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C. The Law Pertaining to Private Personal and Commercial Relations - 18 Questions

I. Civil Law - 12 Questions

A. Legal Personality, Capacity to act (Art 37, NCC)
LEGAL PERSONALITY
- Juridical capacity is the fitness to be the subject of legal relations
- It is inherent in every natural person and is lost only through death.

CAPACITY TO ACT
- The power to do acts with legal effect
- May be acquired and lost
- Restrictions on the capacity to act. The ff do not exempt the incapacitated person from certain obligations, as
when the latter arise from his acts or from property relations, such as easements.
- Minority, insanity, or imbecility, the state of being deaf-mute, prodigality and civil interdiction
- Circumstances that MODIFY or LIMIT the capacity to act. The consequences of these circumstances are gov-
erned in this Code, other codes, the Rules of Court, and in special laws
- Age, insanity, imbecility, the state of being deaf-mute, penalty, prodigality, family relations, alienage, ab-
sence, insolvency and trusteeship.
- Capacity to act is not limited on account of religious belief or political opinion
- A married woman, 21 YOA or over, is qualified for all acts of civil life, except in cases specified by law
(sexist)

Legal Personality Capacity to Act

- Inherent in every natural person - Not inherent in every natural person

- May be lost through death - May be lost through other means
- Cannot be limited or restricted - The latter can be limited or restricted

B. Marital relationships (Family Code and Rabuya)

1. Concept of Marriage - Special contract of permanent union between a man and a woman entered into in accor-
dance with law for the establishment of conjugal and family life.
2. Presumption in favor of marriage - If a man and a woman deport themselves as husband and wife, they are pre-
sumed, in the absence of counter-presumption or evidence special to the case, to be in fact married. The law
favors the validity of marriage and the burden of proof to show the nullity of the marriage rests upon the party
seeking its nullity.
3. Requisites of a valid marriage
a. Essential
i. Legal Capacity
1. Filipinos: male and female, at least 18, must not be suffering from any legal impediment
mentioned in Art 37 and 38 of the FC
2. Foreigner: Governed by their national law. Must submit a certificate of legal capacity to
contract marriage.
3. Absence of either legal capacity, authority of the solemnizing officer, or valid marriage
license, -> VOID
a. EXCEPTION: in case of absence of the authority of the solemnizing officer, the
marriage is valid when either or both parties believed in GOOD FAITH that the
solemnizing officer had the authority to do so. (mistake of fact)
ii. Consent
1. No consent -> no marriage, because marriage is a contract.
2. Defect of consent -> marriage is voidable
b. Formal

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i. Authority of the solemnizing officer

1. Absence -> Void
2. BUT, if either or both the contracting parties believed in good faith that the solemnizing
officer had the legal authority to do so the marriage is valid.
3. Persons authorized to solemnize: Incumbent members of the Judiciary, Religious solem-
nizing officers, Ship captain or airplane chief pilot, Military commanders of a unit, Consul
general, consul, vice-consul, Mayors
ii. Valid marriage license
1. No license or Fake license -> void. Absence of license must be apparent on the mar-
riage contract, or supported by a certification from the local civil registrar that no such
marriage license was issued to the parties.
2. Marriages exempt from requirement of marriage license
a. Articulo mortis marriages - the marriage remains valid even if the ailing party
subsequently survives
b. Marriages among Muslims or members of ethnic cultural communities, provided
that the same are solemnized in accordance with their customs, rites or prac-
tices.
c. Marriages where the residence of either party is so located that there is no
means of transportation to enable such parties to appear personally before the
Local Civil Registrar.
d. Marriage involves a man and a woman who have been living together as hus-
band and wife for at least five (5) years before the marriage and who, during said
period, were not suffering from any legal impediment to marry each other. Peri-
od must be continuous and uninterrupted
iii. Marriage ceremony
1. No form, but the minimum requirements are
a. There should be personal appearance of the parties before the solemnizing offi-
cer
b. Personal declaration in the presence of the solemnizing officer that they take
each other as husband and wife
2. No marriage ceremony -> no marriage, because the state is a party in interest in all mar-
riages.
c. RULES
i. All marriages involving Filipino Citizens solemnized outside the PH, in accordance with the laws
in force in the country where they were solemnized, shall also be valid in the PH (Art 26 (1))
ii. If there is irregularity in any of the formal requisites, the marriage remains perfectly valid, but the
party/parties responsible for the same shall be civilly, criminally, and administratively liable
iii. Effect of No marriage -> proper remedy is not to file a petition for declaration of absolute nullity
of the marriage, but a petition for correction and/or cancellation of entry in the civil registry un-
der Rule 108
4. Marriage contract - best documentary evidence of a marriage. Its absence is not proof that no marriage took
place because other evidence may be presented to prove the fact of marriage.
5. Divorce and Mixed Marriages:
a. GR. No absolute divorce between Filipinos
b. EX: In a mixed marriage involving a Filipino Citizen and a foreigner, the Family Code allows the former to
remarry in case the divorce is validly obtained abroad by the alien spouse capacitating him or her to re-
marry. Elements
i. Valid marriage between the Filipino and the Foreigner
ii. Valid divorce is obtained abroad, REGARDLESS of who between the spouses initiated the di-
vorce proceedings
iii. The divorce decree is proven as a fact and demonstrates its conformity to the foreign law allow-
ing it.

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c. Reckoning point: Citizenship of the parties at the time the divorce is obtained
d. Remedy: file a petition for judicial recognition of the foreign divorce
e. No need to retroactively apply the provisions of the second par of Art 26 of the FC because there is suf-
ficient jurisprudential basis to apply the rule embodied in siad law to absolute divorces obtained by the
foreign spouse prior to the effectivity of the FC.
6. Void Marriages
a. Nature and Characteristics: Ipso facto void w/o need of judicial declaration of nullity, except for the pur-
poses of remarriage. Can be questioned after death, imprescriptible,
b. Can be attacked collaterally, except in cases before the RTC for cancellation or correction of entry under
Rule 108 of the ROC
c. Under the FC: only the spouses can file the petition. Under the CC, any real party in interest can file the
petition
d. Effects
i. May contract another marriage after compliance with Art 40
ii. Parties are not spouses, so they are not obliged to support each other
iii. Not entitled to successional rights.
iv. Children are illegitimate, except for children of void marriages under Art 36 and 53.
v. Property regime: GR: Art 147 or 148, EX: marriage is declared void by reason of non-compliance
with Art 40 of the FC, the applicable property regime is ACP, CPG or complete separation of
property, as the case may be.
vi. GR: DPN remains valid, but the donor may revoke the same.
1. EX: Marriage declared void by reason of Art 40 of the FC and the donee contractor the
marriage in bad faith, the DPN is revoked by operation of law.
2. EX: Marriage is void because both parties to the subsequent marriage referred to in Art
41 acted in bad faith, all DPN by one in favor of the other are revoked by operation of
law.
e. Void marriages
i. Below 18
ii. Absence of authority of the solemnizing officer, ex, either or both parties believed in good faith
that the SO has authority.
iii. Bigamous or polygamous marriages. EX: the subsequent marriage in Art 41 is perfectly valid
when all three requisites mentioned therein were present before the celebration of the subse-
quent marriage, as follows: (i) prior spouse has been absent for four consecutive years or 2 years
where there is danger of death under Art 391 of the CC, (ii) the spouse present had well founded
belief that the absent spouse was already dead; and (iii) the spouse present obtained a judicial
declaration of presumptive death. Art 41 + Bad faith = void ab initio.
iv. Marriage contracted through mistake
v. Void marriage under Art 53 (no liquidation, partition, and distribution of the properties of the
spouses or delivery of the presumptive legitimes of the common children; and there was no
recording of the judgment of annulment or of absolute nullity of the marriage, the partition and
distribution of the properties of the spouses, and the delivery of the children’s presumptive legit-
imes in the appropriate civil registry and registries of property.
vi. Psychological Incapacity: Psychological incapacity is neither a mental incapacity nor a personality
disorder that must be proven through expert opinion. There must be proof, however, of the
durable or enduring aspects of a person's personality, called "personality structure," which mani-
fests itself through clear acts of dysfunctionality that undermines the family. The spouse's per-
sonality structure must make it impossible for him or her to understand and, more important, to
comply with his or her essential marital obligations. Psychological incapacity consists of clear acts
of dysfunctionality that show a lack of understanding and concomitant compliance with one's
essential marital obligations due to psychic causes. It is not a medical illness that has to be med-
ically or clinically identified; hence, expert opinion is not required.(Tan-andal v andal)
vii. Incestuous marriages

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viii. Prohibited marriages by reason of public policy.

ix. Intentional killing of another’s spouse

7. Article 41: Exception to Bigamy

a. The spouse present is authorized to remarry if any of the following conditions is satisfied:
i. the prior sps had been absent for 4 consecutive years, or 2 years in case of disappearance
where there is danger of death under the circumstances set forth in Art 391 of the CC
ii. The sps present had well founded belief that the absent spouse was already dead
iii. The spouse present obtained a judicial declaration of presumptive death of the absentee
spouse.
b. Status of the subsequent marriage:
i. All reqs present -> valid
ii. Not all reqs present/bad faith -> void because bigamous. Remedy: aggrieved spouse can file a
petition for the declaration of nullity.
c. Requirement of judicial declaration of presumptive death:
i. Courts are without any authority to take cognizance of a petition that only seeks to have a per-
son declared presumptively dead under the Civil Code.
d. Remedy if subsequent marriage is valid:
i. Recording of the affidavit of reappearance
ii. By a judicial declaration of dissolution or termination of the subsequent marriage.
e. Effect of termination of valid subsequent marriage
i. Children are legitimate
ii. Property regime is ACP/CPG and it shall be dissolved and liquidated
iii. 2nd spouse contracted the marriage in bad faith
1. His or her share in the net profits shall be forfeited in favor of the common children or, if
there are non, the children of the 2nd spouse by a previous marriage or in default of
children, the spouse present.
2. DPN made to him or her is revoked by operation of law
3. Designation in the insurance policy of the sps present may be revoked, even if such des-
ignation be stipulated as irrevocable
4. Disqualified to inherit from the sps present (testate or intestate)
8. Voidable Marriages
a. Nature: valid until annulled
b. Grounds
Lack of parental con- Unsoundness of mind Fraud Vitiation of Impotency Serious and
sent at the time of mar- Consent incurable STD
riage

Marriage where one of Who can file the The ff Constitutes fraud: (exclusive) Force, intimi- Physically inca- STD must exist
the parties is between petition: 1. Non-disclosure of a previous dation, or pable of consum- at the time of
18-21 and did not ac- 1. The sane sps - but conviction by final judgment of undue influ- mating the mar- marriage.
quire consent from only if no knowl- the other party of a crime involv- ence was riage. Must be Only the injured
father, mother, surviving edge insanity ing moral turpitude induced incurable. Only the party, or the sps
parent or guardian. 2. Guardian, person 2. Concealment by the wife of the Only the in- injured party can that had no
Illegit party, consent of having legal fact that at the time of the mar- jured party, file or the person knowledge of
mother required. charge, must be riage, she was pregnant by a man within 5 years who had no the other’s STD
Who can file? before death of other than her husband from the dis- knowledge of the at the time of
1. Party below 21 - the insane sps 3. Concealment of a sexuallt trans- appearance other’s impotency marriage, within
Parent 3. Insane sps during missible disease, regardless of it of the in- at the time of the 5 years after the
2. Party 21 and above a lucid interval nature, existing at the time of the ducement can marriage, within 5 marriage.
- the party only marriage a petition for years after the Defect is not
within 5 years from During the lifetime of 4. Concealment of drug addiction, annulment be marriage. Defect is subject to ratifi-
attainment of the the sps habitual alcoholism or homosexu- filed. Can be not subject to cation
age of 21 Can be ratified ality or lesbianism exisitng at the ratified ratification
time of the marriage
Can be ratified
Only the injured party can file the
petition, within 5 years after the dis-
covery of the fraud. Can be ratified

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c. Effects of Annulment:
i. Right to remarry. But only after liquidation and dissolution of the property regime
ii. Wife must go back using her maiden name
iii. Children: legitimate
iv. Property regime: ACP/CPG
v. DPN: still valid after annulment. Bad faith can cause revocation

9. Legal Separation
a. Effects of Decree
i. Right to live separately
ii. Termination of property regime
iii. Right to inherit is not affected. But the offending sps is disqualified to inherit from the innocent
sps.
iv. Custody of the minor children shall be awarded to the innocent sps. (VAWC prohibits the award-
ing of custody of minor children to the perpetrator of a woman who is suffering from battered
woman syndrome, but she is not disqualified from having custody of her children)
v. No more obligation for mutual support. By way of exception, the court may order the guilty sps
to give support to the innocent spouse.
vi. DPN: valid. But innocent sps may revoke the donation within 5 years from the finality of the de-
cree of legal separation. If the donor is a 3rd person, the donor may also revoke the donation.
vii. Insurance: designation may be revoked even if it says irrevocable.
b. Grounds:
i. Physical abuse (repetitive)
ii. Other forms of abuse (must be gross and is already a conduct)
iii. Conviction of crime (final judgment, must be more than 6 years even if pardoned)
iv. Drug addiction, habitual alcoholism, lesbianism, or homosexuality
v. Contracting of bigamous marriage (PH or Abroad)
vi. Sexual infidelity or perversion
vii. Abandonment (must be more than one year)
c. Cooling-off period: the case shall not be tried on the merits within 6 months form the filing of the peti-
tion. The cooling-off period does not prevent the court from hearing a motion for preliminary injunction
to prevent the respondent from managing the exclusive property of the petitioner.
i. No cooling-off period if the ground of the petition constitutes VIOLENCE.
ii. Court must take steps to reconcile the parties
d. Defenses
i. Condonation and consent (unilateral act of the innocent sps)
ii. Connivance and collusion (both parties)
iii. Mutual guilt or recrimination
iv. Prescription
v. Death of the party
e. Reconciliation
i. The decree of legal separation is only set aside if there is a decree of reconciliation.
ii. GR: upon reconciliation, the property regime of the sps are not automatically revived. The ff
must be complied to revive the property regime:
1. They must execute an agreement of revival under oath
2. The agreement must specify the properties to be contributed anew to the restored
regime and those to be retained as separate properties
3. The names of the creditors, their addresses and amounts owing to each must likewise be
specified
4. The agreement must be submitted in court for approval by way of a verified motion for
its approval.
iii. No new property regime upon reconciliation

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10. Rights and obligations of spouses

a. Obligation to live together: cannot ask for support if the spouse does not want to live together.
i. Exceptions: the sps live abroad and have valid and compelling reasons.
b. Obligation to observe mutual love, respect, and fidelity
c. Obligation to render mutual help and support
d. The use of husband’s surname by the wife is not mandatory
e. Either sps may exercise any legitimate profession, business without the consent of the other. Under
9262, if the husband prevents his wife from engaging in any legitimate profession, that is an act of vio-
lence.

11. Property relations

a. Marriage settlement:
i. Executed before the celebration of the marriage, the MS must be in writing to be enforceable
and registered to bind 3rd parties.
ii. Only the future sps are the parties to a MS. Except if one of the sps is below 21, the parent
whose consent is required to the marriage must be made a party to the MS, otherwise, VOID.
iii. No marriage - MS is void
b. DPN
i. It is made before the celebration of the marriage, made in consideration of the marriage and the
donation is in favor of one or both the future sps.
ii. Formalities:
1. Personal property the value exceed 5,000 -> DPN must be in writing
2. Real property -> both the donation and the acceptance must be in a public instrument,
otherwise void.
3. Future property -> nature of testamentary disposition. Must be in the form of a will
iii. Limits:
1. ACP -> no limit to donation
2. Not acp -> sps cannot donate to each other more than one-fifth of their present proper-
ty. But only the excess is void.
iv. Every donation between the spouses during the marriage, whether made directly or indirectly,
shall be void regardless of the property regime. The prohibition also applies to persons merely
living together as husband and wife without a valid marriage. Exception: Moderate gifts on oc-
casion of any family rejoicing are valid.
c. ACP in general
i. It is a special kind of co-ownership. The husband and wife become JOINT owners of all the
properties of the marriage. Hence, the provisions on co-ownership shall apply suppletorily.
ii. Consists of all the property owned by the spouses at the time of celebration of the marriage or
acquired after.
iii. Excluded are property acquired before marriage by a sps who has legitimate descendants,
property acquired by gratuitous title, property that is for the personal and exclusive use of the
sps except jewelry
d. CPG in general
i. It is a special type of partnership. The sps place in a common fund the proceeds, products, fruits,
and income from their separate properties and those acquired by either or both spouses through
their efforts or by change. The provisions on partnership shall apply
ii. Excluded property are
1. Those brought into the marriage as exclusive property
2. Property acquired by gratuitous title
3. Those acquired by the right of redemption, barter, or by exchange with property belong-
ing to only one of the spouses.

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4. Property purchased with exclusive money of the wife or of the husband.

iii. Presumption in favor of CPG
iv. Reverse accession
1. If the cost of improvement and any resulting increase in the value of the property by rea-
son of the improvement are more than the value of the property prior to the introduction
of the improvement, the entire property shall become CPG; otherwise, the entire prop-
erty shall become the exclusive property of the owner sps. In either case, there shall be
corresponding reimbursements at the time of liquidation of the conjugal property.
e. Disposition or encumbrance of Community or Conjugal Property
i. Alienation or encumbrance of ACP or CPG property must have the written consent of the other
sps or the authority of the court, without which the disposition/encumbrance is void.
ii. No donation of ACP/CPG property without consent, unless it is moderate in amount
iii. Void contract due to lack of written consent shall be construed as a CONTINUING OFFER on the
part of the consenting spouse and the 3rd person, and may be perfected as a binding contract
upon the acceptance by the other spouse or authorization by the court before the offer is with-
drawn by either or both of the offerors.
iv. Case law: If the transaction is void because it was made without the written consent of the other
spouse or the authority of the court, the buyer may nonetheless invoke the principle of buyer in
good faith if he will be able to prove that he had observed the ff:
1. Diligence in verifying the validity of the title covering the property
2. Diligence in inquiring into the authority of the transacting spouse to sell the property of
the other spouse
f. Separation of property of spouses during the marriage
i. Each sps shall own, dispose of, possess, administer, and enjoy his or her own separate estate,
without need of the consent of the other.
ii. To each sps shall belong all earnings from profession, business, or industry and all fruits, natural,
industrial, or civil due or received during the marriage from his or separate property.
iii. As to expenses, both sps shall bear it in proportion of their income
iv. This kind of property regime will only govern when it is provided for in the marriage settlement.
v. Causes for judicial separation of property
1. One sps is sentenced to a penalty of civil interdiction
2. Judicially declared absentee
3. Lost parental authority
4. Abandonment or failure to comply with marital obligations
5. Other sps who has been granted powers of administration in the MS abused that power
6. SPS has been separated in fact for at least one year and reconciliation is highly improba-
ble.
g. Property Regimes under Art 147 and 148
i. GR: in a void marriage, regardless of the cause, the property relations of the parties during the
period of cohabitation is governed by the provisions of Art 147 or Art 148, as the case may be
ii. Exception: If the subsequent marriage is void by reason of non-compliance with Art 40, the
property relations of the parties to the subsequent marriage may either be ACP or CPG, unless
the parties agree to a complete separation of property

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147 148

- Parties are legally capacitated and not barred by any - Parties are suffering from legal impediments, such as:
impediment to contract marriage, but whose marriage - Under age
is void. - bigamous/polygamous
- Marriages celebrated w/o marriage license - Incest
- Marriages celebrated by a person without legal author- - Prohibited by reason of public policy
ity to solemnize marriages and either or both parties - Art 41 marriage where both are bad faith
cannot claim good faith
- Marriages contracted through mistake of one contract-
ing party as to the identity of the other
- Failure to comply with Art 52
- Parties are capacitated to marry each other and they
live exclusively as husband and wife

- Wages and salaries earned by either party during the
cohabitation shall be owned by the parties in equal
shares and will be divided equally between them, even
if only one party earned the wages the other did not
contribute
- Properties acquired DURING the union through work
and industry shall be governed by the rules on equal
co-ownership and are prima facie presumed to have
been obtained through their joint efforts.
- Prohibitions: During cohabitation, the parties are pro-
hibited from disposing by acts inter vivos or encumber-
ing their respective shares in the co-owned property
without the consent of the other. Effect: disposition is
VOID.
- Bad faith: only one of the parties acted in bad faith,
the share of the latter in the co-ownership shall be
forfeited in favor of the following, which forfeiture shall
takes place upon termination of the cohabitation:
common children, if none, surviving descendants of
the party who acted in bad faith; or in the absence of
descendants, the innocent party
- Wages and salaries earned by each party belong to
him or her exclusively
- Only the properties acquired by both of the parties
through their actual joint contribution of money,
property and industry shall be owned by them in
common in proportion to their respective contribu-
tions. (no proof, no presumption of co-ownership)
- No prohibition against alienation of ideal share
- If one of the parties in the cohabitation is validly mar-
ried to another, his or her share in the co-ownership
shall accrue to the ACP or CPG existing in such valid
marriage.
- No valid marriage. Bad faith rule applies

C. Property

1. Concept of Property
a. Properties are things which are capable of satisfying human wants and are susceptible of appropriation
b. Reqs: Utility, individuality, can be appropriated
c. Kinds:
i. Immovable
1. Immovable by nature (lands, roads, mines)
2. Immovable by incorporation (by reason of their attachment)
3. Immovable by destination (by reason of their purpose, intention)
4. Immovable by analogy
ii. Movable
1. Those not considered as Immovable
2. Real property considered by law as immovable (growing fruits attached to land)
3. Forces of nature which are brought under control by science (Gas & electricity)
4. Things which can be transported from place to place without impairment (vessels)
5. Obligations and actions which have for their object movables or demandable sums
6. Shares of stock of agricultural, commercial, and industrial entities, although they may
have real estate
d. Who can own: Public (everyone), private (one or more persons), government (patrimonial)

2. Ownership

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a. Rights: to enjoy, to possess, to use, to consume, to dispose, to recover, to exclude others, to enclose, to
compensation in case of eminent domain, to the hidden treasure and right of accession
b. Doctrine of self-help: Owner of lawful possessor may use reasonable force to repel or prevent an actual
or threatened unlawful physical invasion or usurpation of his property, which can only be exercised at the
time of actual or threatened dispossession and not when possession has already been lost. In the latter,
the owner must resort to judicial process for the recovery of the property.
c. Doctrine of state of necessity: The owner cannot, however, prohibit interference by another if it is neces-
sary to avert an imminent danger and the threatened damage, compared to the damage arising to the
owner from the interference, is much greater. The owner may, however, demand from the person bene-
fited indemnity for the damage to him
i. Requisites:
1. There is a situation of grave peril, an actual or imminent danger, either upon the person
of the actor or a 3rd person or their property
2. Interference is necessary to avert such danger
3. Threatened damage, compared to the damage arising to the owner from the interfer-
ence, is much greater
4. State of necessity is not brought about by the intentional provocation of the party invok-
ing the same.
d. Right to recover: In no case may possession be acquired through force or intimidation as long as there is
a possessor who objects thereto.
i. Accion interdictal: right to physical possession. Forcible entry and Unlawful detainer
ii. Accion publiciana: plenary action to recover the right of possession, and the issue is which party
has the better right of possession
iii. Accion reinvindicatoria: It is a suit which has for its object the recovery of possession over the
real property as owner. It involves recovery of ownership and possession based on the said own-
ership
e. Right to Surface, sub-surface, and airspace:
i. Limits
1. Servitudes or easements
2. Special laws
3. Ordinances
4. Reasonable requirements of aerial navigation
5. Rights of third persons
6. Contracts
f. Right to hidden treasures
i. A hidden treasure is any deposit of money, jewelry, or other precious objects, which must be
hidden or unknown; and the lawful ownership of which must not appear
ii. Rule:
1. Finder is owner - full ownership of treasure
2. Finder is a trespasser - the treasure solely belongs to the owner of the property on which
the treasure is found
3. Finder is not a trespasser - the finder is entitled to ½ of the treasure and the other half
goes to the owner of the property.
g. Accession: right of the owner of a thing, real or personal, to become the owner of everything which is
produced thereby, or which is incorporated or attached thereto, either naturally or artificially. It is not
one of the modes of acquiring ownership enumerated in Art. 712.
i. Accession Discreta – right of the owner of a property to whatever is produced thereby or to the
fruits of the same
ii. Accession Continua – the extension of the right of ownership of a person to that which is incor-
porated or attached to a thing which belongs to such person.
iii. Rule: All fruits belong to the owner of a thing
iv. Exceptions:

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1. Possession in good faith by another

2. Usufruct
3. Lease of rural lands
4. Pledge
5. antichresis
v. Disputable presumptions as to improvements on land:
1. Works are made by the owner
2. Works are made at the owner’s expense
vi. AMPIL CHARTS <3

Landowner - Builder/Planter/Sower Owner of Materials

Both Good faith and Both Bad faith

LO-BPS can acquire the materials, provided there is full payment OM entitled to
(1) Full payment for value of materials or
(2) OM may remove materials, provided no substantial
injury to work done

Bad Faith Good Faith

LO-BPS can acquire the materials, provided there is full payment OM is entitled to FULL PAYMENT for the value of materials plus
plus damages damages OR
OM may REMOVE materials even if there’s substantial INJURY to
work done, plus damages

Good faith Bad faith

LO-BPS can acquire the materials without paying for the value OM Loses materials without indemnity and will be liable for
thereof and will be entitled to damages due to defects or inferi- damages dues to defects or inferior quality of materials
or quality of materials

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h. Other Basic stuff about accession

i. A lessee cannot be a builder in good faith because he is estopped to deny his landlord’s title. In
cases of lessees, BPS does not apply.
ii. When the lessee makes, in good faith, useful improvements which are suitable to the use for
which the lease is intended, without altering the form or substance of the property leased, the
lessor, upon termination of the lease shall pay the lessee one half of the value of the improve-
ments at that time. Refusal by the lessor to reimburse the amount -> lessee may remove the im-
provements, even though the principal thing may suffer damage thereby.
iii. Alluvium - the accretion which the banks of rivers gradually receive from the effect of the cur-
rent of the waters and which belong to the owners of lands adjoining the said banks
iv. Accretion - act or process by which a riparian land gradually and imperceptibly receives addition
made by the water to which the land is contiguous
v. RULE: the LO can only acquire the alluvium upon registration. Failure to register the acquire allu-
vial deposit by accretion may subject such property to acquisition through prescription by third
persons.
vi. If alluvium happens at sea, the land shall form part of public domain
vii. Avulsion - accretion which takes place when the current of a river, creek, or torrent segregates
from an estate on its bank a known portion and transfers it to another estate, in which case the
owner of the estate to which the segregated portion belonged, retain the ownership. Owner
should remove the transferred portion within 2 years; otherwise, it becomes permanently at-
tached.
viii. Adjunction - It takes place when two movables belonging to different owners are so inseparable
that their separation would impair their nature, making up thereafter a single object but each
preserving its own nature
ix. Commixtion or confusion - mixture of things solid or liquid pertaining to different owners. If the
things mixed are solid, it is called commixtion; if the things are liquid, it is called confusion. Co-
ownership arises when:
1. Mixture was caused by fortuitous event
2. By will of both owners
3. By the will of one owner acting in good faith.
x. Mixture in bad faith, effect: losses the thing belonging to him + damages

3. Co-ownership
a. Definition: right of common dominion which two or more persons have in spiritual part of a thing, not
materially or physically divided
b. Requisites:
i. Plurality of subjects, who are co-owners
ii. Unity of or material indivision, which means that there is a single object which is not materially
divided, and which is the element that binds the subjects
iii. Recognition of ideal shares, which determine the right and obligations of the co-owner
c. RULES:
i. Rights:
1. right of dominion,
2. right to use (limit: only for the purpose intended, must be used in such a way as not to
injure the interest of the other co-owners and such use does not prevent the other co-
owners from making use thereof according to their own right.)
3. The share of the co-owner in the thing owned in common is determined by their agree-
ment and, in default thereof, such share shall be presumed equal
4. Share in benefits and charges shall be in proportion to the interest. Any stipulation to
the contrary is void.
5. Right to alienate undivided share

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6. Right of legal redemption: Requisites

a. There is a co-ownership and a co-owner sold the property to a stranger
b. Sale was made before the partition of the property
c. The right of redemption must be exercised by one or more co-owners within a
period of 30 days to be counter from the time that he or they were notified in
writing by the vendee or by the co-owner vendor
d. The vendee must be reimbursed for the price of the sale (redemption does not
extinguish co-ownership)
ii. Obligations
1. Bring an action in ejectment. This includes an accion publiciana, accion reinvindicatoria,
and action for revival of judgment if it results into the recovery of property (will benefit
all co-owners)
2. Repair for preservation and taxes: Any repair for the preservation of the property owned
in common may be made at will by one of the co-owners and he has the right to de-
mand contribution from the others for the expenses of preservation and to the taxes.
a. Option of co-owner obliged to contributed: co-owner may renounce so much of
his interest in the co-ownership as may be equivalent to his share of expenses
and taxes, unless such waiver is prejudicial to the co-ownership
3. Expenses for improvement or embellishment MUST be decided by the majority
4. All co-owners MUST consent to the making of an alteration on the thing owned in com-
mon
5. Acts of administration requires a majority vote
iii. Limits
1. Cannot claim definite portion (except: when the transferee of an undivided portion of
the land allowed a co-owner of the property to occupy a definite portion thereof, such
undisturbed possession had the effect of a partial partition of the co-owned property
which entitled the possessor to the definite portion which he occupies.
2. Any unauthorized alteration - illegal and invalid and the other co-owners can compel the
erring co-owner to under what has been done at the latter’s expense
iv. Sale: sale by a co-owner of the co-owned property only refers to his own undivided share
v. Extinguishment
1. Merger
2. Prescription
3. Destruction of thing or loss of right
4. Partition

4. Easement
a. Definition: It is a real right on another’s property, corporeal and immovable, whereby the owner of the
latter must refrain from doing or allowing somebody else to do or something to be done on his property,
for the benefit of another person or tenement.
b. Servitude: an encumbrance imposed upon an immovable for the benefit of another immovable belong-
ing to a different owner or for the benefit of a community, or of one or more persons to whom the en-
cumbered estate does not belong
c. Characteristics:
i. Real right that falls upon the property
ii. Limits the use and enjoyment of the property
iii. The right is always enjoyed over an immovable
iv. Enjoyed by another person
v. Indivisible
d. Kinds

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i. Real - where the easement is for the benefit of another immovable belonging to a different own-
er, the immovable in favor of which the easement is established is called “dominant estate”; that
which is subjected is the servient estate
ii. Personal - where the easement is for the benefit of a community, or of one or more persons to
whom the encumbered estate does not belong or the easement pertains to persons without a
dominant estate
iii. Legal - Those constituted by law which has for its object public use or the interest of private per-
sons
iv. Voluntary - those constituted by will or agreement of the parties, but it is only the owner who can
create a servitude that will bind the servient estate
v. Continuous - if its use is, or may be, incessant without the intervention of any act of man, like the
easement of drainage or easement of light and view
vi. Discontinuous - if it is used at intervals and it depends on the act of man, like the easement of
right of way
vii. Apparent - those which are made known and are continually kept in view by external signs that
reveal the use and enjoyment of the same such as a road and window
viii. Non-apparent - those which show no external indication of their existence, such as an easement
of not building beyond a certain height
ix. Positive - that which imposes upon the owner of the servient estate the obligation of allowing
something to be done on his property, such as an easement of right of way
x. Negative - that which prohibits the owner of the servient estate from doing something on his
property which he could lawfully do if the easement did not exist, such as an easement not to
build higher.
e. How to acquire an easement
i. By title
1. All kinds of easements can be acquired by title
2. Refers to a juridical justification for the acquisition of a right, such as law, a will, a dona-
tion, or a contract
ii. By prescription
1. Only for continuous and apparent easements may be acquired by prescription
2. Period of 10 years
3. Positive easement: prescription period is counted from the day on which the owner of
the dominant estate commenced to exercise it upon the servient estate
4. Negative easement: Period is counted from the day on which the owner of the dominant
estate FORBADE, by an instrument ACKNOWLEDGED before a notary public, the owner
of the servient estate, from executing an act which would be lawful without the ease-
ment
f. Easement by apparent sign or legal presumption (exception to the rule on negative easements)
i. There exists an apparent sign of servitude between two estates
ii. At the time of the establishment of such sign, the ownership of the two estates resides in one
person
iii. The sign of the easement is established by the owner of both estates, because the article will not
apply when the easement is established by a person different from the owner
iv. That the ownership over the two estates is later on divided, either by alienation or partition
v. That at the time of division of ownership, nothing is stated in the document of alienation or par-
tition contrary to the easement nor is the sign of the easement removed before the execution of
the document
vi. EFFECT: the existence of the apparent sign has for all legal purposes the same character and
effect as a title of acquisition of the easement.
g. Rights and obligations
i. Right of the servient estate: Retains the ownership of the portion on which the easement is es-
tablished, and may use the property in a manner that will not affect the exercise of the easement

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ii. Right of dominant estate:

1. all the rights necessary for its use are considered granted
2. Right to make any works on the servient estate if necessary for use and preservation
(must not be burdensome on the servient estate)
iii. Limits upon rights of owner of dominant estate. Violation constitutes impairment of the ease-
ment
1. It can only exercise rights necessary for the use of the easement
2. It cannot use the easement except for the benefit of the immovable originally contem-
plated
3. It cannot exercise the easement in any other manner than that previously established
4. It cannot construct anything on it which is not necessary for the use and preservation of
the easement
5. It cannot alter or make the easement more burdensome
6. It must notify the servient estate owner of its intention to make necessary works on the
servient estate
7. It should choose the most convenient time and manner to build said works so as to
cause the least inconvenience to the owner of the servient estate
h. Modes of extinguishing an easement
i. Merger - when two become one
ii. Non-use for 10 years computed from the day on which the easement was not used and if the
easement is continuous, in which case the use of the easement does not depend upon the acts
of man, the 10 year period is counted from the day on which an act contrary to the easement
took place
iii. Impossibility of use
iv. Expiration of terms
v. Fulfillment of condition
vi. Renunciation
vii. Redemption - it is the release of the servient estate from the servitude upon agreement of the
owners of both and upon payment by the owner of the servient estate of the corresponding
consideration to the owner of the dominant estate
viii. Annulment or rescission of title constituting the easement
ix. Termination of the right of the grantor
x. Abandonment of the servient estate
xi. Eminent domain
i. Legal or compulsory easement
i. Easement of drainage of waters: The physical condition of two estates, waters descend naturally
and without the intervention of man from a higher estate to a lower estate
1. It is the obligation of lower estate to receive the waters which naturally and without the
intervention of man flow from the higher estates, as well as the stones or earth which
they carry with them
2. Obligation of the higher estate not to construct works which will increase the burden or
increase the natural flow
ii. Easement of public use: No person shall be allowed to stay in banks of rivers and streams and
the shores of the seas lakes throughout their entire length and within a zone of 3 meters in urban
areas, 20m in agri areas and 40m in forest areas, along their margins, are subject to the ease-
ment of public use in the interest of recreation, navigation, floatage, fishing, and salvage.
iii. Easement of aqueduct: if a person wishes to use upon his estate any water of which he can dis-
pose, he shall have the right to make it flow through intervening estates. Continuous and appar-
ent
iv. Compulsory easement of right of way:
1. The dominant estate is surrounded by other immovables and has no adequate outlet to
a public highway

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2. There must be payment of proper indemnity

3. The isolation was not due to acts of proprietor of the dominant estate
4. The right of way claimed is at the point least prejudicial to the servient estate and insofar
as consistent with this rule, where the distance from the dominant estate to a public
highway may be the shortest.
v. Easement of light and view: easement whereby the dominant estate enjoys the right to have free
access to light, a little air, and a view overlooking the adjoining estate, the servient estate.
vi. Easement of drainage buildings: The right to divert or empty the rainwaters from one’s own roof
or shep to the neighbor’s estate, either drop by drop or through conduits.
vii. Intermediate distances for planting:
1. The right to cut branches if they should extend over a neighboring estate
2. Right to cut roots which penetrated into the land of another
viii. Easement of lateral subjacent support: The right of lateral and subjacent support is the right to
have land supported by the adjoining land or the soil beneath. Support is lateral when the sup-
ported and the supporting lands are divided by a vertical plane. Support is subjacent when the
supported land is above and the supporting land is beneath
j. Voluntary easement
i. Constituted upon the will of the owner of the servient estate
ii. Usufruct: the naked owner may impose any servitude on his property even without the consent
of the usufructuary
iii. Co-owner property: Unanimous consent of all co-owners is required in order to constitute a vol-
untary easement upon the same.

5. Nuisance (restriction or limit upon ownership)

a. Definition: Nuisance is any act, omission, establishment, business, condition or property, or anything else
which:
i. Injures or endangers the health or safety of others
ii. Annoys or offends the senses
iii. Shocks, defies or disregards decency or morality
iv. Obstructs or interferes with the free passage of any public highway or street, or any body of wa-
ter
v. Hinders or impairs the use of property
b. Kinds of nuisance
i. Public nuisance - that which affects a community or neighborhood or any considerable number
of persons, although the extent of the annoyance, danger, or damage upon individuals may be
unequal
ii. Private nuisance - that which violates only privates rights and produces damages to but one or a
few persons
iii. Mixed nuisance - that which is both public and private in its effects, public because it injures
many persons or all the community, and private in that it also produces special injuries to private
rights.
iv. Nuisance per se - nuisance under any and all circumstances and thus may be summarily abated.
TEST: whether the nuisance has become dangerous at all times and under all circumstances to
life, health or property.
v. Nuisance per accidens - not apparently a nuisance, cannot be summarily abated.
c. Doctrine of attractive nuisance: premises that are dangerous in character and that is likely to attract chil-
dren in play, and who fail to exercise ordinary care to prevent children from playing is liable to a child
who is injured even if the child is a trespasser.
d. Remedies Against Nuisance
i. In general
1. Abatement, either judicial or summary

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2. Civil action for recovery of damages, in case of injury to a private person

3. Criminal prosecution, in case of public nuisance
ii. Summary Abatement: LGUs have no power to declare a particular thing as a nuisance unless
such a thing is a nuisance per se.
iii. Who may abate:
1. City and/or the Municipal Health Officer who is charged with the responsibility of abat-
ing public nuisances
2. Private persons may abate a public nuisance which is specially injurious to him by remov-
ing, or if necessary, by destroying the thing if it is a nuisance per se. Reqs are
a. Demand be first made upon the owner or possessor of the property to abate the
nuisance
b. Such demand has been rejected
c. Abatement be approved by the district health officer and executed with the as-
sistance of the local police
d. The value of the destruction does not exceed Php 3,000

D. Obligations
1. Concept
a. Definition: An obligation is a juridical necessity to give, to do, or not to do. It is the juridical relation
whereby a person may demand from another the observance of a determinate conduct, and in case of
breach, may obtain satisfaction from the assets of the latter.
b. Elements
i. Juridical tie - efficient cause established by the various sources of obligations
ii. Object - conduct required to be observed
iii. Active subject - person who can demand the fulfillment of the obligation
iv. Passive subject - person from whom the obligation is juridically demandable
c. Sources of obligations
i. Law: Obligations derived from law are not presumed. Only those expressly determined in this
Code or in special laws are demandable, and shall be regulated by the precepts of the law which
establishes them; and as to what has not been foreseen, by the provisions of this Book
ii. Contract: Obligations arising from contracts have the force of law between the contracting par-
ties and should be complied with in good faith
iii. Quasi-contract
1. It is a juridical relation arising from certain lawful, voluntary, and unilateral acts with the
objective of preventing unjust enrichment or benefit at the expense of another.
2. Form: Not contractual in nature, because there is lack of consent. Not an obligation
based on delict (crime) or quasi-delict (negligence). It arises to avoid a case of unjust
enrichment
3. Negotiorum gestio: It is a juridical relation which arises when a person voluntarily takes
charge of the agency or management of another’s abandoned or neglected business or
property without the owner’s authority.
a. Requisites:
i. A person (officious manager or gestor) voluntarily assumes the man-
agement or agency of the business or property of another
ii. The property must be neglected or abandoned; otherwise, what results
is a case of unauthorized/unenforceable contract and not negotiorum
gestio
iii. There is no authorization from the owner, whether express or implied;
otherwise, what results is a contract of agency and not negotiorum ges-
tio

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iv. The assumption of agency or management must be done in good faith.

(ratification => express agency)
b. Obligation of officious manager
i. Continue with the agency or management until termination.
ii. He can only require the owner to replace him if the owner is already ca-
pable
iii. In the performance of duties, he is obliged to observe the diligence of a
good father of a family. Neglect by officious manager -> liability
iv. He is personally liable for contracts which he has entered into with 3rd
persons, insofar as the latter shall be concerned, even though he acted
in the name of the owner, hence, there shall be no right of action be-
tween 3rd person and owner EXCEPT
1. Owner ratified the management
2. Contract refers to the owner’s business
v. He is liable to the person he delegates to act in behalf of him
vi. The obligation of two or more officious managers is solidary, unless
when the management was assumed to save the thing or business from
imminent danger, in which case, their obligation is merely joint.
vii. Not liable for any loss or damage to the property or business by reason
of fortuitous event. BUT when liable for fortuitous event:
1. Undertakes risky operations which the owner was not accus-
tomed to embark upon
2. Prefers his own interest to that of the owner
3. Fails to return the property or business after demand by the
owner assumes the management in bad faith
4. Is manifestly unfit to carry on the management, except when the
same was assumed to save the property or business from immi-
nent danger
5. Prevents, by his intervention a more competent person from
taking up the management, except when the same was as-
sumed to save the property or business from imminent danger
c. Obligations of the owner
i. Owner is LIABLE to the officious manager for the following:
1. Obligations incurred in his interest
2. Necessary and useful expenses
3. Damages suffered by the officious manager in the performance
of his duties, in the following situations
a. If the owner enjoys the advantages of the officious man-
agement
b. If the management had for its purpose the prevention of
an imminent and manifest loss, although no benefit may
have been derived
c. Even if he did not derive any benefit and there has been
no imminent and manifest danger to the property and
business provided that the officious manager has acted
in good faith and the property or business is intact,
ready to be returned to the owner.
4. Solutio Indebiti: It is a juridical relation which arises when something is received when
there is no right to demand it, and it was unduly delivered thru mistake
a. Requisites:

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i. Payment is made when there exists no binding relation between the

payor, who has no duty to pay, and the person who received the pay-
ment;
ii. Payment is made thru mistake, and not thru liberality or some other
cause
b. Obligations in solutio indebiti
i. The recipient has the obligation to return what has been unduly deliv-
ered
ii. If he acted in bad faith, he is also liable
1. To pay legal interest, if a sum of money is involved
2. To return the fruits he received or thise which should have been
received, if the thing produced fruits
3. To answer for any loss or impairment of the thing from any cause
until it is recovered
4. To pay damages to the person who delivered the thing until it is
recover
iii. Two or more payees, their responsibility is solidary
c. Solutio indebiti vs accion in rem verso

Solutio Indebiti Accion in rem verso

Source: quasi contract Source: law

Reason: mistake of fact or mistake in a doubtful or Reason: undue payment need not be by reason of mistake, if
difficult provision of law there was mistake, it was a mistake of law that is not doubtful
nor difficult

5. Other forms of quasi-delict

a. Support and funeral expenses
b. Accident and calamities
c. A third person who pays the debtor’s indebtedness without the latter’s knowl-
edge is entitled to demand reimbursement but only up to the extent that the
payment has benefited the debtor
d. Any person who is constrained to pay the taxes of another shall be entitled to
reimbursement from the latter
e. When the government, upon the failure of any person to comply with health
regulations concerning property, undertakes to do the necessary work, even
over his objection, he shall be liable to pay the expenses

iv. Delict
1. Criminal liability will give rise to civil liability only if the same felonious act or omission
results in damage or injury to another and is the direct and proximate cause thereof.
Damage or injury to another is evidently the foundation of the civil action
2. Effect of acquittal by reason that the accused is not the author of the criminal act -> no
civil liability ex delicto
3. Acquittal based on reasonable doubt -> not exempt from civil liability
4. Effect of death pending appeal of judgment of conviction: Both the criminal liability and
the civil liability are extinguished. Not extinguished is the civil liability based on other
sources.

v. Quasi-delict
1. Requisites
a. Damage suffered by the plaintiff

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b. Fault or negligence of the defendant

c. Connection of cause and effect between the fault or negligence of defendant
and the damage incurred by the plaintiff
2. Scope:
a. Covers acts or omissions criminal in character
b. Double recovery not allowed
c. Pre-existing contractual relations may bar the applicability of the law on quasi-
delict
3. Culpa contractual vs culpa aquiliana

Culpa contractual Culpa aquiliana

Source: Contract Source: quasi-delict

Role of negligence: incidental Role of negligence: substantive and independent. Negligence cre-
Requisites for recovery: the contracts ates the vinculum
Requisites for recovery: plaintiff must prove negligence

2. Breach of obligations
a. Fortuitous event
i. Extraordinary events not foreseeable or avoidable. There must be difficulty to foresee the event.
It can be an act of God or act of Man
ii. RULE: No person shall be responsible for a fortuitous event. Reqs
1. The cause of the breach of the obligation must be independent of the will of the debtor
2. The event must be either unforeseeable or unavoidable
3. The event must be such as to render it impossible for the debtor to fulfill his obligation
in a normal manner
4. The debtor must be free from any participation in, or aggravation of, the injury to the
creditor.
iii. Exceptions: Obligor remains to be liable when
1. The law expressly provide
2. Parties declared
3. Nature of the obligation
b. Voluntary causes
i. Mora or delay
1. Mora solvendi - delay on the part of the debtor
a. Requisites
i. The obligation be demandable and already liquidated
ii. Debtor delays performance
iii. Creditors require the performance judicially or extrajudicially. (demand =
delay)
b. Exceptions to the requirement of demand
i. Obligation declares
ii. Law does not require demand
iii. Nature and circumstances of the obligation it appears that time was the
controlling motive for the establishment of the contract
iv. Demand would be useless.
c. Effects of Mora solvendi
i. Debtor becomes liable for damages
ii. Debtor remains liable if the things was lost after he has incurred in delay
even if the loss was without his fault or by reason of fortuitous event
iii. Prescriptive period within which the obligee may bring an action against
the obligor does not commence to run until a demand is made

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2. Mora Accipiendi - delay on the part of the creditor

a. Requisites
i. An offer of performance by the debtor who has the required capacity
ii. The offer must be to comply with the prestation as it should be per-
formed
iii. The creditor refuses the performance without just cause
3. Compensation morae - delay on the part of both parties because neither has completed
their part in their reciprocal obligation
a. Reciprocal obligations are those which arise from the same cause, and which
each party is a debtor and a creditor of the other, such that the obligation of one
is dependent upon the obligation of the other. Obligation must be performed
simultaneously
b. No delay when both are in delay
c. There is delay when one of the parties fulfills his obligation, and the other does
not.
ii. Dolo or fraud
1. It is the deliberate and intentional evasion of the fulfillment of the obligation. Waiver of
future fraud is void
iii. Negligence
1. Fault or negligence incident in the performance of an obligation which already existed,
and which increases the liability from such already existing obligation.
2. Negligence shows bad faith it is tantamount to fraud. Waiver of negligence + bad faith =
VOID
3. Kinds of Obligation
a. Civil and Natural

Civil Natural

One which gives a Obligation that is not based on positive law, but on equity and natural law.
right of action to Does not grant a right of action to enforce their performance.
compel its perfor- It authorizes the retention of what has been delivered or rendered by reason thereof
mance.
Provides legal sanc- When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor
tion to breach who voluntarily performs the contract cannot recover what he has delivered or the value of the
service he has rendered

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b. Real and Personal

Real: obligation to give or deliver Personal: obligation to do or not to do

Determinate or specific Indeterminate or generic Positive personal obliga- Negative personal

- Obligation to deliver a determi- - Obligation to deliver an tion - obligation to do obligation - obliga-
nate or specific thing indeterminate or generic tion not to do
thing. When considered breach:
Legal consequences non-performance or per- Remedies in case of
1. Debtor cannot compel the cred- Legal consequences formance is poor or in breach
itor to receive a different one, 1. Creditor cannot de- contravention of the 1. To demand the
although the latter may be of mand a thing of superi- tenor of the obligation undoing of what
the same value as, or more or quality if the quality has been done at
valuable than that which is due and circumstances have Remedies the expense of the
2. Obligation to preserve the thing not been stated. 1. Non-performance - obligor + dam-
to be delivered with the proper 2. The debtor cannot de- ask another person ages
diligence of a good father of the liver a thing of inferior to execute the act. 2. Physically or legal-
family, unless stipulation re- quality Exception: personal ly impossible to
quires another standard of case obligation = dam- undo = damages
3. Deliver the accessions and ac- Remedies: ages only
cessories, even though they are - Ask another person to 2. Poor or in contraven-
not mentioned comply with the obliga- tion to the tenor -
4. To deliver the fruits if the credi- tion at the expense of demand the undoing
tor is already entitled to the the debtor of what has been
same - Compel the debtor done at the expenses
himself to make the of the debtor + ask
Remedies: deliver, + damages another person to
- Specific performance + execute the act +
damages Not susceptible to extin- damages
- Or damages guishment by way of loss

c. Pure, and with a term

Pure obligation Obligation with a term

- Immediately de- - A period that has influence over when the obligation is demandable or suspends demand-
mandable ability
- Similar: obligation - Period may also refer to a future event
subject to a reso-
lutory condition Suspensive term - period must lapse before the performance of the obligation can be de-
or subject to a manded
resolutory term Resolutory term - period after which the obligation is terminated. The obligation is valid up to
a certain date
Term may be indefinite: event which will happen but the date of its happening is unknown

Debtor loses the right to use a period in the ff instances:

1. Debtor becomes insolvent, unless he gives a security
2. Debtor does not furnish the promise security
3. By his acts, debtor impaired the security of it disappears by reason of fortuitous event,
unless he give a new security
4. Debtor violates any undertaking by reason of which the credit agreed to the period
5. Debtor attempts to abscond.

Court may be authorized to fix period in ff circumstances

1. Intention of the parties
2. Duration of the period is left to the will of the debtor
3. When the non-compliance by one of the parties in reciprocal obligations is with re-
spect to time, the court may fix or grant a period if there exists a just cause

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d. Conditional
i. Suspensive and Resolutory

Suspensive Resolutory

● The obligation arises only upon the
fulfillment of the condition.
● During the pendency of the condi-
tion, the creditor has the right to
take necessary measures to preserve
and protect his inchoate interest
● The effects in an obligation to give
shall retroact to the day of the con-
stitution of the obligation. Excep-
tion: reciprocal prestation -> fruits
and interests are deemed mutually
compensated
● Obligation already exists but the same is extinguished upon the fulfill-
ment of the condition
● Immediately demandable
● Fulfillment of the condition: obligation is extinguished
In cases of reciprocal obligations:
The power to rescind obligation is implied in reciprocal ones, in case one
of the obligors should not comply with what is incumbent upon him, such
that “absent any provision providing for a right to rescind, the parties may
nevertheless rescind the contract should the other obligor fail to comply
with its obligations. But the power to rescind must be invoked judicially
- Breach must not be slight or casual
- Prescriptive period: 10 years

ii. Potestive, Casual and Mixed Conditions

Potestive Casual Mixed

Fulfillment of the condition is exclu- When the fulfillment of the condition
sively dependent upon the will of is entirely dependent upon chance or
either the debtor or creditor. upon the will of a third person, in
which case the obligation is valid and
Suspensive + Potestative = VOID will take effect in conformity with the
Civil Code
When the fulfillment of the condition
is partly dependent upon the will of
either of the parties and partly upon
chance or the will of a third person,
in which case the obligation is valid

1. Doctrine of constructive fulfillment of suspensive condition:

a. When the condition is mixed, suspensive, partly dependent upon the will of the
debtor, and the latter intentionally prevents the fulfillment of the condition de-
pendent on him, the entire condition is deemed constructively fulfilled
2. Rule on Constructive Fulfillment of mixed conditional obligation
a. When the condition is mixed, suspensive, partly dependent upon the will of the
debtor and partly dependent upon the will of a 3rd persons, and the debtor did
all in his power to comply, but the condition is not fulfilled because of the 3rd
person over whom the debtor has no control, the entire condition is deemed
constructively fulfilled.

iii. Possible and Impossible Conditions

Possible Impossible

Condition is not Condition is contrary to the law of nature, or good customs, public policy, law
contrary to law of
nature, good cus- Effect:
toms, public poli- - Obligation is void
cy or law - As to donations: condition is considered not imposed. Donation is valid
- As to testamentary dispositions: Not imposed. Disposition is valid

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iv. Conjunctive, Alternative and Facultative

Conjunctive Alternative Facultative

There are several Several prestations which are due, BUT the debtor is required There is only one prestation
prestations which are to perform only one prestation in order for the obligation to be agreed upon, but the
due and the debtor extinguished debtor may render another
is required to per- in substitution
form all prestations Right of choice
in order for the GR: Debtor Creditor needs to be noti-
obligation to be ex- Limit: creditor cannot be compelled to receive part of one and fied if the debtor chooses
tinguished part of the other undertaking; debtor cannot choose prestation to perform the other
that is impossible prestation.
EX: unless expressly granted to the creditor

v. Joint and Solidary

Joint Solidary

● Debtor is liable only for the proportionate part of ● Each debtor is liable for the entire obligation, and each of
the debt, and each creditor is entitled to demand the creditors is entitled to demand the satisfaction of the
only a proportionate part of the credit from each whole obligation from any or all of the debtors
debtor ● When obligation becomes solidary
● Presumption in favor of joint obligations ○ When the obligation expressly so states
● Characteristics ○ When the law so provides
○ The share of each of the joint creditors or ○ When the nature of the obligation so requires
debtors in the credit or debt is considered dis- ● Solidarity among creditors (mutual agency)
tinct from one another ○ Each one of the creditors can represent all of them.
○ Extinction of the debt of one of the various ○ Demand by one Solidary Creditor, payment must be
debtors does not necessarily affect the debts of made to only such creditor
the others ○ Each one of the SolCreditor may extinguish the
○ Delay on the part of only one of the joint debtor’s obligation even without the consent of the
debtors does not produce effects with respect others
to the others, and if the delay is produced ○ SolCreditor cannot assign his rights to a stranger
through the acts of only one of the joint credi- without the consent of the others
tors, the other cannot take advantage. ● Solidarity among debtors (mutual guaranty)
○ Interruption of prescription by one creditor ○ Each one of the debtors is liable for the entire obliga-
does not benefit other creditors tions
○ Personal vices of defect of each obligation ○ Any one of them can pay
does not affect the other. ○ The solidary debtor who paid has the right to demand
○ Insolvency of a debtor does not increase the reimbursement from his co-debtors
liability of his co-debtors, nor does it authorize ○ One of the debtors is insolvent? All his co-debtors will
a creditor to demand anything from his credi- be liable proportionately
tors ○ Solidarity is not affected by varied terms and condi-
○ Defense of res judicata does not extend from tions
one debtor to another ○ The debtor who is entitled to a personal defense need
not pay his share, but must pay the shares of his co-
debtor who does not have any defense

vi. Obligations with a Penal Clause

1. A penal clause is an accessory obligation which the parties attach to a principal obliga-
tion for the purpose of insuring the performance thereof by imposing on the debtor a
special prestation (generally consisting in the payment of a sum of money) in case the
obligation is not fulfilled or is irregularly or inadequate fulfilled.
2. RULE: Penalty takes the place of the indemnity for damages and the payment of interest
3. Exceptions: Indemnity for damages + penalty may be recovered in the FF cases
a. When there is an express stipulation
b. When the obligor, having failed to comply with the principal obligation, also re-
fused to pay the penalty, in which case the creditor is entitled to interest in the
amount of the penalty, in accordance with Art 2209 of the NCC or
c. When the obligor is guilty of fraud in the fulfillment of the obligation
4. Creditor need not present proof of actual damages suffered by him in order that the
penalty may be demanded

 26 of 44

5. Penalty may be reduced by Court when the principal obligation has been partly or irreg-
ularly compiled with by the debtor or even if there has been no performance, if the
penalty is iniquitous or unconscionable

4. Extinguishment of Obligations
a. Payment or performance
i. Payment must be complete
1. GR: Creditor cannot be compelled to accept partial payment
2. Exception: express stipulation; debt is partly liquidated and partly unliquidated, and the
debtor can pay the part liquidated without waiting for the liquidation of the part that is
unliquidated.
ii. Payment extinguishes the obligation only when obligation is completely delivered or rendered
1. Exception:
a. When obligation is substantially performed in good faith;
b. when creditor waives the balance of the obligation (must be explicit)
iii. Payment must be made by the proper persons; otherwise the creditor cannot be compelled to
accept the same
1. Proper persons: debtor or his authorized representative; 3rd person allowed to make
payment by agreement of the parties; 3rd persons interested in the fulfillment of the
obligation, such as guarantors, sureties, or 3rd party mortgagors
2. Strangers cannot compel the creditor to accept payment from him. But, if the creditor
accepts, obligation is extinguished
iv. Payor must have capacity to make payment. No capacity, creditor cannot be compelled to ac-
cept payment. Consignation will not be proper. In obligations to give, the payor must have free
disposal of the thing due and the capacity to alienate
v. Payment must be made to the proper persons (creditors, successor-in-interest, persons autho-
rized to receive payment). Payment to the wrong person, payment is invalid.
1. Exceptions: payment redounded to the benefit of the creditor, creditor ratifies the pay-
ment to the 3rd person, if by the creditor’s conduct, the debtor has been led to believe
that the 3rd person had authority to receive the payment, payment made in good faith,
debtor pays the creditor prior to acquiring knowledge of the assignment of credit made
by the latter
vi. Person to whom payment is made must have the capacity to receive it. Incapacitated to receive
= payment is invalid
1. Exceptions: incapacitated has kept the thing delivered
2. Insofar as the payment has been beneficial to him
vii. The very thing or service due must be delivered
1. Creditor cannot be compelled to accept payment not in the currency stipulated
2. Checks are not legal tender. But if checks are accepted, it shall produce the effect of
payment only when they have been encashed, or they have been impaired through the
fault of the creditor
3. In case an extraordinary inflation or deflation of the currency stipulated should super-
vene, the value of the currency at the time of the establishment of the obligation shall be
the basis of payment, unless there is an agreement to the contrary.
a. Requisites:
i. Official declaration from BPS
ii. Obligation is contractual
iii. Parties agreed to consider the effects of extraordinary inflation or defla-
tion
viii. Payment must be in the proper place, otherwise the creditor cannot be compelled to accept the
payment (gr: domicile of debtor; ex: agreement)
ix. Special forms of payment

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1. Dation in payment - the alienation of the property to the creditor in satisfaction of a debt
in money
a. Requisites:
i. Performance of a prestation in lieu of payment which may consist in the
delivery of a corporeal thing or a real right or credit against the 3rd per-
son
ii. There must be some difference between the prestation due and that
which is given in substitution
iii. There must be an agreement between the creditor and debtor that the
obligation is immediately extinguished by reason of the performance of
a prestation different from that due.
b. Dation extinguishes the obligation when the parties, by agreement, express or
implied, or by their silence, consider the thing as equivalent to the obligation
2. Cession - abandonment of the totality of the property of the debtor in favor of the credi-
tors in order that the same may be applied for the satisfaction of their credits
3. Tender of payment - does not by itself produce legal payment, unless it is completed by
consignation. Merely exempts the debtor from payment of interest
4. Consignation: the act of depositing the thing due with the court or judicial authorities
whenever the creditor cannot accept or refuses to accept payment, and it generally re-
quires a prior tender of payment
5. Application of payment: one debtor and one creditor, between them, there are several
obligations, the various debts be of the same kind; the debts are all due, the payment
made is not sufficient to cover all obligations.

b. Loss of determinate thing due or impossibility or difficulty of performance

i. The thing is lost when it perishes, goes out of commerce, or disappears in such a way that its
existence is unknown or it cannot be recovered.
ii. Requisites for loss of specific thing due:
1. The loss occurs without the fault of the debtor
2. The loss occurs prior to the debtor incurring delay
3. There is no law or stipulation holding the debtor liable even in case of fortuitous event,
or that the nature of the obligation does not require the assumption of risk
iii. Rule: It is presumed that the loss is due to the debtor’s fault. This presumption does not apply in
case of earthquake, flood, storm, or other natural calamity
iv. Debtor is liable for the loss when:
1. He has promised to deliver the same thing to two or more persons who do not have the
same interest
2. The possessor in bad faith in every case
3. Common carrier negligently incurs in delay in transporting the goods.
4. Borrower who uses the thing for a purpose different from that intended, delays its return,
receives the thing under appraisal, lends it to a 3rd person, or saves his property instead
of the thing borrowed
5. The depositary who uses the thing without the depositor’s permission, delays its return,
or allowed others to use it
6. Negotiorum gestior who undertakes risky transactions, prefers his interest to that of the
owner, fails to return the property after demand by the owner, or assumes management
in bad faith
7. When the obligation to deliver a determinate thing proceeds from a criminal offense,
unless prior to its loss the person who should receive it refused acceptance without justi-
fication

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v. Doctrine of unforeseen events: when the service has become so difficult as to be manifestly be-
yond the contemplation of the parties, the obligor may be released therefrom, in whole or in
part

c. Condonation or remission of debt

i. It gratuitous on the part of the creditor, but it requires acceptance by the debtor to be valid
ii. Form: Donation or Legacy
1. Donation: can be express or implied
a. Presumed when a private document evidencing a credit is found in the posses-
sion of the creditor, it gives rise to a presumption that the creditor voluntarily
delivered the document to the debtor and such voluntary delivery gives rise to a
presumption of the condonation of the indebtedness
2. Legacy: must comply with the formalities of a last will and testament
a. Acceptance of the debtor can only be made after the death of the creditor

d. Confusion
i. The meeting in one person of the qualities of creditor and debtor with respect to the same
obligation. It exists when the characters of creditor and debtor are merged in the same person
ii. Requisites
1. It must take place in the person of the principal creditor and principal debtor, hence, if
the merger involves the creditor and the guarantor, the obligation is not extinguished
2. It must be complete and definite, because if it is not complete, the obligation still sub-
sists.

e. Compensation
i. It is a mode of extinguishing the concurrent amounts of the obligations of persons who, in their
own right and as principals, are reciprocally creditors and debtors of each other.
ii. Legal compensation
1. Requisites
a. The parties must be creditors and debtors of each other in their own right and as
principals
b. Both debts consist in a sum of money, or if the things due are consumable, they
be of the same kind, and also of the same quality if the latter has been states
c. Both debts are due
d. Both debts are demandable and liquidated
e. Neither of the debts be subject to any lien, retention, or suit instituted by 3rd
persons of which notice has been communicated in due time to the debtor
2. Effect: when all requisites are present, compensation takes effect by operation of law,
and extinguishes both debts to the concurrent amount, even though the creditors and
debtors are not aware of the compensation
3. Debts not subject to legal compensation
a. One of the debts arises from a depositum
b. When one of the debts arises from the obligations of a depositary or of a bailee
in commodatum
c. When one of the debts arises from a claim for support due by gratuitous title
d. When one of the debts consists in civil liability arising from a penal offense
e. When one of the debts consists in the claim of Government for payment of taxes
f. Novation
i. Novation is the extinguishment of an obligation by the substitution or change of the obligation
by a subsequent one which extinguishes or modifies the first, either by changing the object or
principal conditions, or by substituting another in place of the debtor, or by subrogating a 3rd
person in the rights of the creditor

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ii. Extinctive Novation, requisites

1. There must be a previous valid obligation
2. There must be an agreement of the parties concerned to a new contract
3. There must be the extinguishment of the old contract
4. There must be the validity of the new contract
iii. Objective Novation
1. Change involves the cause, object, or any principal conditions
2. The subsequent agreement must be merely incidental to the main obligation.
iv. Substitution of debtor:
1. Requisite
a. The old debtor must be expressly released from the obligation, and
b. The third person or new debtor must assume the former’s place in the relation
2. Without the express release of the debtor from the obligation, any third party who may
thereafter assume the obligation shall be considered merely as co-debtor or surety.
3. Expromision
a. When the initiative for the change does not emanate from the old debtor and it
may even be made without his knowledge or consent, since it consists in a 3rd
person assuming his obligation. The consent of the new debtor and the creditor
is absolutely required
4. Delegacion
a. Debtor offers and the creditor accepts a 3rd person who consents to the substi-
tution so that the intervention and the consent of these three persons are neces-
sary and they are respectively known as delegante, delegatario and delegado
b. If the debtor fails to perform the obligation by reason of his insolvency, the ac-
tion can be revived against the original debtor in two instances:
i. When the insolvency of the new debtor was already existing and of pub-
lic knowledge at the time the old debtor delegated his debt
ii. When such insolvency was already existing and known to the old debtor
at the time he delegated his debt.
5. Subrogation
a. Defined as the transfer of all the rights of the creditor to a 3rd person, who sub-
stitutes him in all his rights.
b. The nullity of an old obligation may be cured by subrogation.

E. Contracts
1. In general

● A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to
give something or to render some service

● Fundamental Characteristics
○ Obligatory force of contracts
■ Obligations arising from contracts have the force of law between the contracting parties and
should be complied with in good faith.
■ To be obligatory, the contract must be perfected, valid and enforceable
○ Autonomy of contracts
■ The contracting parties are accorded liberality and freedom to establish such stipulations, claus-
es, terms, and conditions as they may deem convenient, provided the same are not contrary to
law, morals, good customs, public order, or public policy
■ Protected by the constitution

 30 of 44

○ Mutuality of contracts
■ Contract must bind both the contracting parties; its validity or compliance cannot be left to the
will of one of them
■ Example: loan agreement gave the creditor the discretion to increase the interest rate at will dur-
ing the term of the loan, such stipulation is void
○ Relativity of contracts
■ Contracts can only bind the parties who entered into it, and it cannot favor or prejudice a 3rd
person
■ Heirs, assigns are also bound except when the rights and obligations arising therefrom are not
transmissible
■ Exception to relativity of contracts: Stipulation pour autrui or stipulation in favor of 3rd person
conferring a clear and deliberate favor upon him and which stipulation is merely a part of a con-
tract entered into by the parties. REQUISITES:
● There must be a stipulation in favor of a 3rd person
● Stipulation must be a part, not the whole of the contract
● Contracting parties must have clearly and deliberately conferred a favor upon a 3rd per-
son, not mere incidental benefit of interest
● 3rd person must have communicated his acceptance to the obligor before its revocation
● Neither of the contracting parties bears the legal representation of authorization of the
3rd party
■ 3rd persons may be affected by contracts creating real rights when they come into possession of
the object of the contract
■ Creditors acquire the right to rescind the contract entered into by the debtor with a 3rd person if
that contract is intended to defraud him
■ Tort interference - any third person who induces another to violate his contract shall be liable for
damages to the other contracting party. REQS
● The existence of a valid contract
● Knowledge on the part of the 3rd person of the existence of the contract and who the
contracting parties are.
● Interference of the 3rd person is without legal justification or excuse

● How are contracts perfected

○ Negotiation - preparation begin when the prospective contracting parties manifest their interest in the
contract and ends at the moment of their agreement
○ Perfection - or birth of the contract occurs when they agree upon the essential elements.
■ How perfection takes place
● Consensual contract: perfection upon the meeting of the minds
● Real contracts: perfection upon the delivery of the object of the agreement. (pledge,
commodatum, mutuum, deposit)
○ Consummation - last state, occurs when the parties fulfill or perform the terms agreed upon in the con-
tract, culminating in the extinguishment thereof.

● Essential requisites of contracts

○ Consent - Manifested by the meeting of the offer and acceptance upon the thing and the cause which
are to constitute the contract. An offer that is not accepted does not give rise to consent, and the con-
tract does not come into existence
■ OFFER
● Expression of the willingness to contract
● Binding as soon as accepted by the person to whom it is addressed
● Requisites
○ Offeror must have a serious intention to become bound by his offer

 31 of 44

○ Terms of the offer must be reasonably certain, definite, and complete, so that
the parties and the court can ascertain the terms of the offer
○ The offer must be communicated by the offeror to the offeree, resulting in the
offeree’s knowledge of the offer.
● Not offers
○ Business advertisements of things for sale
○ Advertisement for bidders
○ Display of goods with a price ticket attached in a shop window
● Offer is terminated
○ By revocation or withdrawal
○ By rejection of the offer or when a offeree makes a counter offer
○ By death, insanity, insolvency, or civil interdiction of either the offeror or the of-
feree prior to the perfection of the contract
○ By expiration of the period fixed for the acceptance of the offer
○ By supervening illegality of the proposed contract prior to perfection
○ By the destruction of the subject matter prior to perfection
● Option contract: preparatory contract in which one party grants to the other, for a fixed
period and under specified conditions, the power to decide whether or not to enter into
a principal contract. It is a separate agreement distinct from the contract.
○ The offeror is bound not to enter into the principal contract with any other per-
son during the period designated, and within that period, to enter into such
contract with the one to whom the option was granted, if the latter should de-
cide to use the option.
○ Not an option contract if no consideration
○ With consideration -> option contract is perfected
○ Consideration must not be earnest money.
● Acceptance of Offer
○ Must be absolute
○ Can be express or implied
○ Cognition theory: Contract is perfected only from the acceptance of an offer is
made known to the offeror
○ The acceptance can be withdrawn or revoked before it is made known to the
offeror
■ Capacity to give consent
● Minors are incapable of giving consent. If the minor looks like an adult and entered into
a contract, the contract cannot be annulled due to the minority as there was an active
misrepresentation by the minor.
● Insane or demented cannot give consent, unless the contract was entered during a lucid
interval
● Others who cannot give consent: deaf mute who do not know how to write, those in a
state of drunkenness or during a hypnotic spell, persons suffering from the accessory
penalty of civil interdiction and incompetents under guardianship, illiterate if the contract
was not fully explained
■ Vices of Consent
● Mistake - mistake as to the object of the contract which includes mistake over the es-
sence of the substantial qualities and mistake as to the amount. Mistake must be so
patent and obvious. Generally, a mistake of fact.
● Violence - force employed must be serious or irresistible and it must have been the de-
termining cause of consent.
● Intimidation - must be the determining cause of the contract, or must have cause the
consent to be given. The threatened act must be unjust or unlawful. The threat must be
real and serious to produce a reasonable and well-grounded fear

 32 of 44

● Undue influence - requisites: a person who can be influenced, the fact that improper in-
fluence was exerted and the submission to the overwhelming effect of such unlawful
conduct
● Fraud: it must have induced the other party to enter into the contract or causal fraud.
For incidental fraud, the party who acted fraudulently is only liable for damages. Fraud
must be serious. It must have resulted to damage and injury to the party seeking annul-
ment

○ Object: All things which are not outside the commerce of men, including future things; all rights which
are not transmissible or all services which are not contrary to law, morals, good customs, public order, or
public policy
■ Requisites
● Must be within the commerce of men,
● Must be real or possible
● Licit
● Determinate or determinable
■ No contract may be entered into upon future inheritance
● Exception: a person may make a partition of his estate by an act inter vivos, provided
that the legitime of compulsory heirs is not prejudiced.

○ Cause: the WHY of the contracts, the essential reason which moves the contracting parties to enter into
the contract
■ GR: cause is not the motive because motive does not affect the consideration
■ Exception: motive may be regarded as cause when the motive has been made a condition upon
which the contract is made to depend
■ Requisites:
● It must exists
● It must be true
● Licit
■ Effect of lesion or inadequacy of cause:
● GR: lesion or inadequacy of cause does not invalidate a contract
● Ex: Lesion is a ground for rescission in the ff cases
○ When the ward suffers lesion by more than ¼ of the value of the property in con-
tracts entered into by guardians on behalf of wards
○ When the absentee suffers lesion by more than ¼ of the value of the property in
contracts entered into by legal representatives on behalf of absentees
○ In partition among co-heirs, when any one of them received things whose value
is less than ¼ than the share to which he is entitled
○ Those undertaken in fraud of creditors when the latter cannot in any other man-
ner collect claims due them
○ Those which refer to things under litigation if they have been entered into by the
defendant without the knowledge and approval of the litigants or of competent
judicial authority
○ All other contracts specially declared by law to be subject to rescission
○ Payments made in a state of insolvency for obligations to whose fulfillment the
debtor could not be compelled at the time they were effected.
○ Delivery (Real contracts)
● Forms of contracts
○ Rule: Contracts are valid regardless of form as long as all the essential requisites are present
○ Exception:
■ When the law requires a certain form to make the contract valid

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● Donation of personal property where the value exceeds 5k (both donation and accep-
tance must be in writing
● Donation of real property (donation and acceptance must be in a public instrument. If
not = void)
● Donation propter nuptias (Form same as ordinary donations)
● Condonation
● Partnership where contribution is real property
● Agency to sell a parcel of land (and so many more)
■ When the law requires a certain form in order that it may be enforceable or in order that it may
be proved in a certain way (statute of frauds! favorite!)
○ Statute of Frauds (must be written or else unenforceable, list is exclusive)
■ An agreement whereby the performance is not within the year of the making of the contract
■ Any special promise to answer for the debt, default, or miscarriage of another (guaranty and
surety)
■ Agreement in consideration of marriage (marriage settlement)
■ Sale of goods, chattels, or things in action at a price not less than Php 500. (500 pesos and
above)
■ Sale of real property or interest therein or lease of real property for more than a year (plus re-
newal)
■ Representation as to the credit of a 3rd person
■ An express trust concerning an immovable
○ The defense of statute of frauds can be waived either by
■ Failing to object to the presentation of oral evidence to prove the contract
■ Accepting the benefits under the contracts
● Reformation (mentioned in the long syllabus)
○ Remedy in equity, whereby a written instrument is made or construed so as to express or conform to the
real intention of the parties, where some error or mistake has been committed
○ Requisites:
■ Meeting of the minds
■ The written instrument does not express the true intention of the parties
■ The failure of the instrument to express the true intention of the parties is due to mistake, fraud,
inequitable conduct, or accident.
○ Mistake can be mutual
○ Rules of interpretation
■ Construe against drafting party - drafter caused the obscurity, it shall not favor him
■ Principle of effectiveness -go for interpretation that makes all the stipulation effective
■ An accessory contract must be read in its entirety and together with the principal agreement
■ Ejusem generis

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Defective contracts

Rescissible Voidable Unenforceable Void

Valid contract until rescinded by All essential requisites for validity
reason of injury or damage to ei- are present, but may be annulled
ther of the contracting parties or to because of want of capacity or viti-
3rd persons. ated consent of one of the parties.
Grounds are mentioned under OB- Valid until declared void.
JECT
Prescriptive period: 4 years starting
Effect: mutual restitution when the intimidation, violence, or
undue influence ceases or when
the mistake or fraud is discovered
Contract cannot be en-
forced by a proper action
in court, unless ratified,
Contract has no force and
effect from the very begin-
ning.
Cannot be validated or
ratified
The right to set up the
defense of inexistence or
absolute nullity cannot be
waived, renounced or pre-
scribe.

Can be ratified
Effect: parties restored to original
status

Requisites Kinds of voidable contracts Kinds of Unenforceable Kinds of void contracts

1. The action for rescission must orig- 1. One of the parties is incapable contracts 1. Illegal contracts
inate from any of the causes speci- of giving consent (if both are 1. Unauthorized con- 2. Absolutely simulated
fied in Art 1381 and 1382 incapable of giving consent -> tracts - contracts contracts (no element of
2. The party asking for rescission has
unenforceable) entered into the consent)
no other legal means to obtain
2. Where both parties are capable name of another 3. Contracts whose cause r
reparation for damage
3. Person demanding rescission must
of giving consent to a contract, person by one who object did not exist at
be able to return what he may be but the consent of one is vitiat- has been given no the time of transaction
obliged to restore if rescission is ed by mistake, violence, intimi- authority or legal 4. Object is outside the
granted dation, undue influence, or representation or commerce of men
4. The object must be legally in the fraud who has acted be- 5. Contact involves an
possession of a 3rd persons who yond his powers impossible service
did not act in bad faith (void if contract in- 6. Intention of the parties
5. The action for rescission must be volves the sale of a cannot be ascertained
filed within 4 years from the accrual parcel of land) 7. Expressly declared void
of the right of action
2. Contract which vio- by law
late the requirement
Requisites of Accion Pauliana (remedy
for fraud)
of the statute of ● Relative simulation - par-
1. The plaintiff asking for rescission frauds ties conceal their true
has a credit prior to the alienation, 3. Contracts where agreements
although demandable later both parties are in-
2. The debtor has made a subsequent capacitated
contract conveying a patrimonial
benefit to a 3rd person
3. The creditor has no other legal
remedy to satisfy his claim
4. The act being impugned is fraudu-
lent
5. The 3rd person who received the
property conveyed, if it is by oner-
ous title, has been an accomplice
in the fraud
6. The conveyance must not be abso-
lutely simulated

● Resolution vs Rescission
Resolution (Art 1191) Rescission (lesion or economic prejudice)

1. Not predicated on injury to economic interests of the party plain-
tiff, but on breach of faith by the defendant that violates the reci-
procity between the parties
2. Contract is valid
3. Applies exclusively to reciprocal contracts
4. Principal action which seeks the resolution or cancellation of the
contract
5. Only a contracting party can be injured and can maintain an action
for rescision
6. The court has discretionary power not to grant rescission
1. The cause of action is subordinated to the existence of
economic prejudice
2. Contract is defective
3. Applies to all kinds of contracts
4. Only subsidiary remedy - it cannot be instituted ex-
cept when the party suffering damage has not other
legal means to obtain reparation for the same
5. A 3rd person can be injured
6. Court must order the rescission once the ground is
proven

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2. Loans and Mortgages

● Contracts of Loan - one of the parties delivers to another, either something not consumable so that the latter
may use the same for a certain time and return it.

Commodatum Mutuum

● What is borrowed or used is non-consumable. ● What is borrowed is money or other consumable

● Essentially gratuitous things to another for consumption, upon the
● Bailor retains the ownership of the thing loans condition that the same amount of the same kind
● Perfected upon delivery and quality shall be paid.
● Thing can be movable or immovable
● Perfected upon delivery
● Duty of bailee: return the thing
● Thing is only movable
● Purely a personal contract
○ Death of the parties - extinguishes the contract
● Duty of bailee: return the identical thing loaned.
○ The bailee cannot allow 3rd persons to use the thing borrowed,
If unable, pay its equivalent in kind, quality and
unless expressly authorized by the bailor (exception: family quantity
members ● May be gratuitous or with a stipulation to pay
○ Unauthorized delegation of use: bailee is liable for the los of interest.
the thing even if it should be through fortuitous event and the
bailee is liable for extraordinary expenses for the preservation
of the thing arising from the fault of the delegate

Obligation of the Baille/borrower Obligation of borrower

1. To pay for ordinary expenses for the use and preservation of the
thing loans
2. Liable for the loss of the thing loaned
○ if it was lost through his fault, or
○ even if it should be lost through fortuitous event (i) when he
devotes the thing loaned to a diff purpose, (ii) keeps it longer
than the period stipulated, (iii) thing is delivered with appraisal
of its value, unless stipulation for exemption of liability due to
fortuitous event, (iv) lends the thing to a 3rd person, who is
not a member of his household, or (v) he chose to save his
own thing rather than the object.
3. Not Liable for deterioration due to the use and not his fault.
4. Liability of two or more bailees (solidarily liable)
5. Return of the thing loaned
○ Contract of precarium: bailor may demand for the return of the
thing loaned at will in a contract of precarium (duration of the
contract is not specified, and the use of the thing is merely toler-
ated
○ Urgent need of the bailore
○ Bailee commits acts of ingratitude
6. Right to retention
Obligations of the bailor
1. Extraordinary expenses for the preservation of the thing
loaned shall be for the account of the bailor
2. Bailee entitled to refund, if payment for extraordinary ex-
penses was advanced
3. Exception: if the extraordinary expenses arise on the occa-
sion of the actual use of the thing by the bailee, even
though he acted without faule, the expenses shall be borne
equally by both the bailor and the bailee, unless there is a
stipulation to the contrary
1. The rules on legal tender and extraordinary
inflation and deflation discussed in Oblicon
are applicable
- The payment of debts in money shall be
made in the currency stipulated, and if it is
not possible to deliver such currency, then
in the PH currency
- Delivery of Promissory notes payable to
order, or bills of exchange or other mercan-
tile documents shall produce the effect of
payment only when they have been en-
cashed, or when through the fault of the
creditor they have been impaired
- In case an extraordinary inflation or defla-
tion of the currency stipulation should su-
pervene, the value of the currency at the
time of the establishment of the obligation
shall be the basis of payment, unless there
is an agreement to the contrary.
2. The debtor owes another thing of the same
kind, quantity and quality even if should
change in value
3. Obligation to pay money interest
4. If the borrower pays interest when there has
been no stipulation therefore, the provisions
of this Code concerning solutio indebiti, or
natural obligations, shall be applied, as the
case may be.

● Real Mortgage Contract

○ Contract whereby the debtor secures to the creditor the fulfillment of a principal obligation, special-
ly substituting to such security immovable property or real rights over immovable property which
obligation shall be satisfied with the proceeds of sale of said property or rights in case the said obliga-
tion is not complied with at the time stipulated

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○ It is a real, accessory, unilateral and subsidiary contract

○ Requisites
■ It is constituted to secure the fulfillment of a principal obligation
■ That the mortgagor be the absolute owner of the thing mortgaged
■ That the persons constituting the mortgage have the free disposal of their property, and in the
absence thereof, that they be legally authorized for the purpose
○ When the principal obligation becomes due, the things in which the mortgage consists may be alienated
for the payment to the creditor
○ The creditor cannot appropriate the things given by way of mortgage or dispose of them. Any stipula-
tion to the contrary is void
○ A mortgage is indivisible, even though the debt may be divided among the successors in interest of the
debtor or of the creditor.
■ The debtor’s heir who has paid a part of the debt cannot ask for the proportionate extinguish-
ment of the pledge or mortgage as long as the debt is not completely satisfied
■ Neither can the creditor’s heir who received his share of the debt return the pledge or cancel the
mortgage, to the prejudice of the other heirs who have not been paid
■ From these provisions is excepted the case in which, there being several things given in mort-
gage, each one of them guarantees only a determinate portion of the credit
■ The debtor, in this case, shall have a right to the extinguishment of the mortgage as the portion
of the debt for which each thing is specially answerable is satisfied
○ Indivisibility of the mortgage is not affected by the fact that the debtors are not solidarily liable
○ The contract of mortgage may secure all kinds of obligations, be they pure or subject to a suspensive or
resolutory condition
○ A promise to constitute a mortgage is a personal action between the contracting parties, without preju-
dice to the criminal responsibility incurred by him who defrauds another, by offering in mortgage as un-
encumbered, thing which he knew were subject to some burden, or by misrepresenting himself to be the
owner of the same
○ Subject of real estate mortgage are immovables, alienable real rights in accordance with the laws, im-
posed upon immovables. Chattel mortgage -> movables
○ REM must be recorded in the Registry of Property so that it is validly constituted
■ BUT, if not recorded, it is still binding between the parties
■ The persons in whose favor the law establishes a mortgage have no other right than to demand
the execution and the recording of the document in which the mortgage is formilized
○ Mortgage directly and immediately subjects the property upon which it is imposed, whoever the posses-
sor may be, to the fulfillment of the obligation for whose security it was constituted
○ Mortgage extends
■ to the natural accessions, improvements, fruits and rents not yet received when the obligation
becomes due, and
■ to the amount of the indemnity granted or owing to the proprietor from the insurers of the
property mortgaged,
■ or in virtue of expropriation of public use, with the declarations, amplifications and limitations
established by law, whether the estate remains in the possession of the mortgagor, or it passes
into the hand of a 3rd persons
○ Mortgage credit can be alienated
○ A stipulation forbidding the owner from alienating the immovable mortgaged shall be void

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3. Interest: (legal interest rate is 6% as on July 1, 2013)

Conventional inter- Compensatory, penalty Compound interest Finance charges Usury

est or Monetary or indemnity interest
interest

Compensation fixed
by the parties for
the use or forbear-
ance of money
Interest imposed by Interest on interest, Includes interest, fees, Excessive interest; beyond that
law or by the courts as imposed either by service charges, dis- allowed by law
penalty or indemnity stipulation of the counts, and such oth-
for damages for breach parties or by judicial er charges incident to
of contractual obliga- demand the extension of credit
tions as the Board may be
regulation provide
(Sec 3(3), RA 3765)

No interest shall be
due, unless it has
been expressly
stipulated in writing
Obligation is the pay- W/o prejudice to the Contracts and stipulations, under
ment of money + provisions of Art any cloak or device, intended to
obligor is in delay = 2212 (interest due circumvent the laws against usury
indemnity of damages shall earn legal in- shall be void,
(no stipulation to the terest from the time The borrower may recover in
contrary) shall be the it is judicially de- accordance with the law on usury
payment of the interest manded, although
agreed upon. the obligation may Usury is no longer in force. Par-
No interest agreed be silent upon this ties may freely stipulate on any
upon -> legal interest point) interest due adjustment in the interest rate on
is 6% and unpaid shall not a loan.
earn interest.
However, the con- A contract of loan with usurious
tracting parties may interest in violation of the Usury
by stipulation capi- Law is valid as to the loan but
talize the interest void as to the usurious interest. In
due and unpaid, usurious loans, the entire obliga-
which was added tion does not become void be-
principal, shall earn cause of an agreement for usuri-
new interest ous interest; the unpaid principal
debt still stands and remains
valid but the stipulation as to the
usurious interest is void, conse-
quently, the debt is to be consid-
ered without stipulation as to the
interest.

● Computation of Legal Interest under Lara’s Gifts and Decors vs Midtown Industrial Sales (2019) which modified
the new guidelines on the imposition of interest as provided in Eastern Shipping Lines case and NACAR case <3
1. When the obligation is breached, and it consists in the payment of a sum of money, (i.e., a loan or forbearance of
money, goods, credits or judgments), the interest due shall be that which is stipulated by the parties in writ-
ing,
a. provided it is not excessive and unconscionable, which,
b. in the absence of a stipulated reckoning date, shall be computed from default, (i.e., from extrajudicial or
judicial demand in accordance with Article 1169 of the Civil Code), UNTIL FULL PAYMENT, without com-
pounding any interest unless compounded interest is expressly stipulated by the parties, by law or regu-
lation.
c. Interest due on the principal amount accruing as of judicial demand shall SEPARATELY earn legal interest
at the prevailing rate prescribed by the Bangko Sentral ng Pilipinas, from the time of judicial demand
UNTIL FULL PAYMENT.

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2. In the absence of stipulated interest, in a loan or forbearance of money, goods, credits or judgments, the rate of
interest on the principal amount shall be the prevailing legal interest prescribed by the Bangko Sentral ng
Pilipinas, which shall be
a. computed from default, i.e., from extrajudicial or judicial demand in accordance with Article 1169 of the
Civil Code, UNTIL FULL PAYMENT, without compounding any interest unless compounded interest is
expressly stipulated by law or regulation.
b. Interest due on the principal amount accruing as of judicial demand shall SEPARATELY earn legal interest
at the prevailing rate prescribed by the Bangko Sentral ng Pilipinas, from the time of judicial demand
UNTIL FULL PAYMENT.

3. When the obligation, not constituting a loan or forbearance of money, goods, credits or judgments, is breached,
an interest on the amount of damages awarded may be imposed in the discretion of the court at the pre-
vailing legal interest prescribed by the Bangko Sentral ng Pilipinas, pursuant to Articles 2210 and 2011 of the
Civil Code.
a. No interest, however, shall be adjudged on unliquidated claims or damages until the demand can be
established with reasonable certainty.
b. Accordingly, where the amount of the claim or damages is established with reasonable certainty, the pre-
vailing legal interest shall begin to run from the time the claim is made extrajudicially or judicially (Art.
1169, Civil Code) UNTIL FULL PAYMENT,
c. but when such certainty cannot be so reasonably established at the time the demand is made, the inter-
est shall begin to run only from the date of the judgment of the trial court (at which time the quan-
tification of damages may be deemed to have been reasonably ascertained) UNTIL FULL PAYMENT.
d. The actual base for the computation of the interest shall, in any case, be on the principal amount finally
adjudged, without compounding any interest unless compounded interest is expressly stipulated by law
or regulation.

F. Torts, Quasi-delicts
● Torts vs Quasi-delicts

Torts Quasi-Delict

Acts giving rise to civil liability but are not
necessarily the consequences of crimes or
contractual obligations.
An unlawful violation of a private right, not
created by contract, and which gives rise
to an action for damages. It is a wrongful
act or omission resulting in breach of a
private legal duty, as distinguished from a
mere breach of contractual duty, and
damage from said breach of duty of such a
character as to afford a right of redress at
law in favor of the injured party against the
wrongdoer
Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi- delict and is governed by the provisions of
this Chapter
Elements
1.Damage suffered by plaintiff
2.Fault or Negligence of the defendant, or some
other person for whose acts he must respond
3.Connection of cause and effect between the
fault or negligence of the defendant and the
damages incurred by the plaintiff
4.No pre-existing contractual relation between
the parties

● Principles
○ Abuse of Right
■ Every person must, in the exercise of his rights and in the performance of his duties, act with jus-
tice, give everyone his due, and observe honestly and good faith. Malice or bad faith is at the
core of an abuse of right
■ Elements:
● Existence of a legal right or duty
● Right is exercised in bad faith








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● For the sole intent of prejudicing or injuring another

○ Unjust enrichment
■ Every person who through an act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter without just or legal ground,
shall return the same to him.
■ Even when an act or event causing damage to another's property was not due to the fault or
negligence of the defendant, the latter shall be liable for indemnity if through the act or event he
was benefited
■ Elements
● A person is unjustly benefited
● Such benefit is derived at the expense of or with damages to another; and
● The aggrieved party has no other action based on a contract, quasi-contract, crime, qua-
si-delict, or any other provision of law.
○ Liability without fault
■ There is strict liability if one is made liable independent of fault, negligence or intent after estab-
lishing certain facts specified by law. Strict liability tort can be committed even if reasonable care
was exercised regardless of the state of mind of the actor at that time
■ Examples: possessors and users of animas, falling objects, Liability of employers in case of death
or injuries of employees
○ Acts contrary to law
■ Every person who, contrary to law, willfully or negligently causes damage to another, shall in-
demnify the latter for the same
○ Acts contrary to morals
■ Any person who willfully causes loss or injury to another in manner that is contrary to morals,
good customs or public policy shall compensate the latter for the damage
■ Elements
● Act is legal
● Act is contrary to morals, good customs, public order or public policy and
● Act is done with intent to injure
● Classification of Torts
○ According to manner ot commission
■ Negligent torts - It involves voluntary acts or omissions which results in injury to others, without
intending to cause the same.
■ Intentional Torts
■ Strict Liability torts
○ Scope
■ General torts: the catch!all provisions on torts provided for in the civil code i.e. Articles 19, 20
and 21.
■ Specific Torts - trespass, assault, battery, negligence, products liability
● Tortfeasor
○ Direct tortfeasor
■ Whoever by act or omission causes damage to another, there being fault or negligence, is oblig-
ed to pay for the damage done
■ A corporation is civilly liable in the same manner as natural persons for torts, because "generally
speaking, the rules governing the liability of a principal or master for a tort committed by an
agent or servant are the same whether the principal or master be a natural person or a corpora-
tion, and whether the servant or agent be a natural or artificial person.
○ Persons made responsible for others (Vicarious Liability)
■ A person is liable not only for his own torts, but also for those committed by others with whom
he has a certain relationship, or for whom he is responsible
■ Not governed by the doctrine of respondeat superior
■ Persons Vicariously liable

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● Father/Mother for their minor children (direct and primary)

● Guardians are liable for the minors and incapacitated persons under their authority (di-
rect and primary)
● Schools, administrators and teachers, and individuals, entities or institutions engaged in
child care having special parental authority over children .(principal and solidary)
● Owners/managers of establishment or enterprise for their employees (direct and prima-
ry)
● Employers for their employees and household helpers (direct and primary)
● State for their special agents (direct and primary)
● Teachers/heads of establishments of art and trades for their pupils/students/apprentices
(principal and solidary)
■ General defenses:
● Diligence of a good father of the family
● No employer-employee relationship
○ Joint tortfeasor
■ all the persons who command, instigate, promote, encourage, advise, countenance, cooperate
in, aid or abet the commission of a tort, or who approve of it after it is done, if done for their
benefit. Liability is solidary

● Proximate cause
○ Definition: That cause which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury, and without which the result would not have occurred. This applies only to
quasi-delicts
○ If plaintiff’s negligence is only contributory, he is considered partly responsible only. He may still recover
from the defendant, but the award is reduced.
○ Cause in fact (But for test) - requires a plaintiff to establish that the act complained of probably caused
the subsequent disability
○ Efficient Intervening Cause: An independent intervening cause as one which is so distinct as to sever the
connection of cause and effect between the negligent act and the injury.
○ Last Clear Chance: Even though a person’s own acts may have placed him in a position of peril and an
injury results, the injured is entitled to recover if the defendant through the exercise of reasonable care
and prudence might have avoided injurious consequences to the plaintiff. Does not apply to joint tort-
feasors, defendants concurrently negligent and as against 3rd persons
■ Requisites
● Plaintiff was in a position of danger by his own negligence
● Defendant knew of such position of the plaintiff
● Defendant had the last clear chance to avoid the accident by exercise of ordinary case,
but failed to exercise such last clear chance and
● Accident occurred as proximate cause of such failure

● Legal Injury
○ Legal invasion of a legal right
○ Elements
■ Right in favor of the plaintiff
■ Obligation on the part of the defendant to respect or not violate such right; and
■ An act or omission on the part of such defendant in violation of the right of the plaintiff or consti-
tuting a breach of the obligation of the defendant to the plaintiff for which the latter may main-
tain an action for recovery of damages
○ There can be damage without injury in those instances in which the loss or harm was not the result of a
violation of a legal duty
○ Damage: Loss, hurt or harm which results from the injury
○ Damages: the recompense or compensation awarded for the damage suffered

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● Intentional Torts
○ Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good cus-
toms or public policy shall compensate the latter for the damage.
○ Every person criminally liable for a felony is also civilly liable
○ Kinds of intentional torts
■ Breach of promise to marry: Generally, not actionable, but! In cases where there is financial damages,
social humiliation, moral seduction and the breach is contrary to good morals, the breach gives rise to
liability
■ Trespass to and/or deprivation of real or personal property
■ Abortion: due to physician’s negligence or done intentionally without consent
■ Illegal dismissal
■ Malicious prosecution: An action for damages brought by one against another whom a criminal pros-
ecution, civil suit, or other legal proceeding has been instituted maliciously and without probable
cause, after termination of such prosecution, suit or proceeding in favor of the defendant therein.
■ Public humiliation (slander by deed)
■ Ostentatious display of wealth
■ Violation of right of privacy and family relations (marites)
■ Dereliction of official duty of public officers
■ Constitutional protection against illegal searches and seizures may be invoked against private individ-
uals
■ Unfair competition
● Involves an injury to a competitor or trade rival
● Must involve acts which are characterized as “contrary to good conscience” or shocking to judicial
sensibilities
■ Tortious interference

● Negligence
○ Omission of that degree of diligence which is required by the nature of the obligation and corresponds
to the circumstances of the persons time and place
○ Diligence required generally: good father of a family or reasonably prudent person
○ Exception: extraordinary diligence required for lawyers, physicians, banks
○ Test: Did the defendant, in doing the alleged negligent act, use that reasonable care and caution which
an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negli-
gence.
○ When negligence is presumed?
■ Res ipsa loquitur: Where the thing which causes injury is shown to be under the management of
the defendant, and the accident is such as in the ordinary course of things does not happen if
those who have the management use proper care, it affords reasonable evidence, in the absence
of an explanation by the defendant, that the accident arose from want of care
■ Violation of statutes and rules: violation of laws = negligence per se
■ Dangerous weapons and substance: Prima facie presumption of negligence by the defendant if
the death or injury results from his possession of dangerous weapons or substances
○ Defenses
■ Plaintiff’s negligence is the proximate cause of the injury
■ Contributory negligence: When the plaintiff's own negligence was the immediate and proximate
cause of his injury, he cannot recover damages. But if his negligence was only contributory, the
immediate and proximate cause of the injury being the defendant's lack of due care, the plaintiff
may recover damages, but the courts shall mitigate the damages to be awarded.
■ Assumption of risk: the one who voluntarily exposes himself to an obvious, known and appreci-
ated danger assumes the risk of injury that may result therefrom
■ Doctrine of Last Clear Chance

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■ Prescription:
● Action for damages: 10 years
● Quasi-delict: 4 years from the time the cause of action arises
■ Fortuitous event
■ Waiver: Rights may be waived, unless the waiver is contrary to law, public order, public policy,
morals, or good customs, or prejudicial to a third person with a right recognized by law.
■ Emergency: a person in danger is not guilty of negligence
■ Damnum Absque Injuria: There can be damage without injury in those instances in which the loss
or harm was not the results of a violation of a legal duty. In such cases, the consequences must
be borne by the injured person alone, the law affords no remedy for damages resulting from an
act which does not amount to a legal injury or wrong. Does not apply when there is abuse of
rights

● Special liability in particular activities

Activities Elements

Manufacturers/ Manufacturer/processors of foodstuffs, drinks, toilet articles and similar goods shall be liable for
processors death or injuries caused by any noxious or harmful substances used, although no contractual
relation exists between them and the consumers

1. Defendant is a manufacturer/processor
2. Good involve foodstuffs, drinks, toilet products and similar goods
3. Use of noxious or harmful substances
4. Death or injury
5. Plaintiff is a consumer, user or purchaser

Nuisance (check
prop)

Violation of Con- Article 32 of the New Civil Code provides for an independent civil action for damages for viola-
stitutional rights; tion of civil and political rights.
Violation of civil Covers both public officers and private individuals.
liberties; Violation Bad faith or malice is not required
of rights commit-
ted by public
officers

Provinces, Cities Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suf-
and Municipalities fered by, any person by reason of the defective condition of roads, streets, bridges, public build-
ings, and other public works under their control or supervision

Owner of Motor In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was in
Vehicle the vehicle, could have, by the use of the due diligence, prevented the misfortune. It is dis-
putably presumed that a driver was negligent, if he had been found guilty of reckless driving or
violating traffic regulations at least twice within the next preceding two months. If the owner was
not in the motor vehicle, the provisions of article 2180 are applicable. (Art. 2184).

Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has
been negligent if at the time of the mishap, he was violating any traffic regulation (Art. 2185).

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Proprietor of 1.Total or partial collapse of building or structure if due to lack of necessary repairs
building or struc- 2.Explosion of machinery which has not been taken care of with due diligence, and the in-
ture or thing lia- flammation of explosive substances which have not been kept in a safe and adequate place
bility for damages 3.By excessive smoke, which may be harmful to persons or property
4.By falling of trees situated at or near highways or lanes, if not caused by force majeure
5.By emanations from tubes, canals, sewers or deposits of infections matter, constructed with-
out precautions suitable to the place

Liability of engineers or architects

The engineer or architect who drew up the plans and specifications for a building is liable for
damages if within fifteen years from the completion of the structure, the same should collapse
by reason of a defect in those plans and specifications, or due to the defects in the ground (Art
1723)

Liability of contractor
The contractor is likewise responsible for the damages if the edifice falls, within fifteen years, on
account of defects in the construction or the use of materials of inferior quality furnished by him,
or due to any violation of the terms of the contract.
If the engineer or architect supervises the construction, he shall be solidarily liable with the con-
tractor. Acceptance of the building, after completion, does not imply waiver of any of the causes
of action by reason of any defect. (Art. 1723)
Period: 10 years following the collapse of the building

Head of the Fami- The head of a family that lives in a building or a party thereof, is responsible for damages caused
ly by thing thrown or falling from the same (Art 2193)

Violations of Data The data subject is entitled to be indemnified for any damages sustained due to such inaccu-
Privacy rate, incomplete, outdated, false, unlawfully obtained or unauthorized use of personal informa-
tion

● Strict Liability
○ Animals, possessor and used of an animal: The possessor of an animal or whoever may make use of the
same is responsible for the damage which it may cause, although it may escape or be lost. This respon-
sibility shall cease only in case the damage should come from force majeure or from the fault of the per-
son who has suffered damage (Art. 2183).
○ Nuisance
○ Products liability, Consumer Act

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G. Damages
● Adequate compensation for the value of loss suffered or profits which obligee failed to obtain

Actual and Compensatory Moral Nominal Temperate Liquidated Exemplary

● Those awarded in order Purpose is to compensate Nominal damages Awarded when the Damages that are Imposed by way of
to compensate a party the claimant for any phys- are given in order court finds that some those agreed upon example or correc-
for an injury or loss suf- ical suffering, mental an- that a right of the pecuniary loss has by the parties to a tion for the public
fered guish, fright, serious anxi- plaintiff, which has been suffered, but its contract, to be paid good, in addition to
● Components ety, besmirched reputa- been violated or amount cannot from in case of breach the moral, temper-
○ Value of the loss suf- tion, wounded feelings, invaded by the the nature of the thereof ate, liquidated to
fered moral shock, social humil- defendant, may be case, be proved with compensatory dam-
○ The profits which the iation, and similar injuries vindicated or rec- certainty. No difference be- ages; Also called
obligee failed to ob- ognized, and not tween penalty and Corrective Damage
tain Requisites: for the purpose of Absent competent liquidated damages
● Loss must be actually be 1. Evidence of besmirched indemnifying the proof on the amount
proven as a fact reputation or physical, plaintiff for any loss of actual damages, Courts may reduce
● Amount of damages mental or psychological suffered by him the courts may allow if iniquitous or un-
○ Breach with good faith suffering sustained by the party to receive conscionable.
= natural and probable the claimant Cannot co-exist temperate damages
consequences of the 2. A culpable act or omis- with compensatory
breach sion factually estab- damages More than nominal,
○ Breach with bad faith = lished but less than com-
obligor shall be re- 3. Proof that the wrongful Nominal and tem- pensatory
sponsible for all dam- act or omission of the perate damages
ages which may be defendant is the proxi- cannot be awarded Amount is left to the
reasonably attributed mate cause of the dam- concurrently discretion of the
to the non-perfor- ages sustained by the court
mance of the obliga- claimant Amount is left with
tion 4. That the case is predi- the discretion of Temperate damages
○ Crimes and quasi- cated on any of the the court may be awarded
delicts = liable for all instances expressed or even in instances
damages which are envision by Art 2219 where pecuniary loss
natural and probable and Art 2220 could theoretically
consequences of the have been proved
act or omission com- GR: Moral damages can- with certainty
plained not be recovered in ac-
○ Death = 50k tions for damages predi-
○ Loss of earning capaci- cated on breach of con-
ty = computation tract.
○ Support = the person Exception: mishap results
who caused the death to death of passenger; in
must give support for a cases in which the carrier
period not exceeding is guilty of fraud or bad
5 years faith; breach of contract is
constitutive of tort

● Attorney’s fees:
○ Actual damages due to the plaintiff and not to counsel
○ Rule: In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs,
cannot be received
○ Exceptions:
■ When exemplary damages are awarded
■ When the defendant’s act or omission has compelled the plaintiff to litigate with 3rd persons or
to incur expenses to protect his interest
■ Criminal case of malicious prosecution
■ In case of a clearly unfounded civil action or proceeding against the plaintiff
■ Where the defendant acted in gross and evidence bad faith in refusing to satisfy the plaintiff’s
plainly valid, just and demandable claim
■ Actions for legal support
■ Action for the recovery of wages of household helpers, laborers and skilled workers
■ action s for indemnity under workmen’s compensation and employer’s liability laws
■ Separate civil action to recover civil liability arising from a crime
■ When at least double judicial costs are awarded.