period and at a determined
price, the privilege to buy or sell, or to
decide whether or not to enter into a
principal contract
5. sale by description – seller sells things
as being of a certain kind, buyer merely
relying on the seller’s representation or
descriptions without seeing the thing
6. sale by sample – seller warrants that
the bulk of the goods shall correspond
with the sample in kind, quality and
character
7. sale by sample & description – must
satisfy both requirements
Contract of Sale – perfected at the
moment there is a meeting of minds
upon the thing which is the object of the
contract and upon the price
Transfer of ownership: upon the
actual/constructive delivery thereof
Kinds of delivery:
1. actual/real delivery – placed in the
control and possession of the vendee
2. constructive or legal delivery – held
by construction of law equivalent to
actual delivery
a. execution of a public
instrument
b. tradition symbolica – use a
token symbol to represent the
thing delivered
c. tradition longa manu – mere
consent of the parties if the thing
sold cannot be transferred to the
possession of the vendee at the
time of the sale
d. tradition brevi manu – vendee
has already the possession of the
thing sold by virtue of another
title
e. tradition constitutum
possesorum – vendor continues
in possession of the thing sold
not as owner but in some other
capacity
f. quasi-traditio – in case of
incorporeal rights, the vendee to
use his rights as new owner with
the consent of the vendor
Loss/Deterioration of the object (Art
1480)
Principle of res perit domino – owner
bears the risk of loss
Object is lost
1. before perfection = seller
2. at the time of perfection, contract is
void or inexistent = seller
3. after perfection but before delivery =
buyer (as exception to the rule of “res
perit domino”)
4. lost after delivery = buyer
Unpaid seller (Art 1525)
1. has not been paid or tendered the
whole price
43
Property, Succession,
2. received a bill of exchange or other
negotiable instrument as conditional
payment and the condition on which it
was received has been broken by reason
of the dishonor of the instrument
Remedies:
In general: specific performance or
action for recission with damages in
either case
Special remedies:
1. sale of personal property in
installment (Recto Law – Art 1484)
a. exact fulfillment of the obligation
should the vendee fail to pay
b. cancel the sale, should the vendee’s
failure to pay cover two (2) or more
installments
c. foreclose the chattel mortgage on the
thing sold, if one has been constituted,
should the vendee’s failure to pay cover
2 or more installments’
Recto Law is only available if there is a
seller-buyer relationship and the object
of the sale is a personal property;
alternative
2. sale of real estate in installments RA
6552 or the realty installment buyer
protection act (MACEDA Law) -
cumulative
Applicable only to:
1. transactions or contracts of sale or
financing of real estate on installment
payments, including sale of residential
and condominium units
2. buyer has paid at least 2 years of
installments
a. right of specific performance – seller
must observe the grace period granted
to the buyer to pay, without additional
interest, the unpaid installments
- grace period = one month per year of
installments paid
- in case of installment payments less
than 2 years, period shall not be less
than 60 days from the date the
installment became due
- failure of buyer to pay within the grace
period allows the seller to proceed to B
b. right of recission – after 30 days from
receipt of the notice of cancellation or
demand for rescission by a notarial act
plus full payment of cash surrender
value to the buyer
- seller shall refund to buyer cash
surrender value of payments equal to
50% of the total payments made and
after 5 years of installments, an
additional 5% every year but not to
exceed 90% of the total payments made
c. right to retain installments – seller
can retain not more than 50% of the
installments paid. But if installments
paid were less than 2 years, seller can
have absolute forfeiture over the
installments paid
GR: husband and wife cannot sell
property to each other (Art 1490)
EX:
1. when a separation of property was
agreed upon in the marriage
settlements
2. there has been a judicial separation
of property under Article 191 Family
Code
Cannot acquire (Art 1491)
1. guardian – property of the person/s
who may be under his guardianship
44
Property, Succession,
2. agents – property whose 2. no agreement as to place of delivery
administration or sale may have been – usage of trade
entrusted to them, unless the consent of 3. no agreement, no prevalent usage –
the principal have been given seller’s place of business
3. executors and administrators – 4. in any other case – seller’s residence
property of the estate under 5. in case of specific goods, which to the
administration knowledge of the parties at the time of
4. public officers and employees – the contract where in some other place
property of the state or of any
subdivision thereof Time of delivery of goods sold
5. justices, judges, prosecuting 1. agreement of the parties
attorneys, clerks of superior and inferior 2. no agreement – usage of trade
courts, and other officers and
employees connected with the If not time is fixed – reasonable time
administration of justice – property and dependent upon the circumstances
rights in litigation or levied upon an attending the particular transaction
execution before the court within whose
jurisdiction or territory they exercise Payment of the price
their respective functions GR: delivery simultaneous with payment
6. any others specially disqualified by of the price
law EX: even without payment, delivery
must be made if a period for payment
Obligations of the contracting parties: has been fixed by the parties
A. vendor
(Art 1495) Art 1502
1. transfer ownership of the thing sold Goods delivered Goods delivered
2. deliver the thing including accessions to buyer “on sale to buyer “on
and accessories or return” trial/on approval/
3. warrant against eviction and defects on satisfaction”
4. take care of the thing pending 1. ownership 1. ownership
delivery passes to buyer remains with the
(Art 1487) on delivery but seller until buyer
5. pay for the expenses of the deed of subsequent signifies his
sale, unless otherwise stipulated return of goods approval or
to seller revests satisfaction
B. vendee ownership in the
(Art 1582) seller 2. sale is subject
1. accept delivery to a suspensive
2. pay price 2. sale is subject condition
to a resolutory
Place of delivery of goods sold condition 3. depends on
1. as per agreement, whether express the character
or implied 3. depends and quality of
entirely on the the goods
45
Property, Succession,
will of the buyer delivered
without
reference to the 4. risk of loss or
quality of goods injury remains
with the seller
4. risk of loss or
injury rests upon
the buyer
Rules in case of double sale (Art 1544)
1. personal property – first possessor in
GF
2. real property
a. to the first registrant in the Registry
of Property, in GF
b. if no inscription, to the first
possessor, in GF
c. if none of the above, to the person
with the oldest title, in GF
Mirror Doctrine – one cannot close his
eyes to facts which should put a
reasonable and prudent man upon his
guard, and then claim that he acted in
good faith under the belief that there
was no defect in the title of the vendor
Roque vs Aguado – requisites for double
sale:
1. 2 or more sales transactions in issue
must pertain to exactly the same subject
matter and must be valid sales
transaction
2. 2 or more buyers at odds over the
rightful ownership of the subject matter
must each represent conflicting interests
3. 2 or more buyers at odds over the
rightful ownership of the subject matter
must each have bought from the same
seller
Warranty – statement or representation
made by the seller of goods,
contemporaneously as a part of the
contract, having reference to the
character, quality or kind of the thing
sold
Kinds:
1. express warrant (Art 1546) – any
affirmation of fact or any promise by the
seller relating to the thing, the natural
tendency of which is to induce the buyer
to purchase the thing, and if the buyer
purchases the thing relying thereon
Art 1341 – mere opinion of a seller does
NOT import a warranty unless:
a. the seller is an expert
b. it was relied upon by the buyer
2. implied warranty – which the law
derives by implication or inference from
the nature of the transaction or the
relative situation or circumstances of the
parties, irrespective of any intention of
the seller to create it
*no implied warranty in auction sales,
“as is where is” sales and sale of 2nd
articles/items
Warranty against hidden defects
Elements:
1. defect must be serious or important
2. it must be hidden
3. it must exist at the time of the sale
4. vendee must give notice of the defect
to the vendor within a reasonable time
Remedies of the Vendee (Art 1567)
a. accion redhibitoria (rescission)
b. accion quanti minores (reduction of
the price)
c. damages, in either case
Equitable mortgage – lacks the
formalities, words or other requisites
46
Property, Succession,
prescribed by law for a mortgage, but
shows the intention of the parties to
make the property as security for a debt
Conventional redemption = equitable
mortgage if … (Art 1602)
1. price of the sale is unusually
inadequate
2. vendor remains in possession as
lessee or otherwise
3. period of redemption is extended
after expiration
4. purchaser retains part of purchase
price
5. vendor binds himself to pay the taxes
of the thing sold
6. any other case where the parties
really intended that the transaction shall
secure the payment of a debt or the
performance of an obligation
In case of doubt, a contract purporting
to be a sale with a right of repurchase,
or an absolute sale = equitable
mortgage
The apparent vendor may ask for the
reformation of the instrument
Pactum commissorium – automatic
appropriation by the creditor of the
thing pledged or mortgaged upon the
failure of the debtor to pay the principal
obligation = prohibited
Lease – contract by virtue of which 1
person binds himself to grant
temporarily the use of a thing or to
render some service to another who
undertakes to pay some rent,
compensation or price
Assignment of lease = consent of lessor
(need) unless there is a stipulation
allowing it
Mortgage of lease right = no consent
needed from lessor
To bind 3rd persons – lease of real estate
must be recorded in the Registry of
Property (Art 1648)
GR: sublease is allowed
EX: expressly prohibited in the contract
of lease of things (Art 1650)
Sublessee is subsidiarily liable to the
lessor for:
1. all acts which refer to the use and
preservation of the thing leased in the
manner stipulated between the lessor
and the lessee (Art 1651)
2. any rent due from the lessee but the
sublessee shall not be responsible
beyond the amount of rent due from
him in accordance with the terms of the
sublease, at the time of the extra-
judicial demand by the lessor (Art 1652)
Obligations of Lessor:
1. deliver the object of the lease fit for
the use intended
2. make necessary repairs to keep it
suitable for the use intended, unless
there is a stipulation to the contrary
3. maintain peaceful and adequate
enjoyment of the lessee for the entire
duration of the contract = legal
disturbance only
Obligations of Lessee:
1. Pay the rent
2. use the thing leased as DFOAF,
devoting it to the use stipulated;
absence of stipulation = that which may
47
Property, Succession,
be inferred from the nature of the thing
leased, according to the custom of the
place
3. pay expenses for the Deed of Lease
4. notify lessor, within the shortest
possible time, of any usurpation or
untoward act of any 3rd person upon the
thing leased (Art 1663)
5. notify lessor with the same urgency
(as #4) of the need of necessary repairs
6. return the thing leased as the
termination of the contract just as he
received it, save what has been lost or
impaired by the lapse of time or by
ordinary wear and tear, or from an
inevitable cause
Art 1666 – the law presumes lessee
received the thing in good condition
unless there is proof to the contrary
Lessee is responsible for the
deterioration/loss of the thing leased,
unless he proves he is not at fault
*burden of proof does not apply when
the destruction is due to a natural
calamity
Termination of the Lease
1. expiration of the lease contract
2. total destruction of the thing leased
by a fortuitous event
If lease was made for a determinate
time, it ceases upon the day fixed,
without need of a demand
Tacita reconduccion – implied new lease
Requisites:
1. original lease contract has expired
2. lessee continues possession of the
thing for 15 days
3. possession of lessee was with the
acquiescence of lessor
4. no notice to the contrary has
previously been given by either party
Characteristic of the new lease = period
of the new lease is the time established
in Art 1682 & 1687 NCC, and not for the
period of the original contract
Causes for judicial ejectment (Art 1673)
1. expiration of the period
2. non-payment of rent stipulated
3. violation of any of the conditions
agreed upon in the contract
4. devoting the thing to any use or
service not stipulated which causes the
deterioration thereof
Sale of thing leased:
1. if lease is not recorded in the Registry
of Property, buyer may terminate the
lease except if:
a. there is a stipulation to the contrary
in the Contract of Sale
b. buyer knows the existence of the
lease
If the sale is fictitious (just for the
purpose of extinguishing the lease), the
supposed vendee cannot terminate the
contract of lease
Presumed fictitious if at the time the
supposed vendee demands the
termination of the lease the sale is not
recorded in the registry of property
2. if sale is with a right of repurchase,
buyer cannot eject the lessee until the
end of the period for redemption
Art 1678 – if lessee makes in GF useful
improvements, w/o altering the form or
48
Property, Succession,
substance of the property leased, upon
the termination of the lease, the lessor 1. voluntary – made by the will of the
shall: depositor; made by 2 or more persons
1. pay the lessee ½ of the value of the each of whom believes himself entitled
improvements at that time to the thing deposited w/ a 3rd person,
2. allow the lessee to remove the who shall deliver it in a proper case to
improvements even though the principal the one to whom it belongs (Art1968)
thing may suffer damage thereby 2. necessary – made:
a. in compliance with a legal obligation
In ornamental expenses, the lessee: b. on the occasion of any calamity
1. shall not be entitled to any c. travellers in hotels or inns (Art 1998)
reimbursement, BUT d. travellers w/ common carriers (Art
2. may remove the ornamental objects, 1736)
provided no damage is caused to the
principal thing and the lessor does not Deposit Commodatum
choose to retain them by paying their For safekeeping Use of the thing
value at the time the lease is Nature or class Non-consumable
extinguished of the object is thing
immaterial
AGENCY May or may not Always
be gratuitous gratuitous
DEPOSIT May be Constituted
Art 1962 – constituted from the moment constituted extra-judicially
a person receives a thing belonging to judicially or only
another w/ the obligations of safely extra-judicially
keeping it and returning the same
Extra-judicial Judicial deposit
Perfected? Upon delivery of the thing deposit
Constituted by Constituted by
Object = only movable things the will of the court order (Art
Gratuitous contract, except if (Art contracting 2005)
1965): parties
1. there is agreement to the contrary Must be movable May be movable
2. depositary is engaged in the business property only or immovable
of storing goods property (Art
2006)
How? Orally or in writing For safekeeping Protection of
owner’s right
Judicial (sequestration) – attachment or As a general Always onerous
seizure of property in litigations is rule: gratuitous
ordered by the court (Art 2005) Depositary Delivered to
obliged to return depositor only
Extra-judicial – made by agreement of the thing upon upon order of
the parties. demand by the court
49
Property, Succession,
depositor
Obligations of the depositary:
1. keep the thing safely
2. not to use it except when
preservation of the thing requires its use
3. keep the secret of the deposit
4. return the thing with all its products,
accessories and accessions upon
depositor’s demand
Obligations of the depositor:
1. gratuitous – reimburse the depositary
for necessary expenses for preservation
(Art 1992)
2. onerous – pay the price agreed upon
3. reimburse depositary for loss arising
from the character of the thing
deposited
Exception: if at the time of the deposit,
he was not aware of or was not
expected to know the dangerous
character of the thing deposited or
unless he notified the depositary of the
same or the latter was aware of it w/o
advice from the depositor (Art 1993)
Art 1973
GR: depositary cannot deposit the thing
with a 3rd person
EX: stipulation allowing deposit with a
3rd person
Effects:
1. depositary is liable for the loss if he
deposited the thing with a person who is
a. manifestly careless
b. unfit
2. depositary is responsible for the
negligence of his employees
Art 1979 – depository is liable for the
loss of the thing deposited through a
fortuitous event if:
1. it is so stipulated
2. he uses the thing without depositor’s
permission
3. he delays its return
4. he allows others to use it even
though he himself may have been
authorized to use the same
Art 1984 – depository cannot demand
that depositor prove his ownership of
the thing deposited
Art 1988 – thing deposited must be
returned to the depositor upon demand,
even if a specified period for such return
has been fixed
EX:
1. thing is judicially attached while in
the possession of the depositary
2. depositary is notified of the
opposition of a 3rd person to the
return/removal of the thing deposited
Responsibility of innkeepers:
1. liable as depositaries for effects
brought by guests, provided:
a. notice was given to them/their
employees
b. the guests/travellers took the
precautions they were advised to take
as to the care and vigilance of their
effects
2. liable for the vehicles, animals and
articles placed in annexes of the hotel
3. liability for loss/injury to personal
property of guests applies whether
caused by:
a. servants or employees of the hotel
b. strangers
50
Property, Succession,
exception: force majeure (Art 2001)
a. use of arms
b. through an irresistible force
Depositary may retain the thing in
pledge until the full payment of what
may be due hum by reason of the
deposit (Art 1994)
Deposit is extinguished (Art 1995)
1. loss/destruction of the thing
deposited
2. in case of a gratuitous deposit, upon
the death of either the depositor or the
depositary
Art 2002 – hotel keeper is not liable for
compensation if the loss is due to:
1. acts of the guests, his family,
servants or visitors
2. character of the things brought into
the hotel
Hotel-keeper cannot free himself from
responsibility by posting notices to the
effect that he is not liable for the articles
brought by the guests (Art 2003)
Stipulation between hotel-keeper and
guest = VOID
NATURAL OBLIGATIONS/
ESTOPPEL/TRUSTS
Natural obligations – those based on
equity and natural law, which are not
enforceable by means of a court action,
but after voluntary fulfillment by the
obligor, authorizes the retention by the
oblige of what has been delivered or
rendered by reason thereof
Solution indebiti – there is a mistake
Natural obligations – there is no mistake
Estoppel
- condition or state by virtue of which an
admission or representation is rendered
conclusive upon the person making it,
and cannot be denied or disproved as
against the person relying thereon
- precludes a person from asserting
something contrary to what is implied by
a previous action/statement if that
person
Kinds of estoppel:
1. estoppel in pais – arises when one by
his acts, representations or admissions,
or by his silence when he ought to
speak out, intentionally or through
culpable negligence, induces another to
believe certain facts to exist and such
other rightfully relies and acts on such
belief, as a consequence of which he
would be prejudiced if the former is
permitted to deny the existence of such
facts
2. estoppel by deed – technical estoppel
by virtue of which a party to a deed and
his privies are precluded from asserting
as against the other and his privies any
right or title in derogation of the deed,
or from denying any material fact
asserting therein
Trusts – legal relationship between one
person having equitable ownership over
a certain property and another having
legal title thereto
Kinds:
1. express – created by the intention of
the trustor and the trustee
2. implied – created by operation of law
a. resulting trust – intent to create a
trust but it is not effective as an express
trust (Art 1448 to 1455)
51
Property, Succession,
therein may be circumstances or
implied resulting trust – property is sold proved by parol other matters
and the legal estate is granted to one evidence indicative of such
party but the price is paid by another for 5. laches & intent
the purpose of having the beneficial prescription not a 4. may be
interest of the property bar to enforce proved by parol
trust evidence
elements of purchase money resulting 5. laches &
trust (implied resulting trust) prescription may
a. actual payment of money, property or bar enforcement
services or an equivalent, constituting
valuable consideration Trust pursuit rule – equity will pursue
b. such consideration must be furnished property that is wrongfully converted by
by the alleged beneficiary of a resulting the fiduciary or otherwise compel
trust restitution to the beneficiary

b. constructive trust A trust will follow the property through

- created by law to prevent unjust
enrichment or oppressions
- expressly or impliedly evidencing a
direct intention to create a trust but by
construction of equity in order to satisfy
the demands of justice
Policarpio vs CA – constructive trust is
substantially an appropriate remedy
against unjust enrichment
all changes in its state and form,
provided its product or proceeds are
capable of identification
QUASI-CONTRACTS
NEGOTIORUM GESTIO/SOLUTIO
INDEBITI
Quasi contracts because it is voluntary,
unilateral and there should be no unjust
enrichment

Express trust Implied trust Negotiorum gestio – voluntarily takes

1. created by 1. created by charge of the agency or mgt of the
intention of operation of law business or prop of another, w/o any
trustor or of the 2. deducible from power from the latter, is obliged to
parties the nature of continue the same until the termination
2. created by transaction by of the affair and its incidents, or to
direct and operation of law require the person concerned to
positive acts of as matters of substitute him, if the owner is in a
parties equity, position to do so (Art 2144)
3. intent to independent of
establish the intention of the This juridical relation does not arise
trust is clear parties when:
4. no trust 3. intent to 1. property or business is not neglected
concerning an establish the or abandoned = unauthorized contract
immovable or trust is taken 2. manager has been tacitly authorized
any interest from by the owner = agency
52
Property, Succession,
3. ratification of the mgt by the owner
of the business = express agency, even
if business may not have been
successful (Art 2149)
Officious manager is liable for fortuitous
event if he: (Art 2147)
a. undertakes risky operations w/c the
owner was not accustomed to embark
upon
b. preferred his interest to that of the
owner
c. fails to return the property or
business after demand by the owner
d. assumed the management in BF
Extinguishment of management (Art
2153)
1. owner repudiates it or puts an end
thereto
2. officious manager withdraws from the
management
3. death, civil interdiction, insanity or
insolvency of owner or officious
manager
Solution indebiti (Art 2154)
- if something is received when there is
no right to demand it, and it was unduly
delivered thru mistake, the obligation to
return it arises
- payment by reason of a mistake in the
construction or application of a doubtful
or difficult question of law
- payer was in doubt whether debt was
due, he may recover if he proves that it
was not due
Finder of lost personal property (Art
719-720)
Finder of movable = return to previous
possessor
if unknown – deposit w/ mayor –
publication for 2 consecutive weeks
a. perishable – sale at public auction 8
days after publication
b. not perishable – 6 months from
publication:
1. owner did not appear – thing/value
awarded to finder
2. owner appeared – 1/10 of the price
of thing to finder
3. finder/owner – obliged to reimburse
the expenses
TORTS AND DAMAGES
Quasi-delict
- whoever by act or omission causes
damage to another, there being fault or
negligence, is obliged to pay for the
damage done
- there is no pre-existing contractual
relation between the parties
Elements:
1. act or omission
2. damage to another
3. existence of fault or negligence
4. no pre-existing contractual relation
between the parties
Negligence
- omission to do something w/c a
reasonable man, guided by those
considerations w/c ordinarily regulates
the conduct of human affairs, would do
- doing something w/c a prudent and
reasonable man would not do
Proximate cause
- cause which, in the natural and
continuous sequence, unbroken by any
efficient and intervening cause,
produces the injury and without which
the result would not have occurred
53
Property, Succession,
Last clear chance – where both parties
are negligent but the negligent act of
one is appreciably later than that of the
other, the one who has the last
reasonable opportunity to avoid the
impending harm and fails to do so, is
chargeable with the consequences of
the loss without reference to the prior
negligence of the other party
Art 2184 – motor vehicle mishap =
owner is solidarily liable with his driver if
the former
1. was in the vehicle
2. could have, by use of due diligence,
prevented the misfortune
Driver disputably presumed negligent –
if found guilty of reckless driving or
violating traffic regulations at least twice
within the next preceding 2 months
Art 2185 – driver of motor vehicle
presumed negligent = if at the time of
mishap, he was violating any traffic
regulation
Prima facie presumption of negligence
of defendant if death or injury results
from:
a. his possession of dangerous weapons
b. possession of dangerous substance
except: when the possession or use
thereof is indispensable in his
occupation or business
res ipsa loquitur – the thing or
transaction speaks for itself
defendant is presumed negligent when:
1. accident was of a kind w/c does not
ordinarily occur unless someone is
negligent
2. instrumentality or agency w/c caused
the injury was under exclusive control of
the person charged w/ negligence
3. injury suffered not due to any
voluntary action on the part of the
person injured
4. absence of explanation by the
defendant
Contributory negligence (Art 2179)
GR: when plaintiff’s own negligence was
the immediate & proximate cause of his
injury, he cannot recover damages
Art 2180 – vicarious liability (imputed
negligence) – liability for acts or
omission of persons for whom one is
responsible
1. father, in case of death or incapacity,
the mother
- damage cause by minor children
- living in their company
2. guardian
- for minors or incapacitated persons
- under their authority
- living in their company
3. owner & manager of establishments
- for employees
- in the service of their branches
- on the occasion of their functions
4. employers
- employees and household helpers
- acting w/in the scope of their assigned
tasks
- even if employers are not engaged in
any business or industry
5. state
- acts of special agents only
6. teachers or heads of establishments
of Arts and Trades = attaches to
teacher-in-charge
- for pupils, students or apprentices
54
Property, Succession,
- while in their custody
- applies to academic institutions also
Defense: observance of all the
DOAGFOAF to prevent the damage
Art 2190 – proprietor of a building or
structure – liable for damages resulting
from its total or partial collapse due to
lack of necessary repairs
Damages – sum of money which the law
awards or imposes as pecuniary
compensation, recompense or
satisfaction for an injury done or a
wrong sustained as a consequence
either of a breach of a contractual
obligation or a tortious act
Damage – loss, injury or deterioration
caused by negligence, design or
accident of one person to another in
respect of another’s property
Damages:
1. actual/compensatory
2. moral
3. nominal
4. temperate/moderate
5. liquidated
6. exemplary/corrective
actual/compensatory – adequate
compensation for such pecuniary loss
suffered by a person as he has duly
proved
Damages may be recovered: (Art 2205)
1. for loss or impairment of earning
capacity in cases of temporary or
permanent personal injury
2. for injury to plaintiff’s business
standing or commercial credit
Damages for death:
1. death indemnity
2. loss of earning capacity
3. support, for a period not exceeding 5
years, the exact duration to be fixed by
the court
moral – include physical suffering,
mental anguish, fright, serious anxiety,
besmirched reputation, wounded
feelings, moral shock, social humiliation
and similar injury (Art 2217)
nominal – adjudicated in order that a
right of the plaintiff, w/c has been
violated or invaded by the defendant,
may be vindicated or recognized and not
for the purpose of indemnifying the
plaintiff for any loss suffered by him (Art
2221)
temperate/moderate – more than
nominal but less than compensatory
damages; may be recovered when the
court finds that some pecuniary loss has
been suffered but its amount cannot,
from the nature of the case, be proved
with certainty (Art 2224)
liquidated – those agreed upon by the
parties to a contract to be paid in case
of breach thereof (Art 2226)
exemplary/corrective – imposed by way
of example or correction for the public
good in addition to moral, temperate,
liquidated or compensatory damages
In criminal cases – exemplary or
corrective damages is awarded when
crime was committed with 1 or more
aggravating circumstance (Art 2230)
In contracts & quasi-contracts –
exemplary or corrective damages is
55
Property, Succession,
awarded when defendant acted in a
wanton, fraudulent, reckless, oppressive
or malevolent manner (Art 2232)

Exemplary damages cannot be

recovered as a matter of right but
discretionary on the court

Stipulation renouncing exemplary

damages in advance = null and void

Hospitals may be held liable for the

negligence of physicians-consultants
allowed to practice in its premises if
they failed to take active steps in fixing
any form of negligence committed
within its premises

Captain of the ship rule – operating

surgeon is the person in complete
charge of the surgery room and all
persons connected w/ the operation