Civil Law Review by Rabuya

R52M9UH7
J9JC9B0M
R52M9UH7
PRE-BAR REVIEWER
in
CIVIL LAW
ELMER T. RABUYA
Professor of Civil Laws and Bar Reviewer
Arellano University School of Law, De La Salle Lipa,
University of Asia & Pacific, University of Perpetual Help-Las Pinas,
Polytechnic University of the Philippines and Philippine Christian University;
Formerly: University of Santo Tomas, University of the East,
Jose Rizal University, Lyceum of the Philippines
and Pamantasan ng Lungsod ng Pasay
Jurists Bar Review Center, Recoletos Law Center
Villasis Law Center, Legal Edge, Academicus Review Center
CPRS Bar Review Center, Excellent Bar Review Center
Author: The Law on Persons & Family Relations, Property, Obligations &
Contracts, and Civil Law Reviewer, Volumes 1 and 2
LLB, AUSL, Class Valedictorian
A.B. Management Economics, Ateneo de Manila University
2021 EDITION
Published & Distributed by
S REX Book Store .....
I
$ 856 Nlcanor Reyes, Sr. St
Tel. Nos.: 8736-0567/8733-6746
2161-65 Freedom Bldg., C.M. Recto Avenue
Tel. Nos.: 8522-4521/8522-4107
Manila, Philippines
m
www.rex.com.ph
B ft B B h BB
!
i
J9JC9B0M
R52M9UH7
• pl.' .
iv
J9JC9B0M l
R52M9UH7
FOR YOU WHO INSPIRED ME:
MELVA,
JOHN DARREL,
HOPE,
NANAY,
AND TO ALL MY STUDENTS
I DEDICATE THIS WORK
J9JC9B0M
R52M9UH7
vi
J9JC9B0M I
R52M9UH7
TABLE OF CONTENTS
BOOK I. - PERSONS & FAMILY RELATIONS

A. PRELIMINARY TITLE 1
Effectivity and Application of Laws 1
Basic Conflict of Laws Rules 6
B. HUMAN RELATIONS 12
Required Norm of Human Conduct 12
C. CIVIL PERSONALITY 19
Civil Personality 19
FAMILY CODE OF THE PHILIPPINES

D. MARRIAGE 23
Requisites For A Valid Marriage 23
Rules on Validity of Absolute Divorces 33
Void Marriages 36
Voidable Marriages 50
Legal Separation 53
Rights and Obligations of Spouses 58
Property Relations In General 61
Absolute Community and Conjugal Partnership of Gains 64
Separation of Property of Spouses During the Marriage .. 77
Property Regimes Linder Articles 147 and 148 79
Family Relations and Family Home 85
Paternity and Filiation 90
Adoption 106
Legal Support 116
Parental Authority 121
Emancipation and Summary Proceedings Under the
Family Code 133
Funerals 136
Surnames 138
Change of First Name and Surname 145
Change or Correction of Entry in Civil Register 147
Absence 153
vii
J9JC9B0M
R52M9UH7
BOOK 11. - PROPERTY

Classification of Property: Immovable and Movable Property 156
Classification of Property: Based on Ownership 161
Ownership in General 167
Accession 172
Quieting of Title and Ruinous Buildings and Trees 183
Co-ownership 186
Ownership of Waters 196
Possession 197
Usufruct 204
Easement 211
Nuisance ............................................. 222
Modes of Acquiring and Transmitting Ownership 225
Donation 232
BOOK III. - SUCCESSION
Basic Principles 241

Wills in General 247
Kinds and Formalities of Wills 251
Codicils and Subsequent Wills 263
Revocation of Wills 264
Republication and Revival of Wills 268
Probate of Wills 269
Testamentary Succession: Legitime 273
Reserva Troncal or Reserva Lineal . 282
Testamentary Succession: Rules Applicable to Disposable
Free Portion 285
Institution of (Voluntary) Heirs 285
Preterition 288
Substitution of Heirs 289
Accretion in Testamentary Succession 292
Condition, Mode, and Term 292
Legacies and Devises 296
Vacancies in Succession................................... •. 298
Predecease 298
Valid Disinheritance 300
Capacity and Incapacity to Succeed 302
Acceptance and Repudiation of Inheritance 306
Modes of Filling Up Vacancies 308
Substitution 308
Accretion 308
Right of Representation 310
viii
J9JC9B0M
R52M9UH7
Intestate or Legal Succession 313

Simplified Rules of Intestate Succession: Estate of
Legitimate Decedent 315
Simplified Rules of Intestate Succession: Estate of
Illegitimate Decedent 329
BOOK IV. - OBLIGATIONS AND CONTRACTS

PART 1: OBLIGATIONS
Concept 332
Sources of Obligations 332
Kinds of Obligations: Civil and Natural 341
Kinds of Obligations: Real and Personal 343
Breach of Obligations 346
Kinds of Obligations: Pure, Conditional, and With a Term 350
Kinds of Obligations: Alternative and Facultative Obligations 357
Kinds of Obligations: Joint and Solidary Obligations 360
Kinds of Obligations: Divisible and Indivisible Obligations.... 367
Kinds of Obligations: Obligations with a Penal Clause 368
Extinguishment of Obligations: Payment 370
Extinguishment of Obligations: Loss 382
Extinguishment of Obligations: Condonation or Remission ... 385
Extinguishment of Obligations: Merger or Confusion 386
Extinguishment of Obligations: Compensation 386
Extinguishment of Obligations: Novation 389
PART 2: CONTRACTS
Basic Concepts 395
Perfection and Essential Requisites of Contracts 399
Forms of Contracts, Reformation, and Interpretation of Contracts 412
Defective Contracts 418
Classification of Contracts as to Defects 418
Rescissible Contracts 420
Voidable Contracts 427
Unenforceable Contracts 431
Void or Inexistent Contracts 433
BOOK V. - SPECIAL CONTRACTS

PART 1: CONTRACT OF SALE
Concept 441
Essential Elements and Formalities 444
ix
J9JC9B0M
R52M9UH7
Obligations of the Parties 451

Pacto De Retro Sale and Equitable Mortgage 464
PART 2: CONTRACT OF LEASE
Lease of Things 467

Contract for Piece of Work 473
PART 3: CONTRACT OF COMMON CARRIER

Concept 476
PART 4: CONTRACT OF PARTNERSHIP

Contract of Partnership 480
PART 5: CONTRACT OF AGENCY

Contract of Agency 497
PART 6: CONTRACTS OF LOAN AND DEPOSIT

Contract of Commodatum 514
Contract of Mutuum 519
Contract of Deposit 524
PART 7: ACCESSORY CONTRACTS

Contracts of Guaranty and Suretyship ... 532
Real Mortgage Contract and Antichresis 543
Personal Property as Security 553
Preference and Concurrence of Credit... 559
BOOK VI. - TORTS & DAMAGES

PART 1: QUASI-DELICT
Concept of Quasi-delict 562
Vicarious Liability 571
Special Cases 583
Joint Tortfeasors 586
PART 2: DAMAGES
Kinds of Damages 591
Actual or Compensatory 591
Moral Damages 596
J9JC9B0M
R52M9UH7
Nominal Damages 598

Temperate or Moderate Damages 599
Exemplary or Corrective Damages 600
Liquidated Damages 601
Attorney’s Fees and Litigation Expenses 602
BOOK VII. - LAND TITLES & DEEDS

Classification of Lands 605
Modes of Disposition of Public Agricultural Lands 609
Indefeasibility of Title 618
Certificate of Title Not Subject to Collateral Attack 624
xi
J9JC9B0M
R52M9UH7
■■ ?
J9JC9B0M
R52M9UH7
BOOK I. — PERSONS & FAMILY RELATIONS
A. Preliminary Title
1) Effectivity and Application of Laws
1.1 Effectivitv of Laws: (a) When law is silent as to its effectivitv:
It shall take effect “after fifteen (15) days following the
completion of [its] publication either in the Official Gazette, or
in a newspaper of general circulation in the Philippines.The
effectivity date is on the 16lhday, not on the IS1*1. For example,
if the law is completely published on March 1, then it will
become effective on March 17. (b) When law provides for its
date of effectivitv: It shall take effect on said date provided
that the law is published. Publication of laws is indispensable
and cannot be dispensed with. The reason for this rule is that
the basic constitutional requirement of due process must be
satisfied? As held in Tahada v. Tuvera) the clause “unless it is
otherwise provided" refers to the date of effectivity and not to the
requirement of publication itself, which cannot in any event be
omitted. This clause does not mean that the legislature may make
the law effective immediately upon approval, or on any other
date, without its previous publication, (c) When law provides that
it shall take effect “immediately upon approval”: It should be
construed as becoming effective immediately upon its complete
publication? There is nothing in Article 2 of the New Civil Code
(NCC), as amended by E.O. No. 200, that prevents a law from
taking effect on a date other than—or even before—the 15-day
period after its publication, and where the law provides for its
own date of effectivity, such date prevails over that prescribed in
Article 2?
'Art. 2, New Civil Code (NCC), as amended by E.O. No. 200.

2Taflada v. Tuvera, 136 SCRA 27 (1985) and Tafiada v. Tuvera, 146 SCRA 446 (1986).
c
'Id.
4La Bugal-B'Laan Tribal Association, Inc. v. Ramos, 421 SCRA 148 (2004).
5W.
J9JC9B0M
R52M9UH7
2 PRE-BAR REVIEWER IN CIVIL LAW
1.2 Presumption of Knowledge of Laws: (a) As to domestic laws:

Everyone is conclusively presumed to know the law. But this rule
applies only to our internal or domestic laws. Thus, ignorance of
the law excuses no one from compliance therewith.6 However,
mistake upon a doubtful or difficult question of law may be
the basis of good faith’ and may come within the scope of
solutio indebiti.1 (b) As to foreign laws: There is no conclusive
presumption of knowledge of foreign laws. Hence, foreign laws
must be specially alleged and proved, and our courts cannot
take judicial notice of them.’ If the foreign law involved is not
properly pleaded and proved, our courts will presume that the
foreign law is the same as our local or domestic or internal law.
This is known as the doctrine of processual presumption10 or
the doctrine of presumed-identity approach in international
law."
1.3 Rule on Operation and Application of Laws: (a) General rule:
In general, laws are to be construed as having only prospective
operation." Lexprospicit, non respicit, the law looks forward, not
backward. This is due to the unconstitutional result of retroacting
a law’s application: it divests rights that have already become
vested or impairs obligations of contract." (b) Exceptions: Laws
may be given retroactive effect in the following cases: (1) When
the law itself provides for its retroactivity,14 unless the retroactive
application of a statute will make it an ex post facto law or will
result in the impairment of obligation of contracts, in which
case, it cannot be given retroactive effect;" (2) When a penal
law is favorable to the accused, unless the convicted felon is a
habitual delinquent, in which case, it cannot be given retroactive
application;" (3) When the law is remedial or procedural in
‘Art. 3, NCC.
’Art. 526,3rd par., NCC.
‘Art. 2155, NCC.
’Adong v. Cheong, 43 Phil. 43.
'“Bank of America, NT & SA v. American Realty Corp., 321 SCRA659 (1999).
"Orion Savings Bank v. Suzuki, 740 SCRA 345 (2014).
"Art. 4, NCC.
"William G. Kwong Management, Inc. v. Diamond Homeowners & Residents Association,
G.R. No. 211353, June 10,2019.
"Art. 4, NCC.
"Secs. 22 and 10, Art. Ill, 1987 Philippine Constitution.
"Art. 22, Revised Penal Code (RPC).
J9JC9B0M
R52M9UH7
BOOK I. — PERSONS & FAMILY RELATIONS 3
nature, because no vested right may attach to nor arise from

procedural laws;17 hence, statutes regulating the procedure of
the courts will be construed as applicable to actions pending and
undetermined at the time of their passage—procedural laws are
retroactive in that sense and to that extent;18 (4) When the law
is curative in character because curative statutes are enacted to
cure defects in a prior law or to validate legal proceedings which
would otherwise be void for want of conformity with certain legal
requirements—curative statutes, therefore, by their very essence,
are retroactive;1’ and (5) When the law creates new substantive
rights, provided it has not prejudiced another acquired right of
the same origin.20
1.4 Requisites For Valid Waiver of Rights: (1) that the person making
the waiver possesses the right; (2) that he has the capacity and
power to dispose of the right; (3) that the waiver must be made
in a clear and unequivocal manner, although it may be made
expressly or impliedly; and (4) that the waiver is not contrary
to law, public policy, public order, morals, good customs, or
prejudicial to a third person with a right recognized by law.21
1.5 Repeal of Laws: (a) Manner of repeal: (1) Express repeal:
An express repeal is that contained in a special provision of
a subsequent law. But the repealing clause must identify or
designate the particular or specific law to be repealed, otherwise
there is no express repeal.22 (2) Implied repeal: It takes place
when the provisions of the subsequent law are incompatible with
those of an earlier law and there is no express repeal. There are
two requisites for implied repeals: (i) the laws cover the same
subject matter; and (ii) the latter is repugnant to the earlier.22
(b) Effect of repeal of repealing law: (1) In express repeal: When
a law which expressly repeals a prior law is itself repealed, the
law first repealed shall not be thereby revived unless expressly
so provided.24 (2) In implied repeal: When a law which impliedly
'’Systems Factors Corp. v. NLRC, 346 SCRA 149 (2000).

"W.
'’Narzoles v. NLRC, 341 SCRA 533 (2000).
“Bona v. Briones, 38 Phil. 276 (1918).
2lSanico V. Colipano, 841 SCRA 141 (2017), citing 1 Caguioa, Civil Code ofthe Phil., 13
(1967 ed.). See also Art. 6, NCC.
22CIR v. Primetown Property Group, Inc., 531 SCRA 436 (2007).
“Agujctas v. CA, 261 SCRA 17 (1996).
24Sec. 21, Chapter 5, Book I, Administrative Code of 1987.
J9JC9B0M
R52M9UH7
repeals a prior law is itself repealed, the prior law shall thereby
be revived, unless the repealing law provides otherwise.2’
1.6 Effect of Judicial Decisions: (a) Part of legal system: Judicial
decisions applying or interpreting the laws or the Constitution
shall form a part of the legal system of the Philippines.26 The
decisions referred to are only those enunciated by the Supreme
Court,2' because only the decisions ofthe Supreme Court establish
jurisprudence or doctrines in this jurisdiction.28 (b) Operation
and application: (1) Rule: retroactive application: The Supreme
Court’s interpretation of a statute forms part of the law as of the
date it was originally passed, because the Court’s construction
merely establishes the contemporaneous legislative intent that
the interpreted law carries into effect.29 Such judicial doctrine
does not amount to the passage of a new law, but consists merely
of a construction or interpretation of a pre-existing one.20 In other
words, in construing the law, the Court merely declares what a
particular provision has always meant. It does not give a new
meaning other than what the law already carries because the Court
does not have the power to legislate. In this sense, interpretations
of law made by the Court necessarily always have a “retroactive”
effect.21 (2) Exception: prospective application: When a doctrine
of the Supreme Court is overruled and a different view is adopted,
the new doctrine should be applied prospectively and should not
apply to parties who had relied on the old doctrine and acted
on the faith thereof.22 (c) Doctrine of stare decisis: Under the
doctrine of stare decisis, a point of law already established will,
generally, be followed by the same determining court and by all
courts of lower rank in subsequent cases where the same legal
“Sec. 22, Chapter 5, Book 1, Administrative Code of 1987.

“Art. 8, NCC.
2,Thc Insular Life Assurance Co. Ltd. Employees Association-NATU v. The Insular Life
Assurance Co., Ltd., 37 SCRA 244 (1971).
“Miranda v. Imperial, 77 Phil. 1066 (1947).
2,PLDT v. Alvarez, 718 SCRA 54 (2014); Republic v. Remman Enterprises, Inc., 717
SCRA 171 (2014); Eagle Really Corporation v. Republic, 594 SCRA 555 (2009).
’“Republic v. Remman Enterprises, Inc., supra, citing Eagle Realty Corporation v.
Republic, supra.
“Team Energy Corporation (formerly: Mirant Pagbilao Corporation and Southern Energy
Quezon, Inc.) v. Commissioner of Internal Revenue, 859 SCRA 1 (2018).
“People v. Jabinal, supra: Sps. Benzonan v. CA and DBP, 205 SCRA 515 (1992); Co v.
CA, 227 SCRA 444 (1993).
J9JC9B0M
R52M9UH7
issue is raised." The rule on stare decisis promotes stability in the

law and should, therefore, be accorded respect. However, blind
adherence to precedents, simply as precedent, no longer rules.
More important than anything else is that the court is right,” thus
it is the duty of the Court to abandon any doctrine found to be in
violation of the law in force."
1.7 Computation of Legal Period: (a) Two laws on counting of legal
periods: There are two laws on the counting of legal periods: (1)
Article 13 of the NCC; and (2) Sec. 31, Chapter 8, Book I of the
1987 Administrative Code of the Philippines. Both laws cover
the same subject matter and the provisions are almost the same,
except in counting a “year.” (b) Implied repeal of Article 13 of
NCC in counting a “year”: Under Article 13 of the Civil Code, a
year is equivalent to 365 days whether it be a regular year or a leap
year. Hence, the actual number of days is important. Under the
Administrative Code, however, a year is understood to be “twelve
calendar months.” Under the Administrative Code, the number of
days is irrelevant. Hence, there exists a manifest incompatibility
between the two laws with respect to the counting of a “year.”
Consequently, the Court declared the implied repeal of Article
13 of the NCC by Section 31, Chapter 8, Book 1 of the 1987
Administrative Code, with respect to the counting of a “year.”56
Therefore, under existing law and jurisprudence, a “year” shall
now be understood to be “twelve calendar months.” (c) How
to count “twelve calendar months”: A calendar month is “a
month designated in the calendar without regard to the number
of days it may contain. It is the "period of time running from
the beginning ofa certain numbered day up to, but not including,
the corresponding numbered day of the next month, and if there
is not a sufficient number of days in the next month, then up to
and including the last day of that month. ",s To illustrate, one
calendar month from December 31, 2007 will be from January
1, 2008 to January 31, 2008; from January 31, 2008. it will be
"Ayala Corporation v. Rosa-Diana Realty and Development Corp-. 346 SCRA 663 (2000).
"Urbano v. Chavez, 183 SCRA 347 (1990).
"Tan Chong v. Sec. of Labor, 79 Phil. 249 (1947).
36CIR v. Primetown Property Group, Inc., 531 SCRA 436. 444 (2007); reileratedin CIR
v. Aichi Forging Company of Asia, Inc., 632 SCRA 422 (2010) and Co v. New Prosperity Plastic
Products, 727 SCRA 503 (2014).
”W.
»Z</.
J9JC9B0M
R52M9UH7
from February 1,2008 until February 29,2008; the next calendar

month is from March 1, 2008 until March 31, 2008; and so on
and so forth. Hence, twelve calendar months from December
31, 2007 is December 31, 2008. (d) Other provisions of Article
13 still in force: The other provisions of Article 13 of the NCC
remain consistent with the provisions of Sec. 31, Chapter 8,
Book I of the Administrative Code and are, therefore, still in
force. Thus, a “month” is understood to be consisting of thirty
days, unless it refers to a specific calendar month, in which case
it shall be computed according to the number of days the specific
month contains; a “day” shall be understood to be consisting of
24 hours; and “night” shall be from sunset to sunrise.39 (e) Rule
in counting periods: The first day is EXCLUDED. The last day is
INCLUDED*
2) Basic Conflict of Laws Rules

2.1 Application of Philippine Penal Laws: (a) Rule: Philippine penal
laws and those of public security and safely are obligatory upon
all who live or sojourn in Philippine territory.’1 Hence, the penal
laws of the Philippines are obligatory not only to its citizens but to
all persons who are within the Philippine territory. This is known
as the principle of generality of criminal laws, (b) Exceptions.
Philippine penal laws shall not apply in the following cases:
(1) if treaty stipulations provide to the contrary; (2) if a law ol
preferential application provides to the contrary; and (3) if a
principle of public international law provides to the contrary. For
example, following the principles of international law, heads ol
State are not subject to Philippine territorial jurisdiction." It is also
a well-established principle of international law that diplomatic
representatives, such as ambassadors or public ministers and their
official retinue, possess immunity from the criminal jurisdiction
of the country of their sojourn, and cannot be sued, arrested, or
punished by the law of that country.’1 However, a consul is not
entitled to the privileges and immunities of an ambassador or
minister, but is subject to the laws and regulations of the country
to which he is accredited.’’
’’Sec. 31, Chapter VIII, Book I, Administrative Code of 1987; Art. 13, NCC.
*W.
’'Art. 14, NCC.
"People v. Galacgac (CA), 54 O.G. 1027.
"Hyde, litlemalional Law, Vol. II, 2nd ed., p. 1266.
"Schneckenburger v. Moran, 63 Phil. 249.
J9JC9B0M
R52M9UH7
2.2 Nationality Principle: (a) Rule: On the matter of status of persons,

condition of persons, the legal capacity of persons, and his family
rights and duties, the applicable law is the national law of the
person concerned. This is known as the “nationality principle”
embodied in Article 15 of the NCC. According to Article 15,
Philippine laws relating to family rights and duties, or to the status,
condition, and legal capacity of persons are binding upon citizens
of the Philippines, although living abroad.45 By analogy, the
same principle applies to foreigners such that they are governed
by their national law with respect to family rights and duties,
status, condition, and legal capacity of persons.46 (b) Rules on
validity of absolute divorces: Following the nationality rule, the
validity of absolute divorces obtained abroad shall be determined
by the applicable national laws of the parties concerned. Thus:
(1) A divorce obtained abroad by an alien may be recognized in
our jurisdiction, provided such decree is valid according to the
national law of the foreigner. However, the divorce decree and
the governing personal law of the alien spouse who obtained the
divorce must be proven. Our courts do not take judicial notice of
foreign laws and judgments; hence, like any other fact, both the
divorce decree and the national law of the alien must be alleged
and proven according to our law on evidence.47 (2) In a mixed
marriage (between an alien and a Philippine national), a decree of
absolute divorce obtained is recognized as valid even insofar as
the Philippine national is concerned so long as the divorce decree
is valid according to the national law of the foreigner spouse and
it capacitated the latter to remarry, regardless of who may have
obtained the divorce decree.48 (3) An absolute divorce secured by
a Filipino married to another Filipino is contrary to our concept
of public policy and morality and shall not be recognized in this
jurisdiction.4'' (4) In determining the nationalities of the parties
for purposes of determining the validity of the divorce decree,
the reckoning point is not the citizenship of the divorcing parties
at birth or at the time of marriage, but their citizenship at the
time a valid divorce is obtained abroad.50 (c) Leital capacity:
Generally, it is the national law of the person concerned which
4iLavadia v. Heirs of Juan Luces Luna, 730 SCRA 376 (2014).

46 Del Soccoro v. Van Wilsem, 744 SCRA 516 (2014).
■"Garcia v. Recio, 366 SCRA 437 (2001).
4“Art. 26, par. 2, FC; Republic v. Manalo, 862 SCRA 580 (2018).
4,Bayot v. CA, 570 SCRA 472 (2008), citing Llorente v. CA. 345 SCRA 592 (2000).
’“Republic v. Orbecido III, 472 SCRA 114 (2005); Bayot v. CA,supra.
J9JC9B0M
R52M9UH7
S PRE-BAR REVIEWER IN CIVIL LAW
applies for purposes of determining his legal capacity. However,

all matters concerning the title and disposition of real property
are determined by what is known as the lex loci rei sitae,5' or the
law of the place where the property is situated.52 This principle
even governs the capacity of the person making a deed relating to
immovable property, no matter what its nature may be. Thus, an
instrument will be ineffective to transfer title to land if the person
making it is incapacitated by the lex loci rei sitae, even though
under the law of his domicile and by the law of the place where
the instrument is actually made, his capacity is undoubted.53 For
example, foreigners are not allowed to own or acquire lands in
the Philippines except by way of hereditary succession.54 (d)
Family rights and duties: The obligation to give support to a
child is a matter that falls under family rights and duties. Insofar
as Philippine laws are concerned, specifically the provisions of
the Family Code on support, the same only applies to Filipino
citizens. By analogy, the same principle applies to foreigners
such that they are governed by their national law with respect
to family rights and duties. Hence, as to whether a foreigner has
an obligation to provide support, he is subject to the laws of his
country, not to Philippine law.” If a foreigner, however, has a
minor child in the Philippines with a Filipino citizen, his national
law will not apply in the Philippines if the same provides that
parents have no obligation to support their children, or that failure
to fulfill such obligation is not punishable by law. In Conflict of
Laws, the forum may refuse to apply the applicable foreign law
if the same is contrary to a sound and established public policy of
the forum. Moreover, a foreign law should not be applied when
its application would work undeniable injustice to the citizens or
residents of the forum. Applying the foregoing, even if the laws
of the foreigner father neither enforce a parent’s obligation to
support his child nor penalize the noncompliance therewith, such
obligation is still duly enforceable in the Philippines because it
would be of great injustice to the child to be denied financial
support when the latter is entitled thereto.511
!lOrion Savings Bank v. Suzuki, 740 SCRA 345 (2014).

•’•’Art. 16, par. 1, NCC.
”Orion Savings Bank v. Suzuki, supra.
MSec. 7, Article XII, 1987 Philippine Constitution.
”Del Soccoro v. Van Wilsetn, 744 SCRA 516 (2014).
!1W.
J9JC9B0M
R52M9UH7
2.3 Principle of Lex Rei Sitae (or Lex Situs): (a) Rule: If the issue
involves properties, whether real or personal, the applicable law
is the law of the country where it is situated.” This is known
as the principle of lex rei sitae or lex situs, (b) Rule as to real
property: The application of the foregoing principle is more
pronounced in the case of real or immovable property. Thus, all
matters concerning the title and disposition of real property are
determined by what is known as the lex loci rei sitae, which can
alone prescribe the mode by which title can pass from one person
to another, or by which an interest therein can be gained or lost.
This general principle includes all rules governing the descent,
alienation, and transfer of immovable property and the validity,
effect, and construction of wills and other conveyances.” This
principle even governs the capacity of the person making a deed
relating to immovable property, no matter what its nature may
be. Thus, an instrument will be ineffective to transfer title to
land if the person making it is incapacitated by the lex loci rei
sitae, even though under the law of his domicile and by the law
of the place where the instrument is actually made, his capacity
is undoubted.” (c) Exceptions to lex rei sitae - national law of
decedent: It is the national law of the decedent which shall
apply in intestate or testamentary succession, with regard to four
items: (1) the order of succession; (2) the amount of successional
rights; (3) the intrinsic validity of provisions of the will;" and
(4) the capacity to succeed," whatever may be the nature of the
property and regardless of the country wherein said property
may be found." For example, our system of legitimes cannot be
extended to the succession of foreign nationals. If there are no
forced heirs or legitimes under the national law of the decedent,
the Philippine laws on legitimes cannot apply." In addition, a
provision in a foreigner’s will to the effect that his properties
shall be distributed in accordance with Philippine law and not
with his national law, is illegal and void, for his national law
cannot be ignored with regard to those matters that Article 16 of
the Civil Code states said national law should govern."
’’Art. 16, par. I, NCC.

’’Orion Savings Bank v. Suzuki, 740 SCR A 345 (2014).
”/</.
“Art. 16, par. 2, NCC.
“Art. 1039, NCC.
"Bellis v. Bellis, 126 Phil. 726 (1967).
MId., citing Miciano v. Brimo, 50 Phil. 867, 870.
J9JC9B0M
R52M9UH7
2.4 Principle of Lex Loci Celebrationis: (a) Forms and solemnities

of wills: The forms and solemnities of wills (extrinsic validity)
shall be governed by the laws of the country in which they
are executed.'’7 Hence, when a Filipino is in a foreign country,
he is authorized to make a will in any of the forms established
by the country in which he may be.“ Exception: However,
joint wills executed by Filipinos in a foreign country shall
not be valid in the Philippines, even though authorized by the
laws of the country where they may have been executed.67 (b)
Forms and solemnities of contracts: The forms and solemnities
of contracts shall be governed by the laws of the country in
which they are executed.65 This is known as the principle of
lex loci celebrationis. Exception: All matters concerning the title
and disposition of real property' are determined by what is known
as the lex loci rei sitae, which can alone prescribe the mode by
which a title can pass from one person to another, or by which
an interest therein can be gained or loss.6’ This general principle
includes all rules governing the descent, alienation, and transfer
of immovable property and the validity, effect, and construction
of wills and other conveyances.76 Hence, the extrinsic validity of
transactions over real property such as alienations, transfers, and
mortgages are governed by the lex situs,7' especially if the situs
provides for mandatory or prohibitory laws on the matter of forms
and solemnities, (c) Intrinsic validity of contracts: No conflicts
rule on essential validity of contracts is expressly provided for in
our laws. The rule followed by most legal systems, however, is
that the intrinsic validity of a contract must be governed by the
lex contractus or “proper law of the contract.” This is the law
voluntarily agreed upon by the parties (the lex loci voluntatis')
or the law intended by them either expressly or implicitly (the
lex loci intentionis). The law selected may be implied from such
factors as substantial connection with the transaction, or the
nationality or domicile of the parties.72 As such, the contracting
6!Art. 16, par. 2, NCC.

“Art. 815, NCC.
"Art. 819, NCC.
'"Orion Savings Hank V. Suzuki, 740 SCRA 345 (2014).
7“M.
71Scmpio-Diy, Handbook on Conjlicl ofLaws, p. 114, 2004 ed.
^Philippine Export and Foreign Loan Guarantee Corp. v. V.P. Eusebio Construction, Inc.,
434SCRA202,214-215(2004).
J9JC9B0M
R52M9UH7
BOOK 1. — PERSONS & FAMILY RELATIONS 11
parties are allowed to select the law applicable to their contract,

subject to the limitation that it is not against the law, morals, or
public policy of the forum and that the chosen law must bear a
substantive relationship to the transaction.7’ In the absence of such
choice, however, there are two possible approaches: (1) to apply
the law of that State that “has the most significant relationship to
the transaction and the parties”;74 or (2) the law of the place of
performance or lex loci solutionis if the issue relates to all matters
relating to the time, place, and manner of performance and valid
excuses for non-performance.75 For example, on the question of
whether there is a breach of an agreement, which includes default
or rnora, and the service contract contains no express choice of
the law that would govern it, it was held that the laws of Iraq bear
substantial connection to the transaction, since one of the parties
is the Iraqi Government and the place of performance is in Iraq.
Hence, the issue of whether there was default in the obligations
may be determined by the laws of Iraq.76
2.5 When Foreign Laws Cannot Be Applied: The Philippines’
prohibitive laws concerning persons, their acts or property, and
those which have for their object public order, public policy,
and good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or conventions
agreed upon in a foreign country.77 A foreign law, judgment, or
contract contrary to a sound and established public policy of the
forum shall not be applied” when its application would work
undeniable injustice to the citizens or residents of the forum.
To give justice is the most important function of law; hence, a
law, or judgment, or contract that is obviously unjust negates the
fundamental principles of Conflict of Laws.”
”/</., citing Jovito R. Salonga, Private International Law 356 (1995 ed.).
74M„ citing Salonga, 355.
15Id., citing Jorge R. Coquia & Elizabeth A. Pangalangan, Conflict ofLaws 418 (1995 ed.).
,6/<Z
77Art. 17, par. 3, NCC.
’’Del Soceoro v. Van Wilscm, 744 SCRA 516 (2(114), citing Bank of America, NT and SA
v. American Realty Corporation, 321 SCRA 659 (1999).
^Continental Micronesia, Inc. v. Basso, 771 SCRA 329 (2015).
J9JC9B0M
R52M9UH7
B. Human Relations
3) Required Norm of Human Conduct
3.1 Norm of Human Conduct: (a) Basic principle: In the exercise
of rights and in the performance of duties, a person is required:
(1) to act with justice; (2) to give everyone his due; and (3) to
observe honesty and good faith.80 If such rules of conduct are
violated, the remedy is an action for damages under Article 20
or 21 of the New Civil Code, (b) Principle of damnun absque
injuria: Under this principle, the proper exercise of a lawful
right cannot constitute a legal wrong for which an action will
lie. although the act may result in damage to another, for no legal
right has been invaded.” Well-settled is the maxim that damage
resulting from the legitimate exercise of a person’s rights is a
loss without injury—damnum absque injuria—for which the
law gives no remedy.” For example, it is within the right of the
owner of a parcel of land to enclose and fence his property, if the
same is not subject to any servitudes.*3 Such act of constructing
a fence within his lot is a valid exercise of his right as an owner,
hence not contrary to morals, good customs, or public policy.84
As a consequence, whatever injury or damage may have been
sustained by others by reason of the rightful use of the said land
by its owner is damnum absque injuria.** (c) Principle of abuse
of right: A right, though by itself legal because recognized or
granted by law as such, may nevertheless become the source of
some illegality. When a right is exercised in a manner which does
not conform with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby committed for which
the wrongdoer must be held responsible.81 This is the principle
of abuse of rights. As explained by the Court, the exercise of a
right ends when the right disappears, and it disappears when it
is abused especially to the prejudice of others.8’ The elements of
abuse of rights are the following: (1) the existence of a legal right
“An. I9.NCC.
"Custodio v. CA, 253 SCRA 483 (1996).
“Amonoy v. Gutierrez, 351 SCRA 731 (2001).
“An. 430, NCC.
"Custodio v. CA, 253 SCRA 483 (1996).
“/</. See also Tanjanco v. CA, 18 SCRA 994
“Albcnson Enterprises Corp. v. CA, 217 SCRA 18 (1993).
"'Philippine Savings Bank v. Geronimo, G.R. No. 170241, April 19,2010, citing MBTC V.
Wong. 359 SCRA 608,618 (2001).
J9JC9B0M
R52M9UH7
or duty; (2) which is exercised in bad faith; and (3) with the sole
intent of prejudicing or injuring another.” Stated otherwise, when
it becomes manifest that one’s right is exercised in bad faith for
the sole intent of prejudicing another, an abuse of right exists.” To
illustrate, when a lot owner fences his property for the purpose of
evicting its occupant whose lease contract had already expired,
said lot owner is liable for damages. He should have resorted to
the proper legal processes (such as filing an action for ejectment)
if he wanted to recover possession of the land.90 (d) Application
of Articles 20. 21, and 2176: It is Article 20 which applies to both
willful and negligent acts that are done contrary to law. On the
other hand, Article 21 applies only to willful acts done contra
bonos mores.9' With respect to negligent acts or omissions,
Article 20 of the Civil Code concerns "violations of existing
law as basis for an injury", whereas Article 2176 applies when
the negligent act causing damage to another does not constitute
“a breach of an existing law or a pre-existing contractual
obligation. " In St. Martin Polyclinic, Inc. v. LIVV Construction
Corp.,91 LWV Construction Corporation deployed Jonathan
Raguindin to Saudi Arabia when the latter was cleared and found
to be fit for employment by St. Martin Polyclinic. However, when
Raguindin had another medical examination in Saudi Arabia, he
tested positive for the Hepatitis C virus. Claiming that St. Martin
was reckless in issuing its medical report, LWV sued the latter
for damages. The MeTC, RTC, and CA found St. Martin liable
for damages under the provisions of Articles 19, 20, and 21. On
appeal to the SC, it was held that the courts a quo erroneously
anchored their respective rulings on the provisions of Articles 19,
20, and 21 of the Civil Code because LWV did not proffer (nor
have these courts mentioned) any law as basis for which damages
may be recovered due to St. Martin’s alleged negligent act. As
the claimed negligent act of St. Martin was not premised on the
breach of any law and that no pre-existing contractual relation
was averred to exist between the parties, the Court ruled that the
governing law is Article 2176, and not Articles 19, 20, and 21, of
the Civil Code.
“Tan v. Valeriano, 833 SCRA 649 (2017).

8,Ka Kuen Chua v. Colorlite Marketing Corp., 830 SCRA 81 (2017).
"Villafuerte v. CA, G.R. No. 134239, May 26, 2005
’'St. Martin Polyclinic, Inc. v. LWV Construction Corp., 847 SCRA 378 (2017), citing the
Separate Opinion of J. Leonen in Alano v. Magud-Logmao, 731 Phil. 407 (2014).
nSupra.
J9JC9B0M
R52M9UH7
3.2 Breach of Promise of Marriage: (a) Rule: The existing rule is that
a breach of promise to marry per se is not an actionable wrong.93
The reason behind the rule is because Congress intended the same
not to be actionable (because Congress deleted the provision in
the draft of the New Civil Code making the same an actionable
wrong), (b) When there is seduction: When the man made use of
the promise of marriage as a subtle scheme or deceptive device
to entice the woman to the sexual act, and such promise is the
proximate cause why the woman gave herself unto the man in
a sexual congress but the man had, in reality, no intention of
marrying her, the man is liable for damages under Article 21 of
the Civil Code.94 The essential feature is seduction, that in law is
more than mere sexual intercourse, or a breach of a promise of
marriage; it connotes essentially the idea of deceit, enticement,
superior power, or abuse of confidence on the part of the seducer
to which the woman has yielded.95 However, when there is no
seduction and the woman voluntarily gave herself to the man
because of love and mutual passion (or mutual lust), the Court
denied recovery of damages under Article 21 of the Civil Code.96
(c) When act is contrary to good customs: When the groom led
the bride to believe that the wedding would push through and
they went through all the wedding preparations but two days
prior to the scheduled ceremony the groom walked out of the
same, the Court held the groom liable for damages to the bride
under Article 21 of the Civil Code because his act was contrary
to good customs.9’ In addition, where the plaintiff has actually
incurred expenses for the wedding and the necessary incidents
thereof, the plaintiff has the right to recover money or property
advanced by him or her upon the faith of such promise.''*
3.3 Accion In Rem Verso-. (a) Concept and requisites: An action for
recovery of what has been paid or delivered without just cause
or legal ground under Article 22 of the Civil Code is called an
accion in rem verso. The purpose of the action is to prevent
unjust enrichment, which exists when a person unjustly retains a
"Gashem Sliookat Baksh v. CA, 219 SCRA 115,125 (1993).

w/d. See also Pe v. Pc, 5 SCRA 200 (1962).
’’Tanjanco v. CA, 18 SCRA 994 (1966).
*Id. See also Hermosisima v. CA, 109 SCRA 629 (1960) and Constanlino v. Mendez, 209
SCRA 18(1992).
’’Wassmer v. Velez, 12 SCRA 648 (1964).
"“Buflag, Jr. v. CA, 211 SCRA 440,448 (1992).
J9JC9B0M
R52M9UH7
benefit to the loss of another, or when a person retains money or

property of another against the fundamental principles ofjustice,
equity, and good conscience.”In order that such action will
prosper, the following requisites must concur: (1) defendant has
been enriched; (2) plaintiff has suffered a loss; (3) enrichment of
the defendant is without just or legal ground; and (4) plaintiff has
no other action based on contract, quasi-contract, crime, or quasi
delict.'™ (b) Compared with solutio indehiti: (1) Similarities:
(i) In both, the plaintiff has suffered a loss; (ii) In both, the
defendant has been enriched; (iii) In both, the enrichment of
the defendant is without just or legal ground; (iv) In both, the
defendant has the obligation to return what was unduly delivered
or paid to him by the plaintiff; and (v) In both, the objective is
to prevent unjust enrichment. (2) Distinctions: (i) In action in
rem verso, the source of obligation is quasi-contract; while in
solutio indebiti, it is law; and (ii) In solutio indebiti, the delivery
or payment to the defendant is by reason of mistake of fact or
mistake in the application of a doubtful or difficult provision of
law; while in action in rem verso, the delivery or payment is not
due to mistake of fact or mistake in the application of a doubtful
or difficult provision of law.
3.4 Liability For Damages Under Article 27: Requisites For
Recovery: (1) that the defendant be a public official charged with
the performance of official duties; (2) that there be a violation
of an official duty in favor of an individual; (3) that there be
willfulness or negligence in the violation of such official duty;
and (4) that there be an injury to the individual.101 But Article 27
presupposes that the refusal or omission of a public official is
attributable to malice or inexcusable negligence.lo:
3.5 Unfair Competition Under Article 28: (a) Concept under the Civil
Code: The concept of “unfair competition” under Article 28 of
the NCC is very much broader than that covered by intellectual
property laws. Under this article, which follows the extended
concept of “unfair competition” in American jurisdictions,
the term covers even cases of discovery of trade secrets of a
"Land Bank of the Philippines v. Ong, 636 SCRA 266 (2010).

'“UP v. Philab Industries, Inc., G.R. No. 152411, Sep. 29, 2004; Land Bank of the
Philippines v. Ong, 636 SCRA 266 (2010).
Ioll Tolentino, Civil Code ofthe Philippines, 1990 ed., p. 113.
'“Philippine Match Co., Ltd. v. City of Cebu, 81 SCRA 99 (1978); Also in Tuzon v. CA,
212 SCRA 739(1992).
J9JC9B0M
R52M9UH7
16 PRE-0AR REVIEWER IN CIVIL LAW
competitor, briber}' of his employees, misrepresentation of all

kinds, interference with the fulfillment of a competitor’s contracts,
or any malicious interference with the latter’s business.103 What is
being sought to be prevented is not competition perse but the use
of unjusL oppressive, or high-handed methods which may deprive
others of a fair chance to engage in business or to earn a living.
Plainly, what the law prohibits is unfair competition and not
competition where the means used are fair and legitimate."” (b)
Requisites for recovery of damages: There is “unfair competition”
under Article 28 of the Civil Code if two requisites are satisfied:
(1) it must involve an injury to a competitor or trade rival, and
(2) it must involve acts which are characterized as “contrary
to good conscience,” or “shocking to judicial sensibilities,” or
otherwise unlawful; in the language of our law, these include
force, intimidation, deceit, machination, or any other unjust,
oppressive, or high-handed method. The public injury or interest
is a minor factor; the essence of the matter appears to be a private
wrong perpetrated by unconscionable means.103
3.6 Recovery ofCivil Liability Unon Acquittal ofAccused: (a) When
accused not the author of the crime: If the acquittal is on the
ground that the accused is not the author of the act or omission
complained of, there is no civil liability ex delicto. This is the
situation contemplated in Section 2, Rule 111 of the Revised
Rules of Criminal Procedure106 which provides that “the civil
action based on delict may be deemed extinguished if there is a
finding in a final judgment in the criminal action that the act or
omission from which the civil liability may arise did not exist.”
However, Section 2 of Rule 111 applies only to a civil action
arising from crime or ex delicto and not to a civil action arising
from quasi-delict or culpa aquiliana. The extinction of civil
liability referred to in Section 2 of Rule 111 refers exclusively to
civil liability founded on Article 100 of the Revised Penal Code
(RPC), whereas the civil liability for the same act considered
as a quasi-delict only and not as a crime is not extinguished
even by a declaration in the criminal case that the criminal act
l03Willaware Products Corporation v. Jcsichris Manufacturing Corp., 734 SCRA 238

(2014).
mId.
'“Manantan v. CA, 350 SCRA 387,397 (2001).
J9JC9B0M
R52M9UH7
charged has not happened or has not been committed by the

accused.10’ (b) When acquittal is based on reasonable doubt: If
the acquittal is based on reasonable doubt on the guilt of the
accused, he is not exempt from civil liability ex delicto which
may be proved by preponderance of evidence only. This is the
situation contemplated in Article 29 of the NCC where the civil
action for damages is “for the same act or omission.”108 In the
landmark case of Roy Padilla v. G4,'w it was held that the court
may acquit the accused based on reasonable doubt on his guilt
but at the same time order him to pay civil liability based on the
delict which was already proved in the same case without need of
filing a separate civil action for the said purpose.
3.7 Independent Civil Action: (a) Rule of implied institution: When
a criminal action is instituted, the civil action for the recovery
of civil liability arising from the offense charged (civil liability
ex delicto') is deemed instituted with the criminal action unless
the offended party: (1) waives the civil action; (2) reserves the
right to institute it separately; or (3) institutes the civil action
prior to the criminal action.110 The civil action which has been
reserved cannot be instituted until final judgment has been
entered in the criminal action."1 If the criminal action is filed
after the civil action has already been instituted, the latter shall
be suspended in whatever stage it may be found before judgment
on the merits and the suspension shall last until final judgment
is rendered in the criminal action. However, the civil action
may be consolidated with the criminal action."2 (b) When no
criminal action instituted: When a separate civil action is brought
to demand civil liability arising from a criminal offense (civil
liability ex delicto), and no criminal proceedings are instituted
during the pendency of the civil case, a preponderance of
evidence shall be sufficient to prove the act complained of."’ (c)
Civil actions not based on delict: When the civil action is based
on an obligation not arising from the act or omission complained
of as a felony (not based on delict), such civil action may proceed
'"’Manliclic v. Calaunan, 512 SCRA 642 (2007).

l08Manantan v. CA, supra.
109129 SCRA 558 (1984).
"°Sec. 1(a), Rule 111, Revised Rules of Criminal Procedure.
'"Sec. 2, Rule 111, Revised Rules of Criminal Procedure.
"2ld.
"’Art. 30, NCC.
J9JC9B0M
R52M9UH7
independently of the criminal proceedings and regardless of the

result of the latter."4 (d) Independent civil actions: The offended
party is authorized to bring an independent civil action in the
cases provided for in Articles 32, 33, 34, and 2176 of the Civil
Code. It shall proceed independently of the criminal action and
shall require only a preponderance of evidence. In no case,
however, may the offended party recover damages twice for the
same act or omission charged in the criminal action.11’ (1) Article
32, NCC: An individual can hold a public officer personally
liable for damages on account of an act or omission that violates a
constitutional right only if it results in a particular wrong or injury
to the former."6 (2) Article 33. NCC: In Article 33, “defamation”
and “fraud” are used in their ordinary sense;"7 while the term
"physical injuries" is understood to mean bodily injury, not the
specific crime of physical injuries."8 Hence, the term includes
the crimes of physical injuries, frustrated homicide, attempted
homicide, or even death. Note that the civil action may proceed
independently of the criminal proceedings even if the crime
charged is “homicide thru reckless imprudence.”119
3.8 Prejudicial Question: (a) Concept: A prejudicial question is
the issue raised in a pending civil case, the resolution of which
determines whether or not a criminal action may proceed or
determines the guilt or innocence of the accused. Section 6 of
Rule 111 of the Revised Rules of Criminal Procedure directs that
the proceedings may only be suspended, not dismissed, and that
it may be made only upon petition, and not at the instance of
the judge alone or the investigating officer.120 (b) Requisites: In
order for a prejudicial question to exist, the following requisites
must be present: (1) the previously instituted civil action involves
an issue similar or intimately related to the issue raised in the
subsequent criminal action; and (2) the resolution of such issue
determines whether or not the criminal action may proceed.121
(c) Nature of pending actions: Generally, a prejudicial question
"4Art. 31, NCC.

"’Sec. 3, Rule 111, Revised Rules of Criminal Procedure.
"‘Vinzons-Chato v. Fortune Tobacco Corp., 575 SCRA 23 (2008).
"’Carandang v. Santiago, 97 Phil. 94 (1955).
"'Id.
"’Madeja v. Caro, 126 SCRA 293 (1983).
“Philippine Agila Satellite, Inc. v. Sec. Lichauco, 496 SCRA 588 (2006).
l!lSec. 7, Rule 111, Revised Rules of Criminal Procedure.
J9JC9B0M
R52M9UH7
comes into play only in a situation where a civil action and a

criminal action are both pending, and there exists in the former
an issue which must be preemptively resolved before the
criminal action may proceed because the resolution of the civil
action is determinative juris el de jure of the guilt or innocence
of the accused in the criminal case.122 Exception: The foregoing,
however, is not an ironclad rule. It is imperative that the Court
consider the rationale behind the principle of prejudicial question,
i.e., to avoid two conflicting decisions, prudence dictates that the
principle underlying the doctrine should be applied, regardless
of the fact that the pending cases are not civil and criminal.125
In Abacan, Jr. v. Northwestern Universit)’, lnc.,'u for example,
the Court applied the principle of prejudicial question even when
there was no criminal case involved therein. The cases involved
were a case for nullification of election of directors before the
Securities and Exchange Commission (SEC) and a civil case for
damages and attachment before the RTC.
c. Civil Personality
4) Civil Personality
4.1 Concent: (a) Definition: Civil personality is synonymous to
“juridical capacity,” the latter being defined as “the fitness to
be the subject of legal relations.”125 In other words, it is simply
the aptitude to be the subject of rights and obligations. In the
absence of civil personality, no rights may be acquired and no
obligations may be incurred, (b) Distinguished from capacity
to act: Capacity to act, on the other hand, is the power to do
acts with legal effect.126 Juridical capacity and capacity to act
are distinguished, as follows: (1) the former is inherent in every
natural person, while the latter is not inherent but may only be
acquired; (2) the former may only be lost (in the case of natural
person) through death; while the latter may be lost through other
means; and (3) the former cannot be limited or restricted; while
the latter can be limited or restricted.
l22Alsons Development and Investment Corp. V. The Heirs of Romeo D. Confesor, G.R.
No. 215671, Sep. 19, 2018, citing Abaean, Jr. v. Northwestern University, Inc.. 495 Phil. 123, 137
(2005).
125Alsons Development and Investment Corp. v. The Heirs of Romeo D. Confesor, supra.
,24495 Phil. 123 (2005).
,2!Art. 37, NCC.
mld.
J9JC9B0M
R52M9UH7
4.2 Civil Personality of Natural Persons: (a) What determines

civil personality in natural persons: It is birth that determines
civil personality.127 But the fetus is considered bom for civil
purposes only when: (1) It is alive at the time it is completely
delivered from the mother’s womb (or after the cutting of the
umbilical cord), if the fetus had an intra-uterine life of at least
seven months; or (2) It survives for at least 24 hours after its
complete delivery from the maternal womb, if it had an intra
uterine life of less than seven months.128 (b) Civil personality
of conceived child: A conceived child, although as yet unborn,
has a limited and provisional personality.129 Its personality is
essentially limited because it is only for purposes favorable to
the child. Its personality is provisional because it depends upon
the child being bom alive later under the conditions mentioned
above, (c) Consequences of civil personality of conceived child:
It can acquire rights but it cannot incur obligations. A conceived
child enjoys the following rights: (1) the right to be a donee of
simple donations, but acceptance shall be made by persons who
would legally represent him if he were already bom;130 (2) the
right to receive support from his progenitors;131 (3) he may not
be ignored by his parents in their testament; otherwise, it may
result in preterition of a forced heir that annuls the institution of
the testamentary heir, even if such child should be bom after the
death of the testator.132 Under the law, a child already conceived
at the time of the death of the decedent is capable of succeeding
provided it be bom later under the conditions prescribed in
Article 41 of the Civil Code.113 (4) Lastly, a conceived child may
be designated as beneficiary in an insurance policy, (d) When
necessary to determine personality of conceived child: There is
a need to establish the civil personality of the unborn child if
his juridical capacity is the issue involved. Thus, if the question
before the court is whether the unborn child acquired any rights
or incurred any obligations prior to his/her death that were passed
on to or assumed by the child’s parents, then there is a need to
12,Art. 40, FC.

'“Art. 41, FC.
l29Quimiguing v. Icao, 34 SCRA 132(1970).
'“Art. 742, NCC.
'’’Quimiguing V. Icao, supra.
mld.
131Art. 1025, par. 2, NCC.
J9JC9B0M
R52M9UH7
establish the civil personality of the unborn child. An example is

the case of Geluz v. C/1,'14 where the legal question is whether or
not the father has the right to file a derivative action for damages
on account of the death of the conceived child, for and on behalf
of the child. The Court ruled that since the child cannot file the
action for lack of civil personality, the action filed on his behalf
may not prosper. On the other hand, there is no need to establish
the civil personality of the unborn child if his/her juridical
capacity and capacity to act as a person are not in issue and the
case is not whether the unborn child has acquired any rights or
incurred any obligations prior to his/her death that were passed
on to or assumed by the child’s parents. An example is the case
of Continental Steel Manufacturing Corporation v. Montano,'11
where the issue is whether or not the father of the conceived
child is entitled to the financial assistance for the death of the
conceived child, as provided for under the Collective Bargaining
Agreement, (e) Effect of death upon civil personality: The
civil personality of a natural person is extinguished by death.”6
Consequently, a deceased person does not have the capacity to be
sued and may not be made a defendant in a case.”7
4.3 Civil Personality of Juridical Persons: Rules: (a) State and its
political subdivisions: Their personality begins as soon as they
have been constituted according to law.”8 (b) Other corporations,
institutions, and entities for public interest or purpose, created
by law: Their personality begins as soon as they have been
constituted according to law.'” (c) Private corporations: A
corporation formed or organized under the Corporation Code
of the Philippines commences to have corporate existence and
juridical personality and is deemed incorporated from the date
the Securities and Exchange Commission issues a certificate
of incorporation under its official seal.1,10 (d) Partnership: To be
considered a juridical person, a partnership must comply with the
following requisites: (1) Two or more persons bind themselves
to contribute money, property, or industry to a common fund;
m2 SCRA801 (1961).
”’603 SCRA621 (2009).
”6Art. 42, NCC.
’’’Gaffney v. Butler, 844 SCRA 570 (2017) and Ventura v. Militante, 374 Phil. 562(1999).
’’’Art. 44(2), NCC.
l4°Sec. 18, par. 3, R.A. No. 11232 or Revised Corporation Code of the Phil.
J9JC9B0M
R52M9UH7
and (2) Intention on the part of the partners to divide the profits
among themselves.'*' However, when immovable or real rights
are contributed, an inventory of the said properties signed by
the parties and attached to the public instrument is required;
otherwise, the partnership is void.'42 (e) Sole proprietorship:
A sole proprietorship does not possess a juridical personality
separate and distinct from the personality of the owner of the
enterprise.'*’
4.4 Rules on Survivorship: (a) If issue is succession: Article 43
of the Civil Code is the applicable law when the question of
survivorship is important for purposes of resolving issues
concerning transmission of successional rights between the
persons involved. Hence, in order for Article 43 of the Civil
Code to apply, two requisites must be satisfied: (1) The question
of survivorship involves persons who are called to succeed each
other, whether the succession is by reason of a will or by operation
of law; and (2) the issue involves transmission of successional
rights between them. If both requisites are present, Article 43
provides for the following rules: (i) whoever alleges the death of
one prior to the other shall prove the same; and (ii) in the absence
of proof, the law presumes that both had died at the same time
and that there shall be no transmission of rights from one to the
other, (b) If issue is not succession: Where the issue involved •
is not transmission of successional rights, e.g., the question of
survivorship is between the insured in a life insurance policy
and his beneficiary, the same shall be resolved by applying the
presumption of survivorship under the Rules of Court. Under the
Rules of Court, when two persons perish in the same calamity,
such as wreck, battle, or conflagration, and it is not shown
who died first, and there are no particular circumstances from
which it can be inferred, the survivorship is determined from the
probabilities resulting from the strength and age of the sexes,
according to the following rules: (1) If both were under the age
of 15 years, the older is deemed to have survived; (2) If both were
above the age of 60, the younger is deemed to have survived; (3)
If one is under 15 and the other above 60, the former is deemed
to have survived; (4) If both be over 15 and under 60, and the sex
'*'Tocao v. CA, 342 SCRA 20 (2000).

'"Art. 1773, in relation to Art. 1771, NCC.
,45Juasing Hardware v. Hon. Mendoza, 201 Phil. 369 (1982); Yao Ka Sin Trading v. CA,
209 SCRA 763 (1992).
J9JC9B0M
R52M9UH7

The Family Code of the Philippines
(Executive Order No. 209, as amended)
be different, the male is deemed to have survived; if the sex be

the same, the older; and (5) If one be under 15 or over 60, and the
other between those ages, the latter is deemed to have survived.144

D. Marriage
5) Requisites For A Valid Marriage
5.1 Concent of Marriage: (a) Dual concept: (1) As a contract: It
is a special contract of permanent union between a man and a
woman entered into in accordance with law for the establishment
of conjugal and family life.145 (2) As a social institution: Our
Constitution clearly gives value to the sanctity of marriage.
Marriage in this jurisdiction is not only a civil contract, but it
is a new relation, an institution the maintenance of which the
public is deeply interested.146 This interest proceeds from the
constitutional mandate that the State recognizes the sanctity
of family life and affords protection to the family as a basic
autonomous social institution.147 Thus, the State is mandated to
protect marriage, being the foundation of the family, which in turn
is the foundation of the nation.148 (b) Constitutional provisions
protecting marriage and family: (1) The State recognizes the
sanctity of family life and shall protect and strengthen the
family as a basic autonomous social institution. It shall equally
protect the life of the mother and the life of the unborn from
conception. The natural and primary right and duty of parents in
rearing of the youth for civil efficiency and the development of
moral character shall receive the support of the Government.14’
(2) The State recognizes the Filipino family as the foundation
of the nation. Accordingly, it shall strengthen its solidarity and
actively promote its total development.150 (3) Marriage, as an
144Sec. 3(jj), Rule 131, Rules of Court.

145Art. I, FC.
146Tilar v. Tilar, 831 SCRA 116 (2017), citing Mariategui v. CA, 282 Phil. 348,356 (1992).
See also Tuazon v. CA, 256 SCRA 158, 169 (1996).
14,Sec. 12, Art. II, 1987 Constitution; see also Hernandez v. CA, 320 SCRA 76 (1999).
148Tilar v. Tilar, supra, citing Sec. 1, Art. XV, 1987 Constitution.
14’M
15°Sec. 1, Art. XV, 1987 Constitution.
J9JC9B0M
R52M9UH7
inviolable social institution, is the foundation of the family and

shall be protected by the State.151 (c) Marriage governed bv law:
(1) Rule: The nature, consequences, and incidents of marriage
are governed by law and not subject to stipulation, except that
marriage settlements may fix the property relations during the
marriage within the limits provided by the Family Code.152 (2)
Doctrine of separation of Church and State, not applicable: In
Tilar v. Tilar,m where the RTC refused to take cognizance of a
petition for declaration of nullity of the marriage on the ground of
psychological incapacity because the marriage was solemnized
pursuant to the Canon Law, the Court ruled that the principle of
separation of Church and State is inapplicable because the nature,
consequences, and incidents of marriage are all governed by law.
In upholding the jurisdiction of the RTC over the petition for
declaration of nullity of marriage solemnized by a Catholic priest
and held in a church, the Court ruled that, while such marriage
is considered a sacrament in the Catholic church, it has civil and
legal consequences which are governed by the Family Code, (d)
Presumptions favoring marriage: (1) That if a man and a woman
deport themselves as husband and wife, they are presumed, in
the absence of counter-presumption or evidence special to the
case, to be in fact married;154 (2) That the law favors the validity
of marriage155 and the burden of proof to show the nullity of the
marriage rests upon the party seeking its nullity.156
5.2 Requisites For Valid Marriage: (a) For marriages celebrated
abroad: (1) Rule: All marriages involving Filipino citizens
solemnized outside the Philippines, in accordance with the laws
in force in the country where they were solemnized, shall also
be valid in the Philippines.15’ (2) Exceptions: The following
marriages shall remain void even if solemnized outside the
Philippines and valid in the place of celebration: Those prohibited
under Articles 35 (1), (4), (5), and (6), 36, 37, and 38. (b) For
marriages celebrated in the Philippines: (1) Requirement of five
“'Sec. 2, Art. XV, 1987 Constitution.

“’Art. 1, FC.
“’831 SCRA 116(2017).
154Scc. 3(aa), Rule 131 of the Rules of Court; Adong v. Cheong Seng Gee, 43 Phil. 43
(1922).
“’Balogbog v. CA, 269 SCRA 267 (1997).
“‘Hernandez v. CA, 320 SCRA 76 (1999).
“’Art. 26, par. 1, FC.
J9JC9B0M
R52M9UH7

requisites: These marriages must strictly comply with the five

requisites for a valid marriage: two are classified as essential
requisites, while three are classified as formal requisites. The
essential requisites are: (i) legal capacity, and (ii) consent. The
formal requisites are: (i) authority of the solemnizing officer,
(ii) a valid marriage license, and (iii) a marriage ceremony.1”
(2) Effect of absence of requisites: In the absence of either legal
capacity, authority of the solemnizing officer, or valid marriage
license, the marriage is void.159 However, in case of absence of
authority of the solemnizing officer, the marriage is perfectly
valid when either or both parties believed in good faith that the
solemnizing officer had the legal authority to do so.160 The basis of
such belief in good faith must be mistake of fact and not mistake
of law.161 If what is absent, however, is consent, there is in fact
no marriage because marriage is also a contract. For example,
in Republic v. Olaybar,'61 where Merlinda Olaybar was not the
one who gave consent to the marriage because her identity and
personal circumstances were used by someone else in contracting
a marriage to a Korean national, it was ruled that there was no
void marriage involving Merlinda Olaybar as there was no
marriage to speak of. If what is absent is marriage ceremony,
there is also no marriage to speak of because the State is a party
in interest in all marriages. For example, in Morigo v. People,'61
where the man and woman simply signed a marriage contract
privately and without the presence of an authorized solemnizing
officer, it was ruled that there was no void marriage because
there was no marriage to speak of. (3) Distinctions between void
marriage and no marriage: (i) According to Olaybar, if there is
in fact no marriage, the 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
under Rule 108. (ii) On the other hand, if the marriage is void,
a petition for correction or cancellation of an entry in the civil
registry cannot substitute for an action to invalidate a marriage.
According to Braza v. The City Civil Registrar of Himamaylan
“‘Arts. 2 and 3, FC.

“’Art. 4, par. 1, FC.
160Art. 35(2), FC.
“'Art. 3, NCC.
'“715 SCRA6O5 (2014).
'“476 SCRA461 (2005).
J9JC9B0M
R52M9UH7
City. Negros Occidental,IM the proper remedy is a Petition for

Declaration of Absolute Nullity of Marriage and the marriage
cannot be dissolved by the mere expedient of changing the
entry of marriage in the civil registry, (iii) According to Morigo,
if there is in fact no marriage, the requirement of obtaining a
judicial declaration of absolute nullity of the marriage prior to
contracting another marriage in Article 40 of the Family Code
does not apply. On the other hand, if a marriage was in fact
celebrated but it is void ab initio, the requirement of Article
40 of the Family Code applies. (4) Effect of defect in consent:
According to paragraph 2 of Article 4, a defect in any of the
essential requisites shall render the marriage voidable. However,
only consent is susceptible of becoming defective but not legal
capacity. (5) Effect of irregularity in formal requisite: 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.'65
5.3 Legal Capacity To Contract Marriage: (a) Requisites for legal
capacity: (1) For Foreigners: Governed by their national law.'66
Hence, they must submit a certificate of legal capacity to contract
marriage issued by their respective diplomatic or consular
officials.'6’ (2) For Filipinos: To be capacitated to contract
marriage, the parties must be: (i) a male and a female; (ii) at least
18 years of age; and (iii) must not be suffering from any legal
impediment mentioned in Articles 37 and 38 of the FC.'6" Hence,
if one of the parties is below 18, or if there is a legal impediment,
such as those enumerated in Articles 37 and 38, or a previous
valid marriage (Art. 35[4]), the marriage is void ab initio, (b)
Sexes of the parties: (1) Validity of same-sex marriage: Same-sex
marriage is not recognized as valid here in the Philippines, even
if the marriage is solemnized abroad and valid there as such. In
fact, the same is noteven considered a marriage under Philippine
laws because marriage is defined in the Family Code as a special
contract of permanent union between a man and a woman only.'69
'"607 SCRA 638 (2009).

'“Art. 4, par. 3, FC.
'“Art. 15, NCC.
'"Art. 21, par. 1,NCC.
'“Art. 5, FC.
'“Art. I, FC.
J9JC9B0M
R52M9UH7

In Falcis, III u Civil Registrar General,™ Atty. Jesus Falcis III

questioned the constitutionality of Articles 1,2, 46(4), and 55(6)
of the Family Code because said provisions limit the definition
of marriage as only between a man and a woman. He argued
that said provisions violate the equal protection clause since there
is no substantial distinction between same-sex and opposite-sex
couples. The Supreme Court, however, dismissed the petition
based on procedural grounds, without ruling on the merits of
the petition. (2) Effect of sex reassignment sureerv: In Silverio
v. Republic,'1' it was held that in this jurisdiction there is no law
legally recognizing sex reassignment and its effects. Citing the
Civil Register Law (Act No. 3753), the Court held that the sex
of a Filipino is determined at birth, visually done by the birth
attendant (the physician or midwife) by examining the genitals of
the infant. If the determination of a person’s sex made at the time
of his or her birth is not attended by error, the same is immutable
and may not be changed by reason of sex reassignment surgery.
However, the ruling in Silverio will not apply if the person
who underwent sex reassignment surgery is a foreigner and his
national law allows him to have a change of sex by reason of
sex reassignment surgery. In determining the sex of a person, he/
she is to be governed by his/her national law because the matter
of status, condition, and legal capacity of a person, as well as
his family rights and duties, shall be governed by the national
law of the person concerned.'72 (3) Effect if doubt in genitals is
bv reason of nature: If the reason for the doubt in the genitals is
nature, as when the body of the person has female chromosome
but also producing high levels of male hormones (congenital
adrenal hyperplasia), the Court ruled that the determining factor
in the gender classification would be what the individual, having
reached the age of majority, with good reason thinks of his/her
sex 173
5.4 Consent: (a) Effect of absence of consent: There is in fact no
marriage. Hence, the remedy is not a petition for declaration of
absolute nullity because there is no marriage that may be declared
void. Instead, the proper remedy is a petition for correction and/
™G.R. No. 217910, Sep. 3,2019.

’”537 SCRA 373 (2007).
172Art. 15.NCC.
’’’Republic V. Cagandahan, 565 SCRA 72 (2008).
J9JC9B0M
R52M9UH7
or cancellation of entry in the civil registry under Rule 108.174 (b)

Effect of defect in consent: The marriage is voidable.175 Those
defects are enumerated in Article 45 of the FC. (c) Meaning of
consent: “Consent” in marriage is simply the personal declaration
made by the groom and the bride during the marriage ceremony
that they are taking each other as husband and wife. If such
consent is given during the marriage ceremony and the same is
not defective, the marriage is perfectly valid, regardless of the
absence of love and the purpose, intent, and motive of the parties
in contracting a marriage. The absence of love does not affect the
validity of the marriage. Likewise, the fact that the marriage was
entered into for other purposes other than what the law or the
Constitution declares does not make marriage void.'76 In Republic
v. Albios,177 where a citizen of the Philippines got married to an
/American citizen solely for the purpose of acquiring American
citizenship in consideration of a sum of money, the Court ruled
that that there is no law that declares a marriage void if it is
entered into for purposes other than what the Constitution or law
declares, such as the acquisition of foreign citizenship.
5.5 Valid Marriage License: (a) Effect of absence of marriage license:
If the marriage was celebrated without a marriage license, the
same is void.171 If the marriage license was spurious or fake, the
marriage is also void.'7’ To be considered void on the ground of
absence of a marriage license, the law requires that the absence of
such marriage license must be apparent on the marriage contract,
or at the very least, supported by a certification from the local civil
registrar that no such marriage license was issued to the parties.'"0
A certification issued by the local civil registrar that their office
has no record of the alleged marriage license is adequate to prove
the non-issuance of a marriage license in the absence of any
circumstance of suspicion. It enjoys probative value, the local
civil registrar being the officer charged under the law to keep a
'"Republic v. Olaybar, 715 SCRA 605 (2014).

175Art. 4, par. 2, FC.
’’“Republic v. Albios, 707 SCRA 584 (2013).
I77W.
l7*Art. 4, in relation to Art. 35(3), FC.
mld.
'“Alcantara v. Alcantara, 531 SCRA 446 (2007). Also in Vitangcol v. People, 780 SCRA
598 (2016).
J9JC9B0M
R52M9UH7

record of all data relative to the issuance of a marriage license.181

In Sevilla v. Cardenas,"12 it was ruled that to be sufficient proof
of the non-issuance of a marriage license, the certification to be
issued by the Local Civil Registrar must categorically state that
the document does not exist in his office or the particular entry
could not be found in the register despite diligent search. If there
is no showing that the local civil registry exerted diligent efforts
to locate the records of the said marriage license, the marriage
cannot be declared void by reason ofabsence ofa marriage license,
(b) Effect of irregularity in issuance of marriage license: If there
is a mere irregularity in the issuance of the marriage license, the
validity of the marriage shall not be affected but the party or
parties responsible for the irregularity shall be civilly, criminally,
and administratively liable.183 In Alcantara v. Alcantara,184 the
Court ruled that the issuance of a marriage license in a city
or municipality, not the residence of either of the contracting
parties, and issuance of a marriage license despite the absence
of publication or prior to the completion of the 10-day period for
publication, are mere irregularities in a formal requisite that do
not affect the validity of the marriage, (c) Marriages exempt from
requirement of marriage license: (\)Articulo mortis marriages.185
The marriage remains valid even if the ailing party subsequently
survives.186 (2) Marriages among Muslims or members of ethnic
cultural communities, provided that the same are solemnized in
accordance with their customs, rites, or practices.18’ (3) Marriages
where the residence of either party is so located that there is no
means of transportation to enable such party to appear personally
before the local civil registrar.188 (4) Marriages involving a man
and a woman who have been living together as husband and wife
for at least five years before the marriage and who, during the
said period, were not suffering from any legal impediment to
marry each other.18’ The five-year period must be: (a) continuous
or uninterrupted; (b) counted backwards from the day of the
""Carillo v. Carino, 351 SCRA 127 (2001); Republic v. CA, 236 SCRA257 (1994).
I82497 SCRA 428 (2006).
I8'M
,84531 SCRA 446 (2007).
185Art. 27, FC.
I86M.
187Art. 33, FC.
188Art. 28, FC.
'“’Art. 34, FC.
J9JC9B0M
R52M9UH7
celebration of the marriage; and (c) characterized by exclusivity,

meaning no third party was involved at any time within the
five years.'" In Republic v. Dayot,'9' the Supreme Court ruled
that the falsity of an affidavit of marital cohabitation, where
the parties have in truth fallen short of the minimum five-year
requirement, effectively renders the marriage void ab initio for
lack of a marriage license. In De Castro v. Assidao-De Castro,'91
the Court further clarified that the falsity of the affidavit cannot
be considered as a mere irregularity in the formal requisites of
marriage. However, the Court held in Santiago v. People'91 that
the falsity of an affidavit of cohabitation in the second marriage
CANNOT be used as a defense in the crime of bigamy, for it will
be the height of absurdity to allow the accused to use her illegal
act to escape criminal conviction.
5.6 Authority of Solemnizing Officer: (a) Effect of absence of
authority: The marriage is void.'" However, 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 perfectly
valid.'” But the belief in good faith must be based on a mistake of
fact and not mistake of law.'96 (b) Effect of irregularity in exercise
of authority: The marriage remains valid but the party or parties
responsible for the irregularity shall be civilly, criminally, and
administratively liable.'” For example, the Court ruled that where
a judge solemnized a marriage outside his court’s jurisdiction,
this is a mere irregularity in the formal requisite. While it may not
affect the validity of the marriage, it may subject the officiating
official to administrative liability.'“ In Keuppers v. Murcia,'99 the
jurisdiction of the MTCC judge was limited to the Island Garden
City of Samal, but the judge solemnized the marriage in Davao
City, or outside of the court’s jurisdiction. The Court ruled that
a municipal trial judge who solemnizes a marriage outside his
'"Niftal v. Bayadog, 328 SCRA 122 (2000); Republic v. Dayot, 550 SCRA 435 (2008).
"'Supra.
'”545 SCRA 162 (2008).
*"763 SCRA 54 (2015).
'"Art. 35(2), FC.
mId.
'"Art. 3, NCC.
'"Art. 4, par. 3, FC.
'"Navarro v. Domagtoy, 259 SCRA 129 (1996); Beso v. Daguman, 323 SCRA 566 (2000);
Arafles v. Occiano, 380 SCRA 402 (2002).
'”860 SCRA 216 (2018).
J9JC9B0M
R52M9UH7

territorial jurisdiction violates Article 7 of the Family Code,

and is guilty of grave misconduct and conduct prejudicial to the
best interest of the service and should be properly sanctioned,
(c) Persons authorized to solemnize marriages: (1) Incumbent
members of the Judiciary.200 (2) Religious solemnizing officers:
Requisites: (i) must be duly authorized by his respective church
or sect in writing; (ii) his written authority must be duly registered
with the Civil Registrar General; (iii) he must act within the
limits of such written authority; and (iv) at least one of the
contracting parties must belong to his church or sect.201 (3) Ship
captain or airplane chief pilot: Requisites: (i) marriage must be
in articulo mortis (at the point of death); and (ii) marriage must
be between passengers and/or crew members.202 Such authority
may be exercised not only while the ship is at sea or the plane is
in flight but also during stopovers at ports of call.203 (4) Military
commanders of a unit: Requisites: (i) must be a commissioned
officer, or an officer in the armed forces holding rank by virtue
of a commission from the President; (ii) assigned chaplain to his
unit must be absent; (iii) marriage must be in articulo mortis;
and (iv) marriage must be solemnized within the zone of military
operations.204 The contracting parties need not be members of the
armed forces. They can be civilians. (5) Consul-General, consul,
or vice-consul: Requisites: (i) marriage must be celebrated
abroad in the country where the consul holds office; and (ii)
marriage must be between Filipino citizens.203 (6) Mayors:206
After the effectivity of the Family Code on August 3, 1988 and
before the effectivity of the Local Government Code (January 1,
1992), mayors did not have authority to solemnize marriages.
5.7 Marriage Ceremony: (a) What constitutes a “marriage ceremony":
No prescribed form or religious rite for the solemnization of
the marriage is required.207 However, the law sets the minimum
requirements constituting a marriage ceremony: first, there should
be the personal appearance of the contracting parties before a
solemnizing officer; and second, their personal declaration in
““Art. 7(1), FC.

201 Art. 7(2), FC.
202Arts. 7(3) and 31, FC.
203Art. 31, FC.
204 Arts. 7(4) and 32, FC.
205 Arts. 7(5) and 10, FC.
206Sec. 444(b)(l)(xviii), R.A. No. 7160, the Local Government Code (LGC) of 1991.
207Art. 6, FC.
J9JC9B0M
R52M9UH7
the presence of the solemnizing officer that they take each other
as husband and wife.205 (b) Requisites for marriage ceremony
to exist: (1) Personal appearance by the contracting parties
before the solemnizing officer.200 Thus, a marriage celebrated
thru video conferencing where either or both parties do not
appear personally before the solemnizing officer is not valid if
celebrated in the Philippines. If celebrated abroad, however, and
valid there as such, it shall likewise be considered as valid in
the Philippines.210 Likewise, a marriage by proxy, if celebrated in
the Philippines, is not valid. However, if celebrated abroad and
valid there as such, it shall likewise be considered as valid in the
Philippines.2" (2) Personal declaration by the contracting parties
that they are taking each other as husband and wife.212 However,
there is no prescribed form or religious rite.213 Hence, the failure
of the solemnizing officer to ask the parties whether they take
each other as husband and wife cannot be regarded as a fatal
omission if the parties nonetheless signed the marriage contract
in the presence of the solemnizing officer.214 A declaration by
word of mouth of what the parties had already stated in writing
would be a mere repetition, so that its omission should not be
regarded as a fatal defect.21’ (3) Such personal declaration by the
parties must be done in the presence of the solemnizing officer.216
Hence, there is no marriage ceremony if what transpired was a
mere private act of signing a marriage contract by the contracting
parties, without the presence of the solemnizing officer.217 In
Ronulo v. People;215 a solemnizing officer from the Aglipayan
Church was charged with violation of Article 352 of the RPC
for allegedly performing an illegal marriage ceremony because
he solemnized the marriage knowing fully well that the parties
did not have a marriage license. The accused contended that he
merely conducted a “blessing” and that in order for a marriage
Ronulo v. People, 728 SCRA 675 (2014).

2wArt. 6, FC.
2l0Art. 26, par. 1,FC.
!"M.
2l2Art 6, FC.
mId.
2l4Infante v. Arenas, CA-G.R. No. 5278-R, June 29, 1951.
™Id.
’“Arts. 2(2) and 6, FC.
!l,Morigo v. People, 422 SCRA 376 (2004).
!“728 SCRA 675 (2014).
J9JC9B0M
R52M9UH7

ceremony to exist, the law requires the verbal declaration

that the couple take each other as husband and wife, and a
marriage certificate containing the declaration in writing
which is duly signed by the contracting parties and attested to
by the solemnizing officer. In holding that the accused indeed
performed a marriage ceremony, the Court ruled that the law sets
the minimum requirements constituting a marriage ceremony:
first, there should be the personal appearance of the contracting
parties before a solemnizing officer; and second, their declaration
in the presence of not less than two witnesses that they take each
other as husband and wife. Both requirements were present in
this case.
5.8 Marriage contract: (a) Importance of marriage contract: It is
the best documentary evidence of a marriage.21’ Its existence
renders unnecessary the presumption that “a man and a woman
deporting themselves as husband and wife have entered into a
lawful contract of marriage.”220 (b) Effect of absence of marriage
contract: Its absence is not, however, proof that no marriage
took place because other evidence may be presented to prove
the fact of marriage.221 Thus, the mere fact that no record of the
marriage exists in the registry of marriage does not invalidate
said marriage, as long as in the celebration thereof, all requisites
for its validity are present.222 The forwarding of a copy of the
marriage certificate to the registry of marriage is not one of
said requisites.22’ (c) Other proofs of marriage: (1) testimony
of a witness to the matrimony; (2) the couple’s public and open
cohabitation as husband and wife after the alleged wedlock;
(3) the birth and baptismal certificates of children bom during
such union; and (4) mention of such nuptial in subsequent
documents.22,1
6) Rules on Validity of Absolute Divorces

6.1 Summary of Rules on Absolute Divorce: The rales on divorce
prevailing in this jurisdiction can be summed up as follows: (1)
Philippine laws do not provide for absolute divorce, and hence,
2l,Villanueva v. CA, 198 SCRA 472 (1991).

22OM.
“'Balogbog v. CA, 269 SCRA 259 (1997).
222 People v. Borromeo, 133 SCRA 106 (1984).
™ld.
224Trinidad v. CA, 289 SCRA 188 (1998); Sarmiento v. CA, 305 SCRA 138 (1999).
J9JC9B0M
R52M9UH7
the courts cannot grant the same; (2) consistent with Articles 15
and 17 of the Civil Code, the marital bond between two Filipino
citizens cannot be dissolved even by an absolute divorce obtained
abroad; (3) an absolute divorce obtained abroad by a couple,
who are both aliens, may be recognized in the Philippines,
provided it is consistent with their respective national laws; and
(4) in mixed marriages involving a Filipino and a foreigner, the
former is allowed to contract a subsequent marriage in case the
absolute divorce is validly obtained abroad by the alien spouse
capacitating him or her to remarry.225
6.2 Rule as to Divorce Between Filipinos: Philippine law does not
provide for absolute divorce; hence, our courts cannot grant
it224 A marriage between two Filipinos cannot be dissolved
even by a divorce obtained abroad, because of Articles 15 and
17 of the Civil Code.227 Such divorce between Filipinos is void
and ineffectual225 because it is contrary to our public policy and
morality.22’ This rule has remained even under the Family Code,
even if either or both parties are residing abroad.250
6.3 Rule in Mixed Marriages: (a) Requisites: 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 remarry. "2JI The following elements must concur in order
for said law to apply, namely: (1) that there is a valid marriage
celebrated between a Filipino citizen and a foreigner;252 and (2)
that a valid divorce is obtained abroad, regardless ofwho between
the spouses initiated the divorce proceedings.255 Thus, pursuant to
Republic v. Manalo,m foreign divorce decrees obtained to nullify
“‘Morisono v. Morisono, G.R. No. 226013, July 2, 2018; see also Garcia V. Recio, 366
SCRA437 (2001).
“‘Garcia v. Recio, 366 SCRA437 (2001).
™Id.
“Lavadia v. Heirs of Juan Luces Luna, 730 SCRA 376 (2014).
22’Bayot v. CA, supra.
250Lavadia v. Heirs of Juan Luces Luna, supra.
“'Art 26,2" par., FC.
“’Republic v. Orbecido III, 472 SCRA 114 (2005).
“’Republic v. Manalo, 862 SCRA 580 (2018); Racho v. Tanaka, G.R. No. 199515, June
25, 2018; Morisono v. Morisono, G.R. No. 226013, July 2,2018; Juego-Sakai v. Republic, G.R.
No. 224015, July 23, 2018; and Nullada V. Civil Registrar of Manila, G.R. No. 224548, January
23,2019.
luSupra
J9JC9B0M
R52M9UH7

marriages between a Filipino and an alien citizen may already

be recognized in this jurisdiction, regardless of who between the
spouses initiated the divorce; provided, of course, that the party
petitioning for the recognition of such foreign divorce decree—
presumably the Filipino citizen—must prove the divorce
as a fact and demonstrate its conformity to the foreign law
allowing it."’ (b) Reckoning point in determining citizenship: In
determining whether it is a case of a mixed marriage, the Court
ruled in Republic v. Orbecido IIP* that the reckoning point is
not the citizenship of the parties at the time of the celebration
of the marriage, but their citizenship at the time a valid divorce
is obtained abroad by the alien spouse capacitating the latter to
remarry. Once it is proven that a party was no longer a Filipino
citizen when he obtained the divorce from his Filipino spouse, the
rule in Article 26, par. 2 of the Family Code would be applicable.
In other words, the validity of the divorce will be determined
based on the law of the country of which he is a citizen at the time
the valid divorce is obtained."7 (c) Article 26, 2nd par, applicable
only to Filipino spouse: Only the Filipino spouse can invoke the
second paragraph ofArticle 26 of the Family Code, while the alien
spouse can claim no right under said provision. The legislative
intent is for the benefit of the Filipino spouse, by clarifying his
or her marital status, settling the doubts created by the divorce
decree. Thus, if the Filipino spouse invokes the second paragraph
of Article 26 of the Family Code, the action is not limited to the
recognition of the foreign divorce decree. If the court finds that
the decree capacitated the alien spouse to remarry, the courts can
declare that the Filipino spouse is likewise capacitated to contract
another marriage."8 (d) When Filipino spouse regains capacity to
remarry: In Republic v. Cote,239 the Court made a pronouncement,
by way of obiter dictum, that the Filipino spouse who likewise
benefits from the effects of the divorce (obtained in a mixed
marriage) cannot automatically remarry; before the divorced
Filipino spouse can remarry, he or she must file a petition for
judicial recognition of the foreign divorce. In Sarto v. People,
however, the Court ruled that the "[r]ecognition of the divorce
"’Morisono v. Morisono, supra.

"‘472 SCRA 114(2005).
”7Quita v. CA, 300 SCRA 406 (1998); see also Llorente V. CA, 345 SCRA 592 (2000).
""Corpuz v. Slo. Tomas, 628 SCRA 266 (2010).
"’859 SCRA 98 (2018).
"°856 SCRA 548 (2018).
J9JC9B0M
R52M9UH7
decree, however, need not be obtained in a separate petition

filed solelyfor that purpose. Philippine courts may recognize the
foreign divorce decree when such was invoked by a party as an
integral aspect ofhis claim or defense." The author believes that
Sarto is the better rule. In other words, once it has been proven
that the divorce obtained abroad is valid, and that it capacitated
the foreign spouse to remarry, the Filipino spouse also regains
his or her capacity to remarry at the same time that the foreign
spouse reacquires his or her capacity to remarry. Thus, even if the
Filipino spouse immediately contracted a subsequent marriage
after the divorce and prior to its judicial recognition, he or she
is not automatically liable for bigamy, (e) Principle applied to
foreign judgment involving bieamv: The principle in Article 26
of the Family Code is also applicable to a marriage between a
Filipino and a foreign citizen who obtains a foreign judgment
nullifying the marriage on the ground of bigamy. The Court
explained that the principle in the second paragraph of Article
26 of the Family Code applies because the foreign spouse, after
the foreign judgment nullifying the marriage, is capacitated
to remarry under the laws of his or her country. If the foreign
judgment is not recognized in the Philippines, the Filipino spouse
will be discriminated—the foreign spouse can remarry while the
Filipino spouse cannot remarry.241 (f) Retroactive application
of rule: In San Luis v. San Luis,2*2 the Court held that there is
no need to retroactively apply the provisions of the second
paragraph of Article 26 of the Family Code because there is
sufficient jurisprudential basis to apply the rule embodied in said
law to absolute divorces obtained by the foreign spouse prior to
the effectivity of the Family Code, as exemplified by the cases of
Van Doni v. Romillo, Jr.,2,2 Pilapil v. lbay-Somera,2U and Quito v.
Court ofAppeals.™
7) Void Marriages
7.1 Concept and Characteristics of Void Marriages: (a) Nature: (1)
Rule: It is inexistent from the very beginning.246 Hence, as a
24lFujiki v. Marinay, 700 SCRA 69 (2013).

242514 SCRA 294 (2007).
WI39 SCRA 139 (1985).
i<4174 SCRA 653 (1989).
24!300 SCRA 406 (1998).
2“J. Vitug, Concurring and Dissenting Opinion in Mercado v. Tan, 337 SCRA 122, 135
(2000).
J9JC9B0M
R52M9UH7

rule, if the marriage is void ab initio, it is ipso facto void without

need of any judicial declaration of nullity.247 (2) Exception: For
purposes of remarriage, even if the prior marriage is void ab initio
a judicial declaration of its nullity is required before a subsequent
marriage can be contracted;248 otherwise, the subsequent
marriage is in itself void ab initio™ and the second marriage is
contracted during the existence of the first marriage resulting in
the crime of bigamy."0 (b) Can be attacked collaterally: A void
marriage can be attacked collaterally."1 For other purposes, such
as, but not limited to the determination of heirship, legitimacy,
or illegitimacy of a child, settlement of estate, dissolution of
property regime, or a criminal case for that matter, the court may
pass upon the validity of marriage even in a suit not directly
instituted to question the same so long as it is essential to the
determination of the case."2 The clause “on the basis of a final
judgment declaring such previous marriage void" in Article 40
of the Family Code connotes that such final judgment need not
be obtained only for purpose of remarriage."3 Hence: (1) In De
Castro v. Assidao-De Castro,354 it was held that the trial court
had jurisdiction to determine the validity of the marriage in an
action for support. (2) In Carino v. Carino,"5 the Court ruled that
it is clothed with sufficient authority to pass upon the validity
of two marriages despite the main case being a claim for death
benefits. (3) In Garcia-Quiason v. Belen,336 the Court allowed a
marriage to be declared void ab initio for being bigamous in a
Petition for Letters of Administration filed by a compulsory heir.
HOWEVER, the Court ruled in Braza v. The City Civil Registrar
ofHimamaylan City, Negros Occidental,"’ that the trial court has
no jurisdiction to nullify marriages in a special proceeding for
cancellation or correction of entry under Rule 108 of the Rules of
247J. Carpio, Concurring Opinion in Abunado v. People, 426 SCRA 562,572 (2004).
248Art. 40, FC; Domingo v. CA, 226 SCRA 572 (1993).
"’Cariilo v. Cariilo, 351 SCRA 127, 134(2001).
"“Abunado v. People, supra', Mercado v. Tan, 337 SCRA 122 (2000) and Marbella-Bobis
v. Bubis, 336 SCRA 747 (2000).
"'Klinal V. Bayadog, 328 SCRA 122, 134 (2000).
™ld.
m/d.
“*545 SCRA 666 (2008).
"’351 SCRA 127 (2001).
“‘702 SCRA 707 (2013).
“’607 SCRA 638 (2009).
J9JC9B0M
R52M9UH7
Court. Since the cause of action is actually to seek the declaration

of the second marriage as void for being bigamous and impugn
the child’s legitimacy, which causes of action are governed not
by Rule 108 but by A.M. No. 02-11-10-SC which took effect on
March 15, 2003, and Art. 17 lof the Family Code, respectively,
it was held that the proper remedy is a petition for declaration of
absolute nullity of the marriage before the Family Court. [NOTE:
In Braza, the marriage is void. Hence, the proper remedy is
petition for declaration of absolute nullity of the void marriage.
In Olaybar, however, there is no marriage to speak of. Hence,
the proper remedy is a petition for cancellation of entry in the
civil registry under Rule 108.] (c) Can be questioned even after
death: A void marriage can be questioned even after the death
of either party?1 If the void marriage was celebrated during the
effectivity of the FC, therefore covered by A.M. No. 02-11-10-
SC, a petition for declaration of absolute nullity can only be filed
during the lifetime of the spouses. After the death of one of the
spouses, the validity of the marriage may still be questioned by
way of a collateral attack in the proceeding for the settlement
of the estate of the deceased spouse?’ If the void marriage was
celebrated before the effectivity of the Family Code, it can be
questioned even after the death of one of the spouses either by
way of a direct action or a collateral attack in the proceeding
for the settlement of the estate of the deceased spouse.240 (d)
Imprescriptible: The action or defense for the declaration of
absolute nullity of a marriage is imprescriptible?' Qualification:
A petition for declaration of nullity of the marriage can only be
filed during the lifetime of the parties, if the marriage is covered
by A.M. No. 02-11-10-SC (or celebrated during the effectivity of
the Family Code)?2 (e) Who can question: (1) By direct action
(or filing a petition for declaration of absolute nullity), only the
husband or the wife can file the petition if the marriage was
celebrated during the effectivity of the Family Code.2" However,
if the ground is bigamy, even the aggrieved spouse in the prior
B8N i nal v. Bayadog, supra.

“’Enrico v. Heirs of Sps. Mcdinaceli, 534 SCRA418 (2007).
•“Ninal v. Bayadog, supra', Carlos v. Sandoval, 574 SCRA 116(2008); Ablazav. Republic,
628 SCRA 27 (2010); and Garcia-Quiason v. Belen, 702 SCRA 707 (2013).
261 Art. 39, FC.
2S2A.M. No. 02-11-10-SC.
“’Sec. 2(a), A.M. No. 02-11-10-SC.
J9JC9B0M
R52M9UH7

marriage has the personality to file the petition.2'*1 On the other

hand, if the marriage was celebrated prior to the effectivity of the
Family Code, any real party in interest may file the petition.265
(2) By way of collateral attack, any proper interested party may
attack a void marriage.266 Such interest refers to successional
rights. Hence, only the compulsory or intestate heirs of the
spouses may attack the validity of the marriage, for the purpose
of protecting their successional rights, upon the death of a spouse
in a proceeding for the settlement of the estate of the deceased
spouse, for marriages covered by A.M. No. 02-11-10,267 or by
way of a petition for declaration of nullity of the marriage, for
marriages celebrated under the Civil Code.268
7.2 Effect of Void Marriages: (a) As to right to remarry - compliance
with Article 40: The parties to a void marriage may contract
another marriage provided that they first secure a judicial
declaration of the nullity of their marriage, as required by Article
40 of the Family Code. If they contract another marriage in the
absence of such judicial declaration, the subsequent marriage is
bigamous and, therefore, void pursuant to Article 40. The crime
of bigamy is also committed.269 If the ground for the nullity of
the marriage is Article 40, there must also be compliance with
the requirements of liquidation, partition, and distribution of
properties of the erstwhile spouse,270 the delivery of presumptive
legitimes,271 and compliance with the requirements of Article
52 of the FC. (b) Parties are not spouses: (1) Not obligated to
support each other: Hence, they are not obliged to support each
other. A trial court has the jurisdiction to determine the validity of
the marriage between the parties in an action for support because
the validity of a void marriage may be collaterally attacked.272 (2)
Not entitled to successional rights: If the marriage is proven void,
2MJuliano-Llave v. Republic, 646 SCRA 753 (2011) and Fujiki v. Marinay, 700 SCRA 69
(2013).
26,Amor-Catalan v. CA, 514 SCRA 607 (2007), cited in Carlos V. Sandoval, supra.
266Ninal v. Bayadog, supra.
’"’Enrico v. Heirs ol’Sps. Medinaceli, G.R. No. 173614, September 28, 2007, 534 SCRA
418.
268Carlos v. Sandoval, 574 SCRA 116 (2008) and Ablaza v. Republic, 628 SCRA 27(2010).
’"’Mercado v. Tan, 337 SCRA 122 (2000) and Marbella-Bobis v. Bobis, 336 SCRA 747
(2000).
27°Art. 50, FC.
271 Art. 51, FC.
272De Castro v. Assidao-Dc Castro, 545 SCRA 666 (2008).
J9JC9B0M
R52M9UH7
the surviving party is not a spouse entitled to successional rights

and the absolute nullity of the marriage can still be raised even
after the death of the deceased spouse.273 (c) Status of children:
(1) Rule: Children of void marriages are generally illegitimate.274
(2) Exception: Children of void marriages under Articles 36 and
53 are exceptionally declared legitimate.275 (d) Effect on property
relations: (1) Rule: In void marriages, regardless of the cause
thereof, the property relations of the parties during the period of
cohabitation are governed by Article 147 or 148, as the case may
be.2 ‘ (2) Exception: If the marriage is declared void by reason
of non-compliance with Article 40 of the FC, the applicable
property regime is absolute community, conjugal partnership, or
complete separation of property, as the case may be.277 (e) Effect
on donation propter nuptias: (1) Rule: If the marriage is judicially
declared void, the donation propter nuptias remains valid but the
donor may revoke the same.271 (2) Exception: If the marriage is
declared void by reason of Article 40 of the FC and the donee
contracted the marriage in bad faith, the donation propter nuptias
is revoked by operation of law.27’ If the marriage is void because
both the parties to the subsequent marriage referred to in Article
41 acted in bad faith, all donations propter nuptias by one in
favor of the other are revoked by operation of law.280
7.3 Enumeration of Void Marriages Under Family Code: (a) Void
marriages under Article 35: (1) Below 18: Where any party is
below 18 years of age.2*1 There is absence of legal capacity. (2)
Absence of authority of solemnizing officer: Where the marriage
is solemnized by any person not legally authorized to perform
marriages.212 Exception: The marriage is valid if either or both
parties believed in good faith that the solemnizing officer had the
273Nirtal v. Bayadog, supra, and Garcia-Quiason V. Belen, 702 SCRA 707 (2 )

“Art. 165, FC.
275Art. 54, FC. ...
27‘Valdez v. RTC, Br. 102, QC, 260 SCRA 221 (1996); Buenaventura V. LA,
261 (2005).
!”Art. 43(2), in relation Io Art. 50, FC; Valdez
Dido, 640 SCRA 178(2011). RTC, Br. 102, QC, supra, and Difio v.
“Art. 86(1), FC.
“Art. 43(2), in relation to Art. 50, FC.
“Art. 44, FC.
“Art. 35(1), FC.
“Art. 35(2), FC.
J9JC9B0M
R52M9UH7

legal authority to do so.“3 But the good faith must be based on

mistake of fact and not mistake of law.284 (3 3 Absence of marriage
license: Where the marriage is celebrated without a marriage
license and it is not exempt from the requirement of marriage
license.285 (4) Bigamous or polygamous marriages:285 A bigamous
marriage is a marriage contracted during the subsistence of a
previous marriage. In Article 35(4), the previous marriage must
be either perfectly valid or voidable, to distinguish it from the
bigamous marriage in Article 40 where the previous marriage
must be truly void ab initio but a subsequent marriage is
contracted in the absence of a judicial declaration of the nullity of
the previous void marriage. Exception: The subsequent marriage
in Article 41 is perfectly valid when all three requisites mentioned
therein were present before the celebration of the subsequent
marriage, as follows: (i) the prior spouse had been absent for four
consecutive years or two years where there is danger of death
under the circumstances stated in Article 391 of the Civil Code;
(ii) the spouse present had a well-founded belief that the absent
spouse was already dead; and (iii) the spouse present obtained a
judicial declaration of presumptive death.287 However, if the
parties to the subsequent marriage in Article 41 acted in bad faith,
said marriage shall be void ab initio for being a bigamous
marriage under Article 35(4).““ (5) Void marriage in Article
35(53: Where one contracted the marriage through mistake as to
the actual physical identity of the other.28’ (6) Void marriage
under Article 53: Where a voidable marriage under Article 45
was already annulled by a final judgment, or a void marriage
under Article 40 was already declared a nullity in a final judgment,
but: (i) there was no liquidation, partition, and distribution of the
properties of the spouses or delivery of the presumptive legitimes
of the common children; and (ii) 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 legitimes in the appropriate
™Id.
284 Art. 3, NCC.
2,5Art. 35(3), FC.
286Art. 35(4), FC.
“’Annas v. Calisterio, 330 SCRA 201 (2000).
““Art. 44, FC.
“’Art. 35(5), FC.
J9JC9B0M
R52M9UH7
civil registry and registries of property.290 (b) Void marriage under

Article 36 (psychological incapacity'): (1) Concept: “Psycho
logical incapacity” as a ground to nullify marriage under Article
36 of the Family Code should refer to the most serious cases of
personality disorders clearly demonstrative of an utter
insensitivity or inability to give meaning and significance to the
marriage.291 It must be a malady that is so grave and permanent as
to deprive one of awareness of the duties and responsibilities of
the matrimonial bond one is about to assume.292 It contemplates
incapacity or inability to take cognizance of and to assume basic
marital obligations and not merely difficulty, refusal, or neglect
in the performance of marital obligations or ill will.293 (2)
Characteristics: (i) Gravity - The incapacity must be grave or
serious such that the party would be incapable of carrying out the
ordinary duties required in a marriage.294 It is essential that the
concerned party was incapable of doing so, due to some
psychological illness existing at the time of the celebration of the
marriage.295 In other words, there must be proof of a natal or
supervening disabling factor in the person—an adverse integral
element in the personality structure that effectively incapacitates
the person from really accepting and thereby complying with the
obligations essential to marriage—which must be linked with the
manifestations of the psychological incapacity.296 (ii) Juridical
Antecedence - It must be rooted in the history of the party
antedating the marriage, although the overt manifestations may
290Art 53, in relation to Arts. 35(6), 52, 50, and 51, FC.
“Eliscupidez v. Eliscupidez, G.R. No. 226907, July 22, 2019; Cahapisan-Santiago v.
Santiago, G.R. No. 241144, June 26,2019; Go-Yu v. Yu, G.R. No. 230443, April 3,2019; Republic
v. Deang, G.R. No. 236279, March 25,2019; Republic v. Tecag, G.R. No. 229272, Nov. 19, 2018;
Republic v. Tobora-Tionglico, 851 SCRA 107 (2018); Republic v. Romero II, 785 SCRA 164
(2016).
“Eliscupidez v. Eliscupidez, supra-, Republic v. Deang, supra', Republic v. Tobora-
Tionglico, supra: Republic v. Romero II, supra; Perez-Ferraris v. Ferraris, 495 SCRA 396 (2006),
citing Marcos v. Marcos, 343 SCRA 755 (2000).
291Yambao v. Republic, 640 SCRA 355 (2011), cited in Cortez v. Cortez, G.R. No. 224638,
April 10,2019.
“Eliscupidez v. Elizcupidez, G.R. No. 226907, July 22, 2019; Cahapisan-Santiago v.
Santiago, G.R. No. 241144, June 26,2019; Republic v. Tobora-Tionglico, 851 SCRA 107 (2018).
“Republic v. Pangasinan, 800 SCRA 184 (2016), citing Marable v. Marable, 639 SCRA
557(2011).
“Republic v. Deang, G.R. No. 236279, March 25,2019 and Republic v. Cuizon-Melgar,
486 SCRA 177 (2006).
J9JC9B0M
R52M9UH7

emerge only after the marriage.2” In other words, a person’s

psychological incapacity to comply with his or her essential
obligations, as the case may be, in marriage must be rooted in a
medically or clinically identifiable grave illness that is incurable
and shown to have existed at the time of marriage, although the
manifestations thereof may only be evident after marriage.258 (iii)
Incurability - It must be incurable, or even if it were otherwise,
the cure would be beyond the means of the party involved.295 It
must be shown to be medically or clinically permanent or
incurable and such incurability may be absolute or even relative
only in regards to the other spouse, not necessarily absolutely
against everyone of the same sex.’“ (3) No need for personal
examination of respondent: In Marcos v. Marcos,the Supreme
Court clarified that there is no requirement that the defendant/
respondent spouse should be personally examined by a physician
or psychologist as a condition sine qua non for the declaration of
nullity of marriage based on psychological incapacity. What is
important, however, as stated in Marcos is the presence of
evidence that can adequately establish the party’s psychological
condition. If the totality of evidence presented is enough to
sustain a finding of psychological incapacity, then actual medical
examination of the person concerned need not be resorted to.’02
However, the totality of evidence must still prove the gravity,
juridical antecedence, and incurability of the alleged
psychological incapacity.’0’ (4) Illustrative cases of psychological
incapacity: (i) In Republic v. Mola Cruz,m where the respondent
spouse was guilty of sexual infidelity and abandonment, allowed
her Japanese boyfriend to stay in the marital abode, shared the
marital bed with her Japanese boyfriend and introduced her
husband as her elder brother, all done under the threat of desertion,
it was held that her blatant insensitivity and lack of regard for the
sanctity of the marital bond and home is psychological incapacity.
’’’Eliscupidez v. Elizcupidez, supra-, Cahapisan-Santiago v. Santiago, supra-, Republic v.

Tobora-Tionglico, supra.
“Republic v. Pangasinan, supra.
“Eliscupidez v. Elizcupidez, supra; Cahapisan-Santiago v. Santiago, supra; Republic v.
Tobora-Tionglico, supra.
’“Santos v. CA, supra.
mi343 SCRA 755 (2000); also in Republic v. lyoy, 470 SCRA 508 (2005).
X2Citedin Zamora v. CA, 515 SCRA 19 (2007).
“’Republic v. Pangasinan, 800 SCRA 184 (2016).
’"G.R. No. 236629, July 23, 2018.
J9JC9B0M
R52M9UH7
(ii) In Tani-Dela Fuente v. Dels Fuente, Jr.™ respondent’s

repeated psychological abuse by intimidating, stalking, and
isolating his wife from her family and friends, as well as his
increasing acts of physical violence, were declared proof of his
paranoid personality disorder which incapacitated him to fully
comprehend and assume the essential obligations of marriage.
(iii) In Antonio v. Reyes,™ the respondent was a pathological liar
and her lies were held to be indicative of her failure to distinguish
truth from fiction, or at least abide by the truth. In declaring her
psychologically incapacitated, the Supreme Court held that a
person unable to distinguish between fantasy and reality would
similarly be unable to comprehend the legal nature of the marital
bond, much less its psychic meaning, and the corresponding
obligations attached to marriage, (iv) In Chi Ming Tsoi v. CA,307
the husband was declared psychologically incapacitated because
of his continuous and unexplainable refusal to have sexual
intercourse with the wife for an unreasonable length of time. In
declaring him psychologically incapacitated, the Supreme Court
held that the senseless refusal of one of the parties to engage in
sexual intercourse for purposes of procreation is equivalent to
psychological incapacity, (c) Void marriages under Article 37
(incestuous marriages): (1) Between ascendants and descendants:
Marriages between ascendants and descendants of any degree,
whether the relationship be legitimate or illegitimate, are
incestuous, hence, void."" (2) Between brothers and sisters:
Marriages between brothers and sisters, whether of the full or
half blood, whether the relationship be legitimate or illegitimate,
are incestuous, hence, void."9 The prohibition applies to those
who are related by blood. On the other hand, marriages between
step-brothers and step-sisters are no longer prohibited under the
Family Code, although prohibited under the New Civil Code.
Following the rule that the validity of a marriage is tested
according to the law in force at the time the marriage is contracted,
the intervening effectivity of the Family Code does not affect the
void nature of a marriage between a step-brother and a step-sister
solemnized under the regime of the Civil Code.’10 (d) Void
3O5819 SCRA638 (2017).

"‘484 SCRA 353 (2006).
”'266 SCRA 324 (1997).
"‘Art. 37(1), FC.
"’Art. 37(2), FC.
II0Ablaza v. Republic, 628 SCRA 27 (2010).
J9JC9B0M
R52M9UH7
BOOK 1. - PERSONS A FAMILY RI.I.AI IONS 45

The Family (.'ode of the Philippines
marriages under Article 38 (prohibited by reasons of public

nolicv): (I) Between collateral blood relatives: Marriages
between collateral blood relatives up to the 4"' civil degree."1 (2)
Between step-parents and step-children: Marriages between
former step-parents and step-children."2 (3) Between parents-in-
law and children-in-law: Marriages between former parents-in-
law and children-in-law."3 (4) Prohibited marriages by reason of
adoption: The adopter cannot marry: (i) the adopted;"4 or (ii) the
surviving spouse of the adopted."’ The adopted, on the other
hand, cannot marry: (i) the adopter;316 (ii) the surviving spouse of
the adopter;317 (iii) the legitimate child of the adopter;"’ or (iv)
another adopted child of the same adopter.319 Any such marriage
shall be void. The law does not, however, prohibit a marriage
between the adopted and an illegitimate child of the adopter. (5)
Intentional killing of another’s spouse: If the spouse of another is
intentionally killed for the purpose of marrying the surviving
spouse, the marriage is void.320 The marriage is void even if the
surviving spouse does not conspire in the killing of his or her
spouse, provided that the killing must be animated primarily by
the intention or desire to do away with the victim for the purpose
of marrying the surviving spouse. The law does not also require
a prior criminal conviction to render the marriage void because
the guilt can be proven in the civil action for declaration of the
nullity of the marriage.
7.4 Bigamous Marriage Under Article 40: (a) Concept: If the prior
marriage is void but a party thereto fails to secure a judicial
declaration of its nullity before contracting another marriage,
the subsequent marriage is also void,321 and such party is liable
for the crime of bigamy.322 (b) Distinguished from bigamous
marriage under Article 3514): (1) In Article 35(4), the prior
'"Art. 38(1), FC.

"’Art. 38(2), FC.
"’Art. 38(3), FC.
"4Art. 38(4), FC.
"’Art. 38(6), FC.
"‘Art. 38(4), FC.
"’Art. 38(5), FC.
"’Art. 38(7), FC.
"’Art. 38(8), FC.
320Art. 38(9), FC.
’"Art. 50, in relation to Art. 40, FC; Carirlo v. Carillo, 351 SCRA 127, 134 (2001).
’"Marbella-Bobis v. Bobis, 336 SCRA 747 (2000) and Mercado v. Tan, 337 SCRA 122
(2000).
J9JC9B0M
R52M9UH7
46 PRE-HAR REVIEWER IN CIVIL LAW
marriage is either valid or voidable; in Article 40, the prior

marriage is void but a subsequent marriage is contracted prior to
a judicial declaration of the absolute nullity of the prior marriage.
(2) In Article 35(4), the property regime of the void marriage is
that provided in Article 148; in Article 40, the property regime
of the void marriage is either absolute community of property
or conjugal partnership of gains, unless the parties provided for
complete separation as their property regime in their marriage
settlement.’” (c) Necessity of judicial declaration of absolute
nullity: In Castillo v. De Leon-Castillo,32* Ty v. Court ofAppeals,325
and Apiag v. Cantero,’“ the Court ruled that the requirement of a
judicial decree of nullity (in Article 40 of the Family Code) does
not apply to subsequent marriages that were celebrated before
the effectivity of the Family Code, particularly if the children
of the parties were bom while the Civil Code was in force. In
other words, the requirement of a judicial decree of nullity in
Article 40 is applicable only to remarriages entered into after the
effectivity of the Family Code on August 3, 1988, regardless of
the date of the first marriage. If the second marriage is celebrated
prior to the effectivity of the Family Code, the rule in People v.
Mendoza,321 People v. Aragon,!2J and Odayat v. Amante32'1 that “no
judicial decree was necessary to establish the invalidity of void
marriages under Article 80 of the Civil Code" applies. In other
words, during the prevailing rule at that time, a void marriage
is non-existent for all purposes including remarriage. Hence, a
second marriage contracted before the effectivity of the Family
Code without a judicial declaration of the nullity of the previous
void marriage is perfectly valid.
7.5 Exception to Bigamy - Article 41. FC: (a) Applicable law: The
validity of a marriage and all its incidents must be determined in
accordance with the law in effect at the time of its celebration.”0
If the subsequent marriage took place prior to the effectivity of
the Family Code or during the Civil Code, the applicable law
“Dido v. Ditto, 640 SCRA 178 (2011).

”’789 SCRA 503 (2016).
”’346 SCRA 86 (2000).
’“268 SCRA 47 (1997).
”’45 Phil. 739(1954).
”'100 Phil. 1033(1957).
”’77 SCRA 338 (1977)
’’“Castillo v. De Leon-Castillo, supra.
J9JC9B0M
R52M9UH7

is the Civil Code. If the subsequent marriage took place during

the effectivity of the Family Code, the applicable law is the
Family Code, (b) Subsequent marriage under the Civil Code:
(1) Requirements under the Civil Code: The spouse present
is authorized to remarry if any of the following conditions is
satisfied: (i) Prior spouse has been absent for seven consecutive
years and spouse present has no news of the absentee being
alive; (ii) Prior spouse has been absent for less than seven years
and generally considered as dead and believed to be so by the
spouse present; or (iii) Prior spouse disappeared in a situation
where there is danger of death under Article 391 of the Civil
Code and has been missing for four years."' The Civil Code does
not require a judicial declaration of presumptive death in order
for the marriage to be valid."2 Under the Civil Code, a judicial
declaration of presumptive death is not necessary so long as the
prescribed period of absence is met. Hence, if the subsequent
marriage took place prior to the effectivity of the Family Code,
the same is valid notwithstanding the absence of such judicial
declaration."’ (2) Status of subsequent marriage under the Civil
Code: The subsequent marriage contracted under the provisions of
Article 83(2) of the Civil Code is not perfectly valid but voidable,
or valid until declared null and void by a competent court.’" The
ground for the annulment of the second marriage is the fact that
the former spouse believed to be dead was in fact living and the
marriage with such former spouse was then in force,"5 and the
petition for annulment can be commenced by the absentee spouse
during his or her lifetime, or by either spouse of the subsequent
marriage during the lifetime of the other.”6 Hence, the subsequent
marriage contracted under the Civil Code can only be terminated
by a final judgment of annulment. The remedy of recording of
affidavit of reappearance does not apply because such remedy
is applicable only for the purpose of terminating a subsequent
marriage validly contracted during the effectivity of the Family
Code, (c) Subsequent marriage under the Family Code: (1)
Requirements under the Family Code: A marriage contracted
"'Art. 83(2), NCC.

’"Annas v. Calisterio, 330 SCRA 201 (2001).
mId.
’"Art. 83(2), NCC.
’"Art. 85(2), NCC.
"‘Art. 87(2), NCC.
J9JC9B0M
R52M9UH7
by any person during the subsistence of a previous marriage

shall be null and void3’7 because it is a bigamous marriage under
Article 35(4) of the FC, unless before the celebration of the
subsequent marriage the following requirements are complied
with: (i) the prior spouse had been absent for four consecutive
years, or two years in case of disappearance where there is danger
of death under the circumstances set forth in Article 391 of the
Civil Code; (ii) the spouse present had a well-founded belief
that the absent spouse was already dead; and (iii) the spouse
present obtained a judicial declaration of presumptive death
of the absentee spouse.3” (2) Status of subsequent marriage
under Family Code: If all three requisites mentioned above are
complied with before the celebration of the subsequent marriage,
the subsequent marriage is perfectly valid. However, if not all
three requisites are complied with, the subsequent marriage is
void because it is a bigamous marriage under Article 35(4) of the
Family Code. (3) Remedy if subsequent marriage is void: If the
subsequent marriage is bigamous and therefore void, the proper
remedy is to file a petition for the declaration of its nullity and the
aggrieved spouse in the prior marriage has the personality to file
such petition following the earlier rulings of the Court that said
aggrieved spouse has the personality to file such petition if the
ground is bigamy, even he or she is not a party to the subsequent
bigamous marriage.33’ If the subsequent marriage is void, the
remedy of recording of affidavit of reappearance is inapplicable
because said remedy applies only if the subsequent marriage
is perfectly valid. (4) Requirement of judicial declaration of
presumptive death: Two applicable laws on presumption of
death: (i) Article 41 of the Family Code is the applicable law
if the presumption of death is for the purpose of contracting
another marriage. Under Article 41, a judicial declaration of
presumptive death is required, (ii) Article 390 or 391 of the
Civil Code is the applicable law if the presumption of death is
for purposes other than remarriage. Under prevailing case law,
courts are without any authority to take cognizance of a petition
that only seeks to have a person declared presumptively dead
under the Civil Code. Such a petition is not authorized by law.3'"3
33,Art. 4I,FC.
J”Juliano-Llave v. Republic, 646 SCRA 753 (2011) and Fujiki v. Marinay, 700 SCRA 69
(2013).
wTadeo-Malias v. Republic, G.R. No. 230751, April 25,2018.
J9JC9B0M
R52M9UH7

(5) Remedy if subsequent marriage is valid: There are two ways

of terminating the valid subsequent marriage, to wit: (i) by the
recording of the affidavit of reappearance;341 or (ii) by a judicial
declaration of dissolution or termination of the subsequent
marriage.342 If the absentee reappears, but no step is taken to
terminate the subsequent marriage, either by affidavit or by court
action, such absentee’s mere reappearance, even if made known
to the spouses in the subsequent marriage, will not terminate
such marriage.343 ( 6) Effects of termination of valid subsequent
marriage mentioned above: (i) the children are legitimate;344 (ii)
if the property regime is either absolute community or conjugal
partnership of gains, the same shall be dissolved and liquidated;343
and (iii) if the second spouse contracted the marriage in bad faith:
(a) his or her share in the net profits shall be forfeited in favor
of the common children or, if there are none, the children of the
second spouse by a previous marriage or in default of children,
the spouse present;346 (b) the donation propter nuptias made
to him or her is revoked by operation of law;347 (c) his or her
designation as beneficiary in any insurance policy of the spouse
present may be revoked, even if such designation be stipulated as
irrevocable;348 and (d) he or she is disqualified to inherit from the
spouse present, whether the succession is testate or intestate.349 If
the subsequent marriage is terminated by the death of the spouse
present, the fact that the second spouse contracted the marriage in
bad faith is of no consequence. (7) Effect of bad faith of parties: If
the spouse present contracted the marriage in good faith because
he or she had a well-founded belief that the absentee spouse is
already dead, the subsequent marriage is perfectly valid if the
other requisites of Article 41 are also complied with, even if the
second spouse may have contracted the marriage in bad faith. If
the spouse present contracted the marriage in bad faith because
he or she did not have a well-founded belief that the absentee
spouse is already dead, the subsequent marriage is void for
34lArt. 42, FC.

343SSS v. Jarque K/a. De Ballon, supra.
wld.
344Art. 43(1), FC.
343Art. 43(2), FC.
»bId.
"’Art. 43(3), FC.
348Art. 43(4), FC.
349Art. 43(5), FC.
J9JC9B0M
R52M9UH7
being a bigamous marriage, even if the second spouse may have

contracted the marriage in good faith. If both parties contracted
the marriage in bad faith, the subsequent marriage shall be void
ah initio and all donations propter nuptias and testamentary
dispositions made by one in favor of the other are revoked by
operation of law?®
8) Voidable Marriages
8.1 Concept and Characteristics of Voidable Marriages: (a) Nature of
voidable marriage: It is considered valid and produces all its civil
effects, until it is set aside by final judgment of a competent court
in an action for annulment.151 Without a judgment of annulment,
the marriage is regarded as valid, (b) Distinguished from void
marriages: (1) In a voidable marriage, the marriage is invalidated
only by a judgment of annulment, unlike a void marriage which is
already invalid from the very beginning and the judgment of the
court is simply confirmatory of its status; (2) A voidable marriage
can be generally ratified by free cohabitation (except for grounds
mentioned in paragraphs [5] and [6] of Article 45), while a void
marriage can never be ratified; (3) A voidable marriage can be
assailed only in a direct proceeding for that purpose (a petition
for annulment) and not collaterally, while a void marriage can
be attacked collaterally; (4) A void marriage can be questioned
even after the death of either party, but a voidable marriage can
be assailed only during the lifetime of the parties and not after
death of either; in which case, the parties and their offspring
will be left as if the marriage had been perfectly valid; (5) The
action or defense for nullity is imprescriptible, unlike voidable
marriages where the action prescribes; and (6) Only the parties to
a voidable marriage can assail it, but any proper interested party
may attack a void marriage.
8.2 Grounds for Annulment: (a) Lack of parental consent: (It When
required? Only when a party is at least 18 years of age but below
21?” (2) Whose consent is required? If the party below 21 is
legitimate, the consent of the father, mother, surviving parent
or guardian, or persons having legal charge of them, in the
3X1Art. 44, FC.

3!lSunlay v. Cojuangco-Suntay, 300 SCRA 760, 771 (1998).
352Art. 45(1), FC.
J9JC9B0M
R52M9UH7

order mentioned;”3 if the party below 21 is illegitimate, only

the consent of the mother is required.”4 (3) Who can file the
petition for annulment? If the party is still below 21, only the
parent whose consent is required can file the petition; but once
the party reaches the age of 21, only the party himself can file
the petition.3” (4) What is the prescriptive period? Five years
from attainment of the age of 21”6 (5) How is the defect ratified?
Only the party himself may ratify the defect upon reaching the
age of 21 by choosing to freely cohabit with the other party.”’
(b) Unsoundness of mind at time of marriage: (1) Who can file
the petition for annulment? The sane spouse but only if he or
she had no knowledge of the other’s insanity; or by any relative,
guardian, or person having legal charge of the insane spouse; or
by the insane spouse during a lucid interval or after regaining
sanity;”8 (2) What is the prescriptive period? During the lifetime
of the spouses.3” (3) How is the defect ratified? Only the insane
spouse has the right to ratify upon coming to reason by choosing
to freely cohabit with the sane spouse.’“ (c) Fraud: (1) What
constitutes fraud? Only the following: (i) non-disclosure of a
previous conviction by final judgment of the other party of a
crime involving moral turpitude; (ii) concealment by the wife
of the fact that at the time of the marriage, she was pregnant by
a man other than her husband; (iii) concealment of a sexually
transmissible disease, regardless of its nature, existing at the
time of the marriage; or (iv) concealment of drug addiction, I
habitual alcoholism or homosexuality or lesbianism existing at
the time of the marriage.361 No other misrepresentation or deceit
other than the foregoing shall constitute such fraud as will give
grounds for action for the annulment of marriage.363 (2) Who
can file the petition for annulment and what is the prescriptive
period? Only the injured party may file the petition, within five
353Art. 14, FC.

354 Art. 176, FC.
“’Art. 47(1), FC.
“6/</.
“’Art. 45(1), FC.
““Art. 47(2), FC.
”’/d.
’“Art. 45(2), FC.
361 Art. 46, par. 1, FC.
“’Art. 46, last par., FC.
J9JC9B0M
R52M9UH7
52 RRE-BAR REVIEWER IN CIVIL LAW
yss»n> *ltcr lhe discovery of the fraud.(3) flow is the defect

Ulilicd7 Only the injured party has the right to ratify the defect
hy freely cohabiting with the other as husband and wife, with
full knowledge of the facts and constituting the fraud.’64 (d)
Vitiation of consent: (I1 Who.can file the petition for annulment
and what IS the pieifliBliySLimSKl? Only the injured party,
within live years from the time the force, intimidation, or undue
influence disappeared or ceased.16’ (2) How is the defect ratified?
Only the injured party has the right to ratify the defect by freely
cohabiting with the other as husband and wife after the force,
intimidation, or undue influence has disappeared or ceased.’66 (e)
Inipotcnsy: (1) What is the eround for annulment? If one party
was physically incapable of consummating the marriage with
the other, or impotency, if such incapacity continues and appears
to be incurable.’6’ Only impotency is a ground for annulment,
not sterility. (2) Who can file the petition for annulment and
what is the prescriptive period? Only the injured party may file
lhe petition, or the other spouse who had no knowledge of the
other’s impotency at the time of the marriage, within five years
after the marriage.’61 (3) The defect of the marriage is not subject
to ratification, (f) Serious and incurable sexually transmitted
disease (STD): (1) What is lhe ground? Existence of STD at the
time of the marriage, which is found to be serious and appears to
be incurable.’6* (2) Who can file the petition for annulment and
what is the prescriptive period? Only the injured party, or the
other spouse who had no knowledge of the other’s STD at the
time of the marriage, within five years after the marriage.’70 (3)
The defect of the marriage is not subject to ratification.
8.3 Effects of Annulment: (a) Right to remarry: After annulment,

the former spouses may validly contract another marriage, but
only upon compliance with the requirements of liquidation of the
absolutecommunity of property or conjugal partnership of gains,
“Art. 47(3), FC.

“Art. 45(3), FC.
“Art. 47(4), FC.
’“Art. 45(4), FC.
“Art. 45(5), FC.
“Art. 47(5), FC.
“Art. 45(6), FC.
’’“Art. 47(5), FC.
J9JC9B0M
R52M9UH7

partition and distribution of properties of the erstwhile spouse,”1

the delivery of presumptive legitimes?" and compliance with the
requirements of Article 52 of the FC; otherwise, the subsequent
marriage is void?" (b) Effect on surname of former wife: In
case of annulment of marriage, and the wife is the guilty party,
she shall resume her maiden name and surname. If she is the
innocent spouse, she may resume her maiden name and surname.
However, she may choose to continue employing her former
husband’s surname, unless: (1) the court decrees otherwise, or (2)
she or the former husband is married again to another person?"
(c) Status of children: Children conceived or bom before the
judgment of annulment has become final and executory shall
be considered legitimate?" (d) Effect on property relations: The
property regime of a voidable marriage prior to its annulment
is either absolute community of property, conjugal partnership
of gains, or complete separation. If the property regime is
either absolute community or conjugal partnership, the same is
automatically terminated upon the finality of the judgment of
annulment”8 and should be subjected to liquidation?” (e) Effect
on donation nronter nuptias: When the marriage is annulled, the
donation proper nuptias remains valid. However, if the donee
acted in bad faith, the donor may revoke the same.”8
9) Legal Separation
9.1 Effects of Decree of Legal Separation: (a) Right to live
separately: A decree of legal separation does not result in the
severance of the marital bond but will only entitle the spouses
to live separately?” As a consequence, the husband no longer
has the right of consortium?8” (b) Effect on property relations: If
the property regime of the spouses is either absolute community
or conjugal partnership of gains, the same is automatically
’"Art. 50, FC.

’’’Art. 51, FC.
’"Art. 53, FC.
’"Art. 371.NCC.
’"Art. 54, FC.
"‘Art. 126(3), FC.
’’’Art. 129, FC.
’’“Art. 86(3), FC.
’’’Art. 63(1), FC.
’•’Regalado, Criminal Law Conspectus, 1“ Ed., 484.
J9JC9B0M
R52M9UH7
terminated'51 and shall be subjected to liquidation. Upon the

liquidation of the absolute community or conjugal partnership,
the share of the offending spouse in the “net profits” shall be
forfeited in favor of: (1) common children; (2) in default thereof,
children of the guilty spouse by a previous marriage; or (3) in
default thereof, the innocent spouse.382 But what is forfeited is
only the net profits, not the net assets.383 Simultaneous with the
termination of the absolute community or conjugal partnership
of gains, the property relations of the spouses shall thereafter be
governed by a regime of complete separation, (c) Effect on right
to inherit: The right of the innocent spouse to inherit from the
offending spouse is not affected. On the part of the offending
spouse, he or she shall be disqualified to inherit from the
innocent spouse.384 As to testamentary succession, testamentary
dispositions in favor of the offending spouse existing at the time
of the finality of the decree of legal separation shall be revoked
by operation of law.385 But he or she is not disqualified from
being made a voluntary heir, devisee, or legatee in the will of
the innocent spouse executed after the issuance of the decree
of legal separation, (d) Effect on custody of minor children: As
a rule, the custody of minor children shall be awarded to the
innocent spouse.384 However, children below seven years old
should not be separated from the mother unless the court finds
compelling reasons to order otherwise.387 However, R.A. No.
9262 (Anti-Violence Against Women and Their Children Act of
2004) prohibits the awarding of custody of minor children to the
perpetrator of a woman who is suffering from battered woman
syndrome.388 In addition, the same law provides that the victim
who is suffering from battered woman syndrome shall not be
disqualified from having custody of her children.38’ (e) Effect on
right to support: The rule is that after the finality of the decree of
legal separation, the obligation of mutual support between the
111 Arts. 99(2), 126(2), and 63(2), FC.

’“Art. 63(2), in relation to Art. 43(2), FC.
’“Siochi v. Cozon, 616 SCRA 87 (2010).
"Art. 63(4), FC.
Mld.
“•Art. 63(3), FC.
38 Art. 63(3), in relation Io Art. 213, par. 2, FC.
3uSec. 28, R.A. No. 9262.
J9JC9B0M
R52M9UH7

spouses ceases.390 By way of exception, the court may, however,
order the guilty spouse to give support to the innocent spouse.3’1
(f) Effect on donation propter nuptias: The donation propter
nuptias remains valid. However, if the donee is the offending
spouse, the innocent spouse may revoke the donation within five
years from the finality of the decree of legal separation.392 If the
donor is a third person, the donor may also revoke the donation
pursuant to Article 86(4) of the FC. (g) Effect on designation as
beneficiary in insurance: If the offending spouse is designated
as beneficiary in any insurance policy of the innocent spouse,
such designation may be revoked even if such designation be
stipulated as irrevocable.393
9.2 Grounds For Legal Separation: (a) Physical violence: As a rule,
to be a ground for legal separation, there must be repetitive acts of
physical violence directed against the petitioner, a common child,
or a child of the petitioner.394 However, a single act of physical
violence directed against the petitioner is a sufficient ground for
legal separation if the same amounts to an attempt against the life
of the petitioner,3” or for the purpose of compelling the petitioner
to change religious or political affiliation.396 (b) Other forms of
abuse: Other forms of abuse (aside from physical abuse) may
also be a ground for legal separation if: (1) the same is gross; and
(2) it becomes a conduct of the respondent.392 However, a single
exertion of moral pressure by the respondent upon the petitioner
is a sufficient ground for legal separation if it is for the purpose
of compelling the petitioner to change religious or political
affiliation.398 Likewise, a single act of sexual abuse is a sufficient
ground for legal separation if it is in the form of an attempt of
respondent to corrupt or induce the petitioner, a common child, or
a child of the petitioner, to engage in prostitution, or connivance
in such corruption or inducement.399 (c) Conviction of crime:
’“Art. 198, FC.

39IM,
392Art. 64, FC.
mld..
™Art. 55(1), FC.
3,5Art. 55(9), FC.
396Art. 55(2), FC.
392Art. 55(1), FC.
3,8Art. 55(2), FC.
’"Art. 55(3), FC.
J9JC9B0M
R52M9UH7
Requisites: (1) there is final judgment; (2) sentence imposed is

imprisonment ofmore than six years, even ifpardoned.400 (d) Drug
addiction, habitual alcoholism, lesbianism, or homosexuality.401
(e) Contracting of bigamous marriage: The mere contracting
by the respondent of a subsequent bigamous marriage, whether
in the Philippines or abroad, is a sufficient ground for legal
separation."2 The intention is that even if the respondent cannot
be prosecuted criminally for bigamy (because he/she committed
the crime outside the Philippines), the contracting of a subsequent
bigamous marriage is a ground for legal separation. By analogy,
even if the respondent is not criminally liable because the
subsequent marriage was contracted without a marriage license,
there is still a ground for legal separation, (f) Sexual infidelity
or perversion:"’ The infidelity need not be committed in relation
to the opposite sex. So long as the sexual act is committed with
someone other than the spouse, whether of the opposite sex or
with same sex, there is a sufficient ground for legal separation,
(g) Abandonment: Requisites: (1) Abandonment is without
justifiable cause; and (2) for more than one year.404
9.3 Cooling-Off Period: (a) Rule: The case shall not be tried (on
the merits) within six months from the filing of the petition.405
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.406 What
is prohibited is trial on the merits of the petition, (b) Exception:
If the ground for the petition constitutes “violence” as defined
in R.A. No. 9262, no cooling-off period shall apply. Instead, the
court is mandated to immediately hear the case."7 (c) Duty of
the court: Courts must take steps toward the reconciliation of the
spouses and may only issue the decree of legal separation after
it has been satisfied that, despite such efforts, reconciliation is
highly improbable."*
"“Art. 55(4), FC.

"‘Art. 55(5), (6), FC.
"’Art. 55(7), FC.
"’Art. 55(8), FC.
“"Art. 55(10), FC.
"’Art. 58, FC.
"“Somosa-Ramos v. Vamenta, G.R. No. L-34132, July 29,1972.
"’Sec. 19, R.A. No. 9262.
"‘Art. 59, FC.
J9JC9B0M
R52M9UH7

9.4 Defenses in Legal Separation: (a) Condonation and consent:

In both, the act is unilateral on the part of the innocent spouse.
In condonation, the pardon is granted after the commission
of the offense; in consent, the approval is given prior to the
commission of the offense.*” (b) Connivance and collusion: In
both, the spouses both participated. In connivance, the ground
is really committed; in collusion, the ground may not have been
really committed but the spouses made it appear as though it
was committed for the purpose of obtaining a decree of legal
separation.410 (c) Mutual guilt or recrimination: Both parties have
given ground for legal separation.411 (d) Prescription: Five years
from occurrence of the cause.412 (e) Effect of death: If a party
dies prior to the entry ofjudgment, the case shall be terminated.
However, if a party dies after the entry ofjudgment, the judgment
shall bind the parties and their successors-in-interest.415
9.5 Effect of Reconciliation: (a) If de facto reconciliation: In the
absence of a “decree of reconciliation,” the decree of legal
separation is not set aside, (b) If there is decree of reconciliation:
The decree of legal separation is set aside, but the separation of
property and any forfeiture of net profits shall subsist.414 As a
consequence: (1) the right of the guilty spouse to inherit from
the innocent spouse in intestate succession shall be automatically
reinstated; (2) the testamentary dispositions in the will of the
innocent spouse favorable to the guilty spouse which have been
revoked by operation of law shall be automatically revived; (3)
if the donation propter miptias made by the innocent spouse
in favor of the guilty spouse has not yet been revoked, the
former loses the right to revoke the donation; (4) however, if
the revocation of the donation propter miptias has been decreed
by the court and the judgment is already final, said judgment is
already res judicata-, and (5) if the innocent spouse has not yet
revoked the designation of the guilty spouse as beneficiary in
any insurance policy, the former loses the right to revoke the
same, (c) Revival of previous property regime: (1) Agreement
"’Art. 56(1), (2), FC.

4l0Art. 56(3), (5), FC.
411Art. 56(4), FC.
412Art. 56(6), FC.
4IJSec. 21, A.M. No. 02-11-11-SC (Rule on Legal Separation).
4l4Sec. 23(d), Rule on Legal Separation; Art. 66(2), FC.
J9JC9B0M
R52M9UH7
for revival of previous property regime: Upon reconciliation

and issuance of a decree of reconciliation, the previous property
regime of the spouses is not automatically revived. If they want
to revive their previous property regime, they must comply with
the following procedures: (i) they must execute an agreement of
revival under oath; (ii) the agreement must specify the properties
to be contributed anew to the restored regime and those to be
retained as separate properties; (iii) the names of creditors, their
addresses and amounts owing to each must likewise be specified;
and (iv) the agreement must be submitted in court for approval
by way of a verified motion for its approval.415 (2) Adoption of
new property regime: The FC does not allow adoption of a new
property regime upon reconciliation.
10) Rights and Obligations of Spouses

10.1 Rights and Obligations: (a) Obligation to live together: (1) Rule:
They are obliged to live together,416 but the court is powerless
to enforce this obligation.41’ But if a spouse leaves the conjugal
dwelling without just cause and later demands for legal support,
the other spouse has the option of giving support by receiving and
maintaining him/her in the family dwelling418 and if he/she refuses,
the right to receive legal support terminates.419 (2) Exception:
The court may exempt one spouse from living with the other if:
(i) the other should live abroad; and (ii) if there is a valid and
compelling reason.420 But exception will not apply if the same is
not compatible with the solidarity of the family.421 (b) Obligation
to observe mutual love, respect, and fidelity: They are obliged
to observe mutual love, respect, and fidelity,422 but the court is
powerless to enforce this obligation. But there are sanctions for
non-observance of this obligation, such as criminal prosecution
for adultery, concubinage, bigamy, etc. (c) Obligation to render
mutual help and support: (1) Rule: They are obliged to provide
4l5Art. 67, FC.

4,6Art. 68, FC.
“Illusorio v. Illusorio-Bildner, 361 SCRA427 (2001).
4l,Art. 204, FC.
4l’Atilano v. Chua Ching Beng, G.R.No. L-11086, March 29,1958, 55 O.G. 3841.
“Art. 69, FC.
n'ld.
“Art. 68, FC.
J9JC9B0M
R52M9UH7

legal support to each other,423 and such obligation is chargeable

to the absolute community424 or to the conjugal partnership.425 (2)
Exception: After the final judgment granting legal separation,
the obligation of mutual support between the spouses ceases;
however, the court may order the guilty spouse to support the
innocent one.426 (d) Right of wife on use of husband’s surname:
(1) Rule: A married woman may retain her maiden name after
marriage. The use of the word “may” in Article 370 of the Civil
Code indicates that the use of the husband’s surname by the wife
is permissive rather than obligatory.427 Clearly, a married woman
has an option, but not a duty, to use the surname of the husband in
any of the ways provided by Article 370 of the Civil Code. She is
therefore allowed to use not only any of the three names provided
in Article 370, but also her maiden name upon marriage.428 She
is not prohibited from continuously using her maiden name once
she is married because when a woman marries, she does not
change her name but only her civil status.429 (2) Wife’s options
in using husband’s surname: There are three ways by which
the wife may use the husband’s surname. She may use: (i) Her
maiden first name and surname and add her husband’s surname;
(ii) Her maiden first name and her husband’s surname; or (iii)
Her husband’s full name, but prefixing a word indicating that she
is his wife, such as “Mrs,”430 (3) Effect of husband’s death: Upon
death of the husband, the widow has an option of: (i) resuming
her maiden name and surname, or (ii) continue employing the
deceased’s surname as though he were still living, in any of the
three ways mentioned in Article 370 of the Civil Code.431 The use
of the husband’s surname after the latter’s death is permissive
and not obligatory.432 Upon termination of the marriage, either by
reason of death of the husband, or divorce, or annulment of the
marriage, the woman is not required to seek judicial confirmation
423Art. 195(1), FC.

424Art. 94(1), FC.
4!5Art. 121(1), FC.
42‘Art. 198, FC.
427Remo v. The Hon. Sec. of Foreign Affairs, 614 SCRA 281 (2010); see also In re
Josephine P. Uy-Timosa, Bar Matter No. 1625, July 18,2006.
428W.
mId.
430Art. 370, NCC.
"'Art. 373, NCC.
432See Yasin v. Honorable Judge Sharia District Court, supra.
J9JC9B0M
R52M9UH7
of the change in her civil status in order to revert to her maiden

name as the use of the former husband’s surname is optional and
not obligatory for her.4’3
10.2 Choice of Domicile: (a) Rule: The right to choose the family
domicile belongs to both the husband and the wife. In case of
disagreement, the court shall decide.434 (b) Exemptions: Court
may exempt one spouse from living with the other if: (1) the
other should live abroad; or (2) if there is a valid and compelling
reason.433 Once the court exempts one of the spouses from living
with the other, the latter shall not lose the right to demand legal
support from the other spouse. But the exemption will not apply
if the same is not compatible with the solidarity of the family.436
10.3 Exercise of profession, business, or activity: (a) Rule: Either
spouse may exercise any legitimate profession, occupation,
business, or activity without the consent of the other.437 Under
R.A. No. 9262, if the husband prevents his wife from engaging
in any legitimate profession, occupation, business, or activity, he
has committed an act of violence punishable by the said law,438
except in cases where the husband objects on valid, serious,
and moral grounds.43’ (b) Liability for obligations incurred in
case of objection: If the other spouse objects to the exercise of
any profession, occupation, business, or activity of the other
and the court finds that such objection is proper, the resulting
liability shall be governed by the following rules: (1) If benefit
has accrued to the family prior to the objection, the resulting
obligation is chargeable to the absolute community or the
conjugal partnership;4443 (2) If benefit has accrued to the family
after the objection, such obligation shall be enforced against the
separate property of the spouse who has not obtained consent;441
and (3) If no benefit accrued to the family, such obligation shall
be enforced against the separate property of the spouse who has
not obtained consent.
"A3
".Art. 69. FC.
".Art. 69. FC.
"A3
"An. '3, FC.
"S«..Se\-t>.R..A.No.9262.
"Sec. 3t»\DX 1 k R-A. No. 9262.
“■.An. 73. FC, is amended by R.A. No. 10572.
"A3
J9JC9B0M
R52M9UH7

11) Property Relations In General

11.1 In General: (a) Law governing property relations: (1) For
Filipino spouses: Rule: Philippine laws shall govern their
property relations, regardless of place of celebration of marriage
and their residence."2 Exception: For properties located outside
of the Philippines, what shall govern is the law of the country
where the property is situated, whether the issue is the extrinsic
or intrinsic validity of contracts affecting said property."3 (2)
For alien spouses: Where both spouses are aliens, their property
relations shall be governed by their national law."4 (b) Absolute
community, conjugal partnership, and complete separation: (1)
Rule: The foregoing property regimes are applicable only to
valid and voidable marriages. Generally, the foregoing property
regimes do not apply to void marriages. (2) Exception: The
property regime of a void marriage under Article 40 of the
Family Code, prior to judicial declaration of its absolute nullity,
is either absolute community of property, conjugal partnership
of gains, or complete separation."’ (c) Property regime of valid,
voidable, and void marriages under Article 40: (1) Their property
regime shall be that provided in the marriage settlement, if any,"4
which can either be the regime of absolute community, conjugal
partnership of gains, or complete separation; (2) In the absence
of a marriage settlement or when the marriage settlement is void,
the applicable property regime is either absolute community of
property, if the marriage was celebrated during the effectivity
of the Family Code,"’ or conjugal partnership of gains, if the
marriage was celebrated during the effectivity of the Civil Code.
In Pana v. Heirs of Jose Juanite, Sr.,M both the RTC and the I
CA took the position that the property regime of a marriage
celebrated under the Civil Code without a marriage settlement
was automatically changed to absolute community upon the
effectivity of the Family Code, as no vested or acquired rights
are impaired. The Supreme Court, however, did not agree. It
"’Art. KO, FC.

“'Art. 16, NCC; Art. 80(2), (3), FC.
“'Orion Savings Bank v. Suzuki, 740 SCRA 345 (2014).
“’Diflo v. Dino, 640 SCRA 178 (2011) and Valdes v. RTC, Br. 102, QC, 260 SCRA 221
(1996).
“4Art. 74(1), FC.
“’Art. 75, FC.
“’G.R. No. 164201, Dec. 10, 2012, 687 SCRA414.
J9JC9B0M
R52M9UH7
ruled that Article 256 of the Family Code does not intend to
reach back and automatically convert into absolute community
all conjugal partnerships that existed before 1988 excepting only
those with prenuptial agreements, (d) Property regime under
Article 147 or Article 148: (1) Rule: The foregoing property
regimes are applicable to: (i) void marriages, regardless of the
cause thereof;*4’ (ii) union or cohabitation of a man and a woman
without the benefit of marriage.450 (2) Exception: The property
regime of a void marriage under Article 40 of the FC is either
absolute community of property or conjugal partnership of gains,
unless the parties agree to a complete separation of property in a
married settlement entered into before the marriage.451
11.2 Marriage Settlement: (a) Execution and modifications: (1) When
made or executed: Before the celebration of the marriage.452 (2)
Purpose: To fix the property relations during the marriage.453
(3) Formalities: The marriage settlement must be in writing;454
otherwise, it is unenforceable pursuant to the Statute of Frauds.455
But to be enforceable against third persons, it must be registered
in the local civil registry where the marriage contract is recorded
as well as in the registries of property.456 (b) Parties to marriage
settlement: (1) Rule: Only the future spouses. (2) Exceptions:
(i) If one of the future spouses is below 21, the parent whose
consent is required to the marriage must be made a party to the
marriage settlement; otherwise, the same is not valid;457 and (ii)
If one of the future spouses is suffering from civil interdiction or
any other disability, the guardian appointed by a competent court
must also be made a party; otherwise, the same is not valid.45" (c)
Effect of non-celebration of marriage: (1) Rule: The marriage
settlement becomes void, including donations propier nuptias
“Valdes v. RTC, Br. 102, supra-, DiSo v. DiSo, supra; and Ocampo v. Ocampo, 764 SCRA
608 (2015).
“Art. 147 or Art. 148, FC.
451 Dirto v. Dido, supra.
“Arts. 76 and 77, FC.
“Alt 1, FC.
“Art. 77, FC.
“Art. 1403(2)(c), NCC.
“Art. 77, FC.
“Art. 78, FC.
“Art. 79, FC.
J9JC9B0M
R52M9UH7

made therein.4” (2) Exception: Stipulations that do not depend

upon the celebration of the marriage shall be valid.460
11.3 Donation Propter Nuptias: (a) Concept: (1) Requisites: (i) made
before the celebration of the marriage; (ii) made in consideration
of the marriage; and (iii) the donation is in favor of one or both
of the future spouses.461 (2) What can be donated: Whether the
donor is one of the future spouses or a third person, both may
donate present property. However, if the donation involves future
property, the same is allowed only when it is a donation between
the future spouses.462 If made by a third person, the donation
is void.46’ (b) Formalities required: If the donation involves
present property, it is in the nature of a donation inter vivos.
As to formalities, the same must comply with the formalities
required in ordinary donations. Hence, if the donation involves
personal property the value of which exceeds P5.000, both the
donation and the acceptance must be in writing; otherwise the
donation is void.464 If the donation involves real property, both
the donation and the acceptance must be in a public instrument;
otherwise, the donation is also void.465 On the other hand, if the
donation involves future property, the same is in the nature of a
testamentary disposition which must be embodied in the form of
a last will and testament.466 (c) Limitations in donation of present
property between future spouses: If the regime agreed upon is
absolute community, there is no limitation on the extent of the
donation by the future spouses to each other.467 If the regime
agreed upon is other than absolute community, they cannot donate
to each other more than one-fifth (1/5) of their present property.
But only the excess shall be void.468 (d) Grounds for revocation
of donation propter nuptias: (1) Non-celebration of marriage:
If the marriage is not celebrated, the donation merely becomes
revocable,46’ except if the donation is made in the marriage
4”Art. 81, FC.

46U/</.
■“'Art. 82, FC.
“’Art. 84, par. 2, FC.
“’Art. 751, NCC.
4wArt. 83, FC, in relation to Art. 748, NCC.
“’Art. 83, FC, in relation to Art. 749, NCC.
466Art. 84, par. 2, FC.
“’Art. 84, par. 1, FC.
“’Art. 84, par. 1, FC.
“’Art. 86(1), FC.
J9JC9B0M
R52M9UH7
settlement, in which case, the donation becomes void."0 (2)

Marriage is judicially declared void: If the marriage is judicially
declared void, the donation becomes revocable."1 Exceptions: (i)
If the marriage is judicially declared void under Article 40 and
the donee contracted the marriage in bad faith, the donation is
revoked by operation of law;472 and (ii) If the subsequent marriage
referred to in Article 41 is void because both parties thereto acted
in bad faith, all donations propter nuptias made by one in favor
of the other are revoked by operation of law.4” (3) Marriage is
annulled: If the marriage is annulled and the donee acted in bad
faith, the donation becomes revocable."4 If the ground is lack
of parental consent, the donation becomes revocable even if the
marriage is not yet annulled.47’ (4) Issuance of decree of legal
separation: Upon issuance of the decree of legal separation, the
donation becomes revocable if the donee is the guilty spouse."6
(5) Other grounds: (i) When the donation is subject to a resolutory
condition and the condition is complied with;"7 and (ii) When the
donee has committed an act of ingratitude as specified in Article
765 of the Civil Code."*
11.4 Donations Between Spouses During Marriage: (a) Rule: Every
donation between the spouses during the marriage, whether made
directly or indirectly, shall be void regardless of the property
regime.4” The prohibition also applies to persons merely living
together as husband and wife without a valid marriage.480 (b)
Exception: Moderate gifts on the occasion of any family rejoicing
are valid,4*'
12) Absolute Community and Conjugal Partnership of Gains

12.1 Basic Concepts: (a) Concept: (1) Absolute community of prop
erty (ACPI: It is a special kind of co-ownership. The husband
"“Art. 81, FC.

"'Art. 86(1), FC.
"’Art. 50, in relation Io Art. 43(3), FC.
"’Art. 44, FC.
"’Art. 86(3), FC.
"’Art. 86(2), FC.
"‘Arts. 64 and 86(4), FC.
"'Art. 86(5), FC.
"‘Art. 86(6), FC.
"’Art. 87, FC.
mld.
*>Id.
J9JC9B0M
R52M9UH7

and the wife become joint owners of all the properties of the
marriage.482 Hence, the provisions on co-ownership shall apply
suppletorily.483 (2) Conjugal partnership of (tains (CPG): It is a
special type of partnership. The husband and the wife 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 chance.‘“ Hence, the provi
sions on partnership shall apply suppletorily.485 (b) Commence
ment: The regimes of absolute community and conjugal partner
ship can only commence at the precise moment that the marriage
is celebrated. Any stipulation to the contrary shall be void.‘“ (c)
Prohibition against waiver: Prior to the liquidation of the absolute
community or conjugal partnership, the law prohibits the waiver
of rights, interests, shares, and effects of the property regime.487
Reason: Prior to liquidation, the interest of each spouse in the
conjugal assets or community property is inchoate and does not
ripen into title until it appears that there are assets left as a result
of the liquidation.488
12.2 Properties Included in ACP and CPG and Exclusive Properties:
(a) In absolute community: (1) Community property: Generally,
the community property shall consist of all the property owned
by the spouses at the time of the celebration of the marriage or
acquired thereafter.489 (2) Exclusive property: (i) Those excluded
from the community property in the marriage settlements;450 (ii)
those acquired before the marriage by either spouse who has
legitimate descendants by a former marriage, as well as the fruits
and income thereof;4’1 (iii) those acquired during the marriage by
gratuitous title by either spouse, including the fruits and income
thereof, unless the grantor expressly declares that they shall form
part of the community property;492 and (iv) those which are for
personal and exclusive use of either spouse; but jewelry shall
482Quiao v. Quiao, 675 SCRA 642 (2012).

“’Art. 90, FC.
■‘“Homeowners Savings & Loan Bank v. Dailo, 453 SCRA 282 (2005).
‘“’Art. 108, FC.
‘“Arts. 88 and 107, FC.
‘“Arts. 89 and 107, FC.
‘““Abalos v. Macatangay, Jr., 439 SCRA 649 (2004).
“’Art. 91, FC.
mId.
“‘Art. 92(3), FC.
‘’’Art. 92(1), FC.
J9JC9B0M
R52M9UH7
form part of the community property.4” (b) Conjugal partnership

of gains: (1) Conjugal property and exclusive: Those brought to
the marriage as his or her own shall remain exclusive property.494
For properties acquired during the marriage, all those properties
are presumed to be conjugal,4” unless it is proven that: (i) it
is acquired by gratuitous title;496 (ii) it is acquired by right of
redemption, by barter, or by exchange with property belonging
to only one of the spouses;4” or (iii) it is purchased with exclusive
money of the wife or of the husband.498 The presumption in favor
of conjugal partnership applies “even if the acquisition appears
to have been made, contracted, or registered in the name of one
or both spouses.”499 Hence, the registration of a property alone
in the name of one spouse does not destroy its conjugal nature5™
and it is not conclusive evidence of the exclusive ownership of
the husband or the wife.501 However, the presumption applies
only when there is proof that the property was acquired during
the marriage.502 It does not operate when there is no showing
as to when property alleged to be conjugal was acquired.503 (2)
Special rule in conjugal partnership-Article 120: Requisites for
applicability: (i) A property is exclusively owned by one of the
spouses; (ii) it is subjected to improvements during the marriage;
and (iii) the improvements were made at the expense of the
conjugal partnership or through the acts or efforts of either or
both spouses. Rules for determination of ownership: If the cost
of improvement and any resulting increase in the value of the
property by reason of the improvement are more than the value
of the property prior to the introduction of the improvement,
the entire property shall become conjugal partnership property;
otherwise, the entire property shall become the exclusive
property of the owner spouse. In either case, there shall be
corresponding reimbursements at the time of liquidation of the
4,1 Art. 92(2), FC.

494Art. 109(1), FC.
“Art. II6, FC.
“Art. 99(2), FC.
“Art. 99(3), FC.
“Art. 99(4), FC.
“Art. 116, FC.
“‘Tarrosa v. De Leon, 593 SCRA 768 (2009).
”'PNB v. Garcia, 724 SCRA 280 (2014).
S0!Imani v. MBTC, 635 SCRA 357 (2010).
"’Cuenca v. Cuenca, 168 SCRA 335 (1988).
J9JC9B0M
R52M9UH7

conjugal partnership. (3) Special rule in conjugal partnership
- Property purchased on installments (Article 118): Requisites
for applicability: (i) Property is bought by one of the spouses
before the marriage; (ii) it is payable on installments; (iii) partly
paid from exclusive funds of the buyer and partly paid from
conjugal funds. Rules for determination of ownership: The time
when full ownership was vested. If vested before the marriage,
it becomes exclusive property of the buyer. If vested during the
marriage, it becomes conjugal property. In either case, there shall
be corresponding reimbursements at the time of liquidation of
the conjugal partnership. (4) Special rule in conjugal partnership
- Credit payable on installments (Article 119): Requisites for
applicability: (i) the credit belongs to one of the spouses; (ii) it is
payable on installments; and (iii) sums are collected during the
marriage. Rules for determination of ownership: (i) Payments on
the principal shall be exclusive property of creditor spouse; and
(ii) Payments of interests falling due during the marriage shall
belong to the conjugal partnership. (5) Special rule in conjugal
partnership - Livestock: For example, the groom brought into the
marriage five cows; while the bride brought seven cows. After
two years, a decree of legal separation was issued and the conjugal
partnership was liquidated. At the time of the liquidation, there
were 20 cows. Some are offspring and some are the parent animals
brought into the marriage. Here, only the excess of the number
brought into the marriage by either spouse shall be considered
conjugal property.”” Hence, five shall be returned to the husband
as his exclusive property; while seven shall be returned to the
wife as her exclusive property. The excess, or eight cows, shall
be considered conjugal property.
12.3 Obligations of the Absolute Community or Conjugal Partnership:
(a) Support: The absolute community or conjugal partnership
shall be liable for the support of: (1) the spouses; (2) their
common children; and (3) legitimate children of either spouse.305
For the support of illegitimate children of either spouse,
legitimate ascendants, descendants, whether legitimate or
illegitimate (excluding common children and legitimate children
of either spouse), and brothers and sisters, whether legitimately
or illegitimately related, only the separate property of the person
swArt. 117(6), FC.

“’Arts. 94(1) and 121(1), FC.
J9JC9B0M
R52M9UH7
obliged to give support shall be answerable.’06 However, if the

obligor has no separate property, the absolute community, if
financially capable, shall advance the support, which shall be
deducted from the share ofthe spouse obliged upon the liquidation
of the absolute community.’07 In conjugal partnership, in case
the obligor has no separate property, such obligation may be
enforced against the partnership assets, if financially capable, but
only after the obligations of the conjugal partnership enumerated
in Article 121 of the FC have been covered; but at the time of
the liquidation of the partnership, such spouse shall be charged
for what has been paid for said purpose.508 (b) Antenuptial debts
(debts contracted before marriagel: Shall be the obligation of
the absolute community or conjugal partnership only if they
have redounded to the benefit of the family.’09 Antenuptial
debts of either spouse which did not redound to the benefit of
the family shall be paid by the separate property of the debtor
spouse. However, in case of absence or insufficiency of the
exclusive property of the debtor-spouse, the absolute community
shall advance its payment to be deducted from the share of the
debtor-spouse upon liquidation of the absolute community.’10
In conjugal partnership, in case the obligor has no separate
property, such obligation may be enforced against the partnership
assets but only after the obligations of the conjugal partnership
enumerated in Article 121 of the FC have been covered; but
at the time of the liquidation of the partnership, such spouse
shall be charged for what has been paid for said purpose.’" (c)
Debts contracted during marriage: Shall be the obligation of the
absolute community or conjugal partnership when: (1) contracted
by both spouses; (2) contracted by one spouse with the consent
of the other; (3) contracted by the administrator-spouse for the
benefit of the community or of the conjugal partnership;’1’ or
(4) contracted by either spouse without the consent of the other
to the extent that the family may have been benefited.’1’ If the
’“Art. 197, FC.

"’Arts. 94(9) and 197, FC.
’“Art. 122, par. 3, in relation Io Art. 197, FC.
"'Arts. 94(7) and 121(7), FC.
’"Art. 94(9), FC.
’"Art. 122, par. 3, FC.
"’Arts. 94(2) and 121(2), FC.
"’Arts. 94(3) and 121(3), FC.
J9JC9B0M
R52M9UH7

debt was contracted by one spouse without the consent of the

other and it did not redound to the benefit of the family, the debt
shall be paid by the separate property of the debtor-spouse and
the absolute community or the conjugal partnership cannot be
compelled to advance its payment, even if the debtor-spouse has
no separate property. Ordinarily, the burden of proof that the
debt was contracted for the benefit of the conjugal partnership
(or the absolute community) lies with the creditor-party litigant
claiming as such.514 However, where the husband contracts the
obligation on behalf of the family business and he himself is the
principal obligor in the contract and directly received the money
and services to be used in the said business, the law presumes
that such obligation will redound to the benefit of the conjugal
partnership (or the absolute community).515 On other hand, no
such presumption can be made if the money or services are given
to another person or entity, and the husband acted only as a surety
or guarantor.516 (d) Taxes and expenses for repair: All taxes, liens,
charges, and expenses, including major or minor repairs, upon the
community property or conjugal partnership property shall be the
obligation of the absolute community or conjugal partnership.517
As to taxes upon the separate property of either spouse, the same
is the obligation of the conjugal partnership;518 while in absolute
community, the same will be the obligation of the property regime
only when the said separate property is used by the family.51’ As
to expenses for the preservation of the separate property of either
spouse, the same is the obligation of the conjugal partnership;570
while in absolute community, the same will be the obligation of
the property regime only when the said separate property is used
by the family.571 (e) Civil liability for delict or quasi-delict: The
liabilities incurred by either spouse by reason of a crime or a
quasi-delict shall be paid by the separate property of the debtor-
514Uomeowner’s Savings & Loan Bank v. Dailo, 453 SCRA 283 (2005).
)15Ross v. PNB-Laoag Branch, 647 SCRA 334 (2011); Security Bank and Trust Company
v. Mar Tierra Corp., 508 SCRA 419 (2006); Ayala Investment & Development Corp. v. CA. 286
SCRA 272 (1998).
’'‘Security Bank and Trust Company v. Mar Tierra Corp., supra, citing rkyala Investment
& Development Corp. v. CA, supra.
’"Arts. 94(4) and 121(4), FC.
’“Art. 121(5), FC.
J1’Art. 94(5), FC.
’“Art. 121(5), FC.
571 Art. 94(5), FC.
J9JC9B0M
R52M9UH7
spouse. However, in case of absence or insufficiency of the

exclusive properly of the debtor-spouse, the absolute community
shall advance its payment to be deducted from the share of the
debtor-spouse upon liquidation of the absolute community.522 In
conjugal partnership, in case the obligor has no separate property,
such obligation may be enforced against the partnership assets but
only after the obligations of the conjugal partnership enumerated
in Article 121 of the FC have been covered; but at the time of
the liquidation of the partnership, such spouse shall be charged
for what has been paid for said purpose.522 (f) Other obligations
of absolute community or conjugal partnership: (1) Expenses to
enable either spouse to commence or complete a professional or
vocational course, or other activity for self-improvement;524 (2)
Value of what is donated or promised by both spouses in favor of
their common legitimate children for the exclusive purposes of
commencing or completing a professional or vocational course,
or other activity for self-improvement;525 and (3) Expenses of
litigation between the spouses unless the suit is found to be
groundless.526
12.4 Administration and Management of Community or Coniugal
Property: (a) Rule: The administration of community or conjugal
property belongs to both spouses jointly.52’ (b) In case of
disagreement: If they cannot agree on matters of administration
of community or conjugal property, the husband’s decision
shall prevail and he can validly enter into contracts (involving
administration) without the consent of the wife.52" However, if
such contract causes economic injury to the family, the wife may
seek the rescission of such contract and other proper remedy
within five years from the date of the contract implementing the
husband’s decision.529 (c) When sole administration allowed:
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the community or
conjugal properties, the other spouse may assume sole powers
of administration. These powers do not, however, include
122 An. 94(9), FC.

121An. 122, par. 3, FC.
’“ArU. 94(6) and 121(6), FC.
’’’Am. 94(8) and 121(8), FC.
’“Art*. 94(10) and 121(9), FC.
,27Arta. 96, par. I and 124, par. I, FC.
’“/</.
m!d.
J9JC9B0M
R52M9UH7

disposition or encumbrance without the authority of the court or

the written consent of the other spouse.’®
12.5 Disposition or Encumbrance ofCommunitv or Conjugal Property:
(a) Rule: Under the regime of absolute community of property
or conjugal partnership of gains, alienation, or encumbrance of
community or conjugal property must have the written consent
of the other spouse or the authority of the court, without which
the disposition or encumbrance is void.”' Neither spouse may
likewise donate any community or conjugal partnership property
without the consent of the other except moderate donations for
charity or on occasions of family rejoicing or family distress.’”
However, either spouse may dispose by will of his or her share
in the community (or conjugal) property.”5 (b) Rule under
Civil Code in conjugal partnership: Under the Civil Code, the
disposition of real property of the conjugal partnership by the
husband without the wife’s consent is not void but merely voidable
and the wife could, during the marriage and within 10 years
from the questioned transaction, seek its annulment.”5 In Felipe
v. Aldon,™ the Court applied this law in a case where the wife
sold some parcels of land belonging to the conjugal partnership
without the consent of the husband. Thus, if the sale of conjugal
partnership property without the consent of one of the spouses
took place before the effectivity of the Family Code, the sale is
merely voidable and not void ab initio. In Ko v. Arambum,”* the
husband sold a conjugal property in 1974 without the consent of
the wife. However, the wife filed the action for annulment only
in 1993. Hence, the Court declared the action to have been filed
outside of the 10-year prescriptive period, (c) Void contract as
continuing offer: Even if the disposition or encumbrance is v oid.
the transaction shall be construed as a continuing offer on the
part of the consenting spouse and the third person, and max be
perfected as a binding contract upon the acceptance by die other
’’“Arts. 96, par. 2 and 124. par. 2, FC.

5,1 Arts. 96. par. 2 and 124, par. 2, FC; Sanjuan Stnietural and Steel Fabricators. Ine.v.CA.
296 SCR A 631 (1998) and Dels Cruz v. Segovia. 555 SCRA 453 (2lk>S).
’“Arts. 98 and 125, FC.
’“Art. 97, FC,
’“Art. 173, NCC; I leirs of Ignaeia Aguilar-Reyes v. Mij-uvs. 410 SCRA 97 (2003); Sps.
Gutting v. CA, 353 Phil. 578 (1998); Heirs of Cristina Ayuste v. CA. 313 SCRA 493 (1999);
Aggabao v. Pandan, Jr.. 629 SCRA 562 (2010).
”’205 Phil. 537 (1982); died in Alfredo V. Bomis.au/mr.
’”836 SCRA 70(2017).
J9JC9B0M
R52M9UH7
spouse or authorization by the court before the offer is withdrawn

by either or both of the offerors?” The transaction executed sans
the written consent of the other spouse or the proper court order
is void; hence, ratification does not occur, for a void contract
could not be ratified.5” When such consent or authorization
is eventually given, there will be a meeting of the offer and
acceptance since the void transaction is nevertheless considered
as a continuing offer on the part of the consenting spouse and the
third person, thereby resulting in the perfection of the contract.
W) Contract void in its entirety: If the alienation or encumbrance
of community or conjugal property is without the written consent
of the other spouse or the authority of the court, the entire
transaction is void.5” It cannot be treated as a valid transaction
with respect to the alleged share of the consenting spouse in the
specific property because such alleged share does not exist as yet.
In Abalos v. Macatangay, Jr.j” it was held that in case of sale of
conjugal property without the consent of the other spouse, the
sale is still void even on the supposition that the spouses only
disposed of their respective shares in the property because "the
rig/;/ oflhe husband or the wife to one-halfofthe conjugal assets
do not vest until the liquidation of the conjugal partnership.
Nemo dal qui non habet. No one can give what he has not. "
Exceptional scenario: In Carlos v. Tolentino j" the Court did not
annul the entire disposition of a conjugal partnership property
despite the absence of consent of one of the spouses thereto
because of the subsequent death of the transacting spouse. In
upholding the validity of the donation, the Court, applying justice
and equity, ruled that since the conjugal partnership was already
terminated upon the death of the transacting spouse, there is no
need to invalidate the disposition of her one-half ('/z) portion of
the conjugal property that will eventually be her share after the
termination of the conjugal partnership, (e) Buyer in good faith:
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
5”Arts. 96, par. 2 and 124, par.2, FC.

’’’Aggabao v. Panilan, 629 SCRA 562 (2010) and Alejo v. Cortez, 827 SCRA 319 (2017).
’’’Arts. 96, par. 2 and 124, par. 2, FC; San Juan Structural and Steel Fabricators, Inc. v. CA,
296 SCRA 631 (1998) and Dcla Cruz v. Segovia, 555 SCRA 453 (2008).
”“439 SCRA 649 (2004).
«'O.R. No. 234533, June 27,2018.
J9JC9B0M
R52M9UH7
• BOOK I. — PERSONS & FAMILY RELATIONS 73

will be able to prove that he had observed two kinds of requisite

diligence, namely: (1) the diligence in verifying the validity of
the title covering the property; and (2) the diligence in inquiring
into the authority of the transacting spouse to sell conjugal (or
community) property in behalf of the other spouse.“
12.6 Dissolution/Termination of Absolute Community or Coniupal
Partnership: (a) Death: (1) Rules under the Family Code: There is
a mandatory obligation on the part of the surviving spouse to
liquidate the community or conjugal partnership property, either
judicially or extrajudicially, within one year from the death of the
deceased spouse; otherwise: (i) the subsequent marriage of the
surviving spouse shall be governed by a mandatory regime of
complete separation of property; and (ii) any disposition or
encumbrance involving the community or conjugal partnership
property of the terminated marriage shall be void.“ In Uy v.
Estate of Vlpa Fernandez,“ however, it was ruled that the sale
made by the surviving spouse notwithstanding the absence of
liquidation of the absolute community properties (or conjugal
partnership properties) is not necessarily void. Applying Article
493 of the Civil Code, the sale made by the surviving spouse of
his one-half (A) undivided share in the subject property is not
necessarily void, for his right as a co-owner thereof was
effectively transferred, making the buyer a co-owner of the
subject property. (2) If conjugal partnership was established in
the Civil Code: If the conjugal partnership is established before
the effectivity of the Family Code and one of the spouses died
also before the effectivity of the Family Code, the foregoing
mandatory obligation to liquidate and the effects of failure to do
so do not apply because the Civil Code does not mandatorily
require the surviving spouse to liquidate the conjugal partner-
ship.“ As a consequence: (i) if the surviving spouse contracts
another marriage, even during the effectivity of the Family Code,
the said marriage shall not be governed mandatorily by the
regime of complete separation; and (ii) any disposition or
encumbrance of the conjugal property shall not be void. Instead,
542Bautisla v. Silva, 502 SCRA 334 (2006); Ravina v. Villa Abrille, 604 SCRA 120 (2009);
and Aggabao v. Panilan, 629 SCRA 562 (2010).
“Arts. 103 and 130, FC.
“822 SCRA 382 (2017).
“Art. 130, FC. See also Heirs of Go, Sr. v. Servacio, 657 SCRA 10 (2011) and Domingo
v. Molina, 791 SCRA 47 (2016).
J9JC9B0M
R52M9UH7
follow the rules on co-ownership, (b) Decree of fepal separation:

(1) Effects if there is a decree of legal separation: Upon the
issuance ofthe decree of legal separation, the absolute community
or conjugal partnership is automatically terminated."6 However,
upon liquidation of the absolute community or conjugal
partnership, the share of the offending spouse in the “net profits”
shall be forfeited in favor of: (i) common children; (ii) in default
thereof, children of the guilty spouse by a previous marriage; or
(iii) in default thereof, the innocent spouse."’ But what is forfeited
is only net profits, not the net assets."8 Simultaneous with the
termination of the absolute community or conjugal partnership of
gains, the property relations of the spouses shall thereafter be
governed by a regime of complete separation. (2) Effects of mere
separation de facto: The separation in fact (or separation without
a decree of legal separation) between husband and wife does not
affect the regime ofabsolute community or conjugal partnership."’
However, such separation de facto shall produce the following
effects: (i) the spouse who leaves the conjugal home or refuses to
live therein, without just cause, shall have no right to be
supported; (ii) when the consent of one spouse to any transaction
of the other is required by law, judicial authorization shall be
obtained in a summary proceeding; (iii) if the community
property or conjugal partnership property is not sufficient, the
separate property of both spouses shall be solidarily liable for the
support of the family and the spouse present shall, upon proper
petition in a summary proceeding, be given judicial authority to
administer or encumber any specific property of the other spouse
and use the fruits or proceeds thereof to satisfy the latter’s
share;”0 and (iv) if a spouse without just cause abandons the
other or fails to comply with his or her obligations to the family,
the aggrieved spouse may petition for receivership, judicial
separation of property, or for authority to be the sole administrator
of the absolute community or conjugal partnership.’" A spouse is
deemed to have abandoned the other when he or she has left the
conjugal dwelling without any intention of reluming. The spouse
who has left the conjugal dwelling for a period of three months or
"‘Arts. 99(2), 126(2), and 63(2), FC.

"’Art. 63(2), in relation Io Art. 43(2), FC.
"'Siochi v. Gozon, 616 SCRA 87 (2010).
"’Arts. 100 and 127, FC.
Mld.
’"Arts. 101 and 128, FC.
J9JC9B0M
R52M9UH7

has failed within the same period to give any information as to

his or her whereabouts shall be prima facie presumed to have no
intention of returning to the conjugal dwelling.”2 (c) Finality of
judgment of annulment or declaration of nullity: The property
regime of a voidable marriage is either absolute community of
property, conjugal partnership of gains, or complete separation.
If the property regime of the voidable marriage is either absolute
community of property or conjugal partnership of gains, the said
property regime is terminated upon the finality of a judgment of
annulment.”3 On the other hand, if the marriage is void, regardless
of the cause thereof, the property relations of the parties during
the period of cohabitation, are governed by Article 147 or 148, as
the case may be.”4 Ordinarily, therefore, there is no absolute
community of property or conjugal partnership of gains in a void
marriage. The only exception is when the marriage is void by
reason of Article 40 of the Family Code. The property regime of
a void marriage under Article 40 of the FC, prior to judicial
declaration of its absolute nullity, is either absolute community
of property, conjugal partnership of gains, or complete
separation.’” Hence, upon the finality of the judgment declaring
the marriage void on the ground of Article 40 of the FC, the
absolute community or conjugal partnership of gains is
terminated.”6 (d) Judicial separation of property: Upon the
judicial separation of property during the marriage, either
voluntarily or for cause,”’ the absolute community or conjugal
partnership of gains is terminated.”8 However, an extrajudicial
dissolution of the conjugal partnership (or absolute community)
without judicial approval is void.’” (e) Procedures for liquidation
of absolute community or conjugal partnership: (1) Inventory,
listing separately the exclusive properties and the properties of
I
”2M.
511Arts. 99(3) and 126(3), FC.
5MValdez v. RTC, Dr. 102, QC, 260 SCRA 221 (1996); Buenaventura v. CA, 454 SCRA
261 (2005).
’’’Difio v. Difio, 640 SCRA 178 (2011) and Valdes V. RTC, Br. 102, QC, 260 SCRA 221
(1996).
’“Arts. 99(3) and 126(3), FC. L
’’’Arts. 135 and 136, FC.
j
’’“Arts. 99(4) and 126(4), FC.
’’’Espinosa v. Omafia, 659 SCRA 1 (2011), citing Selanova v. Judge Mendoza, A.M. No.
804-CJ, 159-A Phil. 360 (1975).
J9JC9B0M
R52M9UH7
the absolute community.’" (2) Amounts advanced by the absolute

community or conjugal partnership in payment of personal debts
and obligations of either spouse shall be credited to the absolute
community or conjugal partnership as an asset thereof.561 In
conjugal partnership, each spouse shall be reimbursed for the use
of his or her exclusive funds in the acquisition of property or for
the value of his or her exclusive property, the ownership of which
has been vested by law in conjugal partnership.’62 (3) Payment of
debts and obligations of the absolute community or conjugal
partnership out of its assets. In case of insufficiency of said
assets, the spouses shall be solidarily liable for the unpaid balance
with their separate properties.’63 (4) Whatever remains of the
exclusive properties of the spouses shall thereafter be delivered
to each of them.’4* (5) The net remainder of the properties of the
absolute community shall constitute its “net assets” (in conjugal
partnership, the net remainder of the conjugal partnership
properties shall constitute its “net profits”), which shall be
divided equally between the spouses, unless a different proportion
or division was agreed upon in the marriage settlements, or
unless there has been a voluntary waiver of such share.’65 The
“net assets” is different from “net profits.” It is the latter which is
subject to forfeiture under Articles 43(2) and 63(2) of the FC.566
The “net profits” refer to the increase in value between the market
value of the community property at the time of the celebration of
the marriage and the market value at the time of its dissolution.’67
In the regime of absolute community of property, “net profits” is
computed based on the following procedure: (i) Get the market
value of the absolute community properties at the time of the
community’s dissolution; (ii) From the totality of the market
value of all the properties, subtract the debts and obligations of
the absolute community; (iii) The result of the foregoing
procedure shall be “net assets” or net remainder of the properties
of the absolute community; (iv) Deduct the market value of the
’“Arts. 102(1) and 129(1), FC.

561 Arts. 129(2) and 94(9), FC.
’“Art. 129(3), inrelaiionlo Arts. 118 and 120,FC.
“’Arts. 102(2) and 129(4), FC.
’“Arts. 102(3) and 129(5), FC.
’“Arts. 102(4) and 129(7), FC.
’“Art. 102(4), FC.
J9JC9B0M
R52M9UH7

properties at the time of marriage. The result is the “net profits.”368

(v) Delivery of presumptive legitimes of the common children.569
(vi) The conjugal dwelling, including the lot shall be adjudicated
to the spouse with whom the majority of the common children
choose to remain unless otherwise agreed upon by the parties. In
case there is no majority, the court shall decide.570
13) Separation of Property of Spouses During the Marriage

13.1 In General: (a) Concent: In the regime of complete separation of
property, each spouse shall own, dispose of, possess, administer,
and enjoy his or her own separate estate, without need of the
consent of the other. To each spouse shall belong all earnings
from his or her profession, business, or industry and all fruits,
natural, industrial, or civil, due or received during the marriage
from his or her separate property.571 As to expenses, both spouses
shall bear the family expenses in proportion to their income, or,
in case of insufficiency or default thereof, to the current market
value of their separate properties.572 The liability of the spouses
to creditors for family expenses shall, however, be solidary.575
(b) Effect on SALN requirement: In Abid-Babano v. Executive
Secretary,574 it was ruled that the requirement under Republic Act
No. 6713 and similar laws that the sworn statement of assets,
liabilities, and net worth (SALN) to be filed by every government
official must include assets, liabilities, and net worth of the
spouse of the filer is construed NOT TO INLCUDE the assets,
liabilities, and net worth of spouses whose property regime during
the marriage is by law or by agreement prior to the marriage
one of complete separation of property. The evil sought to be
prevented by our laws on the SALN, i.e., that a spouse would be
used to conceal from the public the full extent of a government
employee’s wealth and financiai/proprietary interests, does not
exist in this case.
13.2 When Complete Separation Governing: (a) If provided in
marriage settlements: Complete separation will govern if it is the
’“Quino v. Quiao, 675 SCRA642 (2012).

’“Arts. 102(5) and 129(8), FC.
’’“Arts. 102(6) and 129(9, FC.
571 Art. 145, NCC.
572Art. 146, par. 1, FC.
575Art. 146, par. 2, FC.
574G.R. No. 201176, August 28, 2019.
J9JC9B0M
R52M9UH7
property regime provided for in the marriage settlements.5” If

separation of property is agreed upon in the marriage settlements,
the spouses may no longer adopt absolute community or conjugal
partnership during the marriage because these two regimes can
only commence at the precise moment of the celebration of the
marriage.5’6 The separation may refer to present or future property
or both.5” The separation may be total or partial. In case of partial
separation, properties not agreed upon as separate shall pertain
to the absolute community.578 (b) Pursuant to judicial order: (1)
Upon issuance of a decree of legal separation;579 (2) Upon a joint
petition of the spouses for voluntary separation (or without need
for a cause);560 and (3) Upon petition for judicial separation due
to a sufficient cause.581 The following are considered sufficient
causes for judicial separation of property: (i) other spouse is
sentenced to a penalty which carries civil interdiction; (ii) other
spouse is judicially declared an absentee; (iii) other spouse
is judicially decreed to have lost parental authority; (iv) other
spouse abandoned the other or failed to comply with his or her
obligations to the family as provided in Article 101; (v) other
spouse who has been granted powers of administration in the
marriage settlements abused that power; and (vi) spouses have
been separated in fact for at least one year and reconciliation is
highly improbable.582 In (i) to (iii), the presentation of the final
judgment against the guilty or absent spouse shall be enough basis
for the grant of the decree of judicial separation of property.583
(c) Failure to liquidate: If the absolute community or conjugal
partnership of the previous marriage was terminated by reason
of death and the surviving spouse, who failed to liquidate the
absolute community or conjugal partnership within one year from
the death of the deceased spouse, contracted another marriage,
the subsequent marriage shall be governed by a mandatory
regime of complete separation.588
"’Arts. 74(1) and 134, FC.

"‘Arts. 88 and 107, FC.
’"Art. 144, FC.
”*/</.
"’Arts. 63(2) and 66(2), FC.
’“Art. 136, FC.
581 Art. 135, FC.
’’’Art. 135.FC.
583Art. 135, last par., FC.
’“Arts. 103 and 130, FC.
J9JC9B0M
R52M9UH7

13.3 Revival of Previous Property Regime: (a) Grounds for revival:
(1) In case of voluntaryjudicial separation of property, the parties
may file a motion in the same proceeding for the revival of the
previous property regime even in the absence of a reason/ground.
However, no voluntary separation may thereafter be granted.’8’
(2) If the judicial separation is for sufficient cause, the parties
may file a motion in the same proceeding for the revival of the
previous property regime upon cessation of the ground which
was the basis of the judicial order for separation.”8 If judicial
separation is for a sufficient cause, the spouses can again petition
for judicial separation so long as there is a new cause/ground. (b)
Procedure for revival: The same procedure for the revival of the
previous property regime upon reconciliation of the spouses after
the issuance of the decree of legal separation shall be followed.
13.4 Transfer of Administration of Exclusive Property to Other
Spouse: (a) Bv agreement: It may be done by means of a public
instrument, which shall be recorded in the registry of property
of the place where the property is located.’87 (b) Upon order
of court: Based on the grounds: (i) Other spouse becomes the
guardian of the other; (ii) Other spouse is judicially declared
an absentee; (iii) Other spouse is sentenced to a penalty which
carries with it civil interdiction; or (iv) Other spouse becomes
fugitive from justice or hiding as an accused in a criminal case.588
(c) Automatic termination of administration: The alienation of
any exclusive property’ of a spouse administered by the other
automatically terminates the administration over such property
and the proceeds of the alienation shall be turned over to the
owner-spouse.’”
14) Property Regimes Under Articles 147 and 148

14.1 Applicability: (a) In void marriages: (1) General rule: In a void
marriage, regardless of the cause thereof, the property relations
of the parties during the period of cohabitation is governed by
the provisions of Article 147 or Article 14S. as the case may
’•’Art. 141(7), FC.

’“An. 141(1)46), FC.
’•’Art. 110. par. 2, FC.
’“Art. 142. FC.
’•’Art. II2, FC.
J9JC9B0M
R52M9UH7
be, of the Family Code.”" In other words, there is no absolute

community or conjugal partnership in a void marriage5’1 at any
point, even during the period prior to declaration of nullity. Thus,
the rules which are set up to govern the liquidation of either the
absolute community or the conjugal partnership of gains, the
property regimes recognized for valid and voidable marriages,
are irrelevant to the liquidation of the co-ownership between
common-law spouses or spouses of void marriages.5” In the
liquidation of the properties of the parties to a void marriage, the
provisions on co-ownership under the Civil Code should apply,
and such liquidation need not be made in the same proceeding
for declaration of nullity of marriage.5’3 The partition of the co-
ownership in Article 147 may even be made by an agreement
between the parties. In Diaz-Salgado v. Anson,w the Court ruled
that since the property regime of the parties is governed by Article
147, the properties acquired during the cohabitation are presumed
to be co-owned. Accordingly, the provisions on co-ownership
under the Civil Code shall apply in the partition of the properties
co-owned by the parties. Under the Civil Code, partition may be
made by agreement of the parties or by judicial proceedings. (2)
Exception: If the subsequent marriage is void by reason of non-
compliance with Article 40, the property relations of the parties
to the subsequent marriage may either be absolute community
or conjugal partnership of gains, as the case may be, unless the
parties agree to a complete separation of property in a marriage
settlement entered into before the marriage.5’5 As such, Sec.
19( 1) of A.M. No. 02-11 -10-SC, which requires the liquidation,
partition, and distribution of properties prior to the issuance of
decree of nullity of the marriage applies only to a void marriage
under Article 40 of the Family Code when said rule mentions
of “decree of absolute nullity'' and not to a marriage declared
void by reason of psychological incapacity under Article 36 of
“Valdes v. RTC, Br. 102. QC, 260 SCRA 221, 226 (1996); Diflo V. Diflo, 640 SCRA
178 (2011); Ocampo v. Ocampo, 764 SCRA 608 (2015); Diaz-Salgado V. Anson, 798 SCRA 541
(2016).
’’'Carino v. Carino, 351 SCRA 127 (2001).
’’•Valdes v. RTC, Br. 102, QC, supra', see also Buenaventura v. CA, 454 SCRA 261
(2005); Dino v. Dino, 640 SCRA 178 (2011); Barrido v. Nonato, 738 SCRA 510 (2014); Ocampo
v. Ocampo, 764 SCRA 608 (2015).
’’’Dino v. Dino, supra.
’”798 SCRA 541 (2016).
’’’Dirto v. Dino, supra', see also Art. 50, in relation to Art. 43(2), FC.
J9JC9B0M
R52M9UH7

the Family Code. In the latter case, since the applicable property
regime is that provided in Article 147 of the Family Code, the
declaration of nullity can already be made even without waiting
for the liquidation of the properties of the parties because it is not
necessary to liquidate the properties of the spouses in the same
proceeding for declaration of nullity of marriage.(b) In union
of parties without the benefit of marriage: If the man and woman
simply lived together as husband and wife without the benefit
of marriage, they are governed by the property regime provided
for in Article 147 or Article 148. These property regimes do not
apply, however, to same-sex cohabitation. The latter is governed
by the law on property.
14.2 When Governed Bv Article 147 or Article 148: (a) In void
marriages: Article 147 “applies to union of parties who are
legally capacitated and not barred by any impediment to
contract marriage, but whose marriage is nonetheless void for
other reasons,”’ such as: (1) marriages declared void by reason
of psychological incapacity (Art. 36, FC);”“ (2) marriages
celebrated without a valid marriage license (Art. 35[3], FC);’”
(3) marriages celebrated by a person without legal authority to
solemnize marriages and either or both parties cannot claim good
faith (Art. 35[2], FC); (4) marriages contracted through mistake
of one contracting party as to the identity of the other (Art.
35[5], FC); and (5) subsequent marriages that are void because
of failure to comply with the procedural requirements of Article
52 (Art. 35[6], in relation to Art. 53, FC). On the other hand,
if the marriage is void because the parties are suffering from
legal impediments, the property regime applicable is Article 148,
including the following void marriages: (1) marriages where one
of the contracting parties is below 18 years of age; (2) bigamous
and polygamous marriages under Article 35(4); (3) incestuous
marriages under Article 37; (4) marriages which are prohibited
by reasons of public policy under Article 38; and (5) subsequent
marriages contemplated in Article 41 of the FC where both parties
acted in bad faith and declared void under Article 44. (b) In union
of parties without the benefit of marriage: The governing property
”‘W.
’’’Diaz-Salgado v. Anson, 798 SCRA 541 (2016).
’’"Mercado-Fehr v. Fehr, 414 SCRA 288 (2003); Valdez V. RTC. Br. 102, QC, supra;
Bucnavenlura v. CA, supra and Diflo v. Dido, supra.
’"Carino v. Carillo, supra.
J9JC9B0M
R52M9UH7
'C PRE-BAR REVIEWER IN CIVIL LAW
regime is Article 147 if two requisites are satisfied: (1) the parties
are capacitated to marry each other; and (2) they live exclusively
with each other as husband and wife.™ If both requisites are not
satisfied, the governing property regime is Article 148. As such,
Article 147 does not apply to cases of multiple alliances, even
if in relation to each union the parties are capacitated to marry
each other. In the same way, even if it is a case of exclusive
cohabitation but the parties are not capacitated to marry each
other, Article 147 does not apply. In both situations, the property
regime of the parties shall be that which is provided in Article
148 of the Family Code. Although the adulterous cohabitation
of the parties commenced before the effectivity of the Family
Code on August 3, 1988, Article 148 thereof applies because this
provision was intended precisely to fill up the hiatus in Article
144 of the Civil Code.™1 Hence, even if the cohabitation or the
acquisition of the property occurred before the Family Code took
effect, Article 148 governs.6”
14.3 Applicable Rules Under Article 147: (a) On salary and wages:
Wages and salaries earned by either party during the cohabitation
shall be owned by the parties in equal shares603 and will be
divided equally between them, even if only one party earned
the wages and the other did not contribute thereto.604 (b) On
property acquired during cohabitation: Under this property
regime, properties acquired by both parties during their union
through their 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.60’ Article 147 creates
a presumption that properties acquired during the cohabitation
of the parties have been acquired through their joint efforts,
work, or industry, and shall be owned by them in equal shares.606
Stated otherwise, properties acquired during the cohabitation are
presumed co-owned by the parties. It further provides that a party
““Mercado-Fehr v. Fehr, 414 SCRA 288 (2003); cited in Difio v. Diilo, 640 SCR A 178
(2011); Barrido v. Nonato, 738 SCRA 510 (2014) and Ocampo v. Ocampo, 764 SCRA 608 (2015).
“'Tumlos v. Fernandez, 330 SCRA 718 (2000); see also Saguid v. CA, 403 SCRA 678
(2003); and Alienza v. De Castro, 508 SCRA 593 (2006).
“’Atienza v. De Castro, supra, citing Tumlos V. Fernandez, supra.
“’Art. 147, FC.
“Carillo v. Carillo, supra.
“’Valdes v. RTC, Br. 102, QC, supra; Barrido v. Nonato, supra; Salas, Jr. v. Aguila, supra;
Ocampo v. Ocampo, supra; and Diaz-Salgado v. Anson, supra.
“Gonzales v. Gonzales, 478 SCRA 327 (2005).
J9JC9B0M
R52M9UH7

who did not participate in the acquisition by the other party of

any property shall be deemed to have contributed jointly in the
acquisition thereof if the former’s efforts consisted in the care and
maintenance of the family and of the household.™7 Efforts in the
care and maintenance of the family and household are regarded
as contributions to the acquisition of common property by one
who has no salary or income or work or industry.™3 Unlike the
conjugal partnership of gains, the fruits of the couple’s separate
property are not, however, included in the co-ownership.m (c)
Prohibition against alienation of ideal share in co-ownership:
During the cohabitation, the parties are prohibited from disposing
by acts inter vivos or encumbering their respective shares in the
co-owned property without the consent of the other.610 Such
disposition or encumbrance is void. In other words, Article 493 ■
of the NCC does not apply. But after the cohabitation, Article
493 of the NCC will already be applicable, (d) Effect of bad
faith: If the cohabitation is by reason of a void marriage and
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 take place upon the termination of the
cohabitation: (1) the common children, if any; (2) in default of
common children, the surviving descendants of the party who
acted in bad faith; or (3) in the absence of descendants, the
innocent party.6"
14.4 Applicable Rules Under Article 148: (a) On salary and wages:
Wages and salaries earned by each party belong to him or her
exclusively.611 (b) On property acquired during cohabitation:
Under this regime, 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 contributions.615 Hence, mere
cohabitation without proof of contribution will not result in a
mld; also in Valdes v. RTC, Br. 102, QC, supra-, Barrido v. Nonato, supra; Salas, Jr. V.
Aguila, supra; Ocampo v. Ocampo, supra; and Diaz-Salgado v. Anson, supra.
““Barrido v. Nonato, supra, citing Agapay v. Palang, 276 SCRA 340 (1997); see also
Ocampo v. Ocampo, supra; and Diaz-Salgado v. Anson, supra.
"“VMez v. RTC, Br. 102, QC, supra.
‘'“Art. 147, par. 2, FC.
‘"Art. 147, par. 3, FC.
6l2Art. 148, FC; Cariflo v. Carillo, supra.
6l5Valdes v. RTC, Br. 102, QC, supra; see also Atienzav. De Castro, 508 SCRA 593 (2006).
J9JC9B0M
R52M9UH7
co-ownership.616 Such contributions and corresponding shares

were prima facie presumed to be equal.615 However, for this
presumption to arise, proof of actual contribution is required.616
Stated otherwise, co-ownership will only be up to the extent of
the proven actual contribution of money, property, or industry.617
If the actual contribution of the party is not proved, there will
be no co-ownership and no presumption of equal shares.618 The
fact that the controverted property was titled in the name of
the parties to an adulterous relationship is not sufficient proof
of co-ownership absent evidence of actual contribution in the
acquisition of the property.61’ Registration under the Torrens
title system merely confirms, and does not vest title.620 The
words “married to” preceding the name of a spouse are merely
descriptive of the civil status of the registered owner and such
words do not prove co-ownership under Article 148.621 (c) No
prohibition against alienation of ideal share: Unlike in the co-
ownership existing in Article 147, the law does not prohibit one
of the co-owners in Article 148 from disposing or encumbering,
during the cohabitation, his or her share in the co-ownership
without the consent of the other co-owner. In other words, the rule
in Article 493 of the NCC applies in the co-ownership existing
under Article 148. (d) If one has a valid marriage: If one of the
parties in the cohabitation is validly married to another, his or her
share in the co-ownership shall accrue to the absolute community
or conjugal partnership existing in such valid marriage.622 If there
is no such valid marriage, the share of the party who acted in bad
faith (whether either or both acted in bad faith) shall be forfeited,
which forfeiture shall take place upon the termination of the
cohabitation, in favor of: (1) the common children, if any; (2)
in default of common children, the surviving descendants of the
party who acted in bad faith; or (3) in the absence of descendants,
the innocent party.671
61,Tumlos v. Fernandez, supra.

6l5Art. 148, FC; Lavadia v. Heirs of Juan Luces Luna, 730 SCRA 376 (2014).
6l‘Atienza v. De Castro, supra; also in Saguid V. CA, 403 SCRA 678 (2003) and Lavadia
v. Heirs of Juan Luces Luna, 730 SCRA 376 (2014).
61,W.
“‘Agapay v. Palang, G.R. No. 116668, July 28,1997,342 Phil. 302.
‘"Adriano v. Court of Appeals, 385 Phil. 474, cited in Saguid v. CK, supra.
"“Ventura, Jr. v. Abuda, 708 SCRA 640 (2013).
"'Go-Bangayan v. Bangayan, Jr., 700 SCRA 702 (2013).
"■’Art. 148,2" par., FC.
"’Art. 148,2,d and 3", pars., FC.
J9JC9B0M
R52M9UH7

The Family Code of (lie Philippines
15) Family Relations and Family Home

15.1 Extent of Family Relations: (a) Who are included in “family
relations”: (1) husband and wife; (2) parents and children; (3)
ascendants and descendants; and (4) brothers and sisters, whether
of full or half-blood.624 (b) Clarifications: (1) The enumeration is
exclusive and defines the operation of Article 151 of the Family
Code.62’ (2) Among the collateral blood relatives, only brothers
and sisters, whether of full or half-blood, are included in Article
150. The other collateral blood relatives are considered strangers.
(3) Linder the Family Code, family relations, which is the primary
basis for succession, exclude relations by affinity.626 Hence, the
in-laws are not included in Article 150.
15.2 Requirement of Earnest Efforts Towards Compromise: (a) Rule:
If a suit is between "members of same family," there must be
prior earnest efforts towards a compromise; otherwise, the case
must be dismissed.627 Hence, the attempt to compromise as well
as its failure or inability to succeed is a condition precedent
to the filing of a suit between members of the same family.62*
Stated otherwise, a party’s failure to comply with Article 151
of the Family Code before filing a complaint against a family
member would render such complaint premature.62’ However,
the failure of a party to comply with this condition precedent is
not a jurisdictional defect. Under the old rule,™ the Court had
the occasion to rule that if the opposing party fails to raise such
defect in a motion to dismiss, the defect is deemed waived.651
Applying by analogy the new rule,652 the failure to raise such
defect as an affirmative defense in the answer may be deemed as
waiver of the same, (b) Suit must be exclusive among “members
of same family”: In order for the requirement of prior earnest
efforts towards a compromise to apply, the suit must be exclusive
"’Art. 150, FC.

"’Hontiveros v. RTC, 309 SCRA 340 (1999); Esquivias v. CA, 272 SCRA 803 (1997);
Guerrero v. RTC, llocos Norte, Br. XVI, 229 SCRA 274 (1994).
"‘Ining v. Vega, 703 SCRA 407 (2013).
627Art. 151, FC.
"“Wee v. Gonzales, 436 SCRA 96.
"’Martinez v. Martinez, 461 SCRA 562 (2005).
"’Rule 16, Sec. l(j), 1997 Revised Rules ol Court.
"’Romero v. Singson, 764 SCRA 620 (2015), citing Tribiana v. Tribiana, 481 Phil. 539,
547 (2004).
"’Rule 8, Sec. 12(a)(5), 2020 Rules ol'Civil Procedure.
J9JC9B0M
R52M9UH7
among members of the same family. “Efforts to compromise” are

not a jurisdictional prerequisite for the maintenance of an action
whenever a stranger to the family is a party thereto, whether
as necessary or indispensable one.633 (c) Meaning of “members
of same family”: The phrase “members of the same family” in
Article 151 of the Family Code must be understood as referring
to the relations enumerated in Article 150 of the FC.634 Case law
states that Article 151 of the FC must be construed strictly, it
being an exception to the general rule. Any person not enumerated
in Article 150 is considered a stranger who, if included in a suit
between and among family members, would render unnecessary
the earnest efforts requirement under Article 151.635 Hence, the
earnest efforts requirement under Article 151 does not apply if
the following are included in the suit: (1) nephews and nieces;636
(2) a brother-in-law;637 or (3) a sister-in-law.638 (d) Cases not
subject to compromise: The rule in Article 151 requiring exertion
of earnest efforts towards a compromise as condition precedent
to the filing of a suit between members of the same family “shall
not apply to cases which may not be the subject of compromise
under the Civil Code.”63’ Under Article 2035 of the Civil Code,
the law prohibits a compromise upon the following questions:
(1) the civil status of persons; (2) the validity of a marriage or a
legal separation; (3) any ground for legal separation; (4) future
support; (5) the jurisdiction of courts; and (6) future legitime.640
15.3 Concent and Benefit of Family Home: (a) Concept: The family
home is a real right which is gratuitous, inalienable, and free
from attachment, constituted over the dwelling place and the land
on which it is situated. It confers upon a particular family the
right to enjoy such properties.641 It cannot be seized by creditors
"’Esquivias v. CA, 272 SCRA 803 (1997), citing Magbaleta v. Gonong, 76 SCRA 511
(1977).
tuId.
"’Moreno v. Kahn, G.R. No. 217744, July 30,2018.
“6W.
"’Esquivias v. CA, supra.
"‘Martinez v. Martinez, 461 SCRA 562 (2005).
"’Art. 151, par. 2, NCC.
““Art. 2035, NCC.
"'Salazar v. Felias, 854 SCRA 103 (2018), citing Ramos v. Pangilinan, 625 SCRA 181
(2010). See also Eulogio v. Bell, Sr., 762 SCRA 103 (2015), citing Taneo, Jr. v. CA, 304 SCRA
308(1999).
J9JC9B0M
R52M9UH7

except in certain special cases."2 (b) Benefit of family home:

It is exempt from execution, forced sale, or attachment."2 (c)
Conditions precedent for exemption: (1) Manner of constitution:
(i) If constructed before effectivity of FC, it must be judicially or
extrajudicially constituted; (ii) If constructed before effectivity
of FC and was not judicially or extrajudicially constituted under
the Civil Code, it automatically became the family home but
only from 3 August 1988;"4 and (iii) A family home is deemed
constituted on a house and lot from the time it is actually
occupied as a family residence."2 The actual occupancy must
be by any beneficiary; hence, actual occupancy by maids and
overseers is not sufficient."6 (2) Who must constitute: There must
be proof that the alleged family home was constituted jointly by
the husband and wife or by an unmarried head of a family."’
For purposes of availing the benefits of a family home, a person
may constitute, however, only one family home."’ (3) Where
constructed: The family home must be part of the properties of
the absolute community or the conjugal partnership, or of the
exclusive properties of either spouse with the latter’s consent, or
on the property of the unmarried head of the family."’ It cannot be
established on property held in co-ownership with third persons."0
(4) Actual value: At the time of its constitution, the actual value
of the family home shall not exceed the amount of P300.000
in urban areas and P200,000 in rural areas."1 (d) Exception
to protection: Even if duly constituted as a family home, it is
not exempt from execution, forced sale, or attachment for the
following claims: (1) Non-payment of taxes; (2) Debts incurred
prior to the constitution of family home; (3) Debts secured by 1
mortgages on the premises before or after such constitution."2
Article 155 of the Family Code explicitly provides that debts t
“•’/</., citing Josef v. Santos, 572 SCRA 57, 63 (2008).

“’Art. 155, FC.
“'Modequillo v. Breva, 185 SCRA 766 (1990); Kilerated in Manacop V. CA. 277 SCRA
57(1997).
“’Art. 153, FC.
“‘Patricio v. Dario III, 507 SCRA 438 (2006), citing Manacop v. CA, supra.
“’Art. 152, FC; Kelley, Jr. v. Planters Products, Inc., 557 SCRA 499 (2008).
“‘Art. 161, FC.
“’Art. 156, FC; Kelley, Jr. v. Planters Products, Inc., supra.
"“Cabang v. Basay, 582 SCRA 172 (2009).
"'Art. 157, FC; Kelley, Jr. v. Planters Products, Inc., 557 SCRA 499 (2008).
"’Art. 155, FC.
J9JC9B0M
R52M9UH7
secured by mortgages are exempted from the rule against

execution, forced sale, or attachment of family home.6” (4) Debts
due to laborers, mechanics, architects, builders, materialmen,
and others who have rendered service or furnished material for
the construction of the building.6” (e) How and who may invoke
protection: (1) How to invoke: It is not sufficient that the person
claiming exemption merely alleges that such property is a family
home.6’’ Such claim for exemption should be set up and proved
to the sheriff before the sale of the property at public auction.
Failure to do so would estop the party from later claiming the
exemption.6’6 (2) Personal privilege: The right to exemption or
forced sale under Article 153 of the FC is a personal privilege
granted to the judgment debtor and as such, it must be claimed
not by the sheriff, but by the debtor himself before the sale of
the property at public auction.6” While the family home is a real
right, which is gratuitous, inalienable, and free from attachment,
such right can be waived or be barred by laches by the failure to
set up and prove the status of the property as a family home at the
time of the levy or a reasonable time thereafter.6” (3) Duration
of protection: The exemption provided as aforestated is effective
from the time of the constitution of the family home as such, and
lasts so long as any of its beneficiaries actually resides therein.6”
15.4 Effect of Increase in Actual Value: (a) If bv reason of voluntary
improvement: If the value of the family home exceeds the
maximum amount allowed (P300,000 in urban areas or P200,000
in rural areas) because of voluntary improvements by the one
establishing the family home, then Article 160 will apply.660 To
warrant, therefore, the execution sale of the family home under
Article 160, the following facts are required to be established: (i)
there was an increase in its actual value; (ii) the increase resulted
from voluntary improvements on the property introduced by
the persons constituting the family home, its owners, or any of
“’Vitug v. Abuda, 778 SCRA 609 (2016) and Fortaleza v. Lapitan, 678 SCRA 469 (2012).
654Art. 155, FC.
“’Versola v. CA, 497 SCRA 385 (2006).
“‘Honrado v. CA, 476 SCRA 280 (2005); died in Vctsola v. CA, supra.
“’Honrado v. CA, 476 SCRA 280 (2005); Sps. Versola v. CA, 497 SCRA 386 (2006);
Arriola v. Arriola, 542 SCRA 666 (2008); Olivia-De Mesa v. Acero, Jr., 663 SCRA 40 (2012).
“’Olivia-De Mesa v. Aceron, Jr., supra.
“’Art. 153, FC.
Mld.
J9JC9B0M
R52M9UH7

its beneficiaries; and (iii) the increased actual value exceeded

the maximum allowed under Article 157.“' Any subsequent
improvement or enlargement of the family home by the persons
constituting it, its owners, or any of its beneficiaries will still be
exempt from execution, forced sale, or attachment provided the
following conditions obtain: (i) the actual value of the property
at the time of its constitution has been determined to fall below
the statutory limit; and (ii) the improvement or enlargement does
not result in an increase in its value exceeding the statutory limit.
Otherwise, the family home can be the subject of a forced sale,
and any amount above the statutory limit is applicable to the
obligations under Article 160.662 (b) If bv reason of involuntary
improvement: If the increase in value is by reason of an
involuntary improvement, like the conversion into a residential
area or the establishment of roads and other facilities, the one
establishing the family home should not be punished by making
his home liable to creditors.663 Hence, the family home still enjoys
protection from execution, forced sale, or attachment. It cannot
be sold pursuant to Article 160 of the FC to satisfy the claim of a
judgment creditor not mentioned in Article 155, but it can be sold
to satisfy claims mentioned in Article 155.
15.5 Effect of Death of Person Who Constituted Family Home: (a)
Continuance of family home: If there are beneficiaries who
survive and are living in the family home, it will continue for 10
years, unless at the expiration of 10 years, there is still a minor
beneficiary, in which case the family home continues until that
beneficiary becomes of age.661 (b) Prohibition against partition:
During the continuance of the family home, the heirs cannot
partition the same unless the court finds compelling reasons
therefor.665 (c) Beneficiaries of family home: There are two sets of
beneficiaries: (1) The husband and wife, or an unmarried person
who is the head of a family, who constituted the family home; and
(2) Their parents, ascendants, descendants, brothers, and sisters,
whether the relationship be legitimate or illegitimate, who are
living in the family home and who depend upon the head of the
“’Eulegio v. Bell, Sr., 762 SCRA 103 (2015).

‘"Patricio v. Dario III, 507 SCRA 438 (2006).
“’Art. 159, FC.
J9JC9B0M
R52M9UH7
family for legal support.666 However, for purposes of availing of

the benefits of a family home, a person may be the beneficiary of
only one family home.667 In order for the relatives of the person
who constituted the family home to be considered a beneficiary
of the family home, three requisites must concur: (i) they must be
among the relationships enumerated in Article 154 of the Family
Code; (ii) they actually live in the family home; and (iii) they are
dependent for legal support upon the head of the family.668
16) Paternity and Filiation

16.1 Filiation and Status of Children: (a) Paternity and filiation-
Paternity is the civil status of a father in relation to the child.
Filiation is the civil status of a child in relation to his or her
parents, (b) Kinds of filiation: (1) Natural filiation: By reason
of blood relationship, which is either legitimate or illegitimate
filiation, which includes artificial insemination; or (2) Artificial
filiation: By reason of adoption.669 (c) Status of children: The
status of a marriage determines in large part the filiation of its
resultant issue.67’ Thus, the following rules: (1) Legitimate
children: If conceived OR bom during a valid marriage.671 (2)
Illegitimate children: If conceived AND bom outside of a valid
marriage.672 Therefore, children of those who are not married
to each other are illegitimate. Likewise, children of void
marriages are generally illegitimate.672 Exception: Children of
void marriages by reason of Articles 36 and 53 are considered
legitimate children.67’ (d) Legitimated children: “Legitimated” is
not a separate status, for there are only two classes of children:
legitimate and illegitimate.672 Therefore, upon legitimation, the
child’s status becomes “legitimate.” Prior thereto, the child is
illegitimate, le I Artificial insemination: In artificial insemination,
the egg of the wife is fertilized through artificial means with the
sperm of the husband or a donor. Whether the sperm is that of the
“'Art. 154, EC.

“'Art. 161, FC.
“Patricio V. Dario III, 507 SCRA 438 (2006).
“"Art. 163, FC.
‘"De Smun v. Angelo, 251 SCRA 206 (1995).
‘'•Art. 164, 1* par, FC,
"Art. 165, FC.
"/d
6 ‘Art. 54, in relation io Art. 165, FC.
6 De Santos v. Angeles, 251 SCRA 206 (1995).
J9JC9B0M
R52M9UH7

husband or that of a donor, the child is legitimate if: (i) both the
husband and the wife authorized or ratified such insemination in
a written instrument; (ii) such written instrument is executed and
signed by them before the birth of the child;676 and (iii) it is the
wife who bore in her womb and delivered the child. The Family
Code provision on artificial insemination does not authorize the
use of a surrogate mother, (f) Surrogate mother: Our law does
not recognize the validity of a surrogate mother contract, which
is defined as any agreement in which a woman agrees to conceive
or carry a child for another individual or a couple, either free of
charge or for a consideration. In this jurisdiction, such agreement
is contrary to law, morals, and public policy. A child bom by
the surrogate mother is considered an illegitimate child of the
surrogate mother, if the latter is not married.
16.2 Presumption of Legitimacy: (a) Statement of presumption:
Under Article 164 of the FC, a child conceived or bom by the
wife during a valid marriage is presumed to be legitimate,677
meaning, presumed a child also of the husband. Hence, if the
spouses are merely separated in fact, the child of the wife with
the paramour is presumed to be a legitimate child of the husband
and the wife.676 If the wife contracted a bigamous marriage and
had a child in the subsequent bigamous marriage, said child is
presumed to be a legitimate child of the valid prior marriage.6” (b)
Only husband can impugn child’s legitimacy: While the husband
is alive, impugning the legitimacy of the child is his strictly
personal right for the simple reason that he is the one directly
confronted with the scandal and ridicule which the infidelity of
his wife produces, and he should be the one to decide whether
to conceal that infidelity or expose it in view of the moral and
economic interest involved.660 Upon his death, his heirs acquire
the right to impugn the child’s legitimacy in the following
situations: (1) if the husband should die before the expiration
of the period for bringing his action; (2) if he should die after
the filing of the complaint, without having desisted therefrom;
"‘Art. 164, par. 2, FC.

677SSS v. Aguas, 483 SCRA 383 (2006); Concepcion V. CA, 468 SCRA 438 (2005); Liyao,
Jr. v. Tanhoti-Liyao, 378 SCRA 563 (2002).
‘“Liyao, Jr. v. Tanhoti-Liyao, 378 SCRA 563 (2002).
"“Concepcion v. CA, 468 SCRA 438 (2005).
““Liyao, Jr. v. Tanhoti-Liyao, supra, and SSS v. Aguas, 483 SCRA 383 (2006).
J9JC9B0M
R52M9UH7
or (3) if the child was bom after the death of the husband.651 As
a consequence of this rule, the child himself cannot choose his
own filiation. If the husband, presumed to be the father, does
not impugn the legitimacy of the child, then the status of the
child is fixed, and the latter cannot choose to be the child of his
mother’s alleged paramour.682 In such a situation, the child cannot
successfully maintain an action to claim illegitimate filiation
against the mother’s alleged paramour. Neither may the mother’s
alleged paramour recognize or admit his paternity over the child,
for such recognition of paternity may not be given legal effect.
Both situations are not allowed under the law for two obvious
reasons: (i) those are tantamount to a collateral attack upon the
child’s legitimacy which is not allow'ed because the legitimacy of
the child can be impugned only in a direct action brought for that
purpose, by the proper parties, and within the period limited by
law;“! and (ii) they are not the proper party to question the child’s
legitimacy because impugning the legitimacy of the child is a
strictly a personal right of the husband, or in exceptional cases,
his heirs.684 (c) Mother cannot imnuen child’s legitimacy: The
presumption of legitimacy will not be affected even if the mother
may have declared against the child’s legitimacy or may have
been sentenced as an adulteress.685 The prohibition applies only
to a situation where the wife denies the paternity of the husband.
Article 167 does not apply to a situation where a child is alleged
not to be the child of nature or biological child of the couple, (d)
Prescrintive neriod of action to impugn legitimacy: (1) One year
from knowledge of birth or recording of such birth in the civil
register, if the husband, or in exceptional cases, any of his heirs,
resides in the city or municipality where birth took place or was
recorded; (2) Two years, if the husband or, in his default, all of his
heirs do not reside at the place of birth or where it was recorded,
but all are not residing outside the Philippines; or (3) Three years,
if the husband or, in his default, all of his heirs reside abroad.6"6
Upon the expiration of the periods set forth in Article 170, and
in proper cases Article 171, of the Family Code, the action to
68lArt. 171, FC.

M!Liyao, Jr. v. Tanhoti-Liyao, supra.
“’Tison v. CA, 276 SCRA 582 (1997).
6MLiyao, Jr. v. Tanhoti-Liyao, supra.
“Art. 167, FC.
“Art. 170, FC.
J9JC9B0M
R52M9UH7

impugn the legitimacy of a child would no longer be legally

feasible and the status conferred by the presumption becomes
fixed and unassailable?” However, the foregoing prescriptive
period will only apply if the action is to impugn legitimacy—
the child was the undisputed offspring of the mother but the
husband denies paternity. If it is asserted that the child is not the
child at all of the spouses, then Articles 170 and 171 of the FC
do not apply.™ (e) Grounds to impugn legitimacy: (1) Physical
impossibility of sexual intercourse: The physical impossibility
for the husband to have sexual intercourse with the wife must
have happened during the period of the child’s conception—
which is the first 120 days of the 300 days immediately preceding
the birth of the child—due to the following reasons: (i) physical
incapacity to have sexual intercourse with the wife, or impotency
(but not sterility);'’89 (ii) they were living separately and sexual
intercourse was impossible;690 or (iii) serious illness of husband
which absolutely prevented sexual intercourse.6’1 (2) Biological
or scientific reasons: Showing that the husband is not the father,
including: (i) result of blood testing, which is conclusive on non
paternity;692 and (ii) result of DNA test, which may now be used
to establish paternity or non-patemity.691 (3) Ground in artificial
insemination: That written authorization or ratification of either
parent was obtained thru mistake, fraud, violence, intimidation,
or undue influence.61*1 (f) Legitimacy not subject to collateral
attack: The issue of legitimacy cannot be attacked collaterally.6”
The legitimacy of the child can be impugned only in a direct
action brought for that purpose, by the proper parties, and within
the period limited by law.696 Hence: (1) the issue of legitimacy
“’SSS v. Aguas, 483 SCRA 383 (2006), citing De Jesus v. Estate of Juan G. Dizon, 366
SCRA 499 (2001). See also Tison v. CA, 276 SCRA 582 (1997).
““Labngala v. Santiago, 371 SCRA 360 (2001); Babiera v. Catotal, 333 SCRA 487 (2000);
Benitez-Hadua v. CA, 229 SCRA 468 (1994).
“’Art. 166(l)(a), FC.
'"'Art. 166(!)(b), FC.
"'Art. 166( l)(c), FC.
w2Jao v. CA, 152 SCRA 359 (1987).
w,Tijing v. CA, 354 SCRA 17 (2001);Tecson v. Commission on Elections, 424 SCRA 277;
Agustin v. CA, 460 SCRA 315 (2005).
'"‘Art. 166(3), FC.
M3Tison v. CA. 276 SCR A 582 (1997).
Braza v. City Civil Registrar of Himamaylan City, Negros Occidental, 607 SCRA
638(2009).
J9JC9B0M
R52M9UH7
cannot be properly controverted in an action for reconveyance;6”

(2) nor in an action for partition with inventory and accounting;658
(3) nor in a Petition for Correction of Entries under Rule 108.6”
(g) Effect of termination of marriage and remarriage of mother:
If the previous marriage is terminated and the mother contracted
another marriage within 300 days after the termination of
the marriage, and a child is bom within 300 days after the
termination of the previous marriage, the following are the rules
in determining the father of the child: (1) the first husband is
considered the father if the child is bom before 180 days after
the solemnization of the second marriage and within 300 days
after the termination of previous marriage;™ or (2) the second
husband is considered the father if the child is bom after 180 days
following the celebration of the second marriage, even if bom
within the 300 days after the termination of former marriage.701
O’) Effect if child bom after 300 days: If a child is bom after 300
days following the termination of the marriage, his legitimacy or
illegitimacy shall be proved by whoever alleges such legitimacy
or illegitimacy.™
16-3 Action to Prove l egitimate or Illegitimate Filiation: (a) Not
sub|ect to agreement: (1) Rule: Public policy demands that there
be no compromise on the status and filiation of a child.70’ Paternity
or filiation is a relationship that must be judicially established.™
It cannot be left to the will or agreement of the parties.’05 (2)
Prohibited compmmk,.- Article 2035(1) of the NCC prohibits
a compromise agreement upon the civil status of persons, (b)
Action to claim filiation- (1) Legitimate filiation: It is an action
filed by a child to prove that he or she is a legitimate child of a
certain couple who are validly married. An example is the case
w,De Jesus v. Estate of Decedent Juan Gamboa Dizon, 366 SCRA 499 (2001).
"’Miller v. Miller, G.R. No. 200344, August 28,2019 and Braza v. City Civil Registrar of
Himamaylan City, Negros Occidental, 607 SCRA 638 (2009).
’“>/</.
mld.
mAn. 169, FC.
™JUy v. Chua, 600 SCRA 806 (2009), citing Concepcion v. C A, 468 SCRA 438 (2005) and
Baluyut v. Baluyut, 186 SCRA 506 (1990).
’“De Asis v. CA, 303 SCRA 176,183 (1999).
’“Rivero v. CA, 458 SCRA 714, 734-735 (2005).
J9JC9B0M
R52M9UH7

of Aguilar v. Siasat,m where the child was able to prove his

legitimate filiation with a certain couple using a public document
—the SSS Form E-l of his father acknowledging his filiation
with the child. (2) Illegitimate filiation: It is an action by a child
to prove that he or she is a biological child of the alleged parent,
although conceived and bom outside of wedlock. Ordinarily, the
action is to prove paternity, but it may also be an action to prove
maternity. An example is the case of Ara v. Pizarro,'101 where two
children claimed to be illegitimate children of a certain Josefa
A. Ara. However, the Court ruled that since Josefa Ara had
already died, both were proscribed from proving their filiation
under the second paragraph of Article 172 of the Family Code,
(c) Same manner of proving: (1) Rule: Illegitimate children may
establish their illegitimate filiation in the same way and on the
same evidence as legitimate children.708 (2) Prescriptive period:
Whether the action is to prove legitimate or illegitimate filiation,
the action may be brought by the child during his or her lifetime.
However, the action is transmitted to the heirs of the child in the
following cases: (i) when the child dies during minority; or (ii)
when the child dies in a state of insanity. In these two cases, the
heirs shall have a period of five years within which to institute the
action.70’ (3) When action allowed after death of alleged narent/s:
If the action is to claim legitimate filiation, the action may be
brought by the child during his lifetime and even after the death
of the alleged parents, whether the action is based on the first or
second paragraph of Article 172 of the FC. Thus, there is only
one limitation: the lifetime of the child. On the other hand, if the
action is to prove illegitimate filiation based on the first paragraph
of Article 172, the action may be brought by the child during his
lifetime and even after the death of the alleged parents. However,
if the action is based upon open and continuous possession of the
status of an illegitimate child, or any other means allowed by the
rules or special laws, it may only be brought during the lifetime
of the alleged parent;710 otherwise, the action is already barred
by the death of the alleged parent.7" In this situation, therefore,
7OO748 SCRA 555 (2015).

70,817 SCRA 518 (2017).
’““Art. 175, 1“ par., FC.
709Arts. 173, par. 1 and 175, pars. 1 and 2, FC.
7l0Guy v. CA, 502 SCRA 151 (2006). Sn-Art. 175, par. 2, NCC.
’"Uyguangco v. CA, 178 SCRA 684 (1989) and Ara v. Pizarro, supra.
J9JC9B0M
R52M9UH7
the action to establish illegitimate filiation has a dual limitation:

the lifetime of the child and the lifetime of the putative parent.
However, if the action for support was filed while the putative
parent was still alive, it is not barred under paragraph 2 of
Article 172 of the Family Code. It was held that the death of the
putative father is not a bar to the action commenced during his
lifetime by one claiming to be his illegitimate child.’12 The rule
on substitution of parties provided in Section 16, Rule 3 of the
2020 Revised Rules of Civil Procedure, thus applies.
16.4 Proof of Filiation: (A) Voluntary admission of filiation: (a)
Record of birth appearing in civil registry or final judgment: (1)
Importance of birth certificate- A birth certificate is a formidable
piece of evidence prescribed by both the Civil Code and Article
172 ofthe Family Code for purposes of recognition and filiation.713
Being a public document, a birth certificate offers prima facie
evidence of filiation714 and a high degree of proof is needed to
overthrow the presumption of truth contained in such public
document.713 (2) Validity of birth certificate: Under Section 5 of
Act No. 3753 (the Civil Registry Law), in the registration of the
birth of a legitimate child the law allows the birth certificate to be
signed by either parent. In the registration of an illegitimate child,
it is mandatory that the mother of an illegitimate child signs the
birth certificate of her child in all cases, irrespective of whether
the father recognizes the child as his or not.’,c If it is only the
father who registered the birth of an illegitimate child without the
consent of the mother, the birth certificate is void.717 (3) When
considered competent evidence: It is the rule that if the
(illegitimate) father did not sign in the birth certificate, the
placing of his name by the mother, doctor, register, or other
person is incompetent evidence of paternity’1* and the Local Civil
Registrar is devoid of authority to record the paternity of an
’’’Salas v. Matusalcm, 705 SCRA 560 (2013), ciling Mendoza V. CA, 278 Phil. 687, 694
(1991).
’’’Solinap v. Locsin, Jr., 371 SCRA711 (2001).
”4Sayson v. CA, 205 SCRA 321,328 (1992).
,IJHeirs of Pedro Cabais v. CA, 316 SCRA 338; ciling People v. Fabro, 277 SCRA 19, 37.
,l6Barcelole V. Republic, 834 SCRA 564 (2017), ciling Calimag v. Heirs of Macapaz, 791
SCRA 620 (2016).
’”/</.
’"Roces v. Local Civil Registrar, 102 Phil. 1050 (1958) and Berciles v. GS1S, 128 SCRA
53 (1984).
J9JC9B0M
R52M9UH7

illegitimate child upon the information of such third person.71’

The foregoing rule does not, however, apply when there is a
showing that the putative father had a hand in the preparation of
the birth certificate,720 as when he was the one who went to the
Local Civil Registry and gave all the data about his child’s
birth,721 or who caused the registration the child’s birth
certificate,722 or who supplied the information himself about the
child’s birth, including his paternity.722 However, a delayed
registration of birth, made after the death of the putative parent,
is tenuous proof of filiation because it is analogous to cases where
a putative father’s name is written on a certificate of live birth of
an illegitimate child, without any showing that the putative father
participated in preparing the certificate.724 But when the birth
certificate is signed by the father, the same is competent evidence
of paternity725 and there is no further need, in fact, to file any action
for acknowledgment because said mode is by itself a consummated
act.726 In Zoleta-San Agustin v. Sales™ where the illegitimate
father was no longer capable of writing his name as he was
already blind and bedridden at the time he affixed his thumbmark
to notarized documents of admission of filiation, the Court ruled
that a thumbmark is considered a valid mode of signature, (b)
Public instrument of admission of filiation: The public document
contemplated in Article 172 of the Family Code refers to the
written admission of filiation embodied in a public document
purposely executed as an admission of filiation and not for some
other purpose,72’ and the admission must be made personally by
the parent himself or herself, not by any brother, sister, or
7l’Jison v. CA, 286 SCRA 495 (1998), citing Fernandez v. CA, 230 SCRA 130, 136-137
(1994), Roces v. Local Civil Registrar, 102 Phil. 1050 (1958). See also Cabatania v. CA, 441
SCRA 96 (2004); Puno v. Puno Enterprises, Inc., 599 SCRA 585 (2009); Perla v. Baring. 685
SCRA 101 (2012); Salas v. Matusalem, 705 SCRA 560 (2013).
"“Castro v. CA, 173 SCRA 656 (1989); llano v. CA, 230 SCRA 242 (1994) and Arado v.
Alcoran, 762 SCRA 37 (2015).
72lCastro v. CA, supra.
722Arado v. Alcoran, supra.
723llano v. CA, supra.
724Ara v. Pizarro, 817 SCRA 518 (2017).
725SSS v. Aguas, 483 SCRA 383 (2006).
726Montefalcon v. Vasquez, 554 SCRA 513 (2008).
"’SOI SCRA 683 (2016).
"“Fernandez v. Fernandez, 363 SCRA 811 (2001).
J9JC9B0M
R52M9UH7
relative;719 otherwise, such recognition is ineffectual.™ An

example of which is the admission of filiation made in the SSS
Form E-l.”1 A notarial agreement to support a child whose
filiation is admitted by the putative father is acceptable evidence
to prove paternity.”2 The notarial agreement must, however, be
accompanied by the putative father’s admission of filiation to be
an acceptable evidence of filiation. Hence, a mere undertaking to
provide financial support without admission of filiation is not
acceptable evidence to prove filiation.”3 Filiation may likewise
be established by notarial wills as well as holographic wills,
except that they no longer need to be probated or to be strictly in
conformity with the formalities thereof for purposes of
establishing filiation.™ (c) Private handwritten instrument of
admission of filiation: (1) Requisites: (i) it must be in the parent’s
own handwriting;”3 (ii) there must be a statement of admission of
paternity or filiation; and (iii) it must be signed by the parent
concerned.”6 (2) Effect of absence of signature: In the case of
Dela Cruz v. Gracia,m the Court adopted the following rules
respecting the requirement of affixing the signature of the
acknowledging parent in any private handwritten instrument
wherein an admission of filiation of a legitimate or illegitimate
child is made: (i) where the private handwritten instrument is the
lone piece of evidence submitted to prove filiation, there should
be strict compliance with the requirement that the same must be
signed by the acknowledging parent; and (ii) where the private
handwritten instrument is accompanied by other relevant and
competent evidence, it suffices that the claim of filiation therein
be shown to have been made and handwritten by the
acknowledging parent as it is merely corroborative of such other
evidence. (3) Effect of admission if child is presumed legitimate
child of someone else: If the child is presumed to be a legitimate
mCenido v. Apacionado, 318 SCRA 688 (1999).

""Rivero v. CA, 458 SCRA 714,737; ciling Cenido v. Apacionado, supra.
"'Aguilar v. Siasat 748 SCRA 555 (2015).
"’Marcaydav. Naz, 210 Phil. 386 (1983), died in Herrera V. Alba, 460 SCRA 197 (2005).
"’Nepomuceno v. Lopez, 616 SCRA 145 (2010).
™Polenciano v. Reynoso, 401 SCRA 391 (2003); citing Vitug, Compendium ofCivil Law
and Jurisprudence, 1993 revised ed., p. 230.
"’Art 172, par. 1(2), FC.
"‘Art. 172, par. 1, No. (2), FC; Salas v. Matusalem, 705 SCRA 560 (2013); Nepomuceno
v. Lopez, 616 SCRA 145 (2010).
”’594 SCRA 648 (2009); reileraledin Aguilar v. Siasat 748 SCRA 555 (2015).
J9JC9B0M
R52M9UH7

child by applying the provisions of Article 164 of the FC, any

admission of paternity by the wife’s paramour to prove
illegitimate filiation may not be given effect. It is only when the
legitimacy of a child has been successfully impugned that the
paternity of the husband can be rejected.™ (B) Compulsory
Recognition of Filiation: (a) Open and continuous possession of
status: (1) Concept: It means the enjoyment by the child of the
position and privileges usually attached to the status of a
legitimate or an illegitimate child, as the case may be.73’ (2)
Requisites: To prove open and continuous possession of the
status of an illegitimate child, there must be evidence of the
manifestation of the permanent intention of the supposed father
to consider the child as his, by continuous and clear manifestations
of parental affection and care, which cannot be attributed to pure
charity. Such acts must be of such a nature that they reveal not
only the conviction of paternity, but also the apparent desire to
have and treat the child as such in all relations in society and in
life, not accidentally, but continuously.740 By “continuous” is
meant uninterrupted and consistent, but does not require any
particular length of time.741 In sum, in order to prove open and
continuous possession of the status of an illegitimate child: (i)
there must be evidence of the permanent intention of the supposed
father to consider the child as his and such recognition has been
consistently shown and manifested throughout the years publicly,
spontaneously, continuously, and in an uninterrupted manner—
and not merely shown by sporadic and isolated actions; and (ii)
the proven actions must show clear manifestations of parental
affection and care and not attributable to pure charity, (b) Other
means allowed bv law or bv rules of court: (1) Result of DNA
test: Competent evidence to prove filiation and paternity.742 In
Herrera v. Alba,™ the Court held that an order directing the
alleged father to undergo DNA paternity testing does not violate
,)8De Jesus v. Estate of Decedent Juan Gamboa Dizon, 366 SCRA 499 (2001); see also
Liyao, Jr. v. Tanhoti-Liyao, 378 SCRA 563 (2002).
7wFemandez v. Fernandez, 363 SCRA 811 (2001).
740Jison v. CA, 286 SCRA 495, 531 (1998); citing Arturo M. Tolentino, I Civil Code ofthe
Philippines: Commentaries and Jurisprudence 602-605 (1985); and Mendoza v. Court ofAppeals,
201 SCRA 675, 683 (1991) and Perla v. Baring, 685 SCRA 101 (2012).
™ld., at p. 531; citing Sempio-Diy, at 245-246.
742Tijing v. CA, 354 SCRA 17 (2001); Tecson v. Commission on Elections, 424 SCRA 277;
Agustin v. CA, 460 SCRA 315 (2005).
743460 SCRA 197 (2005); See also Agustin v. CA, 460 SCRA 315 (2005).
J9JC9B0M
R52M9UH7
his right against self-incrimination because such right applies

only to testimonial evidence. The Court likewise ruled that our
Rules on Evidence do not pose any legal obstacle to the
admissibility of DNA analysis as evidence. In Estate of Rogelio
Ong v. Diaz,'u it was held that the death of the claimed father
does not ipso facto negate the application of DNA testing for as
long as there exists appropriate biological samples of his DNA.
In Lucas v. Lucas,w however, the Court held that to warrant the
issuance of a DNA testing order, there must be a show cause
hearing wherein the applicant must first present sufficient
evidence to establish aprimafacie case or a reasonable possibility
of paternity or good cause for the holding of the test. The Court
also stressed that the issuance of a DNA testing order remains
discretionary upon the court. The court may, for example,
consider whether there is absolute necessity for the DNA testing.
If there is already preponderance of evidence to establish
paternity and the DNA test result would only be corroborative,
the court may, in its discretion, disallow DNA testing. (2) Result
of blood test: Not conclusive for the purpose of establishing
paternity. Hence, not competent evidence.746 (3) Physical
resemblance: The extremely subjective test of physical
resemblance or similarity is not competent evidence to prove
paternity and filiation.’" (4) Other proof: In the absence of the
record of birth and admission of legitimate filiation, Article 172
of the Family Code provides that filiation shall be proved by any
other means allowed by the Rules of Court and special laws.
Such other proof of one’s filiation may be a baptismal certificate,
a judicial admission, a family Bible in which his name has been
entered, common reputation respecting his pedigree, admission
by silence, the testimonies of witnesses, and other kinds of proof
admissible under Rule 130 of the Rules of Court.’" The totality
of evidence, however, should be sufficient to establish filiation
because a high standard of proof is required to establish paternity
’"540 SCR A 480 (2007).

’"650 SCRA 667 (2011).
’"Jao v. CA, 152 SCRA 359 (1987).
’"Cabatania v. CA, 441 SCRA 96 (2004).
’"Heirs of Paula C. Fabillar v. Pallet, G.R. No. 231459, Jan. 21, 2019. See also Salas V.
Matusalcm, 705 SCRA 560 (2013), Wring Golardo v. Buling, 678 SCRA 436, 443 (2012); Craz
v. Cristobal, 529 Phil. 695, 710-711 (2006); Heirs of Ignacio Conti v. CA, 360 Phil. 536, 548-549
(1998) and Trinidad V. Court of Appeals, 352 Phil. 12, 32-33 (1998); Uyguangco v. CA, 258-A
Phil. 467,472-473 (1989).
J9JC9B0M
R52M9UH7

and filiation. An order for recognition must be issued only if

paternity or filiation is established by clear and convincing
evidence.74’ In Makati Shangri-la Hotel and Resort, Inc. v.
Harper,™ the Court clarified that the case of Heirs of Ignacio
Conti v. Court ofAppeals15' did not treat a baptismal certificate,
standing alone, as sufficient to prove filiation; on the contrary,
Conti expressly held that a baptismal certificate had evidentiary
value to prove filiation if considered alongside other evidence of
filiation. As such, a baptismal certificate alone is not sufficient to
resolve a disputed filiation.
16.5 Rights of Legitimate and Illegitimate Children: (A) Right to
Use Surname: (a) Legitimate children: Have the right to use
the surnames of the father and mother, in conformity with the
provisions of the Civil Code on surnames.752 But they shall
principally use the surname of the father.’” However, for a valid
reason, the child may be allowed to change his or surname to that
of his or her mother because the word “principally” in the codal
provision is not equivalent to “exclusively” so that there is no
legal obstacle if a legitimate or legitimated child should choose
to use the surname of his or her mother to which it is equally
entitled.’” But he or she may not be allowed to replace the
father’s surname with that of the stepfather’s surname because
such change of name may result into confusion with respect to
the child’s paternity.’55 (b) Illegitimate children: (1) Rule: In the
absence of recognition by the father, illegitimate children are
required to use the surname of their mother.756 The use of the
word “shall” in Article 176 of the FC underscores its mandatory
character. The discretion on the part of the illegitimate child to use
the surname of the father is conditional upon proof of compliance
with R.A. No. 9255,757 the law amending Article 176 of the Family
Code. Pursuant to Article 176, as amended, an illegitimate child
acquires the right to use the father’s surname if he is voluntarily
,5O679 SCRA 444 (2012).

”'300 SCRA 345 (1998).
’“Art. 174, No. (1), FC.
’“Art. 364, NCC.
’“Alton v. Republic, 97 SCRA 858 (1980) and Oshita v. Republic, 125 Phil. 1098 (1967).
’“Republic v. CA, 300 SCRA 138 (1998); Moore v. Republic, 8 SCRA 282 (1963) and
Padilla v. Republic, 113 SCRA 789 (1982).
’“Art. 176, FC, as amended by R.A. No. 9255.
’“Barcelote v. Republic, 834 SCRA 564 (2017).
J9JC9B0M
R52M9UH7
recognized by the father in the following situations: (i) If his/

her filiation has been expressly recognized by the father through
the record of birth appearing in the civil register; or (ii) When an
admission of paternity is made by the father in a public document
or private handwritten instrument. (2) Use of father s surname
discretionary: In Grande v. Antonio,™ the Court clarified that
Article 176 of the Family Code, as amended by R.A. No. 9255,
gives illegitimate children the right to decide if they want to use
the surname of their father or not. It is not the father or the mother
who is granted by law the right to dictate the surname of their
illegitimate children. The use of the word “may” in the provision
readily shows that an acknowledged illegitimate child is under no
compulsion to use the surname of his illegitimate father. Hence,
a father cannot compel the use of his surname by his illegitimate
children upon his recognition of their filiation.75’ (3) Effect if no
signature on private handwritten instrument: If the admission
of paternity is made in a private handwritten instrument which
was not signed by the father, the following rules should be
applied according to Dela Cruz v. Graciailu> (i) where the pri vate
handwritten instrument is the lone piece of evidence submitte
to prove filiation, there should be strict compliance with the
requirement that the same must be signed by the acknowledging
parent; otherwise, such instrument cannot authorize the child to
use the father’s surname; and (ii) where the private handwritten
instrument is accompanied by other relevant and competent
evidence, it suffices that the claim of filiation therein be shown
to have been made and handwritten by the acknowledging parent
as it is merely corroborative of such other evidence, in whic i
case, such instrument now authorizes the child to use the father s
surname. (4) Use of stepfather’s surname: While a legitimate
child was not allowed by the Court to use the surname of the
stepfather, an illegitimate child, on the other hand, was allowed
to use the surname of the stepfather because the same would
eliminate the stigma of illegitimacy which the child would carry
if he or she would continue to use the surname of the illegitimate
father.761 (B) Right to Receive Support: (a) l.egitimate children.
Support of legitimate children is a liability of the absolute
,5,716 SCRA 698 (2014).

mId.
’“594 SCRA 648 (2009).
74lCalderon v. Republic, 19 SCRA 721 (1967) and Llancla v. Agrava, 57 SCRA 29 (1974).
J9JC9B0M
R52M9UH7

The Family Code of lhe Philippines
community ofproperty762 or of the conjugal partnership ofgains.76’

If the community property761 or the conjugal partnership765 is
insufficient to pay for such support, the spouses shall be liable
solidarily liable for the same with their separate properties,
(b) Illegitimate children: (1) Against whose property may
payment be charged: Support of illegitimate children of either
spouse is the liability of the exclusive or separate property of
the illegitimate parent concerned.766 However, in case of absence
or insufficiency of exclusive property of the parent concerned,
the same shall be advanced by the absolute community.767 In
conjugal partnership, the support of illegitimate children can be
charged over the assets of the conjugal partnership in case of
absence or insufficiency of property of the illegitimate parent
only if the other responsibilities of the conjugal partnership
mentioned in Article 121 of the Family Code have already been
covered.768 (2) Filiation must first be duly established: Filiation
must be established for a child to claim support from a putative
father. When filiation is beyond question, support follows
as a matter of obligation. To establish filiation, an action for
compulsory recognition may be filed against the putative father
ahead of an action for support. In the alternative, an action for
support may be directly filed, where the matter of filiation shall
be integrated and resolved.76’ (C) Successional Rights: (a) Rule:
Both are compulsory and legal heirs of their parents,™ except
that the legitime of an illegitimate child shall consist of one-
half ('/2) of the legitime of a legitimate child771 and the intestate
share of an illegitimate child shall be one-half (!6) of the share
of a legitimate child.772 (b) Filiation must be duly established:
An illegitimate child, to be entitled to support and successional
762Art. 94(1), FC.

’“’Art. 121(1), FC.
’“Art. 94, last par., FC.
,61Art. 121, last par., FC.
766Art. 197, FC.
767Art. 94(9), FC.
’“Art. 122, par. 3, FC; Dewara v. Lamela, 647 SCRA 483 (2011) and Pana v. Heirs of Jose
Juanite, Sr., 687 SCRA 414 (2012).
’’"Abella v. Caballero, 836 SCRA 453 (2017), citing Dolina v. Vallecera, 638 SCRA 707
(2010); and Agustin v. CA.460 SCRA 315 (2005).
’’’Art. 887( 1), NCC; Art. 176, FC; Arts. 979 and 988. NCC.
771 Art. 176, FC, as amended.
772Art. 983, in relation to Art. 895, NCC, as amended by Art. 176, FC.
J9JC9B0M
R52M9UH7
IM PR 1.11,VK RI.VII.WI R IN civil. LAW
rights from the putative or presumed parent, must prove his

filiation to the latter."' However, an action to compel recognition
may also be integrated with an action to claim inheritance.™ (D)
Ritrht to Citizenship: (a) Legitimate Children: On the matter of
citizenship, it is a settled rule that only legitimate children follow
the citizenship of the father.’’5 Under Article IV, Section 1(4) of
the 1935 Constitution, the citizenship of a legitimate child bom
of a Filipino mother and an alien father followed the citizenship
of the father, unless, upon reaching the age of majority, the child
elected Philippine citizenship. The right to elect Philippine
citizenship was recognized in the 1973 Constitution when it
provided that “those who elect Philippine citizenship pursuant to
the provisions of the Constitution of nineteen hundred and thirty-
five are citizens of the Philippines.” Likewise, this recognition by
the 1973 Constitution was carried over to the 1987 Constitution
which states that “those bom before January 17,1973 of Filipino
mothers, who elect Philippine citizenship upon reaching the age
of majority are Philippine citizens.’™ (b) Illegitimate children:
Only legitimate children follow the citizenship of the father;
illegitimate children are under the parental authority of the
mother and follow her nationality. Moreover, it was likewise
ruled that an illegitimate child of a Filipina need not perform any
act to confer upon him all the rights and privileges attached to
citizens of the Philippines; he automatically becomes a citizen
himself.’"
16.6 Legitimation: (a) Concept and requisites: (1) Concept:
Legitimation is the process provided under our law where the
status of a child conceived and bom out of wedlock is improved,
by operation of law, from illegitimacy to that of legitimacy by the
mere subsequent marriage of the parents.”* (2) Requisites: (i) The
child is conceived and bom outside of wedlock;”’ (ii) At the time
of conception of the child, his/her parents were not disqualified
by any impediment to marry each other, or were so disqualified
only because either or both of them were below 18 years of age;’*"
’’’Paulino v. Paulino, 3 SCRA 730 (1961).

"‘Tayag v. CA, 209 SCRA 665 (1992) and Guy v. CA, 502 SCRA 151 (2006).
’"Republic v. Sagun, 666 SCRA 321 (2012) and Go, Sr. v. Ramos, 598 SCRA 266 (2009).
mld.
"’Go, Sr. v. Ramos, 598 SCRA 266 (2009).
"'Arts. 177, 178, and 179, FC.
"’Art. 177, FC.
’“Art. 177, as amended by R. A. No. 9858.
J9JC9B0M
R52M9UH7

(iii) After the birth of the child, his/her parents subsequently got
married;”1 and (iv) Such marriage is not void ah initio.’"'2 (b)
Effects of legitimation: (1) Child becomes legitimate: Prior to
the marriage of the parents, the status of the child is illegitimate.
Upon the celebration of the marriage between the child’s parents,
the status of the child is ipso jure raised to legitimacy and the
child becomes entitled to the same rights being enjoyed by a
legitimate child.78’ Note that legitimation takes place ipso jure
by the mere subsequent marriage of the parents without need of
any additional act on the part either of the parents or of the child.
(2) Effects retroactive: Upon the celebration of the marriage
between the child’s parents, the effects of legitimation shall
retroact to the time of the child’s birth.’*4 If the child dies prior
to the marriage of his/her parents, the subsequent marriage of
his/her parents shall nonetheless benefit his/her descendants.785
(c) Action to impugn legitimation: (1) Not subject to collateral
attack: In BBB v. AAA,7S6 the Court ruled that legitimation cannot
be attacked collaterally in the petition for issuance of protection
order. (2) Who may impugn: Only those who are prejudiced in
their rights as a result of the legitimation may impugn the same.78’
The rights referred to are successional rights. Hence, only those
whose successional rights are directly affected may impugn the
legitimation that took place. (3) Prescriptive period: Five years
from the time of death of either of the parents of the child,”8
from whom the plaintift’/petitioner is a compulsory or intestate
heir. (4) Grounds: For purposes of impugning the legitimation of
a child, the inquiry is limited to the issue of whether or not the
following requisites of legitimation were complied with: (i) the
child was conceived and born outside of wedlock; (ii) at the time
of the child’s conception, his/her parents were not disqualified by
any impediment to marry each other, or even if so disqualified,
the sole reason for disqualification was because either or both
of the parents were below 18 years of age at that time; (iii) the
’“'Art. 178. FC.

’“’M.
’“’Art. 179, FC.
784Art. 180, FC.
’"’Art. 181, FC.
’“750 SCRA 188 (2015).
’“’Art. 182, FC.
J9JC9B0M
R52M9UH7
parents of the child subsequently marry each other; and (iv) such
marriage is valid, or, at least, voidable. If the foregoing requisites
are not complied with, then legitimation does not take place.
17) Adoption
17.1 Adonlion in General: (a) Concept: Adoption is defined as
the process of making a child, whether related or not to the
adopter, possess in general, the rights accorded to a legitimate
child.’*’Ordinarily, it is a juridical act, a proceeding in rem,
which creates between two persons a relationship similar to
that which results from legitimate paternity and filiation.790
By way of exception and pursuant to R.A. No. 11222, or the
Simulated Birth Rectification Act, the law now allows the filing
of an administrative adoption upon compliance with certain
requirements, (b) Effect of absence of adoption decree or order
of adoption: In the absence of a judicial decree of adoption
(pursuant to Domestic Adoption Act) or order of adoption
(pursuant to R.A. No. 11222), a mere ward (ampori), without the
benefit of formal (judicial or administrative) adoption, is neither
a compulsory nor a legal heir.”1 Likewise, a simulation of birth,
which is the tampering of the civil registry to make it appear in
the birth records that a certain child was bom to a person who is
not his/her biological mother,”2 does not also produce the legal
effects of adoption, (c) Proceedings in rem: Adoption is in the
nature of proceedings in rem™ and the court does not acquire
jurisdiction over the case if the notice by publication does not
carry the true name of the child to be adopted.”1 Under the new
rules on domestic adoption, the registered name of the adoptee
in the birth certificate and the names by which the adoptee has
been known are required to be stated in the caption of the petition
for adoption.’” (d) Domestic and inter-country adoption: (I)
7fc9In the Matter of the Adoption of Stephanie Nalhy Astorga Garcia, 454 SCR A 541, 551
(2005); citing Paras, Civil Code of the Philippines Annotated, Vol. I, Fifteenth Edition, 2002,
p. 685.
7vild., ciling Pineda, The Family Code ofthe Philippines Annotated, 1989 Edition, pp. 272-
273, ciling 4 Valverde, 473.
’’'Manuel v. Ferrer, 247 SCRA 476 (1995) and Delgado Vda. de Dela Rosa v. Heirs of
Marciana Rustia Vda. de Damian, 480 SCRA 334 (2006).
’’’See. 3(j), R.A. No. 8552, The Domestic Adoption Act (DAA).
’’’Ellis v. Republic, 7 SCRA 962 (1963).
”4Yu Seco v. Republic, 108 Phil. 807 (1960).
’’’Sec. 12(1), Rule on Adoption.
J9JC9B0M
R52M9UH7

Domestic Adoption (R.A. No. 8552): Where the entire adoption

process beginning from the filing of the petition up to the issuance
of the adoption decree takes place in the Philippines. Domestic
adoption applies: (i) if the adopter is a Filipino citizen, he must
be a permanent resident of the Philippines; or (ii) if the adopter
is a foreigner, he must have been a resident of the Philippines for
at least three continuous years prior to the filing of the petition
for adoption and such residency is maintained until the adoption
decree is entered;”6 OR such residency requirement may be
waived in the following situations: (i) the adopter is a former
Filipino citizen who seeks to adopt a relative within the fourth
degree of consanguinity or affinity; (ii) the adopter seeks to adopt
the legitimate son/daughter of his/her Filipino spouse; or (iii) the
adopter is married to a Filipino citizen and seeks to adopt jointly
with his/her spouse a relative of the latter within the fourth
degree of consanguinity or affinity.7” (2) Inter-Country Adoption
(R.A. No. 8043): Where the petition for adoption is filed, the
supervised custody is undertaken and the decree of adoption is
issued outside of the Philippines. Inter-country adoption applies:
(i) if the adopter is a Filipino citizen, he must be permanently
residing abroad; or (ii) if the adopter is a foreigner, he does not
satisfy the residency requirement under the Domestic Adoption
Act but is qualified to adopt under the Inter-Country Adoption
Act. (e) Rules of preference in adoption: (1) Preference in favor
of extended family: If there is a real need for adoption, it is the
policy of the State to prefer adoption by the child’s extended
family over adoption by an unrelated person;™ (2) Preference
in favor of domestic adoption: Inter-country adoption shall be
resorted to only when domestic adoption of the child is not
available7” and inter-country adoption is in the best interest of
the child.™
17.2 Who May Be Adopted: (a) Child legally available for adoption:
The child must have been declared a Child Legally Available tor
Adoption.*01 The child may either be a person below 18 years of
age or a person over 18 years of age but is unable to fully take care
,96Sec. 7(b), DAA.

”’M.
™Sec. 2(a), DAA.
7”Sec. 2(c)(vi), DAA.
*°°Sec. 7, R.A. No. 8043, The Inter-Country Adoption Act (ICAA).
“'Sec. 2(5), R.A. No. 9523. Note that R.A. No. 9523 repeals Sees. 2(c)(iii), 3(b)(e) and
8(a) of R.A. No. 8552 (DAA).
J9JC9B0M
R52M9UH7
of himself/herself or protect himself/herself from abuse, neglect,

cruelty, exploitation, or discrimination because of physical or
mental disability or condition.801 The Certification Declaring a
Child Legally Available for Adoption (CDCLAA) applies only
to surrendered, abandoned, neglected, and dependent children as
mentioned in R.A. No. 9523.“ Any of the following adoption
proceedings in court does not require a Certification Declaring
a Child Legally Available for Adoption: (1) adoption of an
illegitimate child by any of his/her biological parent; (2) adoption
of a child by his/her step-parent; or (3) adoption of a child by a
relative within the fourth degree of consanguinity or affinity.“M
Under Section 8 of R.A. No. 9523, the certification that a child is
legally available for adoption shall be issued by the Department
of Social Welfare and Development (DSWD) in lieu of a judicial
order, thus making the entire process administrative in nature.
Note that under Section 8(a) of the DAA, the declaration that a
child is legally available for adoption can be had either judicially
or administratively. Section 8(a) was expressly repealed,
however, by R.A. No. 9523.“ Under the amendatory law, the
process of declaring a child legally available for adoption has
been made entirely administrative.“ The certification issued by
the DSWD, shall be, for all intents and purposes, the primary
evidence that the child is legally available in a domestic adoption
proceeding, as provided in R.A. No. 8552 (Domestic Adoption
Act) and in an inter-country adoption proceeding, as provided
in R.A. No. 8043 (Inter-Country Adoption Act).807 (b) Adoption
of relative: Our laws do not prohibit relatives, either by blood or
affinity, from adopting one another,such as: (1) adoption of the
legitimate son/daughter of one spouse by the other spouse;1"' (2)
the adoption of one’s own illegitimate child;810 or (3) the adoption
of a person consistently considered and treated by the adopter
as his or her own child since minority.8" In the adoption of the
“Sec. 2(2), R.A. 9523.

“Sec. 4, IRRofR.A. No. 9523.
mld.
K>See Sec. 11 (Repealing Clause), R.A. No. 9523.
“See Sec. 8, R.A. No. 9523.
mld.
“‘Santos, Jr. v. Republic, 21 SCRA 379 (1967).
“Sec. 8(b), DAA.
!,0Sec. 7, DAA.
‘"Sec. 8(d), DAA; Art. 187, No. (I), FC.
J9JC9B0M
R52M9UH7

foregoing child, the adoptee may even be a person of legal age.

(c) Who else may be adopted: (1) a child whose adoption has
been previously rescinded;812 or (2) a child whose biological or
adoptive parent(s) has died.813 In the latter case, the law requires
that no adoption proceedings shall be initiated within six months
from the time of death of said parent(s).814
17.3 Who May Adopt: (a) Age requirement: In domestic adoption,
adopter must be of legal age and at least 16 years older than
the adoptee; but the age gap may be waived if the adopter is the
biological parent of the adoptee or the adopter is the spouse of the
adoptee’s parent.815 In inter-country adoption, the adopter must
be at least 27 years of age at the time of the application and at
least 16 years older than the child to be adopted at the time of
application, unless the adopter is the parent by nature of the child
to be adopted or the adopter is the spouse of the parent by nature
of the child to be adopted.816 (b) Requirement of joint adoption bv
spouses: On the part of the spouses, they are required to jointly
adopt.817 In the case of In Re: Petition for Adoption of Michelle
P. Litn and Michael Jude P Lint,™ the Court had the occasion to
explain that the requirement of joint adoption by husband and
wife is mandatory. According to the Court, the use of the word
“shall” in Section 7 of the DAA means that joint adoption by the
husband and the wife is mandatory.81’ The Court also emphasized
that the requirement of joint adoption is still mandatory even if
the person to be adopted is already of legal age and already freed
from parental authority.820 (c) Exceptions to joint adoption: (1)
If one spouse seeks to adopt the legitimate son/daughter of the
other; (2) If one spouse seeks to adopt his/her own illegitimate
son/daughter, but the other spouse must give his/her consent;
and (3) If the spouses are legally separated from each other.821 In
the adoption of one’s own illegitimate child, the requirement of
812See. 8(e), DAA.

"’Sec. 8(f), DAA.
8IJSec. 8(1), DAA.
8l5Sec. 7(a), DAA.
8l6Sec. 9(a), ICAA.
8l,Sec. 7, par. 2, DAA and Sec. 9(b), ICAA.
8i“588 SCRA 98 (2009).
‘'"id.
mld.
82lSec. 7, par. 2, DAA.
J9JC9B0M
R52M9UH7
obtaining the consent of the other spouse is mandatory according

to the case of Castro v. Gregorio.02 According to the Court, in
all instances where it appears that a spouse attempts to adopt
a child out of wedlock, the other spouse and other legitimate
children must be personally notified through personal service
of summons and it is not enough that they be deemed notified
through constructive service; otherwise, the court does not
validly acquire jurisdiction over the proceedings and the decision
of the court is null and void.823
17.4 Requirement of Supervised Custody: (a) Domestic adoption:
The temporary protective custody of the prospective adopter(s)
is under the supervision of the court and shall last for a period
of at least six months, which may be reduced by the court motu
proprio or upon motion. If adopter is alien, the law mandatorily
requires completion of the six-month trial custody and may not
be reduced except if: (1) a former Filipino citizen seeks to adopt
a relative within the fourth degree of consanguinity or affinity;
(2) one seeks to adopt the legitimate son/daughter of his/her
Filipino spouse; or (3) one who is married to a Filipino citizen
and seeks to adopt jointly with his/her spouse a relative within
the fourth degree of consanguinity or affinity of the Filipino
spouse.824 Under the Foster Care Act of 2012 (R.A. No. 10165),
in case of the adoption of the foster child by the designated foster
parents, the trial custody period may be partially waived to the
extent of the period equivalent to the period in which the foster
child has been under the care of the foster parents; provided,
that a harmonious relationship exists between the foster child,
the foster parents, and, where applicable, the foster family.823
(b) Inter-Countrv adoption: The process, which shall last for
six months, takes place outside of the country and under the
supervision of the foreign adoption agency.826 If unsuccessful,
the Inter-Country Adoption Board (ICAB) shall look for another
prospective applicant. Repatriation of the child is to be resorted
to only as a last resort.82’ If successful, (ICAB) shall transmit a
822738SCRA 415 (2014).

mld.
“‘Sec. 15, Rule on Adoption.
“’Sec. 17, R.A.No. 10165 and Rule 18.1, Article VI, IRR of R.A. No. 10165.
“Sec. 42, Implementing Rules on ICAA.
“’Sec. 47, Implementing Rules on ICAA.
J9JC9B0M
R52M9UH7
BOOK I. — PERSONS & FAMILY RELATIONS HI

written consent for the adoption to be executed by the DSWD’28

and the applicant then files a petition for adoption in his/her
country.829
17.5 Simulated Birth Rectification Act (R.A. No. 11222): (a) Benefit
of law: (1) Exemption from liability: It exempts from criminal,
civil, and administrative liability those who simulated the birth
record of a child prior to the effectivity of R.A. No. 11222 and
those who cooperated in the execution of such simulation."”
(2) Conditions for exemption: (i) The simulation of birth was
made for the best interest of the child and that the child has
been consistently considered and treated by such person or
persons as her, his, or their own daughter or son; and (ii) That
a petition for adoption with an application for the rectification
of the simulated birth record is filed within 10 years from the
effectivity of R.A. No. 11222.“' (b) Administrative adoption:
(1) Requisites for administrative adoption: (i) the simulation of
birth was made for the best interest of the child; (ii) the child
has been consistently considered and treated by the person/s
who simulated the birth of such child as her, his, or their own
daughter or son; (iii) such person/s has or have filed a petition for
adoption with an application for the rectification of the simulated
birth record within 10 years from the effectivity of R.A. No.
11222;“’ (iv) a certificate declaring the child legally available
for adoption (CDCLAA) is issued by the DSWD in favor of
such child"’’ [Note: The CDCLAA is no longer required if the
adoptee is already an adult or a relative of the adopter within
the fourth degree of consanguinity or affinity.8”]; and (v) the
child has been living with such person/s for at least three years
before the effectivity of R.A. No. 11222.“’ If condition number
(v) is not met, the adoption must be done judicially. (2) Order of
adoption: The petition for administrative adoption is filed before
the DSWD and the "Order of Adoption” is issued by the DSWD
"•"Sec. 48, Implementing Rules on ICAA.

“’Sec. 49. Implementing Rules on ICAA.
"“Sec. 4. R.A. No. 11222.
"'Id.
"“See. 4, R.A. No. 11222.
“’Sec. 5, R.A. No. 11222.
“"Sec. 9, R.A. No. 11222.
“’Sec. 5. R.A. No. 11222.
J9JC9B0M
R52M9UH7
Secretary.554 The Order of Adoption issued in administrative

adoption shall have the same effect as that of a decree of adoption
issued pursuant to the Domestic Adoption Act and shall take
effect on the date the petition was filed with the Office of the
SWDO, even if the petitioner dies before its issuance.837
17.6 Effects of Domestic Adoption: (a) Severance of legal ties: (1)
Rule: Unlike in the Family Code where only the parental authority
of the biological parent over the adopted is terminated and
transferred in favor of the adopters,658 the Domestic Adoption Act
declares the severance of "all legal lies between the biological
parent(s) and the adoptee," including parental authority, and
their transfer in favor of the adopter(s), except in cases where the
biological parent is the spouse of the adopter.859 Thus, the parental
authority of the parents by nature over the adopted shall terminate
and the same shall be vested in the adopters, except if the adopter
is the spouse of the parent by nature of the adopted, in which
case, the parental authority over the adopted shall be exercised
jointly by both spouses.848 (2) Effect of death of adopters during
minority of adopted: However, when both the adopting parents
die during the time that the adopted is still aminor or incapacitated,
all legal ties that had been severed by the adoption decree between
the biological parents and the adopted are deemed automatically
restored.841 Considering that adoption is a personal relationship
and that there are no collateral relatives by adoption, there shall
be no one left to care for the minor adopted child if the adopting
parents have passed away, hence, the parental authority of the
biological parents (and other legal ties between them) should be
deemed automatically restored, applying by analogy the
provisions ofSection 20 of the DAA.842 (b) Legitimacy: (1) Rule:
The adoptee shall be considered the legitimate son/daughter of
the adopter(s) for all intents and purposes and as such is entitled
to all the rights and obligations provided by law to legitimate
sons/daughters bom to them without discrimination of any
“‘Sec. 1 LILA. No. 11222.

,5,W.
““Art. 189(2), FC.
“Sec. 16. DAA.
“Art. 189(2), FC.
“'Bartolonie v. SSS, 740 SCRA 78(2014), applying by analog)' Sec. 20, DAA.
“'-Id.
J9JC9B0M
R52M9UH7

kind.843 (2) Personal relationship: However, the relationship

established by the adoption is limited to the adopting parents and
does not extend to their other relatives, except as expressly
provided by law.844 Thus, the adopted child cannot be considered
as a relative of the descendants, ascendants, and collaterals of the
adopting parents, nor of the legitimate children which they may
have after the adoption except that the law imposes certain
impediments to marriage by reason of adoption.843 Neither are
the children of the adopted considered as descendants of the
adopter.846 (3) Retroactive effects of decree of adoption: (i) Rule:
The adoption decree "shall be effective as ofthe date the original
petition wasfiled" and that this rule "shall also apply in case the
petitionerfs) dies before the issuance ofthe decree ofadoption to
protect the interest of the adoptee. Hence, for purposes that
are beneficial to the interest of the adopted child, the latter
acquires the rights that are being enjoyed by legitimate children
as of the date of the filing of the petition for adoption and not only
at the time of the issuance of the adoption decree, (ii) Not
applicable for purposes of vicarious liability: However, no
retroactive effect may be given to the granting of the petition for
adoption for the purpose of imposing liability upon the adopting
parents accruing at a time when adopting parents had no actual
or physical custody over the adopted child.M It must be
emphasized that the basis of parental liability for the torts of a
minor child is the relationship existing between the parents and
the minor child living with them and over whom, the law
presumes, the parents exercise supervision and control. Put a
little differently, no presumption of parental dereliction on the
part of the adopting parents may arise if the adopted child is not
in fact subject to their control at the time the tort is committed.844
(c) Successional rights: (1) Effects in succession by law: In legal
and intestate succession (which will also extend to compulsory
succession), the adopter(s) and the adoptee shall have reciprocal
"’Sec. 17, DAA.

•"Santos, Jr. v. Republic, 21 SCRA 379 (1967), citing I Tolentino, Civil Code, I960 ed.,
p. 652; see also In the Matter of Adoption of Ana Isabel Henriette Antonio Concepcion Georgiana
v. Republic, G.R. No. L-18284, April 30, 1963.
•“/</.
"’Sec. 13, DAA.
"“Tamargo v. CA, 209 SCRA 518 (1992).
wId.
J9JC9B0M
R52M9UH7
rights ofsuccession without distinction from legitimate filiation.’50

Hence, they become legal and compulsory heirs of each other. (2)
Effects in succession by will: If the adoptee and his/her biological
parent(s) had left a will, the law on testamentary succession shall
govern.*51 (3) Obiter Dictum: Article 189(3) of the Family Code
and Section 18, Article V of R.A. No. 8552 (law on adoption)
provide that the adoptee remains an intestate heir of his/her
biological parent.'52 Also, the biological parents retain their rights
of succession to the estate of the adopted child pursuant to Article
190(2) of the Family Code.153 (d) Right to surname: (1) Rule: The
Family Code and the Domestic Adoption Act categorically
declare that the adopted child has the right to use the surname of
the adopter(s).'54 However, the provision of law which entitles the
adopted minor to the use of the surname of the adopter refers to
the adopter’s own surname and not to her surname acquired by
virtue ofmarriage because adoption creates a personal relationship
only between the adopter and the adopted.855 (2) Adoption of
illegitimate child by biological father: In In re: Adoption of
Stephanie Nathy Astorga Garcia,** the Court allowed an
illegitimate child, upon adoption by her natural father, to use the
surname of her natural mother as her middle name. The Court
explained that there is no law prohibiting an illegitimate child
adopted by her natural father to use as middle name her mother’s
surname. On the contrary, the use of such middle name will
maintain her maternal lineage. (3) Reverting back to previous
surname: In Republic v. CA and Wong,1” the Court allowed an
adopted child, after the death of the adopting father, to drop the
surname of the adopter and use again the surname of the natural
father. The Court found the justification to be proper and
reasonable—that use of the surname Wong embarrassed and
isolated him from his relatives and friends, as the same suggests
a Chinese ancestry when in truth and in fact he is a Muslim
Filipino residing in a Muslim community. The Court reasoned
“Sec. 18, DAA.

“'Id.
l>10biter Dictum in In the Matter of Adoption of Stephanie Nathy Astorga Garcia, 454
SCRA 541 (2005), supra.
,!,Obiler Dictum in Bartolome V. SSS, 740 SCRA 78 (2014).
“Art. 189(1), FC; Sec. 14, DAA.
“Valdez-Johnson v. Republic, G.R. No. L-18284, April 30,1963.
“454 SCRA 541 (2005).
“’209 SCRA 189 (1992).
J9JC9B0M
R52M9UH7

that a change of name does not, after all, define or effect a change
in one’s existing family relations or in the rights and duties
flowing therefrom. Nor does it alter one’s legal capacity, civil
status or citizenship; what is altered is only the name, (e) Issuance
of amended birth certificate: (1) Issuance of new birth certificate-
The adoption decree shall state the name by which the child is to
be known.838 An amended certificate of birth shall be issued by
the Civil Registry attesting to the fact that the adoptee is the child
of the adopter(s) by being registered with his/her surname.85’ The
I
original certificate of birth shall be stamped "cancelled" with the
1 annotation of the issuance of an amended birth certificate in its
I
E place and shall be sealed in the civil registry records. The new
5 birth certificate to be issued to the adoptee shall not bear any
t
5 notation that it is an amended issue.860 (2) Confidentiality of all
IJ records: All records, books, and papers relating to the adoption
cases in the files of the court, the DSWD, or any other agency or
institution participating in the adoption proceedings shall be kept
strictly confidential and the court may order its release under the
following conditions only: (i) the disclosure of the information to
a third person is necessary for purposes connected with or arising
5 out of the adoption; (ii) the disclosure will be for the best interest
of the adoptee; and (iii) the court may restrict the purposes for
which it may be used.861 (f) Adoption decree cannot be collaterally
attacked: It is settled that filiation cannot be collaterally
attacked.862 The same rule is applied to adoption such that it
cannot also be made subject to a collateral attack.86’ In Reyes v.
Sotero,** the Court reiterated that adoption cannot be assailed
collaterally in a proceeding for the settlement of a decedent’s
estate.865 Furthermore, in Austria v. Reyes,the Court declared
that the legality of the adoption by the testatrix can be assailed
only in a separate action brought for that purpose and cannot be
subject to collateral attack.867
858Sec. 13, DA A.
85,Sec. 14, DAA.
“°W.
86lSec. 15, DAA.
862Reyes v. Mauricio, 636 SCRA 79 (2010).
86’W.
864482 SCRA 520 (2006).
865Cited in Reyes v. Mauricio, supra.
86631 SCRA 754 (1970).
867Cited in Reyes V. Mauricio, supra.
J9JC9B0M
R52M9UH7
17.7 Rescission of Adoption Decree: (a) Who may rescind: The

Domestic Adoption Act withdrew the right of an adopter to
rescind the adoption decree and gave to the adopted child the sole
right to sever the legal ties created by adoption.868 An adopter,
while barred from severing the legal ties of adoption, can always
for valid reasons cause the forfeiture of certain benefits otherwise
accruing to an undeserving child. For instance, upon the grounds
recognized by law, an adopter may deny to an adopted child his
legitime and, by a will and testament, may freely exclude him
from having a share in the disposable portion of his estate.'69
(b) Grounds for rescission: (1) Repeated physical and verbal
maltreatment by the adopters) despite having undergone
counseling; (2) attempt on the life of the adoptee; (3) sexual
assault or violence; or(4) abandonment and failure to comply with
parental obligations.™ (c) Prescriptive period: If incapacitated,
within five years after the adopted reaches the age of majority.
If incompetent at the time of the adoption, within five years after
recovery from such incompetency.871 (d) Effects of rescission:
(1) Parental authority of the adoptee’s biological parent(s), if
known, or the legal custody of the DSWD shall be restored if
the adoptee is still a minor or incapacitated; (2) Reciprocal rights
and obligations of the adopter(s) and the adoptee to each other
shall be extinguished; (3) Cancellation of the amended certificate
of birth of the adoptee and restoration of his/her original birth
certificate; and (4) Succession rights shall revert to its status
prior to adoption, but only as of the date ofjudgment ofjudicial
rescission. Vested rights acquired prior to judicial rescission shall
be respected.'72
18) Legal Support

18.1 Basic Principles in Sunnort: (a) Definition: Legal support, also
known as family support, is that which is provided by law,
comprising everything indispensable for sustenance, dwelling,
clothing, medical attendance, education, and transportation, in
keeping with the financial capacity of the family.'71 The education
“'See. 19, DAA; Lahom v. Sibulo, 406 SCRA 135 (2003).

'“Lahom v. Sibulo, supra.
'’"Sec. 19, DAA.
’’’Sec. 21, Rule on Adoption.
■’’See. 20, DAA.
'’’Patricio v. Dario III, 507 SCRA 438 (2006); seealso Art. 194, l“par.,FC.
J9JC9B0M
R52M9UH7

of the person entitled to be supported shall include his schooling

or training for some profession, trade, or vocation, even beyond
the age of majority, while transportation shall include expenses
in going to and from school, or to and from place of work.™
(b) Who are obliged to support each other: (1) Spouses.8” To be
entitled to support, the spouse must be the legitimate spouse.876 If
the marriage is void, the parties are not actually spouses. Hence,
there is no obligation to support each other and the absolute
nullity of the marriage can be raised and resolved by the court in
the action for support filed by one against the other. Adultery of
the wife is a valid defense in an action for support.8” If adultery
is proved and sustained, it will defeat the action for support.878
But if both are equally at fault the principle of in pari delicto
applies, in which case, the husband cannot avail of the defense
of adultery.87'1 After final judgment granting the petition (in legal
separation or annulment of marriage or declaration of nullity of
marriage), the obligation of mutual support ceases. However, the
court may order the guilty spouse to give support to the innocent
one.880 (2) Legitimate ascendants and descendants.88' (3) Parents
and their children (whether legitimate or illegitimate) and the
latter’s children (whether legitimate or illegitimate).88’ Note that
the prohibition under the barrier rule in succession by operation
of law embodied in Article 992 of the Civil Code does not apply
to legal support. However, the illegitimate filiation must be duly
established. (4) Legitimate brothers and sisters (whether of full
or half blood);881 and (5) Brothers and sisters, not legitimately
related. However, the right to support of an illegitimate sibling
ceases when the need for support of an illegitimate brother or
sister, who is of legal age, is due to a cause imputable to his/
her fault or negligence.™ (c) Basis of legal support: The issue of
legal support is dependent upon the relationship enumerated in
"''Art. 194, 2nd par., FC.

“’’Art. 195(1), FC.
“’“Suntero v. CFI of Cavite, 153 SCRA 728, 734 (1987).
“’’Reyes v. Ines-Luciano, 88 SCRA 803 (1979).
“’’Almaeen v. Baltazar, 103 Phil. 1147 (1958).

““Art. 198, FC.
““'An. 195(2), FC.
““’Art. 195(3).(4). FC.
““’Art. 195(5), FC.
““Art. 196. FC.
J9JC9B0M
R52M9UH7 1
Articles 195 and 196. It is not dependent upon parental authority.

Support and parental authority are two distinct concepts. As
consequences: (1) A child, who is not financially capable, is still
entitled to legal support even if he is already emancipated and
freed from the parent’s parental authority; (2) An illegitimate
father whose filiation to the illegitimate child has been duly
established is liable to support the latter even if he has no parental
authority over the child; and (3) The grandparents are liable to
support their grandchildren even if the parents are still exercising
parental authority over the latter, if such parents do not have the
financial capability to support the children. In Lim v. Lim,™5 the
Court held that the obligation to provide legal support passes on
to ascendants not only upon default of the parents but also for the
latter’s inability to provide sufficient support.886 Ordinarily, the
obligation to give support rests principally on those more closely
related to the recipient. However, the more remote relatives may
be held to shoulder the responsibility should the claimant prove
that those who are called upon to provide support do not have the
means to do so.887 (d) Order of liability for support: Whenever
two or more persons are obliged to give support, the liability shall
devolve upon the following persons in the order mentioned, as
follows: (1) the spouse; (2) the descendants in the nearest degree;
(3) the ascendants in the nearest degree; and (4) the brothers and
sisters.8" However, when the obligation to give support falls upon
two or more persons, the payment of the same shall be divided
between them in proportion to the resources of each.88’ However,
in case of urgent need and by special circumstances, the judge
may order only one of them to furnish the support provisionally,
without prejudice to his right to claim from the other obligors the
share due from them.*’0 When two or more recipients at the same
time claim support from one and the same person legally obliged
to give it, should the latter not have sufficient means to satisfy all
claims, the order established above shall be followed, unless the
concurrent obligees should be the spouse and a child subject to
parental authority, in which case the child shall be preferred.8’1
“’604 SCRA691 (2009).
"’Mangonon v. CA, 494 SCRA 1 (2006).

“'Art. 199, FC.
“’Art. 200, par. 1, FC.
“Art. 200, par. 2, FC.
•’'Art. 200, par. 3, FC.
J9JC9B0M
R52M9UH7

18.2 Payment of Support: (a) Amount of support: It shall be in pro

portion to the resources or means of the giver and the necessities
of the recipient.892 Hence, any judgment granting support never
becomes final and is always subject to modification, depending
upon the needs of the child and capabilities of the parents to give
support.893 (b) When demandable: From the time the person who
has a right to receive support needs it for maintenance, but it
shall not be paid except from the date ofjudicial or extrajudicial
demand.894 But support must be demanded and the right to it
established before it becomes payable, for the right to support
does not arise from the mere fact of relationship, even from
the relationship of parents and children, but from imperative
necessity without which it cannot be demanded, and the law
presumes that such necessity does not exist unless support is
demanded.895 (c) Manner of payment: Giver has the option of
giving support in two ways: (1) By paying the allowance fixed;
or (2) By receiving and maintaining in the family dwelling the
person who has a right to receive support.896 The second option
may not be availed of in case there is a moral or legal obstacle
thereto.897 As consequences: (i) An illegitimate father cannot
choose the second option because there is a legal obstacle for
choosing the same. Under the law, an illegitimate child shall be
under the parental authority and custody of the mother.898 The
illegitimate father is not entitled to the child’s custody, even if
he admits paternity.8" (ii) A legal or moral obstacle likewise
exists when the relations between the grandparents and the
grandchildren were already strained due to the filing of the suit
for declaration of legitimacy and support and the denial by the
grandfather of familial relationship with the grandchildren.900 (iii)
When the wife is entitled to separate maintenance or is justified
to live separately from the husband, the second option is not
892 Art. 201, FC.

"’’Lam v. Chua, 426 SCRA 29 (2004) and Montefalcon v. Vasquez, 554 SCRA 513 (2008).
"“Art. 203, 1st par., FC.
,95Sy v. CA, 541 SCRA 371 (2007), citing Jocson v. The Empire Ins. Co. and Jocson
Lugniton, 103 Phil. 580 (1958).
“’‘Art. 204, FC.
“’“Art. 176, FC; Briones V. Miguel, 440 SCRA 455 (2004).

“"Briones v. Miguel, supra.
""Mangonon v. CA, 494 SCRA 1 (2006).
J9JC9B0M
R52M9UH7
likewise available, such as when the wife and the minor children
left the house of the in-laws where they were then living when
she caught her husband in a “very compromising situation” with
the in-house midwife of the mother-in-law.’01
18.3 Distinctions Between Legal and Contractual Support: (a) As to
concent: That which is indispensable for sustenance, dwelling,
clothing, medical attendance, education, and transportation,
in keeping with the financial capacity of the family, is legal
support.’02 The excess in amount beyond that required for legal
support is contractual support,in addition to that which is given
in a contract or in a last will and testament, (b) Susceptibility
to attachment: The right to legal support is a purely personal
right essential to the life of the recipient, so that it cannot be
subject to attachment or execution.501 Contractual support, on
the other hand, is subject to levy on attachment or execution.505
(c) Susceptibility to renunciation: The right to receive legal
support cannot be renounced; nor can it be transmitted to a third
person.*16 Being intransmissible, support cannot be the object of
contracts.50’ On the other hand, the right to receive contractual
support can be renounced or waived and can be transmitted to a
third person, (d) Susceptibility to compromise agreement: Right
to receive future support cannot be the subject of compromise.50’
On the other hand, the right to receive contractual support can be
the subject matter of a compromise agreement, (e) Susceptibility
to compensation: Legal support cannot be compensated with
what the recipient owes the obligor.505 If the claim for support
due is by gratuitous title, compensation may not even be set up.510
“’Lim v. Lim, 604 SCRA691 (2009).

“’Patricio v. Dario 111, 507 SCRA 438 (2006); see also Art. 194, l“par.,FC.
“’An. 208, par. 1, FC.
“’Siguion Reyna Montecillo and Ongsiako Law Offices v. Chionlo-Sia, 783 SCRA 56
(2016), ciling Art. 205, FC. See also De Asis v. CA, 303 SCRA 176 (1999).
“’Art. 208, par. 1, FC.
“’Siguion Reyna Montecillo and Ongsiako Law Offices v. Chionlo-Sia, supra, ciling De
Asis v. CA, supra.
mld„ citing Art. 1347, NCC.
“’Art. 2035, NCC.
“’Art. 1287, par. 2, NCC.
’’“Art. 1287, par. 2, NCC.
J9JC9B0M
R52M9UH7

19) Parental Authority

19.1 Basic Principles in Parental Authority: (a) Concept: Parental
authority or patria potestas in Roman Law is the juridical
institution whereby parents rightfully assume control and
protection of their unemancipated children to the extent required
by the latter’s needs. It is a mass of rights and obligations
which the law grants to parents for the purpose of the children’s
physical preservation and development, as well as the cultivation
of their intellect and the education of their heart and senses.’"
The rights of the parents are but ancillary to the proper discharge
of parental duties to their children under parental authority.9'2 (b)
Over whom parental authority is exercised: (1) Rule: Parental
authority is exercised over unemancipated or minor children.913
(2) Exceptions: The effects of parental authority still exist, even
after minority, in the following instances: (i) in marriage of a
party who is at least 18 years of age but below 21, where parental
consent is still necessary;914 (ii) in the marriage settlement of a
party below 21 but at least 18 years of age, the person whose
consent to the marriage is required under Article 14 of the FC is
also required to be a party to the marriage settlement, otherwise,
the settlement is not valid;915 (iii) the parents shall continue to
be vicariously liable for quasi-delict committed by their children
at least 18 years of age but below 21, provided that the latter
are living in their company.916 (c) Renunciation and transfer of
parental authority: (1) Rule: Parental authority and responsibility
may not be renounced or transferred except in the cases authorized
by law.917 Thus, when a parent entrusts the custody of a minor to
another, such as a friend or godfather, even in a document, what
is given to the latter is merely temporary custody and it does not
constitute a renunciation of parental authority.918 (2) Exceptions:
The renunciation or transfer of parental authority is valid in
the following cases: (i) adoption;919 (ii) guardianship;920 (iii)
’"Masbale v. Relucio, G.R. No. 235498, July 30, 2018.

’’’Medina v. Makabali, 27 SCRA 502 (1969).
911Art. 209, FC.
9,4Art. 45(1), FC.
9,5Art. 78, FC.
9l6Art. 2180, NCC; in relation to Art. 236 of the FC.
9l,Art. 210, FC.
’’"Santos, Sr. v. CA, 242 SCRA 407 (1995); Sagala-Eslao v. CA, 266 SCRA 317 (1997).
’’’Art. 189(1), FC; Cang v. CA, 296 SCRA 128 (1998).
920Sagala-Eslao v. CA, 266 SCRA 317 (1997).
J9JC9B0M
R52M9UH7
voluntary and involuntary commitment of a child to the DSWD

or any duly-licensed child placement agency or individual;921 (iv)
in case there is a need to impose disciplinary measures upon the
child pursuant to Articles 223 and 224 of the FC; or (v) when
a child (foster child) is placed under the care of foster parents
pursuant to the provisions of R.A. No. 10165, the latter shall have
the rights, duties, and liabilities of persons exercising substitute
parental authority, as may be provided under the Family Code
over the children under their foster care.922
19.2 Parental Authority Over Legitimate Children: (a) Governing law:
If the child is legitimate, the governing laws are Articles 211 to
213 of the Family Code, (b) Parental preference rule: Parents are
placed first in rank in matters of parental authority.923 Under the
parental preference rule, in case of death, absence or unsuitability
of either parent, the parent present and suitable shall continue
to exercise parental authority.924 The remarriage of the surviving
parent shall not affect parental authority over the children, unless
the court appoints another person to be the guardian of the
person or property of the children.923 (c) Joint exercise of parental
authority: The father and mother shall jointly exercise parental
authority over the persons of their common (legitimate) children.
In case of disagreement, the father’s decision shall prevail,
unless there is a judicial order to the contrary.926 (d) Rule in case
of separation of parents: (1) If child below seven: If the child is
under the age of seven, the law presumes that the mother is the
best custodian.92’ Hence, the law provides that “no child under
seven years of age shall be separated from the mother unless
the court finds compelling reasons to order otherwise. "'m This
is the so-called “tender-age presumption” rule,929 which should
be applicable only if the minor child is legitimate. If the child is
illegitimate, he or she is always under the parental authority and
’•'Arts. 154 and 142, P.D. No. 603 (Child and Youth Welfare Code).
“Sec. 6, R.A. No. 10165.
“J. Vitug, Concurring Opinion in Vancil v. Belmcs, 358 SCRA 707, 714 (2001).
“Art. 212, FC.
mId.
“Art. 211, FC.
“Espiritu v. CA, 242 SCRA 362 (1995).
“Art. 213, par. 2, FC.
“Pablo-Gualbcrto v. Gualbcrto, 461 SCRA 450,476 (2005); Gamboa-Hirsch v. CA, 527
SCRA 380 (2007).
J9JC9B0M
R52M9UH7

Thu* Family Code of the Philippines
(Executive Order No, 209, as amended)
custody of the mother, regardless of the child’s age.''”'-' However,

in Masbate v. Relucio,”' the Court ruled that the tender-age
presumption rule applies whether the child is legitimate or
illegitimate. [Note: The author believes that the ruling in Pablo-
Gualberto is the better rule and that Article 213 should be applied
only to legitimate children. The author submits that if the child
is illegitimate, the governing law is Article 176 of the Family
Code. After all, the second paragraph of Article 213 is but a
continuation of the first paragraph of the same Article.] In the
case of Dacasin v. Dacasin,n2 the Court held that this statutory
awarding of sole parental custody to the mother under the second
paragraph of Article 213 of the Family Code is mandatory and
any agreement to the contrary is void. In this case, the Court
declared void a compromise agreement providing for joint
custody of a child below seven years of age. (2) Compelling
reasons: For compelling reasons, the mother may be deprived
of custody of a child below seven years of age. In the past, the
following reasons have been considered ample justification to
deprive a mother of custody and parental authority: (i) neglect
and abandonment;™ (ii) unemployment and immorality;™ (iii)
habitual drunkenness;™ and (iv) drug addiction, maltreatment
of the child, insanity, and being sick with a communicable
disease.''’11 However, to deprive the wife of custody the husband
must clearly establish that her moral lapses have had an adverse
effect on the welfare of the child or have distracted the offending
spouse from exercising proper parental care.”’ (3) If child is at
least seven: Parental authority over the child shall be “exercised”
by the parent designated by the court.”11 In all controversies
regarding the custody of minors, the sole and foremost criterion
is the physical, educational, social, and moral welfare of the child
concerned, taking into account the respective resources and social
and moral situations of the contending parents.’” (4) Visitation
’"'Art. 176. FC.

’"G.R. No. 235498, July 30,2018.
’”611 SCRA 657(2010).
’’’Medina v. Mabakali, supra.
’’’Cervantez, v. Fajardo, 169 SCRA 575 (1989).
’’’Perez, v. CA, 255 SCRA 661 (1996).
”'7r/.
’’’Pablo-Gualberto v. Gualberto, supra.
’’’Art. 213, par. I, FC.
”’Sy v. CA, 541 SCRA 371 (2007), citing Unson III Navarro, 101 SCRA 183, 189
(1980).
J9JC9B0M
R52M9UH7
rights: The non-custodial parent is entitled to visitation rights.540

(5) No res judicata in custody cases: The matter of custody is not
permanent and unalterable and can always be re-examined and
adjusted.’*' In a very real sense, then, a judgment involving the
custody of a minor child cannot be accorded the force and effect
of res judicata?*-
19.3 Parental Authority Over Illegitimate Child: (a) Governing law:
The governing law is clearly Article 176 of the Family Code.
However, in Masbate v. Relucio,9*1 the Court applied paragraph
2 of Article 213 to an illegitimate child. In said case, the Court
ruled that the tender-age presumption rule applies whether the
child is legitimate or illegitimate. [Note: The author believes that
the ruling in Pablo-Gualberto is the better rule and that Article
213 should be applied only to legitimate children. The author
submits that if the child is illegitimate, the governing law is
Article 176 of the Family Code. After all, the second paragraph
of Article 213 is but a continuation of the first paragraph of the
same Article. In addition, even under Article 176, the illegitimate
mother may be shown to be unfit to have custody because the
primary consideration in all controversies involving minor
children is the best welfare of the child.] (b) Mother’s sole
parental authority: Insofar as illegitimate children are concerned,
Article 176 of the Family Code states that illegitimate children
shall be under the parental authority of their mother. In the
exercise of that authority, mothers are consequently entitled to
keep their illegitimate children in their company, and the Court
will not deprive them of custody, absent any imperative cause
showing the mother's unfitness to exercise such authority and
care?** (c) Effect of admission of nalernilv: The fact that the
father of an illegitimate child admits paternity is not a ground
to give him custody but a ground only: (I) to order him to give
support to the child; and (2) to authorize the child to use the
father’s surname, if the acknowledgment of paternity is in writing
or made in the birth certificate.''4’ Since the illegitimate father has
’"'Silva v. CA, 275 SCRA 340 (1997).

’’’Becket v. Sarmiento, Jr., 689 SCRA 494 (2013), d/ing Espiritu v. CA, 242 SCRA 362
mld.
’’’G.R.No. 235498, July 30,2018.
wld.
’’’Art. 176, FC, as amended by R. A. No. 9255.
J9JC9B0M
R52M9UH7

no parental authority and is not entitled to custody, he cannot

also demand, as a matter of right, to be granted joint custody
over the minor illegitimate child, (d) Visitation rights: But the
illegitimate father is entitled to visitation rights.946 However, to
be entitled to the constitutionally-protected inherent and natural
right of a parent to have access to his/her child (called “visitation
right”), there must be parent-child relationship between them.947
(1) In Concepcion v. Court ofAppeals,m the child was conceived
and bom in a bigamous second marriage contracted by the wife
during the pendency of her previous marriage. At the time of the
child’s birth, the prior marriage remained subsisting. Thus, the
child was declared to be a legitimate child of the first marriage by
applying the presumption of legitimacy under Article 164 of the
FC. Consequently, the second husband was denied visitation right
because of the absence of parent-child relationship between him
and the child, the child being presumed to be a legitimate child
of the first husband. (2) If the biological father of the illegitimate
child consented to the adoption of the child by the biological
mother and the latter’s spouse, the biological father will lose
his visitation right because the legal tie between him and the
child is severed by the decree of adoption, (e) When illegitimate
father entitled to child’s custody: Conformably with the ruling
of the Court in Masbate v. Relucio,*" the illegitimate father may
possibly be entitled to have custody over an illegitimate child if he
is entitled to exercise substitute parental authority under Article
216 of the Family Code by being the child’s actual custodian,
which presupposes the default of the following persons: (i) the
child’s mother; (ii) the child’s maternal grandparents; and (iii)
brother or sister over the age of 21.
19.4 Substitute Parental Authority: (a) Concept: It is the parental
authority which the persons designated by law may exercise over
the persons and property of unemancipated children in case of
death, absence, or unsuitability of both parents,956 or in default of
a judicially appointed guardian.951 (b) Who may exercise substi
tute parental authority: The following, in the order indicated:
"‘Silva v. CA, 275 SCRA 340 (1997).

"’Concepcion v. CA, 468 SCRA 438 (2005).
"’/</.
"’Supra.
950Art. 214, FC; Vancil v. Belmes, 358 SCRA 707 (2001).
"'Art. 216, FC.
J9JC9B0M
R52M9UH7
126 PRL-BAR REVIEWER IN CIVIL LAW
(1) the surviving grandparent”2 and, in case several survive,

the one designated by the court, taking into account all relevant
considerations, especially the choice of the child over seven years
of age;”’ (2) the oldest brother or sister, over 21 years of age,
unless unfit or disqualified;”4 (3) the child’s actual custodian, over
21 years of age, unless unfit or disqualified;’” and (4) in case of
foundlings, abandoned, neglected, or abused children, and other
children similarly situated, parental authority shall be entrusted
in summary judicial proceedings to heads of children’s homes,
orphanages and similar institutions duly accredited by the proper
government agency.”6 Under the Foster Care Act of 2012 (R.A.
No. 10165), the designated foster parents shall have the rights,
duties, and liabilities of persons exercising substitute parental
authority, as may be provided under the Family Code over the
children under their foster care.”7 However, they only have the
rights of a person with special parental authority to discipline
the foster children as defined under Family Code, insofar as it
prohibits the infliction of corporal punishment upon the child.
The infliction of corporal punishment by the foster parents shall
be ground for revocation of the Foster Family Care License and
termination of Foster Placement Authority.”'1 In view of the
foregoing, even if the illegitimate father is not granted parental
authority, in the absence of the child’s mother and maternal
grandparents, the child’s father may be entitled to custody if he is
the actual custodian.’”
19.5 Special Parental Authority, (a) Concent: It is the parental authority
granted by law to certain persons, entities, or institutions in view
of their special relation to children under their “supervision,
instruction or custody.” (b) Scone of special parental authority;
This special parental authority and responsibility applies to all
authorized activities, whether inside or outside the premises
of the school, entity, or institution.’1'" Thus, such authority
”2Art. 216(1), FC.

’"Art. 214. in relation Io Art. 213,1st par.. FC.
,i4Art. 216(2), FC.
’’’Art. 216(3), FC.
”‘Art. 217, FC.
’’’See. 7, R.A.No. 10165.
”!Sec. 8, R.A.No. 10165 and Rule 8, Part 111, IRR of R.A. No. 10165.
’’’Masbate v. Rclucio. G.R. No. 235498, July 30.2018.
960Art. 218,2nd par., FC; St. Mary’s Academy v. Carpilanos, 376 SCRA 473 (2002).
J9JC9B0M
R52M9UH7

and responsibility applies to field trips, excursions, and other

affairs of the pupils and students outside the school premises
whenever authorized by the school or its teachers.”1 (c) Who
may exercise special parental authority: (1) the school; (2) school
administrators; (3) school teachers; or (4) individual, entity, or
institution engaged in child care.”2 (d) Civil liability for quasi
delict: If a minor causes damage to another while he/she is under
special parental authority, the liability shall be bome by the
following: (1) the persons given special parental authority shall
be "principally and solidarity liable " for such damages;”’ and
(2) the parents, judicial guardians or persons exercising substitute
parental authority over said minor shall be "subsidiarily
liable. ””4 Whether principally or subsidiarily liable, they are not
liable "if it is proved that they exercised the proper diligence
required under the particular circumstances.
19.6 Effect of Parental Authority 1 Jnon Persons of Children: (a) Right
to custody:”6 This is a natural right incident to parenthood,”’
which right is also enshrined in law under Article 220 of the
FC.”8 However, in consideration of the child’s welfare and
well-being (and not merely material comfort), the custody of a
minor may be given to a non-relative as against the mother.”’
(b) Duty to provide sunport and education:™ Parental authority,
however, is not the basis of this obligation but the family ties or
relationships recognized by law in Articles 195 and 196 of the
FC; and the obligation of the parents to provide support is not
co-terminus with the exercise of parental authority.”1 A parent
who fails or refuses to do his part in providing his child the
education his station in life and financial condition permit can
be charged for neglect of child under Article 59(4) of P.D. No.
603. However, while said parent can be indicted for violation
”'St. Mury’s Academy v. Carpitanos, supra.

”-’Art. 218, 1st par., FC.
'"■’Art. 219. FC.
“4M.
”’/</.
’“Art. 220(1), FC.
“’Sagala-Eslao v. CA, supra.
‘IMhn. 220(1), FC; Tonog v. Tonog, 376 SCRA 523 (2002).
mSee Medina v. Makabali, supra.
’’"Art. 220(1), FC.
”'SeeArt. 194, par. 2, FC.
J9JC9B0M
R52M9UH7
of Article 59(4) of P.D. No. 603, he cannot be charged with

violation of Section 10(a) of R.A. No. 7610 (Child Abuse).
Section 10 (a) of R.A. No. 7610 expressly penalizes any person
who commits other acts of neglect, child abuse, cruelty, or
exploitation or be responsible for other conditions prejudicial to
the child’s development including those covered by Article 59 of
P.D. No. 603 “but not covered by the Revised Penal Code." The
“neglect of child” punished under Article 59(4) of P.D. No. 603
is also a crime (known as “indifference of parents”) penalized
under the second paragraph of Article 277 of the Revised Penal
Code. Hence, it is excluded from the coverage of R.A. No.
7610.”2 (c) Duty of representation: Parents are duty-bound to
represent their unemancipated children in all matters affecting
their interests.”1 This duty extends to representation in court
litigations.”4 However, when the best interests of the child so
requires, the court may appoint a guardian ad litem to represent
the minor.”5 (d) Duty to give or withhold consent: (1) This duty
may extend even beyond the age of majority. Hence, parental
consent is necessary if a party to the marriage is between the
ages of 18 and 21,”6 in which case, the parent concerned is also
required to be a party to the marriage settlement, if one is to be
executed.”’ (2) In Imbong v. Ochoa, Jr.™ the Court declared
unconstitutional Section 7 of R.A. No. 10354, otherwise known
as the Responsible Parenthood and Reproductive Health Act of
2012 (RH Law), and the corresponding provision in the RH-1RR
insofar as these provisions, among others, allow minor-parents
or minors who have suffered a miscarriage access to modem
methods of family planning without written consent from their
parents or guardian/s. The Court reasoned that it is an affront to
the constitutional mandate to protect and strengthen the family
as an inviolable social institution, as the State cannot replace
the child’s natural mother and father when it comes to providing
the child’s needs and comfort. Thus, to say that their consent
is no longer relevant is anti-family. (3) Section 23(a)(2)(H) of
the RH Law was likewise declared unconstitutional because it
”2De Guzman v. Perez, 496 SCRA 474 (2006).

”5Art. 220(5), FC.
mSee Sec. 5, Rule 3, 1997 Rules of Civil Procedure.
’’’Art. 222, FC.
’’’Arts. 14 and 45(1), FC.
’’’Art. 78, FC.
”*721 SCRA 146(2014).
J9JC9B0M
R52M9UH7

effectively limits the requirement of parental consent to “only
in elective surgical procedures," and denies the parents their
right of parental authority in cases where what is involved are
“non-surgical procedures.” According to the Court, the parents
should not be deprived of their constitutional right of parental
authority for to deny them of this right would be an affront to the
constitutional mandate to protect and strengthen the family, (e)
Right to discipline child: (1) The FC authorizes those exercising
parental authority "to impose discipline on (minor children) as
may be required under the circumstances, "9n but the law must
not be interpreted to authorize punishments beyond moderate
ones for the following reasons: (i) Parental authority may be
suspended, upon proper petition to the court, if the parent
or person exercising parental authority “treats the child with
excessive harshness or cruelty.”*60 (ii) In addition, the parent
concerned may also be held criminally liable for violation of
R.A. No. 7610, otherwise known as the “Special Protection of
Children Against Abuse, Exploitation and Discrimination Act,” if
he or she employs excessive harshness or cruelty upon the child.
In Bongalon v. People,the Court clarified, however, that not
every instance of the laying of hands on a child constitutes the
crime of child abuse under Section 10 (a) of R.A. No. 7610. Only
when the laying of hands is shown beyond reasonable doubt to
be intended by the accused to debase, degrade, or demean the
intrinsic worth and dignity of the child as a human being should
it be punished as child abuse. Otherwise, it is punished under the
RPC. (2) Those exercising parental authority may also petition
the court for the imposition of appropriate disciplinary measures
upon the child,”2 which may include the commitment of the child
in entities or institutions engaged in child care or in children’s
homes duly accredited by the proper government agency.”3 Such
commitment must not exceed 30 days.”4 (3) In the case of those
exercising special parental authority, the law prohibits them from
inflicting corporal punishment upon the child.Under the Foster
Care Act of 2012 (R.A. No. 10165). the designated foster parents
”'Art. 22<>(H), FC.

’""Art. 231(1), FC.
**'694 SCRA 12(2013).
W2Art. 223, FC.
'"‘Art. 224, FC.
wtd.
“’Art. 233, 2nd par., FC.
J9JC9B0M
R52M9UH7
shall have the rights, duties, and liabilities of persons exercising

substitute parental authority, as may be provided under the Family
Code over the children under their foster care.”6 However, they
only have the rights of a person with special parental authority
to discipline the foster children as defined under Family Code,
insofar as it prohibits the infliction of corporal punishment upon
the child. The infliction of corporal punishment by the foster
parents shall be ground for revocation of the Foster Family
Care License and termination of Foster Placement Authority.”’
(4) In SPARK v. Quezon City,™ an association of young
adults and minors that aims to forward a free and just society,
called SPARK, questioned the constitutionality of the curfew
ordinances of Quezon City, Navotas, and Manila on the ground,
inter alia, that it violates the constitutional right of parents to
rear their children. The Court, while acknowledging the parent’s
primary role in child-rearing, also recognized that the State, as
parens patriae, has the inherent right and duty to aid parents
in the moral development of their children and that the Curfew
Ordinances are but examples of legal restrictions designed to aid
parents in their role of promoting their children’s well-being.
The Court emphasized that the Curfew Ordinances apply only
when the minors are not—whether actually or constructively—
accompanied by their parents. As such, the only aspect of
parenting that the Curfew Ordinances affects is the parents’
prerogative to allow minors to remain in public places without
parental accompaniment during the curfew hours. To the mind of
the Court, the Curfew Ordinances only amount to a minimal—
albeit reasonable—infringement upon a parent’s right to bring up
his or her child and should not be declared unconstitutional for
violating the parents’ right to rear their children.
19.7 Effect of Parental Authority Unon Property of Children: (a)
Legal guardianship over nronertv of minor children: (1) Rule:
The father and mother jointly exercise legal guardianship over
the property of their minor children without the necessity of a
court appointment.’” However, the court may appoint a guardian
of the child’s property when the best interests of the child so
’“Sec. 7, R.A. No. 10165.

’’’Sec. 8, R.A. No. 10165 and Rule 8, Part III, IRRof R.A. No. 10165.
”‘835 SCRA 350 (2017).
’•’Art. 225, 1 st par., FC.
J9JC9B0M
R52M9UH7

requires.990 (2) When bond is required: The law requires the

parent concerned to post a bond if “the market value of the
property or the annual income of the child exceeds P50,000.00,”
which bond shall not be less than 10% of the value of the
property or annual income.991 (3) Rule when child represented
disinherited or incapacitated parent: In succession by operation
of law, in case a compulsory heir or legal heir (in the direct line)
is disinherited or incapacitated to inherit, he can be represented
by his children and the latter shall acquire the inheritance
due to the disinherited or incapacitated heir.992 However, the
disinherited or incapacitated heir cannot enjoy the usufruct or
administration of the property thus inherited,99’ in which case,
the court shall appoint a judicial administrator to administer the
property inherited by the minor child in representation of the
disinherited or incapacitated parent, (b) Use of child’s property:
The property of minor children shall be devoted exclusively to
their support and education, unless the title or transfer provides
otherwise.994 The parents have the right to use only the “fruits
and income” of said property for the following purposes: (1)
primarily, to the child’s support; and (2) secondarily, to the
collective daily needs of the family.’9’ (c) Rule on disposition
or encumbrance of child’s property: While the parents have the
right to administer the property of their minor children, such
right does not include the power to dispose or encumber said
property without court authorization. Administration includes
all acts for the preservation of the property and the receipt of
fruits according to the natural purpose of the thing. Any act of
disposition or alienation, or any reduction in the substance of the
patrimony of the child, exceeds the limits of administration.996
Thus, a father or mother, as the natural guardian of the minor
under parental authority, does not have the power to dispose or
encumber the property of the latter. Such power is granted by law
only to a judicial guardian of the ward’s property and even then
only with the court’s prior approval secured in accordance with
’"Art. 222, FC.

991 Art. 225, 2nd par., FC.
’’’Arts. 923 and 1035, NCC.
mld.
994Art. 226, 1st par., FC.
"’Art. 226, 2nd par., FC.
996Neri v. Heirs of Uy, 683 SCRA 553 (2012), citing 1 Tolentino, Civil Code of the
Philippines, p. 644 (1974 ed.).
J9JC9B0M
R52M9UH7
the proceedings set forth by the Rules of Court.”’ Consequently,

any disposition or encumbrance of the property of the minor by
the parent without the proper judicial authority, unless ratified
by them upon reaching the age of majority, is unenforceable in
accordance with Articles 1317 and 1403(1) of the Civil Code.”8
(d) Rule on lease of property belonging to minor children: As a
rule, the parents, as legal guardian of the minor’s property, may
validly lease the same even without court authorization because
lease has been considered as an act of administration.9” However,
if the lease will be recorded in the Registry of Property, the same
should be made only after obtaining court authorization."”0 The
same rule applies if the lease is for a period of more than one year
because this is already deemed as an act of dominion.'001
19.8 Suspension and Termination of Parental Authority: (a) Grounds
for termination of parental authoriiv: (1) death of the parents;
(2) death of the child; (3) emancipation of the child;1002 (4)
adoption of the child; (5) appointment of a general guardian;
(6) judicial declaration of abandonment of the child in a case
filed for the purpose; (7) final judgment divesting the party
concerned of parental authority; (8) judicial declaration of
absence or incapacity of person exercising parental authority.™’
For grounds (1) to (3), the termination of parental authority is
permanent. For grounds (4) to (8), parental authority may be
revived thru a court judgment, (b) Grounds for suspension of
parental authority: (1) conviction of crime which carries with
it the penalty of civil interdiction;"”1 (2) treating the child with
excessive harshness or cruelty; (3) giving the child corrupting
orders, counsel, or example; (4) compelling the child to beg; (5)
subjecting the child or allowing him to be subjected to acts of
lasciviousness;™’ however, subjecting the child or allowing the
child to be subjected to sexual abuse is a ground for permanent
mld. ; see also Bautista v. Bustos, G.R. No. L-4155, Dec. 17, 1952.
'"‘Id.; see also Cables v. CA, 531 SCRA691 (2007).
’’’San Diego, Sr. v. Nombre, II SCRA 165, 169 (1964).
'““Art. 1647, NCC.
'“'Act-Art. 1878(8), NCC.
'“’Art. 228, FC.
'“’Art. 229, FC.
'““Art. 230, FC.
'“’Art. 231, FC.
J9JC9B0M
R52M9UH7

deprivation of parental authority.1006 In ground (1), the suspension

of parental authority is automatic and reinstatement is likewise
automatic upon service of the sentence.1007 In grounds (2) to (5),
suspension of parental authority is pursuant to a court decree in
an action filed for the purpose or in a related case and parental
authority may be reinstated upon order of the court when it finds
that the cause thereof has ceased and will not be repeated.™’
19.9 Parental and Filial Privilege: (a) Applicable laws: Article 215
of the Family Code and Section 25, Rule 130 of the Rules of
Court, (b) As to applicability: The first applies only in criminal
proceedings; the second applies in both civil and criminal cases,
(c) As to who may invoke: In the first, only the descendants;
in the second, it may be invoked either by descendants or
ascendants, (d) As to scope of privilege: In the first, a descendant
cannot be compelled to testify in criminal against his parents and
grandparents, except when such testimony is indispensable in a
crime against the descendants or by one parent against the other.
In the second, it says that a person may not be compelled to testify
against his parents, other direct ascendants, children, or other
direct descendants. In both, however, the person concerned can
waive the privilege by choosing to testify against his relatives.
He cannot be compelled to testify, but he may choose to testify.
20) Emancipation and Summary Proceedings Under the Family Code

20.1 Emancipation: (a) Concept: It is the means by which a child
is freed from parental authority and custody of, and from
the obligation to render services to, the parent or persons
exercising parental authority, (b) How emancipation takes
place: By attainment of the age of majority.100’ Under present
laws, majority commences at the age of 18 years.1010 (c) Effects
of emancipation: (1) Rule: (i) termination of parental authority
over the person and property of the child; and (ii) the child then
becomes qualified and responsible for all acts of civil life.1011
(2) Exceptions: (i) In contracting marriage, parental consent is
'"'Art. 232, FC.

""’Art. 230. FC.
"'"Art. 231, FC.
""'Art. 234. FC.
101'7</.. as amended bj R.A. No. 6809.
1011 Art. 236. FC.
J9JC9B0M
R52M9UH7
still necessary if a party is at least 18 but below 21.1012 Without

parental consent, the marriage is voidable.1013 (ii) If such party'
will enter into a marriage settlement, the person who is required
to give his consent to the marriage is also required to be a party
to the marriage settlement; otherwise, the marriage settlement is
not valid.1014 (iii) In contracting marriage, parental advice is still
necessary if a party is at least 21 but below 25.1015 (iv) The parents
or guardians are still liable for the quasi-delict committed by a
person who is at least 18 but below 21, if the latter is living in the
company of the former.1016
20.2 Summary Proceedings Under Family Code: (a) Judicial
declaration of presumptive death: For the purpose of contracting
the subsequent marriage under Article 41 of the Family Code,
the spouse present must institute a summary proceeding for
the declaration of presumptive death of the absentee.1017 This
procedure does not apply if the purpose of the presumption of
death is not to remarry, in which case the applicable law is either
Article 390 or 391 of the Civil Code (and not Article 41 of the
Family Code). Under prevailing case law, courts are without any
authority to take cognizance of a petition that only seeks to have
a person declared presumptively dead under the Civil Code. Such
a petition is not authorized by law.101’ (b) In administration of
community or conjugal property: Under the Family Code,1019 the
administration and enjoyment of the community property or of
the conjugal partnership property shall belong to both spouses
jointly and, in case of disagreement, the husband’s decision shall
prevail. The remedy of the wife, however, is to bring the matter
to the attention of the courts in a summary proceeding under Title
XI of the Family Code within five years from the date of the
contract implementing the husband’s decision, (c) In disposition
or encumbrance of community or conjugal property: When one
spouse is absent and unable to participate in the administration
of the common or conjugal properties, court authorization for the
l012Art. 14. EC.

""’Art. 45(1), FC.
1014Art. 78, FC.
101JArt. 15, FC.
101 ‘Art. 236, FC; in relation to Art. 2180, NCC.
101,Lasl par., Art. 41, FC.
'“'“Tadeo-Matias v. Republic, G.R. No. 230751, April 25,2018.
"'’Arts. 96 and 124, FC.
J9JC9B0M
R52M9UH7

alienation or encumbrance of such properties may be obtained by

the spouse present in a summary proceeding under Title XI of the
Family Code.1020 However, the situation contemplated in Article
124 of the FC, which authorizes a summary proceeding under
the Family Code, is one where the spouse is absent, or separated
in fact, or has abandoned the other, or consent is withheld or
cannot be obtained. A summary proceeding under the Family
Code does not apply to cases where the non-consenting spouse is
incapacitated or incompetent to give consent. In the latter case,
the proper remedy is judicial guardianship proceedings under
Rule 93 of the Rules of Court.1021 (d) In case of separation de
facto or abandonment: When a husband and wife are separated
in fact, or one has abandoned the other and one of them seeks
judicial authorization for a transaction where the consent of the
other spouse is required by law but such consent is withheld or
cannot be obtained, such judicial authorization may be obtained
in a summary proceeding under Title XI of the Family Code.1022
In case of separation in fact or abandonment, the deserted spouse
may petition for judicial authority to administer or encumber
specific separate property of the abandoning spouse and to use the
fruits or proceeds thereof for the support of the family.1023 Such
judicial authorization may be obtained in a summary proceeding
under Title XI of the Family Code.1024 (e) In relation to exercise
of parental authority over property of minor child: Under the
Code,'023 the father and the mother shall jointly exercise legal
guardianship over the property of their minor child without the
necessity of a court appointment. However, when the market
value of the property or the annual income of the child exceeds
P50,000, the parent concerned shall be required to furnish a bond
in such amount as the court may determine. For this purpose, a
verified petition for approval ofthe bond shall be filed in the proper
court of the place where the child resides, or, if the child resides
in a foreign country, in the proper court of the place where the
property or any part thereof is situated. Such petition is likewise
governed by the summary judicial proceedings under Title XI
see Uy v. CA, 346 SCRA 246.

l02lUy v. CA and Jardeleza, 346 SCRA 246 (2000); Jardeleza v. Jardeleza, 347 SCRA 210
(2000).
m2See Art. 236, in relation to Arts. 100(2) and 127(2), FC.
,023&e Arts. 100(3) and 127(3), FC, in relation to Arts. 239 to 248, FC.
l0245ee Arts. 239-248, FC.
l02sArt. 225, FC.
J9JC9B0M
R52M9UH7
of the Family Code.1026 (f) Judgment in summary proceeding is

immediately executory: An order of the trial court granting the
petition for judicial declaration of presumptive death pursuant to
Article 41 of the FC is immediately final and executory. Hence,
the right to appeal is not granted to any of the parties therein.
It is therefore erroneous for the Office of the Solicitor General
(OSG) to file a notice of appeal, and for the RTC to give due
course thereto. However, the aggrieved party may file a petition
for cerliorari to question abuse of discretion amounting to lack
ofjurisdiction.1027
21) Funerals
21.1 Who Has Duty and Right to Arrange for Funerals: (a) Rule: Shall
be in accordance with the order established for support,'028 as
follows: (1) spouse; (2) descendants in the nearest degree; (3)
ascendants in the nearest degree; or (4) brothers and sisters.102’ (b)
In case of concurrence: (1) among the descendants of the same
degree, the oldest shall be preferred; (2) among brothers and
sisters, the oldest shall be preferred; and (3) among ascendants,
the paternal side shall be preferred.10’0 The law simply confines
the right and duty to make funeral arrangements to the members
of the family.'”' Thus, the common-law wife does not have the
right to make funeral arrangements over the objection of the legal
wife10’2 or the deceased’s brothers and sisters.10”
21.2 Forms of funeral: Shall be in accordance with the following: (1)
Wishes of the deceased; (2) In the absence of such expression,
determined by the deceased’s religious beliefs or affiliation; or
(3) In case of doubt, the form of funeral is to be decided upon
by the person obliged to make arrangements for the same, after
consulting the other members of the family.10” The wishes of the
decedent with respect to his funeral are not, however, absolute,
'“Art. 225, in relation Io Art. 249, FC.

'“’Republic v. Sarenogon, Jr„ 783 SCRA 615 (2016); Republic v. Tango, 594 SCRA 560
(2009); Republic v. Cantor, 712 SCRA 1 (2013).
'“"Art. 305, NCC.
'“’Art. 199, FC.
'“Art. 305, NCC.
'"'Valino v. Adriano, 723 SCRA 1 (2014).
,m!d.
'“’Tomas Eugenio, Sr. v. Velez, 263 Phil. 1149 (1990).
'“Art. 307, NCC.
J9JC9B0M
R52M9UH7
as said wishes are limited by Article 305 of the Civil Code in

relation to Article 199 of the Family Code, and subject the same
to those charged with the right and duty to make the proper
arrangements to bury the remains of their loved one. Thus, if
the husband was cohabiting with another woman at the time of
his death and expressly wished that he be buried in the family
mausoleum of the paramour against the wishes of his legitimate
family, said wish cannot prevail over the right and duty of the
loved ones under Article 305 of the Civil Code to make the
proper arrangements.10)5
21.3 Liability for Expenses and Damases: (a) For funeral expenses:
Funeral expenses, including the construction of a tombstone
or mausoleum, shall be chargeable against the property of the
deceased. If the deceased is one of the spouses, such expenses are
chargeable to the conjugal partnership of gains or the absolute
community.1036 (b) For damages: Any person who: (1) shows
disrespect to the dead; or (2) wrongfully interferes with a funeral,
shall be liable to the family of the deceased for damages, material
and moral.1037
21.4 Disposition of Human Remains: (a) Rule: There can be no
retention, interment, disposition of, or exhumation of human
remains without the consent of those who have the right and duty
to make funeral arrangements for the decease, as mentioned in
Article 305 of the Civil Code, in relation to Article 199 of the
Family Code.1038 (b) Organ Donation: Under the Organ Donation
Act of 1991, or R.A. No. 7170, as amended by R.A. No. 7885,
any of the following persons, in the order stated hereunder, in the
absence of actual notice of contrary intentions by the decedent or
actual notice of opposition by a member of the immediate family
of the decedent, may donate all or any part of the decedent’s
body'030 for education, research, advancement of medical or
dental science, therapy, or transplantation,1010 after or immediately
before death: (1) spouse; (2) son or daughter of legal age; (3)
either parent; (4) brother or sister of legal age; or (5) guardian
'“’’Valino v. Adriano, supra.

'“‘Art. 310, NCC.
l0),Art. 309, NCC.
10)11Art. 308, NCC.
l03’Sec. 4, R.A. No. 7170.
,040Sec. 6, R.A. No. 7170.
J9JC9B0M
R52M9UH7
over the person of the decedent at the time of his death."”' Any
individual, at least 18 years of age and of sound mind, may also
give by way of legacy, to take effect after his death, all or part of
his body for the foregoing purposes."”2
22) Surnames
22.1 In General: (a) Concept of name: A man’s name is the designation
by which he is known and called in the community in which he
lives and is best known. It is defined as the word or combination of
words by which a person is distinguished from other individuals
and, also, as the label or appellation which he bears for the
convenience of the world at large addressing him, or in speaking
of or dealing with him.1045 It is both of personal as well as public
interest that every person must have a name."”4 (b) Characteristics
of names: A name is said to have the following characteristics:
(1) It is absolute, intended to protect the individual from being
confused with others. (2) It is obligatory in certain respects, for
nobody can be without a name. (3) It is fixed, unchangeable, or
immutable, at least at the start, and may be changed only for good
cause and by judicial proceedings. (4) It is outside the commerce
of man, and, therefore, inalienable and intransmissible by act
inter vivos or mortis causa. (5) It is imprescriptible."”’ (c) Use
of surname is fixed hv law: The name of an individual has two
parts: (1) the given or proper name and (2) the surname or
family name. The given or proper name is that which is given to
the individual at birth or at baptism, to distinguish him from other
individuals. The surname or family name is that which identifies
the family to which he belongs and is continued from parent to
child. The given name may be freely selected by the parents for
the child, but the surname to which the child is entitled is fixed
by law.11**4 (d) Use of middle name: There is no law regulating the
use of a middle name. The middle name or the mother’s surname
is only considered in Article 375(1) of the Civil Code in case
there is identity of names and surnames between ascendants and
"”'Sec. 4, R.A. No. 7170.

IW2Scc. 3, R.A. No. 7170.
"”’/n re: Adoption of Stephanie Nalhy Astorga Garcia, 454 SCRA 541 (2005), citing
Republic v. CAand Maximo Wong, 209 SCRA 189 (1992).
,W5Repub)ic v. CA and Maximo Wong, supra.

lau>ln re: Adoption of Stephanie Nathy Astorga Gareia, supra, citing Republic v. CA and
Maximo Wong, supra.
J9JC9B0M
R52M9UH7
descendants, in which case, the middle name or the mother’s

surname shall be added.10" The foregoing does not, however,
mean that middle names have no practical or legal significance.
Middle names serve to identify the maternal lineage or filiation
of a person as well as further distinguish him from others who
may have the same given name and surname as he has.1018 Thus,
the members of the Civil Code and Family Law Committees
that drafted the Family Code recognized the Filipino custom of
adding the surname of the child’s mother as his middle name. In
the Minutes of the Joint Meeting of the Civil Code and Family
Law Committees, the members approved the suggestion that the
initial or surname of the mother should immediately precede the
surname of the father.10" In In re: Petition for Change of Name
and/or Correction of Entry in the Civil Registry of Julian Lin
Carulasan Wang,1050 the Court did not allow a legitimate child
to drop the middle name from his registered name. In that case,
the Court did not find the justification for the dropping of the
middle name to be reasonable because the only reason advanced
by petitioner for dropping his middle name is convenience.
22.2 Surname of Legitimate Children: (a) Rule: They shall have the
right to bear the surnames of the father and the mother,108' but
shall principally use the surname of the father.1082 However, if
there is a valid reason, a legitimate child may be allowed to drop
the father’s surname and use the surname of his or her mother.1083
The Court justified that the word “principally” as used in the
codal provision is not equivalent to “exclusively” so that there
is no legal obstacle if a legitimate or legitimated child should
choose to use the surname of his mother to which he is equally
entitled.1088 But he cannot be allowed to drop the father’s surname
and replace it with that of the stepfather’s because such change
of name may result to confusion with respect to the child’s
paternity.1088
'°"Supra.
"*“/« re: Petition for Change of Name and/or Correction of Entry in the Civil Registry of
Julian Lin Carulasan Wang, 454 SCRA 155 (2005).
lo"/n re: Adoption of Stephanie Nathy Astorga Garcia, supra.
'“"‘Supra.
'“'Art. 174(1), FC.
1082Art. 364, NCC.
'“’Alfon v. Republic, 97 SCRA 858 (1980) and Oshita v. Republic, 125 Phil. 1098 (1967).
IO84M.
'“’Republic v. CA, 300 SCRA 138 (1998); see also Moore v. Republic, 8 SCRA 282
(1963) and Padilla v. Republic, 113 SCRA 789 (1982).
J9JC9B0M
R52M9UH7
22.3 Surname of Illegitimate Children-, (a) Rule: In the absence of

recognition by the father, illegitimate children are required to use
the surname of their mother.1056 The use of the word “shall” in
Article 176 of the FC underscores its mandatory character. The
discretion on the part of the illegitimate child to use the surname
of the father is conditional upon proof of compliance with R.A.
No. 9255,'“’ the law amending Article 176 of the Family Code.
Under said law, an illegitimate child acquires the right to use the
father’s surname if he is voluntarily recognized by the father in
the following situations: (1) If his/her filiation has been expressly
recognized by the father through the record of birth appearing
in the civil register; or (2) when an admission of paternity is
made by the father in a public document or private handwritten
instrument.10” (b) Use of father’s surname not mandatory: In
Grande v. Antonio,'"” the Court clarified that Article 176 of the
Family Code, as amended by R.A. No. 9255, gives illegitimate
children the right to decide if they want to use the surname of their
father or not. It is not the father or the mother who is granted by
law the right to dictate the surname of their illegitimate children.
The use of the word “may” in the provision readily shows that
an acknowledged illegitimate child is under no compulsion to
use the surname of his illegitimate father. Hence, a father cannot
compel the use of his surname by his illegitimate children upon
his recognition of their filiation.1"* (c) If paternity is admitted
in private handwritten instrument: (1) While Article 176 of the
Family Code, as amended, does not explicitly state that the
private handwritten instrument acknowledging the child’s
paternity must be signed by the putative father, said provision
must, however, be read in conjunction with related provisions
of the Family Code which require that recognition by the father
must bear his signature, specifically Articles 172 and 175 of
the Family Code. That a father who acknowledges paternity of
a child through a written instrument must affix his signature
thereon is clearly implied in Article 176 of the Family Code.1061
(2) If the admission of paternity is made in a private handwritten
'"‘Art. 176, FC, as amended by R.A. No. 9255.

'“’Barcelole v. Republic, 834 SCRA 564 (2017).
lmld.
'“’716 SCRA 698 (2014).
1
l061Dela Cruz v. Gracia, 594 SCRA 648 (2009).
J9JC9B0M
R52M9UH7
instrument which was not signed by the father, may the

illegitimate child be allowed to make use of the father’s surname
on the basis of such instrument? In Dela Cruz v. Gracia,1062 the
Court allowed the child to use the father’s surname on the basis
of such private handwritten instrument considering that there are
other evidence to prove paternity and filiation. In the same case,
the Court adopted the following rules respecting the requirement
of affixing the signature of the acknowledging parent in any
private handwritten instrument wherein an admission of filiation
of a legitimate or illegitimate child is made: (i) where the private
handwritten instrument is the lone piece of evidence submitted
to prove filiation, there should be strict compliance with the
requirement that the same must be signed by the acknowledging
parent; otherwise, such instrument cannot authorize the child to
use the father’s surname; and (ii) where the private handwritten
instrument is accompanied by other relevant and competent
evidence, it suffices that the claim of filiation therein be shown
to have been made and handwritten by the acknowledging
parent as it is merely corroborative of such other evidence, in
which case, such instrument now authorizes the child to use the
father’s surname, (d) If birth certificate is void: In Barcelote v.
Republic,where the Court declared the birth certificates of two
illegitimate children void because the same were registered only
by the father without the knowledge and consent of the mother,
it was likewise ruled that the children did not acquire the right to
use the father’s surname because of failure to comply with the
requirements of Article 176 of the Family Code, as amended, (e)
If child was never recognized bv the father: If the surname of an
illegitimate child registered in the civil registry and appearing in
his birth certificate is that of his illegitimate father, who failed
to recognize him, can he be allowed to change his surname with
that of the mother’s? In Republic v. Capote,1064 the Court allowed
an illegitimate child who had been using his father’s surname
although the latter did not recognize him to use the mother’s
surname in lieu of the father’s. The Court explained that the child
is entitled to change his name as he was never recognized by his
father while his mother has always recognized him as her child.
Such change of name, according to the Court, will erase the
,M2Supra.
'“’G.R. No. 222095, August 7, 2017.
'““5I4SCRA76 (2007).
J9JC9B0M
R52M9UH7
impression that he was ever recognized by his father, (f) Allowed,

to use surname of stepfather: While a legitimate child was not
allowed by the Court to use the surname of the stepfather,
an illegitimate child, on the other hand, was allowed to use the
surname of the stepfather in Calderon v. Republic'066 and Llaneta
v. Agrava.M1 The Court held that a petition for change of name
of an infant should be granted where to do so is clearly for
the best interest of the child. In Calderon, The Court took into
consideration the opportunity provided for the minor petitioner
to eliminate the stigma of illegitimacy which she would carry if
she continued to use the surname of her illegitimate father.
22.4 Surname of Adopted Children: (a) Rule: One of the effects of
adoption is that the adopted is deemed to be a legitimate child
of the adopter for all intents and purposes. Being a legitimate
child by virtue of adoption, it follows that the adopted child is
entitled to all the rights provided by law to a legitimate child
without discrimination of any kind, including the right to bear
the surname of the adopter.'"68 The law on use of surnames under
the Civil Code also provides that “an adopted child shall bear the
surname of the adopter.”'"69 (b) If adopted only bv the wife: The
provision of law which entitles the adopted minor to the use of
the surname of the adopter refers to the adopter’s own surname
and not to her surname acquired by virtue of marriage.'"’" Thus,
in the following situations the child may not use the adopter’s
surname acquired by virtue of marriage: (1) If the wife adopts her
illegitimate child with the consent of the husband. This is one of
the exceptions to the rule ofjoint adoption by spouses.'"’1 (2) If the
spouses are legally separated and only the wife files the adoption.
This is also one of the exceptions to the rule of joint adoption
by spouses.'"” (3) If the adoption was made by the woman prior
to her marriage and she thereafter contracted a marriage, (c) In
adoption bv illegitimate father: In In re: Adoption of Stephanie
'“’Republic v. CA, 300 SCRA 138 (1998).

‘““19 SCRA 721 (1967)
'“’57 SCRA 29 (1974).
m,ln re: Adoption of Stephanie Nathy Astorga Garcia, supra.
'“’Art. 365, NCC.
'"’"Valdez-Johnson v. Republic, G.R. No. L-18284, April 30,1963.
'”'Sec. 7, DAA.
'mId.
J9JC9B0M
R52M9UH7
Nathy Astorga Garcia,1073 the Court allowed an illegitimate child,

upon adoption by her natural father, to use the surname of her
natural mother as her middle name. The Court explained that
the there is no law prohibiting an illegitimate child adopted by
her natural father to use, as middle name, her mother’s surname.
On the contrary, the use of such middle name will maintain her
maternal lineage, (d) Adopted may be allowed to revert back to
surname of biological parent: In Republic v. CA and Wong,'074 the
Court allowed an adopted child, after the death of the adopting
father, to drop the surname of the adopter and use again the
surname of the natural father. The Court found the justification
to be proper and reasonable—that use of the surname Wong
embarrassed and isolated him from his relatives and friends, as
the same suggests a Chinese ancestry when in truth and in fact he
is a Muslim Filipino residing in a Muslim community. The Court
reasoned that a change of name does not, after all, define or effect
a change in one’s existing family relations or in the rights and
duties flowing therefrom. Nor does it alter one’s legal capacity,
civil status, or citizenship; what is altered is only the name.'""
Besides, the adopting mother consented to the petition for change
of name.
22.5 Surname of Married Woman: (a) Rule: A married woman may
retain her maiden name after marriage. The use of the word
“may” in Article 370 of the Civil Code indicates that the use
of the husband’s surname by the wife is permissive rather than
obligatory.'076 Clearly, a married woman has an option, but not
a duty, to use the surname of the husband in any of the ways
provided by Article 370 of the Civil Code. She is therefore
allowed to use not only any of the three names provided in Article
370, but also her maiden name upon marriage.'077 She is not
prohibited from continuously using her maiden name once she
is married because when a woman marries, she does not change
her name but only her civil status.'"7" (b) Three options in using
husband’s surname: She may use: (1) Her maiden first name
and surname and add her husband’s surname; (2) Her maiden
'""454 SCRA 541 (2005).

l074Supra.
'""Republic v. CAand Wong. G.R. No. 97906, May 21, 1992, 209 SCRA 189.
'""Remo v. The Hon. Sec. of Foreign Affairs, 614 SCRA 281 (2010); also In re Josephine
P. Uy-Timosa, Bar Matter No. 1625, July 18, 2006.
IO77M.
'™Id.
J9JC9B0M
R52M9UH7
first name and her husband’s surname; or (3) Her husband’s

full name, but prefixing a word indicating that she is his wife,
such as “Mrs.”10” (c) Rule in case of legal separation: The wife
shall continue using her name and surname employed before the
legal separation.1050 Therefore, if the wife adopted her husband’s
surname after the marriage, the use of the husband’s surname
becomes obligatory when legal separation has been granted.1081
(d) Rule in case of annulment of marriage: (1) If the wife is the
guilty party, she shall resume her maiden name and surname. (2)
If she is the innocent spouse, she may resume her maiden name
and surname or continue using the former husband’s surname,
unless: (i) the court decrees otherwise; or (ii) she or the former
husband is married again to another person.1082 (e) In case of death
of husband: Upon death of the husband, the widow has an option
of: (1) resuming her maiden name and surname, or (2) continue
employing the deceased’s surname as though he were still living,
in any of the three ways mentioned in Article 370 of the Civil
Code.1051 The use of the husband’s surname after the latter’s death
is permissive and not obligatory.1084 Upon termination of the
marriage, either by reason of death of the husband, or divorce,
or annulment of the marriage, the woman is not required to seek
judicial confirmation of the change in her civil status in order
to revert to her maiden name as the use of the former husband’s
surname is optional and not obligatory for her.1085
22.6 In Case of Identity of Names and Surnames: (a) Between
ascendants and descendants: (1) The word “Junior” can only be
used by a son; (2) Grandsons and other direct male descendants
shall either: (i) add a middle name or the mother’s surname, or
(ii) add the Roman numerals II, III, and so on.1084 (b) Between
those who are not ascendants and descendants: The younger
person is obliged to use such additional name or surname as will
avoid confusion.1087
'“’’Art. 370, NCC.

1080Art. 372, NCC.
10,1 Yasin v. Honorable Judge Shari'a District Court, 311 Phil. 696, 707 (1995).
10,2Art. 371, NCC.
1081Art. 373, NCC.
'“See Yasin v. Honorable Judge Shari’a District Court, supra.
msld.
'“Art. 375, NCC.
'“’Art. 374, NCC.
J9JC9B0M
R52M9UH7
22.7 Other Rules: (a) Usurpation of name: The usurpation of name

under Article 377 of the Civil Code implies some injury to the
interests of the owner of the name. It consists in the possibility
of confusion of identity between the owner and the usurper, and
exists when a person designates himself by another name. The
elements are as follows: (1) there is an actual use ofanother’s name
by the defendant; (2) the use is unauthorized; and (3) the use of
another’s name is to designate personality or identify a person."”8
(b) Rules on pen name and stage names: The employment of pen
names or stage names is permitted subject to two conditions: (1) it
is done in good faith; and (2) there is no injury to third persons.10”
If these conditions are satisfied, then the law protects the use of
such pen names or stage names since the law also prohibits its
usurpation."”0 (c) Rules on use of alias: Any person desiring to
use an alias shall apply for authority therefor in proceedings like
those legally provided to obtain judicial authority for a change
of name, and no person shall be allowed to secure such judicial
authority for more than one alias. The petition for an alias shall
set forth the person’s baptismal and family name and the name
recorded in the civil registry, if different, his immigrant’s name,
if an alien, and his pseudonym, if he has such names other than
his original or real name, specifying the reason or reasons for
the use of the desired alias. The judicial authority for the use of
alias the Christian name and the alien immigrant’s name shall be
recorded in the proper local civil registry, and no person shall use
any name or names other than his original or real name unless the
same is or are duly recorded in the proper local civil registry."”'
23) Change of First Name and Surname

23.1 What Name May Be Changed: By Article 408 of the Civil Code,
a person’s birth must be entered in the civil register. The official
name of a person is that given him in the civil register. That is his
name in the eyes of the law.1092 While it is true that under Article
376 of the Civil Code, no person can change his name or surname
"""*Dapaiir v. Biascan, 482 Phil. 385 (2004), citing Tolentino V. Court of Appeals, 162 SCRA
66(1988).
'“’Art. 379, NCC.
"”»/</.
l09lSec. 2, C.A. No. 142, as amended by R.A. No. 6085.
"”2Republic v. Hernandez, 253 SCRA 509 (1996), citing Chomi v. Local Civil Registrar of
Manila, 99 Phil. 1004 (1956); Ng Yao Siong v. Republic, 16 SCRA 483 (.1966).
J9JC9B0M
R52M9UH7
without judicial authority, nonetheless, the only name that may

be changed is the true and official name recorded in the Civil
Register.""’
23.2 Change of First Name: (a) Governing law: R.A. No. 9048 now
governs the change of first name,1094 as amended by R.A. No.
10172.""’ It vests the power and authority to entertain petitions
for change of first name to the city or municipal civil registrar or
consul general concerned. Under the law, therefore, jurisdiction
over applications for change of first name is now primarily lodged
with the aforementioned administrative officers. The intent and
effect of the law is to exclude the change of first name from the
coverage of Rules 103 (Change ofName) and 108 (Cancellation or
Correction of Entries in the Civil Registry) of the Rules of Court,
until and unless an administrative petition for change of name is
first filed and subsequently denied.1®6 It likewise lays down the
corresponding venue, form, and procedure. In sum, the remedy
and the proceedings regulating change of first name are primarily
administrative in nature, not judicial.1097 (b) Grounds for change
of first name: Petitions for change of first name or nickname
may be allowed in any of the following cases: (1) The petitioner
finds the first name or nickname to be ridiculous, tainted with
dishonor, or extremely difficult to write or pronounce; (2) The
new first name or nickname has been habitually and continuously
used by the petitioner and he has been publicly known by that
first name or nickname in the community; or (3) The change
will avoid confusion.""" A change of first name is not allowed by
reason of sex reassignment surgery.""9
23.3 Change ofName Under Rule 103: (a) Scope of Rule 103: A change
of first name is now governed by R.A. No. 9048, as amended by
R.A. No. 10171.1100 A person seeking (1) to change his or her
surname or (2) to change both his first name and surname may file
a petition for change of name under Rule 103, provided that the
""’Yasin v. Honorable Judge Shari 'a District Court, supra', see also Republic V. Hernandez,
supra.
‘“Silvcrio v. Republic, 537 SCRA 373 (2007).
""’Republic v. Gallo, 851 SCRA 570 (2018).
""‘Last par. of Sec. 7, R.A. No. 9048.
"’’’Silvcrio v. Republic, supra.
"""Sec. 4, R.A. No. 9048.
""’Silvcrio v. Republic, supra.
,mld.
J9JC9B0M
R52M9UH7
jurisprudential grounds in Republic v. Hernandez are present."”

The grounds for change of name enumerated in Republic v.
Hernandez are listed below, (b) Change of name - Privilege only:
The State has an interest in the names bome by individuals and
entities for purposes of identification, and that a change of name
is a privilege and not a matter of right."02 Before a person can be
authorized to change his name, that is, his true or official name
or that which appears in his birth certificate or is entered in the
civil register, he must show proper and reasonable cause or any
convincing reason which may justify such change."" In Republic
v. Hernandez,"w the Court enumerated the following grounds
as being sufficient to warrant a change of name: (1) when the
name is ridiculous, dishonorable, or extremely difficult to write
or pronounce; (2) when the change results as a legal consequence
of legitimation or adoption; (3) when the change will avoid
confusion; (4) when one has continuously used and been known
since childhood by a Filipino name and was unaware of alien
parentage; (5) when the change is based on a sincere desire to
adopt a Filipino name to erase signs of former alienage, all in
good faith and without prejudice to anybody; and (6) when the
surname causes embarrassment and there is no showing that the
desired change of name was for a fraudulent purpose or that
the change of name would prejudice public interest, (c) Effect
of change of name: A change of name does not define or effect
a change in one’s existing family relations or in the rights and
duties flowing therefrom. It does not alter one’s legal capacity,
civil status, or citizenship; what is altered is only the name.""
24) Change or Correction of Entry in Civil Register

24.1 Correction of Clerical or Typographical Errors: (a) Governing
law: Together with Article 376 of the Civil Code, Article 412
of the Civil Code was amended by R.A. No. 9048 and R.A. No.
10172 insofar as clerical or typographical errors are involved.
"“'Bartolome v. Republic, G.R. No. 243288, August 28,2019.

"“Ong Peng Oan v. Republic, 102 Phil. 468, 470 (1957), cited in In Re: Change of Name
of Yap Ek Siu v. Republic, G.R. No. L-25437, April 28, 1969.
"“’Republic v. Hernandez, 253 SCRA 509 (1996). citing Ong Pen Oan v. Republic, 102
Phil. 460 (1957); Nacionale v. Republic, 16 SCRA 636 (1966); Yu v. Republic, 17 SCRA 253
(1966); Calderon v. Republic, 19 SCRA 721 (1967).
Supra.
"“Republic v. CA and Wong, 209 SCRA 189 (1992); Yu v. Republic, 17 SCRA 253
(1966); Calderon v. Republic, 19 SCRA 721 (1967).
J9JC9B0M
R52M9UH7
The correction or change of such matters can now be made

through administrative proceedings and without the need for
a judicial order. In effect, R.A. No. 9048, as amended by R.A.
No. 10172, removed from the ambit of Rule 108 of the Rules
of Court the correction of such errors. Rule 108 now applies
only to substantial changes and corrections in entries in the
civil register."" (b) Meaning of clerical or typographical errors:
Refers to a mistake committed in the performance of clerical
work in writing, copying, transcribing, or typing an entry
in the civil register that is harmless and innocuous, such as
misspelled name or misspelled place of birth, mistake in the
entry of day and month in the date of birth, or the sex of
the person or the like, which is visible to the eyes or obvious
to the understanding, and can be corrected or changed only by
reference to other existing record or records."07 Under R.A. No.
9048, as amended by R.A. No. 10172, any correction involving
the change of nationality, age, or status of the petitioner cannot
be considered a mere clerical or typographical error."08 It is a
substantial change for which the applicable procedure is Rule
108 of the Rules of Court. In addition to the change of the first
name, the day and month of birth, and the sex of a person may
now be changed without judicial proceedings. Republic Act No.
10172 clarifies that these changes may now be administratively
corrected where it is patently clear that there is a clerical or
typographical mistake in the entry. It may be changed by filing
a subscribed and sworn affidavit with the local civil registry
office of the city or municipality where the record being sought
to be corrected or changed is kept."1" R.A. No. 10172 defines a
clerical or typographical error as a recorded mistake, “which is
visible to the eyes or obvious to the understanding.'' Evidently
the test for whether a correction is clerical or substantial is found
in the provision itself. Misspelled names or missing entries are
clerical corrections if they are visible to the eyes or obvious
to the understanding and if they may be readily verified by
referring to the existing records in the civil register. They
must not, however, involve any change in nationality, age, or
status."10
"“Republic v. Cagandahan, 565 SCRA 72 (2008).

"“’Sec. 2(3), R.A. No. 9048, as amended by R.A. No. 10172.
""Id.
"“Republic v. Gallo, 851 SCRA 570 (2018).
"'“Bartolome v. Republic, G.R. No. 243288, August 28,2019.
J9JC9B0M
R52M9UH7
24.2 Summary of Rules: In Bartolome v. Republic,"" the Court

summarized the rules, as follows: (a) A person seeking (1) to
change his or her first name, (2) to correct clerical or typographical
errors in the civil register, (3) to change/correct the day and/or
month of his or her date of birth, and/or (4) to change/correct his
or her sex, where it is patently clear that there was a clerical or
typographical error or mistake, must first file a verified petition
with the local civil registry office of the city or municipality
where the record being sought to be corrected or changed is
kept, in accordance with the administrative proceeding provided
under R.A. No. 9048 in relation to R.A. No. 10172. A person
may only avail of the appropriate judicial remedies under Rule
103 or Rule 108 in the aforementioned entries after the petition
in the administrative proceedings is filed and later denied, (b) A
person seeking (1) to change his or her surname or (2) to change
both his or her first name and surname may file a petition for
change of name under Rule 103, provided that the jurisprudential
grounds discussed in Republic v. Hernandez'"1 are present. (3)
A person seeking substantial cancellations or corrections of
entries in the civil registry may file a petition for cancellation or
correction of entries under Rule 108. As discussed in Lee v. Court
of Appeals"" and more recently, in Republic v. Cagandahan,"'"
R.A. No. 9048 “removed from the ambit of Rule 108 ofthe Rules
of Court the correction of such errors. Rule 108 now applies
only to substantial changes and corrections in entries in the civil
register.”
24.3 Illustrative Cases: (1) In Bartolome v. Republic,"" the Court
ruled that a petition to change name from "Feliciano” to “Ruben”
on the ground that petitioner has been using the latter since
childhood is primarily administrative and covered by R.A. No.
9048. (2) In Republic v. Gallo,"'" the Court ruled that a prayer to
enter a person’s middle name is a mere clerical error, which may
be corrected by referring to existing record, hence, also covered
by R.A. No. 9048. (3) In Republic v. Sali,"'1 the Court held that
""Supra.
",!253 SCRA 509(1996).
"n419 Phil. 392 (2001).
"“Supra.
""Supra.
'""Supra.
"I7822 SCRA 239 (2017).
J9JC9B0M
R52M9UH7
a change of therein respondent Lorena Ompas Sali’s first name

from “Dorothy” to “Lorena” on the ground that the latter was the
name she was using since birth was primarily administrative in
nature and should be filed under the procedure provided in R.A.
No. 9048.
24.4 Change of Entry as to Sex: Prior to the enactment of R.A. No.
10172, a petition to correct one’s biological sex was governed
by Rule 108 as this was a substantial change excluded in the
definition of clerical or typographical errors in Republic Act
No. 9048. This was affirmed in Republic v. Cagandahan'"3 and
Republic v. Gallo."', In Cagandahan, the Court ruled: ‘‘Under
Rep. Act No. 9048, a correction in the civil registry involving the
change of sex is not a mere clerical or typographical error. It is
a substantial change for which the applicable procedure is Rule
108 of the Rules of Court.” It was only when R.A. No. 10172 was
enacted on August 15,2012 that errors in entries as to biological
sex may be administratively corrected, provided that they
involve a typographical or clerical error. However, this is not true
for all cases as corrections in entries of biological sex may still
be considered a substantive matter.” In that case, the Court also
ruled that a party who seeks a change of name and biological sex
in his or her Certificate of Live Birth after a gender reassignment
surgery has to file a petition under Rule 108. In that case, it was
held that the change did not involve a mere correction of an error
in recording but a petition for a change of records because the sex
change was initiated by the petitioner. In Republic v. Unabia,"20
the Court ruled that while administrative correction of sex was
only authorized with the passage in 2012 of R.A. No. 10172,
the amendments under R.A. No. 10172 were applicable to the
present petition filed in 2009 because R.A. No. 10172, being
remedial in nature, may be applied to pending petitions.
24.5 Substantial Changes or Corrections Covered bv Rule 108: (a)
Scope of Rule 108: Considering that clerical or typographical
errors can now be corrected or changed through administrative
proceedings and without the need for a judicial order, Rule 108
now applies only to substantial changes and corrections in entries
in the civil register,"21 including change of nationality, age, or
""565 SCRA 72 (2008).

'"’851 SCRA 570 (2018).
"!°G.R. No. 213346, Febmary 11,2019.
"2lSilverio v. Republic, supra and Republic v. Cagandahan, supra.
J9JC9B0M
R52M9UH7
status."22 In Republic v. Valencia,1122 the Court adopted the view

that substantial errors or matters in a civil registry may also be
corrected under Rule 108 and the true facts established, provided
the parties aggrieved avail themselves of the appropriate
adversary proceeding.
24.6 Important Reminders on Rule 108: (a) In Republic v. Coseteng-
Magpayo,"1' the Supreme Court held that when a petition for
cancellation or correction of an entry in the civil register involves
substantial and controversial alterations including those on
citizenship, legitimacy of paternity or filiation, or legitimacy of
marriage, strict compliance with the requirements of Rule 108
of the Rules of Court is mandated, (b) The Supreme Court has
stressed that a petition seeking a substantial correction of an
entry in a civil register must implead as parties to the proceedings
not only the local civil registrar, but also all persons who have or
claim any interest which would be affected by the correction.""
(c) While there may be cases where the Court held that the failure
to implead and notify the affected or interested parties may be
cured by the publication of the notice of hearing, in those cases
earnest efforts were made by petitioners in bringing to court all
possible interested parties."26 Such failure was likewise excused
where the interested parties themselves initiated the corrections
proceedings;"27 when there is no actual or presumptive
awareness of the existence of the interested parties;"2’ or when
a party is inadvertently left out."2’ (d) In Tan v. Office of the
Local Civil Registrar of the City of Manila,"20 petitioner filed
on 24 November 2011 a petition for Correction of Entry under
Rule 108 before the RTC seeking to correct his name in the birth
certificate from “Ramon Corpus Tan Ko” to “Ramon Corpuz
Tan.” After hearing, the RTC dismissed the petition because the
petitioner failed to comply with the requirements of an adversarial
proceeding, noting that the correction sought for is a substantial
"22R.A. No. 10172.

""225 Phil. 408 (1986).
""641 SCRA533 (2011).
"2JOnde v. Office of the Local Civil Registrar of Las Pinas City, 734 SCRA66I (2014).
"“Republic v. Uy, 703 SCRA425 (2013), ct/ing Ceruila v. Delantar, supra.
"21Id„ citing Republic v. Kho, 526 SCRA 177 (2007).
"2>Id., citing Barco v. CA, Phil. 39 (2004).
"!’M, citing Republic v. Cosctcng-Magpayo, supra.
"’°G.R. No. 211435, April 10,2019.
J9JC9B0M
R52M9UH7
correction and is governed by Rule 108 of the Rules of Court,

which is not summary, but an adversarial proceeding. The RTC
ruled that the petitioner should have impleaded his mother. The
Court ruled that the correction sought by the petitioner involves a
substantial change and not a mere clerical error. The Court noted
that the name “Tan Ko” has been consistently used not only in
the entries for petitioner’s name, but also for that of his parents.
Thus, the “correction” of petitioner’s name from “Ramon Corpus
Tan Ko” to “Ramon Corpuz Tan” would necessarily affect not
only his name, but also the names of his parents as entered in
his Certificate of Live Birth. Altering petitioner’s surname from
“Tan Ko” to “Tan” would, in effect, be an adjudication that the
first name of his father is indeed “Ko” and his surname “Tan.”
Clearly, the correction would affect the identity of petitioner’s
father. Moreover, there would be a need to correct his mother’s
name from ‘Trinidad Corpus Tan Ko” to ‘Trinidad Corpuz
Tan.” This would require deleting the word “Ko” from “Tan
Ko” and changing the letter “s” to “z” in “Corpus.” To effect
the correction, it would be essential to establish that “Trinidad
Corpus Tan Ko” and “Trinidad Corpuz Tan” refer to the same
person. A summary proceeding would certainly be insufficient
to effect such substantial corrections. Since the proceeding is
adversarial, his failure to implead his mother is fatal because
she would be affected by the proceeding for correction of entry
which he filed considering that his mother’s name in the subject
birth certificate would necessarily be changed if the correction
prayed for is granted, (e) In Ohoma v. Office of the Local Civil
Registrar of Aguinaldo, Ifugao,'m the petitioner sought the
cancellation of his first birth certificate registered on 13 June
1986 under Registry Number 45-86. He alleged that his birth was
belatedly recorded on 8 February 2000 under Certificate of Live
Birth with Registry Number 2000-24. He alleged that his first
birth certificate contained erroneous entries and that his second
birth certificate reflects the true and correct data. Citing Office of
the Civil Registrar-General Administrative Order No. 1, Series
of 1983, requiring the registration of the birth of a child within
30 days from the time of birth in the Office of the Local Civil
Registrar of the city/municipality where it occurred, the Court
ruled that there can be no valid late registration of petitioner’s
birth as the same had already been lawfully registered within 30
"3IG.R. No. 239584, June 17,2019.
J9JC9B0M
R52M9UH7
days from his birth under the first birth certificate. Consequently,
it is the second birth certificate that should be declared void and
correspondingly cancelled even if the entries therein are claimed
to be the correct ones.
25) Absence
25.1 Concept and Stages: (a) Concept: It is the special legal status of
one who is not in his domicile, his whereabouts being unknown,
and it is uncertain whether he is dead or alive."” (b) Three stages
of absence: (1) Provisional absence: When a person disappears
from his domicile, his whereabouts being unknown, without
leaving an agent to administer his property."” Its requisites are
the following: (i) that the absentee should have disappeared
from his domicile; (ii) that his whereabouts are not known;
(iii) that he did not leave any agent to administer his property;
and (iv) that the appointment of a representative in connection
with such property is urgent or necessary. (2) Declared absence:
When a person disappears from his domicile, and two years ha
elapsed without any news about him or since the receipt of
last news, or five years have elapsed in case he left a perso
administer his property."” Its requisites are the following: (i),
the absentee should have disappeared from his domicile; (ii) tw.
his whereabouts are not known; and (iii) that he has been absent
without any news for two years, if nobody was left to administer
his property, or for five years if somebody was left to administer
such property. (3) Presumptive death: When after the period
provided by law, a person is presumed dead."” (c) Requirement
of judicial declaration of absence: (1) When necessary: There
is no need for a judicial declaration of absence if there are no
properties."’'’ The need to have a person judicially declared an
absentee is when he has properties which have to be taken care
of or administered by a representative appointed by the court
(Article 384, Civil Code); the spouse of the absentee is asking
for separation of property (Article 135[2], Family Code) or the
spouse is asking the Court that the administration of all classes
of exclusive property of the absentee be transferred to him/her
"”l Tolentino, Civil Code ofdie Phil., 1992 Ed., 683.

"’’Art. 381, NCC.
"”Art. 384, NCC.
"’’Arts. 390 and 391, NCC.
"’’Reyes v. Alcjandrino, 141 SCRA65 (1986).
J9JC9B0M
R52M9UH7
(Article 142[2], Family Code). (2) Declaration of absence and

petition for administration: The petition to declare the husband
an absentee and the petition to place the management of the
conjugal properties in the hands of the wife may be combined
and adjudicated in the same proceeding."37 In Daya Maria Tol-
Noguera v. Villamor,"3* the Court reiterated the rule that it is not
necessary that a declaration of absence be made in a proceeding
separate from and prior to a petition for administration.
25.2 Presumption of Death: (a) Governing law: (1) Article 41 of the
FC is the applicable law if the presumption of death is only for
the purpose of contracting a valid subsequent marriage. (2) If
the presumption of death is for purposes other than remarriage,
the applicable law is either Article 390 or 391 of the Civil Code,
(b) Requirement of judicial declaration of presumptive death:
It is only when the presumption of death is for the purpose of
remarriage that a judicial declaration of presumptive death is
required and authorized by law (under Article 41 of the Family
Code). If the presumption of death is for purposes other than
remarriage, where the applicable law is either Article 390
or Article 391 of the Civil Code, a petition for issuance of a
judicial declaration of presumptive death is not authorized."3’
The following are the reasons why a petition for declaration
of presumptive death based on the Civil Code was disallowed
in our jurisdiction: (1) Articles 390 and 391 of the Civil Code
merely express rules of evidence that only allow a court or a
tribunal to presume that a person is dead upon the establishment
of certain facts. (2) Since Articles 390 and 391 of the Civil Code
merely express rules of evidence, an action brought exclusively
to declare a person presumptively dead under either of the said
articles actually presents no actual controversy that a court
could decide. In such action, there would be no actual rights
to be enforced, no wrong to be remedied nor any status to be
established. (3) A judicial pronouncement declaring a person
presumptively dead under Article 390 or Article 391 of the Civil
Code, in an action exclusively based thereon, would never really
become “final” as the same only confirms the existence of a
primafacie or disputable presumption. The function of a court to
render decisions that is supposed to be final and binding between
citing Peyer v. Martinez, 88 Phil. 72, 80.

II3,G.R. No. 84250, July 20, 1992.
"”Tadeo-Matias v. Republic, G.R. No. 230751, April 25,2018.
J9JC9B0M
R52M9UH7
litigants is thereby compromised. (4) Moreover, a court action to

declare a person presumptively dead under Articles 390 and 391
of the Civil Code would be unnecessary. The presumption in the
said articles is already established by law."40
25.3 Required Period of Absence for Presumptive Death: (a) Kinds
of absence: (1) Ordinary absence - if the person disappeared in
a situation where there was no danger of death; and (2) Qualified
absence - if the person disappeared in a situation where there
was danger of death, (b) For purposes of remarriage: Four
years in case of ordinary absence; two years in case of qualified
absence."41 (c) For opening of succession: In case of ordinary
absence, 10 years generally; however, if the person disappeared
after the age of 75, five years of absence."42 In case of qualified
absence, four years.1143 (d) For all other purposes: Seven years in
case of ordinary absence,"44 and four years in case of qualified
absence."45
"•“Id.
1141 Art. 41, FC.
1,42Art. 390. par. 2, NCC.
1143Art. 391, NCC.
"44Art. 390, par. l.NCC.
"45Art. 391, NCC.
J9JC9B0M
R52M9UH7
BOOK II. — PROPERTY
1) Classification of Property: Immovable and Movable Property

1.1 Concept of Property: (a) Definition: Properties are things which
are capable of satisfying human wants and are susceptible
of appropriation, (b) Requisites: (i) utility, or the capacity to
satisfy human wants; (ii) individuality and substance, or having
a separate and autonomous existence; and (iii) susceptibility of
being appropriated.
1.2 Kinds of Immovable Property: (a) Immovable bv nature: Those
which by their essence and nature are immovable or cannot be
moved from one place to another, such as lands, roads,1 mines,
quarries, and slag dumps;2 (b) Immovable hv incorporation:
Those which become immovable by reason of their attachment or
incorporation to an immovable in such manner as to be an integral
part thereof, such as buildings and constructions of all kinds
adhered to the soil;’ trees, plants, and growing fruits attached to
the land or forming an integral part of an immovable;4 and those
that are attached to an immovable in the manner provided for in
paragraph 3 of Article 415; (c) Immovable hv destination: Those
which are essentially movable, but by the purpose for which they
have been placed in an immovable, partake of the nature of the
latter because of the added utility derived therefrom, such as
those mentioned in pars. 4, 5, 6, 7, and 9 of Article 415; and (d)
Immovable bv analogy: Those that are mentioned in par. 10 of
Article 415.
1.3 Enumeration of Immovable Property in Article 415: (a) Paragranh
].: Lands, buildings, roads, and constructions of all kinds adhered
to the soil. (1) Lands and roads: They are always immovable.
'Art. 415(1), NCC.

’Art. 415(8), NCC.
’Art. 415(1), NCC.
4Art. 415(2), NCC.
156
J9JC9B0M
R52M9UH7
BOOK II. — PROPERTY 157
(2) Buildings: A building, if permanently attached to the land, is

always immovable.5 Those merely superimposed on the soil or
sold for immediate demolition are considered movable property.6
A building by itself is a real or immovable property, hence, it may
be mortgaged apart from the land on which it has been built.’ A
building is immovable by incorporation, hence, once the house is
demolished, it ceases to exist as such and hence its character as
an immovable likewise ceases.8 Once a building is permanently
attached to the land, it is immovable property, irrespective of
whether or not said structure and the land on which it is adhered to
belong to the same owner,’ or whether the building is erected by
the owner of the land, or by a usufructuary or lessee.10 However,
if the parties will treat a building as a movable, as between them,
they are estopped from alleging the contrary." The foregoing
principle or view is not applicable to strangers to said contract.1’
As far as third persons, who are not parties to the contract, the
house (or building) is considered an immovable property.13 Even
if the parties treated a building as personal property, the Register
of Deeds (RD) may not refuse the registration of the chattel
mortgage because the duties of the RD are purely ministerial in
character.14 (3) Construction adhering to soil: To be immovable,
the construction must be attached permanently to the land,15 and
it must not be of provisional or temporary character but fixed
or integral, (b) Paragraph 2: Trees, plants, and growing fruits,
while they are attached to the land or form an integral part of
an immovable. (1) Trees and plants: Generally immovable if
incorporated to the soil. Hence, if cut or uprooted they become
movable property, unless they form an integral part of the land, as
in the case of timber which constitutes the natural product of the
’Punzalan, Jr. v. I'da. de Lacsamana, 121 SCRA 331,335 (1983); citing 3 Manresa 20.
‘Bautista, el al. v. Supnad, (C A) 59 O.G. 1575, 1578 (1962).
’Prudential Bank v. Panis, 153 SCR A 390 (1987).
"Bicerra v. Teneza, 6 SCRA 649, 651 (1962).
’Lopez v. Orosa, Jr., 103 Phil. 98 (1958).
'“Ladera v. Hodges (CA), 48 O.G. 5374; cited in Evangelista v. Alto Surety & Insurance
Co., Inc., 103 Phil. 401.
"Navarro v. Pineda, 9 SCRA 631 (l963);Tumalad v. Vicencio, 41 SCRA 143 (1971).
'’Evangelista v. Alto Surety & Insurance Co., Inc., supra, al p. 405.
'’Navarro v. Pineda, supra, al p. 636.
'“Standard Oil Co. of New York v. Jaramillo. 44 Phil. 630 (1923).
153 Manresa 18-19; cited in II Tolentino, Civil Code, p. 17.
J9JC9B0M
R52M9UH7
tenement.16 (2) Growing fruits: For certain purposes, they may be

regarded as personal property pursuant to Article 416(2). Thus,
for purposes of sale,17 attachment and execution, and mortgage,1’
they are regarded as personal property, (c) Paragraphs 3 and
4: (1) Paragraph 3: refers to permanent fixtures, or everything
attached to an immovable in a fixed manner, in such a way
that it cannot be separated therefrom without breaking the
material or deterioration of the object. (2) Paragraph 4: refers to
ornaments or statues, reliefs, paintings, or other objects for use
or ornamentation, placed in buildings or on lands by the owner
of the immovable in such a manner that it reveals the intention
to attach them permanently to the tenements. (3) Distinctions
between paragraphs 3 and 4: (i) Paragraph 3 is immovable by
incorporation while paragraph 4 is immovable by destination; (ii)
in paragraph 3, separation from the immovable is not possible
without injury; while in paragraph 4, it is possible; and (iii) in
paragraph 3, it is not important who caused the attachment; while
in paragraph 4, it is necessary that it should be the owner of the
immovable who must place the ornament unto the immovable, (d)
Paragraph 5: refers to machineries, receptacles, instruments, or
implements intended to be used for an industry or works. They are
immovables by destination. (1) Requisites for immovability: (i)
Must be destined for use in the industry or work in the tenement1’
and must be essential and principal elements of the industry or
works.20 (ii) Industry or work must be carried on in a building
or on a piece of land,21 or even on waters.22 Thus, submarine or
underwater communications cables may be classified under the
term “machinery” as real property under Article 415(5).2J (iii)
They must be placed by the owner of the tenement, unless the
tenant acts as an agent of the owner.24 (2) Application of estoppel:
Although the machineries are essential and principal elements
of the industry, they can be proper subjects of a writ of replevin
l63 Manresa, 6th Ed., p.20.

l7M.,p.21.
‘“Sibal v. Valdez, 50 Phil. 512,524 (1927).
"B.H. Berkenkolter v. Cu Unjieng y Hijos, 61 Phil. 663; Ago v. CA, 6 SCRA 530, 536
(1962).
^Mindanao Bus Co. V. City Assessor and Treasurer, 6 SCRA 197, 200 (1962).
J,/ut; Board of Assessment Appeals v. Manila Electric Company, supra.
^Capitol Wireless, Inc. v. Provincial Treasurer of Batangas, 791 SCRA 272 (2016).
Dld.
24Davao Sawmill Co. v. Castillo, 61 Phil. 709(1935).
J9JC9B0M
R52M9UH7
BOOK 11. —PROPERTY 159
if the parties have treated the same as personal property.25 (e)

Paragraph 6: refers to animal houses, pigeon-houses, beehives,
fish ponds, or breeding places of similar nature. (1) Requisites
for immovability: (i) permanently placed or attached to the land;
and (ii) must be placed by the owner of the land. (2) They must
not be permanently attached to the soil; otherwise, it will become
an immovable by incorporation under paragraph 1 (construction
adhering to the soil) or under paragraph 3. (f) Paragraph 7:
fertilizers actually used on a piece of land, (g) Paragraph 8: refers
to mines, quarries, and slag dumps, while the matter thereof
forms part of the bed, and waters either running or stagnant,
(h) Paragraph 9: refers to docks and structures which, though
floating, are intended by their nature and object to remain at a
fixed place on a river, lake, or coast. (1) They are immovables
by destination. (2) A classic example is a boathouse which, by
its nature, is a vessel and, therefore, a personal property but, if
it is tied to the shore and used as a residence, and since it floats
on waters which is immovable, is considered real property.26 (i)
Paragraph 10: refers to contracts for public works, and servitudes
and other real rights over immovable property. (1) They are
immovables by analogy. (2) If the real right is exercised over
an immovable property, like a registered real estate mortgage, it
is a real property.22 If exercised over a movable property, it is a
personal property. However, if it is a personal right, it is always a
personal property, whether exercised over a personal property or
over a real property, except contracts for public works.
1.4 Real Property For Taxation Purnoses: (a) Local Government Code
prevails: As between the Civil Code, a general law governing
property and property relations, and the Local Government
Code, a special law granting local government units (LGUs)
the power to impose real property tax, the latter prevails for the
purpose of determining which property is subject to real property
tax.2" (b) Illustrative cases: (1) In Manila Electric Company v.
City Assessor,1'1 it was ruled that the transformers, electric posts,
25Serg’s Products, Inc. v. PCI Leasing and Finance, Inc., 338 SCRA 499 (2000); Makati
Leasing and Finance Corp. V. Wearever Textile Mills, Inc., 122 SCRA 294 (1983).
“Capitol Wireless, Inc. v. Provincial Treasurer of Batangas, 791 SCRA 272 (2016).
2,MBTC v. Alejo, 364 SCRA 812, 819 (2001); see also Hongkong & Shanghai Bank v.
Aldecoa & Co., 30 Phil. 255,273.
“Manila Electric Company v. The City Assessor, 765 SCRA 52 (2015); Provincial Assessor
of Agusan del Sur v. Pilipinas Palm Oil Plantation, Inc., 805 SCRA 112 (2016).
NSupra.
J9JC9B0M
R52M9UH7
transmission lines, insulators, and electric meters of MERALCO

may qualify as “machinery” under the Local Government
Code subject to real property tax. (2) In Capitol Wireless, Inc.
v. Provincial Treasurer of Batangas,10 the Court likewise ruled
that submarine or undersea communications cables entering
the territorial jurisdiction of the Philippines are akin to electric
transmission lines and may qualify as “machinery” subject to real
property tax under the Local Government Code.
1.5 Movable Property Under Articles 416 and 417: (a) Art. 416(1):
Movables susceptible ofappropriation not included in Article 415.
Interest in business is personal property under this provision,31 as
well as the business itself.33 (b) Art. 416(2): Real property which
by any special provision of law is considered as personalty, such
as growing fruits although attached to the land for purposes
of the sale of the whole crops,33 for purposes of the Chattel
Mortgage Law," or for purposes of attachment or execution.35 (c)
Art. 416(3): Forces of nature which are brought under control by
science, such as gas36 and electricity.37 (d) Art. 416(4): In general,
all things which can be transported from place to place without
impairment of the real property to which they are fixed, such as
vessels.3* (e) Art. 417(1): Obligations and actions which have for
their object movables or demandable sums. However, a mortgage
loan is considered real property because it is a real right over an
immovable property and, therefore, considered real by analogy.3’
(f) Art. 417(2): Shares of stock of agricultural, commercial,
and industrial entities, although they may have real estate.
Membership shares in golf clubs are considered as movable or
personal property." Such share is a property right which a person
cannot be deprived of without affording him the benefit of due
process."
"791 SCRA 272 (2016).

"Strochccker v. Ramirez,44 Phil. 933 (1922).
33Laurel v. Abrogar, 576 SCRA 41 (2009), decided by the En lluuc.
”3 Manrcsa, 6th Ed., 21.
"Sec. 7, par. 3, Act No. 1508; Sibal v. Valdez, 50 Phil. 512 (1927).
"Sibal v. Valdez, supra.
"US v. Tambunling, 41 Phil. 364.
"US v. Carlos, 21 Phil. 553.
"Rubiso v. Rivera, 37 Phil. 72; Phil. Refining Co., Inc. v. Jarque, 61 Phil. 229.
"Hongkong & Shanghai Bank v. Aldecoa, 30 Phil. 255.
"Valley Golf & Country Club, Inc. v. I'da. de Caram, G.R. No. 158805, April 16, 2009.
11 Valley Golf and Country Club, Inc. V. Reyes, 774 SCRA 214 (2015).
J9JC9B0M
R52M9UH7
1.6 Classification of Movable Property: (a) Consumable or non

consumable: A consumable is a movable which cannot be used in
a manner appropriate to its nature without itself being consumed;
while a non-consumable is a movable which can be used in a
manner appropriate to its nature without itself being consumed.42
The classification applies to movables and to corporeal objects
only, (b) Fungible and non-fungible: A movable is classified
as fungible if, by the intention of the parties, it can be replaced
by another of the same kind; otherwise, it is a non-fungible. In
classifying movables into consumable or non-consumable, the
basis of the classification is the very nature of the corporeal
object itself. On the other hand, the basis of the classification of
movables into fungible or non-fungible is simply the intention of
the parties.
2) Classification of Property: Based on Ownership

2.1 In General: (a) Classification based on ownership: Pursuant to
Article 419 of the Civil Code, property, in relation to the person
to whom it belongs, is either of public dominion or of private
ownership. As such, properties are owned either in a public
capacity (dominio publico) or in a private capacity (propiedad
privado).43 (b) Public dominion: There are three kinds of property
of public dominion: (1) those intended for public use; (2) those
intended for some public service; and (3) those intended for the
development of national wealth.44 (c) Private ownership: In turn,
the Civil Code classifies property of private ownership into three
categories: (1) patrimonial property of the State under Articles
421 and 422; (2) patrimonial property of LGUs under Article
424; and (3) property belonging to private individuals under
Article 425.4S
2.2 Property of the State: (A) Property of Public Dominion: (a)
Kinds of nronertv of public dominion: (1) those intended for
public use, or those the use of which is not confined to privileged
individuals, but is open to the indefinite public,46 such as roads,
canals, rivers, torrents, ports, and bridges constnicted by the State,
42Art. 418, NCC.

■"Republic v. Alejandre, G.R. No. 217336, Oct. 17, 2018.
“Id.
43Id.
“Villarico v. Sarmiento, 442 SCRA 110 (2004).
J9JC9B0M
R52M9UH7
banks, shores, roadsteads, and others of similar character;47 (2)

those intended for some public service,48 or those which cannot
be used indiscriminately by anyone but only by those that are
authorized by proper authority;49 and (3) those intended for the
development of the national wealth.’0 Mere intention to devote a
property to public use, public service, or for the development of
the national wealth is sufficient in order to make it a property of
public dominion and it is not necessary that it must actually be
used as such.’1 (b) Examples of property for public use: (1) The
term "ports " in Article 420( 1) of the NCC includes airports’2 and
seaports.” (2) Aside from shores, foreshore lands are also part
of the public dominion,54 as well as the reclamation of foreshore
lands and submerged areas.” Foreshore land is that part of the land
immediately in front of the shore; the part which is between high
and low water marks, and alternately covered with water and left
dry by the flux and reflux of the tides. It is indicated by a middle
line between the highest and lowest tides.” The mere reclamation
of foreshore lands and submerged areas do not convert them
into patrimonial property. There must be a law or presidential
proclamation officially classifying them into patrimonial
property.” (3) All waters belong to the State and are classified as
property of public dominion,’8 including rivers and their natural
beds,” natural lakes,“ and their natural beds, which is the ground
’’Art. 420(1), NCC.

48 Art. 420(2), NCC.
"II Caguioa, Civil Code ofthe Philippines, 1966 Ed., p. 31.
"Art. 420(2), NCC.
’’Manila Lodge No. 761 v. CA, 73 SCRA 162 (1976); Agripino Capitulo, e! al. V. Alejo
Aquino, No. 15488-R, (CA) 53 O.G. 1477, November 19, 1956.
’’Manila International Airport Authority v. CA, 495 SCRA 591,622 (2006); also In Manila
International Airport Authority v. City of Pasay, 583 SCRA 234 (2009) and Maetan-Ccbu Interna
tional Airport Authority (MCI AA) v. City of Lapu-Lapu, 757 SCRA 323 (2015).
’’Philippine Fisheries Development Authority v. CA, 534 SCRA 490 (2007) and Curata v.
Philippine Ports Authority, 590 SCRA 214 (2009).
’’Republic v. CA, 281 SCRA 639 (1997).
’’Chavez v. Public Estates Authority, 433 Phil. 506 (2002).
“Hacut v. Director of Lands, (CA) 49 O.G. No. 5, p. 1863 (1953); Ponce v. Gomez, G.R.
No. L-21870, February 3, 1965; and Ponce v. City of Cebu, G.R. No. L-22669, June 24, 1966.
’’Chavez v. Public Estates Authority, supra.
’’Art. 3, Water Code of the Philippines.
’’Art. 5(a), Waler Code.
“Art. 5(c), Water Code.
J9JC9B0M
R52M9UH7
covered by their waters when at their highest ordinary depth,61

and creeks, defined as a recess or arm extending from a river and
participating in the ebb and flow of the sea.62 (4) Aside from roads,
a road right of way for national highways is also a property of
public dominion.63 (5) Lands classified as reservations for public
or quasi-public uses, such as military reservations, are property
of public dominion.64 (6) Water works system constructed by
the DPWH devoted to public use is also property of public
dominion.63 (c) Alienable and disposable agricultural lands: (1)
Classes of public lands: The 1987 Constitution classifies lands
of the public domain (or public lands) into agricultural, forest or
timber, mineral, and national parks. Under Section 2, Article XII
of the 1987 Constitution, only agricultural lands of the public
domain may be alienated; all other natural resources may not be
alienated.66 (2) Two types of alienable and disposable lands of the
State: (i) patrimonial lands of the State, without limitation; and
(ii) lands of the public domain, or the public lands as provided by
the Constitution, but with the limitation that the lands must only
be agricultural.6’ (3) Still classified as public dominion: Lands
of the public domain, whether declared alienable and disposable
or not, are property of public dominion and thus insusceptible to
acquisition by prescription.68 Such declaration merely gives the
State the authority to alienate or dispose the agricultural land, in
accordance with law.6’ To be converted into patrimonial property,
there are two ways: (i) there must be an express declaration by
the State that the public dominion property is no longer intended
for public service, or the development of the national wealth, or
that the property has been converted into patrimonial property;
and such declaration shall be in the form of a law duly enacted
by Congress or a Presidential Proclamation in cases where the
61 Art. 74, Spanish Law of Walers of 1866; cited in Republic v. CA, 131 SCRA 532 (1984).
“Mimeclang v. Intermediate Appellate Court, 161 SCRA 469,471 (1988); citing Mercado
v. Municipal President of Maeabebe, 59 Phil. 592 (1934); see also Maneclang v. 1AC, 144 SCRA
553, 556 (1986); Usero v. Court of Appeals, 449 SCRA 352, 359 (2005).
61Hi-Lon Manufacturing, Inc. v. Commission on Audit, 833 SCRA 540 (2017).
“Navy Officers’ Village Association, Inc. v. Republic, 764 SCRA 524 (2015), and Republic
v. Bacas, 433 Phil. 506 (2002).
63General Mariano Alvarez Services Cooperative, Inc. v. NHA, 750 SCRA 156 (2015).
“Heirs of Mario Malabanan v. Republic, 704 SCRA 561 (2013).
6’Heirs of Mario Malabanan v. Republic, supra; Republic v. Noval, 840 SCRA 11 (2017).
“Heirs of Mario Malabanan v. Republic, 587 SCRA 172 (2009).
"Dumo v. Republic, 865 SCRA 119 (2018).
J9JC9B0M
R52M9UH7
President is duly authorized by law;™ or (ii) it is actually alienated

and disposed of by the State.’1 (d) Sec. 14 (1) and (2) of Property
Registration Decree: (1) Distinctions: (i) in par. 1, basis of grant
of title is simply possession and occupation; while in par. 2, the
basis is acquisitive prescription;™ (ii) in par. 1, registration is
based on the Property Registration Decree and the Public Lands
Act; in par. 2, it is based on the Property Registration Decree and
Civil Code;” (iii) in par. 1, the land involved is agricultural land of
the public domain already declared alienable and disposable (not
yet patrimonial); in par. 2, the land involved must be patrimonial.
(2) Requisites for registration under par. 1: (i) land is alienable
and disposable land of the public domain, at least at the time
of filing of application; (ii) applicant and its predecessors-in-
interest have been in open, continuous, exclusive, and notorious
possession and occupation of the land under a bona fide claim
of ownership; and (iii) applicant and its predecessors-in-interest
have possessed and occupied the land since June 12, 1945, or
earlier.” If all requisites are present, the land ceases to be part
of the public domain and becomes private property.” This mode
of disposition is referred to as judicial confirmation of imperfect
or incomplete title under Section 48(b) of the Public Land Act.
(3) Requisites for registration under par. 2: (i) land is alienable
and disposable patrimonial property of the public domain; (ii)
the applicant and his predecessors-in-interest have been in
possession of the land for at least 10 years, in good faith and with
just title, or for at least 30 years, regardless of good faith or just
title; and (iii) the land had already been converted to or declared
’"Heirs of Mario Malabanan v. Republic, 5X7 SCR A 172 (2009).

71 died in Heirs of Mario Malabanan v. Republic, 5X7 SCRA 172 (2009) and Dream
Village Neighborhood Associated, Inc. v. BCDA, 702 SCRA 222 (2013).
’’Republic v. Zurbaran Realty and Development Corp., 719 SCRA 601 (2014), ciliiiH Heirs
ofMario Malabanan v. Republic, 5X7 SCRA 172 (2009), reiterated in Espiritu, Jr. v. Republic, X2X
SCRA 77 (2017) and Kawayan Hills Corp. v. CA, G.R. No. 203090, Sep. 5, 201X.
™/d.
’■‘Republic v. Alonso, G.R. No. 2I073X, Aug. 14, 2019; Republic v. Science Park of the
Philippines, Inc., G.R. No. 237714, Nov. 12, 20IX; Republic v. Bautista, G.R. No. 211664, Nov.
12, 2018; Republic v. Manahan-Jazmines, G.R. No. 227388, July 23, 2018; Dumo v. Republic,
865 SCRA 119 (2018); Republic v. Malijan-Javier, 860 SCRA 443 (2018); Leonidas v. Vargas,
849 SCRA 210 (2017); Espiritu, Jr. v. Republic, 828 SCRA 77 (2017); Republic v. The Estate of
Virginia Santos, 813 SCRA 541 (2016); Republic v. Local Superior of the Institute of the Sisters of
the Sacred Heart of Jesus of Raguse, 783 SCRA 501 (2016); Republic v. Dayaoen, 762 SCRA 310
(2015); Republic v. Alba, 767 SCRA 385 (2015); Republic v. Zurbaran Realty and Development
Corp., 719 SCRA 601 (2014).
”Hcirs ofMario Malabanan v. Republic, 704 SCRA 561 (2013).
J9JC9B0M
R52M9UH7
BOOK II. —PROPERTY 165
as patrimonial property of the State at the beginning of the said

10-year or 30-year period of possession.76 (e) Characteristics
of property of public dominion: (1) They are outside the
commerce of man.77 They cannot be subject to sale, disposition,
or encumbrance; any sale, disposition, or encumbrance of such
property of the public dominion is void for being contrary to law
and public policy.78 They cannot likewise be leased or otherwise
be the subject matter of contracts.” (2) They are not susceptible
to private appropriation and cannot be acquired by acquisitive
prescription.80 (3) They cannot be the subject of an auction sale,
levy, encumbrance, or disposition through public or private
sale. Any encumbrance, levy on execution, or auction sale of
any property of public dominion is void for being contrary to
public policy.81 (4) They cannot be burdened by any voluntary
easement.82 (B). Patrimonial Property of State: (a) Concept: All
other property of the State, which is not of the character stated in
Article 420 of the NCC, is patrimonial property.83 It is property
owned by the State in its private capacity81 or private property
of the government, (b) Sub-classification: (1) “by nature or
use” or those covered by Article 421, which are not property of
public dominion or imbued with public purpose based on the
State’s current or intended use; and (2) “by conversion” or those
covered by Article 422, which previously assumed the nature
of property of public dominion by virtue of the State’s use, but
’“Republic v. Bautista, G.R. No. 211664, Nov. 12, 2018; Espiritu, Jr. V. Republic, 828
SCRA 77 (2017); Republic v. Zurbaran Realty and Development Corp., 719 SCRA 601 (2014).
’’Manila International Airport Authority v. CA, 495 SCRA 591 (2006), citing Municipal
ity of Cavite v. Rojas, 30 Phil. 602 (1915); see also Dacanay v. Asistio, Jr., 208 SCRA 404, 411
(1992).
’"Navy Officers’ Village Association, Inc. v. Republic, 764 SCRA 524 (2015).
’’Dacanay v. Asistio, supra, citing Villanueva v. Castaileda and Macalino, 15 SCRA 142;
Municipality of Cavite v. Rojas, 30 Phil. 602; Espiritu v. Municipal Council of Pozorrubio, 102
Phil. 869; and Muyot v. De la Fuente, 48 O.G. 4860.
""Dream Village Neighborhood Associated, Inc. v. BCDA, 702 SCRA 222 (2013); Maltese
v. Velasco, 577 SCRA 108 (2009); Insular Government v. Aldecoa, 19 Phil. 505.
"'Privatization and Management Office v. Court ofTax Appeals, G.R. No. 211839, March
18, 2019; Mactan-Cebu International Airport Authority V. City of Lapu-lapu, 757 SCRA 323
(2015); General Mariano Alvarez Services Cooperative, Inc. v. NHA, 750 SCRA 156 (2015);
Curata v. Philippine Ports Authority, 590 SCRA 214 (2009); Manila International Airport Authority
v. CA, 495 SCRA 591 (2006); see also Vda. de Tan Toco v. Municipal Council of Iloilo, 49 Phil.
52.
"Villarico v. Sarmiento, 442 SCRA 110 (2004).
87Art. 421, NCC.
“Heirs of Leopoldo Delfin and Soledad Delfin v. NHA, supra', Hinunangan v. Director of
Lands, 24 Phil. 124, 127(1913).
J9JC9B0M
R52M9UH7
which are no longer being used or intended for said purpose.”

(c) Susceptible to prescription: In Heirs of Mario Malabanan v.
Republic* the Court ruled that patrimonial property of the State
may be acquired by prescription, citing Article 1113 of the Civil
Code, (d) Conversion to patrimonial property: There must be:
(1) abandonment or non-use; and (2) affirmative act, either on
the part of executive or the legislative, to reclassify property of
the public dominion into patrimonial property.87 Such affirmative
act need be a law, except in the conversion of agricultural lands
of the public domain which have already been declared alienable
and disposable, where the conversion must be expressly declared
in the form of a law duly enacted by Congress or a Presidential
Proclamation in cases where the President is duly authorized by
law."
2.3 Property of Provinces. Cities, and Municipalities: (a) In general:
The property of LGUs is either for public use (public dominion)
or patrimonial.8’ (b) Public dominion: (1) Kinds: The properties
of public dominion of LGUs are the following: (i) those
expressly enumerated in paragraph 1 of Article 424 as intended
for public use, such as provincial roads, city streets, municipal
streets, the squares, fountains, public waters, promenades, and
public works for public service paid for by said provinces,
cities, or municipalities; and (ii) those not expressly enumerated
in the first paragraph of Article 424 but devoted to public and
governmental purposes, such as local administration, public
education, and public health/'0 (2) Characteristics: Governed by
the same principles as property of public dominion of the same
character.’1 In summary, the property of LGUs devoted to public
use is outside the commerce of man and as a consequence: (i) it
"Republic v. Alejandre, G.R. No. 217336, Oct. 17,2018.

“‘587 SCRA 172 (2009); reiteratedin Republic v. Ching, 634 SCRA 415 (2010), Republic
v. Rizalvo, Jr., 644 SCRA 516 (2011), Republic v. East Silvcrlane Realty Development Corp-, 666
SCRA 401 (2012), Tan v. Republic, 669 SCRA 499 (2012), Republic v. Metro Index Realty and
Development Corp., 675 SCRA 439 (2012), Republic v. Espinosa, 677 SCRA 92 (2012), Heirs
of Mario Malabanan v. Republic, 704 SCRA 561 (2013), Republic v. Gielczyk, 708 SCRA 433
(2013), Republic v. Cortez, 715 SCRA 416 (2014), Andres v. Sta. Lucia Realty & Development,
Inc., 768 SCRA 56 (2015) and Republic v. Tan, 783 SCRA 643 (2016).
•'Laurel v. Garcia, 187 SCRA 797 (1990).
"Heirs of Mario Malabanan v. Republic, 587 SCRA 172 (2009).
•’Art. 424, NCC.
’“Sangguniang Panlalawigan of Bataan v. Garcia, Jr., 804 SCRA 629 (2016) and Province
of Zamboanga del Norte v. City of Zamboanga, 22 SCRA 1334 (1968).
’'Pilapil v. CA, 216 SCRA 33 (1992).
J9JC9B0M
R52M9UH7
BOOK H. —PROPERTY 167
is not alienable or disposable; (ii) it is not subject to registration

under Presidential Decree No. 1529 and cannot be the subject
of a Torrens title; (iii) it is not susceptible to prescription; (iv) it
cannot be leased, sold, or otherwise be the object of a contract; (v)
it is not subject to attachment and execution; and (vi) it cannot be
burdened by any voluntary easements.” (c) Patrimonial property:
These are the properties of the LGUs not expressly mentioned in
paragraph 1 of Article 424 and devoted to proprietary or private
purposes, (d) Extent of Congress’control: If the property is owned
by the local government in its public and governmental capacity,
it is public property and Congress has absolute control over it;
but if the property is owned in its private or proprietary capacity,
then it is patrimonial and Congress has no absolute control, in
which case, the local government unit cannot be deprived of it
without due process and payment ofjust compensation.”
3) Ownership in General
3.1 Rights Included: (1) right to enjoy,94 which includes the right over
the fruits (jus fruendi), right to possess (jus possidendi), right to
use (jus utendi), and right to consume or abuse (jus abutendi); (2)
right to dispose;95 (3) right to recover;96 (4) right to exclude others
from the property;9’ (5) right to enclose or fence his property;98
(6) right to compensation in case of eminent domain;99 (7) right to
the surface, the sub-surface, and the space above the land;™ (8)
right to hidden treasure;191 and (9) right of accession.'"
3.2 Right to Eniov: (a) Basic limitation: Principle of abuse of right,
(b) Right to exclude others: (1) Right to fence: A property owner
may enclose or fence his property subject only to the limitations
“Alolino v. Flores, 788 SCRA 92 (2016).

’’Sangguniang Panlalawigan of Bataan v. Garcia, Jr., supra, and Province of Zamboanga
del Norte v. City of Zamboanga, supra.
'“Art. 428, 1st par., NCC.
”M.
“Art. 428, 2nd par., NCC.
’’Art. 429, NCC.
’“Art. 430, NCC.
'"Art. 435, NCC.
'"Art. 437, NCC.
101 Art. 438, NCC.
'“Arts. 440-475, NCC.
J9JC9B0M
R52M9UH7
and restrictions provided by law.'”’ (2) Doctrine of self-help:

Owner or 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.
(3) Doctrine of state of necessity: The owner cannot, however,
prohibit interference by another if the same is necessary to avert
an imminent danger and the threatened damage, compared to
the damage arising to the owner from the interference, is much
greater.'06 The owner may, however, demand from the person
benefited indemnity for the damage to him.'07 (4) Requisites of
state of necessity: (i) there is a situation of grave peril, an actual
or imminent danger, either upon the person of the actor or a third
person or their property; (ii) interference is necessary to avert
such danger; (iii) threatened damage, compared to the damage
arising to the owner from the interference, is much greater;108
and (iv) state of necessity is not brought about by the intentional
provocation of the party invoking the same.105
3.3 Right to Recover: (a) Basic rule: In no case may possession
be acquired through force or intimidation as long as there is a
possessor who objects thereto. He who believes that he has an
action or a right to deprive another of the holding of a thing
must invoke the aid of the competent court if the holder should
refuse to deliver the thing."" (b) Action interdicted: (1) Concept:
Limited to right to physical possession or possession de facto,
independently of any claim of ownership. The action is either
forcible entry (FE) or unlawful detainer (UD). (2) Distinctions:
(i) in FE, plaintiff must prove that he was in prior physical
possession of the premises; in UD, plaintiff need not have been
in prior physical possession; (ii) in FE, possession of land by
103Art. 430, NCC; Aneco Realty and Development Corp. v. Landex Development Corp.,
560 SCRA 182 (2008).
'“Art. 429, NCC.
l03German Management & Services, Inc. v. Court of Appeals, 177 SCRA 495.
'“Art. 432, NCC.
'"‘Art. 432, NCC.

'"’People v. Rcbutado, G.R. No. 124058, December 10,2003.
""Art. 536, NCC.
J9JC9B0M
R52M9UH7
defendant is unlawful from the beginning; in UD, possession of

defendant is inceptively lawful but it becomes illegal by reason
of termination of his right to the possession of the property
under his contract; (iii) in FE, no need for previous demand
to vacate the premises; in UD, such demand is jurisdictional
in nature.1" Hence, in UD the one-year prescriptive period is
counted from the date of the last demand."3 (3) Jurisdiction:
Always with the MTC. (c) Action publiciana: (1) Concept:
An action publiciana, or an action plenaria de posesion is a
plenary action to recover the right of possession, and the issue
is which party has the better right of possession (possession de
jure)."3 The issue in an action publiciana is the “better right of
possession” of real property independent of title. It is also used
to refer to an ejectment suit where the cause of dispossession is
not among the grounds for forcible entry and unlawful detainer,
or when possession has been lost for more than one year and the
action can no longer be maintained under Rule 70 of the Rules
of Court. The objective of the plaintiffs in action publiciana is
to recover possession only, not ownership."'1 (2) Jurisdiction:
It is an action involving title to or possession of real property.
The MTC has jurisdiction if the assessed value of the property
does not exceed P20,000, or P50,000, for actions filed in Metro
Manila;"5 otherwise, jurisdiction is with the RTC. (d) Action
reinvindicatoria: (1) Concept: 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
ownership."6 (2) Requisites: The claimant must prove two things:
first, the identity of the land claimed; and second, his title thereto."’
In regard to the first requisite, in an action reinvindicatoria, the
'"Acaylar, Jr. v. Harayo, 560 SCRA 624 (2008).

"’Mirallosa v. Cannel Development, Inc., 711 SCRA 30 (2013).
"’Martinez v. Heirs of Lim, G.R. No. 234655, Sep. 11, 2019.
,l4/r/. See also Urieta FiZo. de Aguilar v. Alfaro, 623 SCRA 130(2010);Supapo v. De Jesus,
756 SCRA 211 (2015); Estate of Soledad Mananlan v. Soniera, 584 SCRA 81 (2009); Madrid v.
Mapoy, 596 SCRA 14 (2009); Velasquez v. Cruz, 771 SCRA 122 (2015); Canlas v. Tubil, 601
SCRA 147 (2009); Estate of Soledad Mananlan v. Somera, 584 SCRA 81 (2009).
ulFlores-Cruz v. Goli-Cruz, 600 SCRA 545 (2009); see also Supapo v. De Jesus, 756
SCRA 211 (2015) and Hilario v. Salvador, 457 SCRA 815 (2005).
"‘Hilario v. Salvador, 457 SCRA 815 (2005).
"’Art. 434, NCC; Ibot v. Heirs of Francisco Tayco, 755 SCRA 75 (2015); VSD Realty &
Development Corp. v. Uniwide Sales, Inc., 702 SCRA 597 (2013); Jakosalem v. Barangan, 666
SCRA 138 (2012); Heirs of Bienvenido and Araceli Tayag v. Gabriel, 669 SCRA 284 (2012); VSD
Realty & Development Corp. v. Uniwide Sales, Inc., 684 SCRA 470 (2012).
J9JC9B0M
R52M9UH7
person who claims that he has a better right to the property must
first fix the identity of the land he is claiming by describing the
location, area, and boundaries thereof.118 With respect to the second
requisite, the settled rule is that the plaintiff must rely on the
strength of his title, not on the weakness of the defendant’s title."’
(3) Jurisdiction: It is action involving title to or possession of
real property. The MTC has jurisdiction if the assessed value of
the property does not exceed P20,000, or P50.000, for actions
filed in Metro Manila; otherwise, jurisdiction is with the RTC.
(4) Registered owner’s action imprescriptible: An action by the
registered owner to recover a real property registered under the
Torrens System does not prescribe.120 (e) Not collateral attack:
In an action for forcible entry or unlawful detainer and action
publiciana, the objective of the plaintiff is to recover possession
only, not ownership. The adjudication, in short, is not conclusive
on the issue of ownership. Hence, in an action publiciana, the
defense ofownership (i.e., that the defendant, and not the plaintiff,
is the rightful owner) will not trigger a collateral attack on the
plaintiff’s Torrens or certificate of title because the resolution
of the issue of ownership is done only to determine the issue
of possession.'21 In an action reinvindicatoria, the court where
the reinvindicatory or reconveyance suit is filed has the requisite
jurisdiction to rule definitively or with finality on the issue of
ownership—it can pass upon the validity of the plaintiff’s
certificate of title. Hence, there is no collateral attack.122
3.4 Right to Surface. Sub-surface, and Airspace: (a) Rule: The owner
of a piece of land has rights not only to its surface but also to
everything underneath and the airspace above it up to a reasonable
height.123 (b) Limitations: (i) servitudes or easements;124 (ii) special
laws;125 (iii) ordinances,126 (iv) reasonable requirements of aerial
"’Heirs of Bienvenido and Araceli Tayag v. Gabriel, supra: Notarte v. Notarte, 679 SCRA
378(2012).
"’VSD Really & Development Corp. v. Uniwide Sales, Inc., supra.
l:“Aledro-Runa v. Lead Export and Agro-Dcvelopment Corp., G.R. No. 225896, July 23,
2018, citing Heirs of Nieto v. Municipality of Meycauayan, Bulacan, 564 Phil. 674, 679 (2007).
"'Heirs of Cullado v. Gutierrez, G.R. No. 212938, July 30,2019.
I22M.
'“Republic v. CA, 160 SCRA 228 (1988); citing Art. 437, NCC.
n'Id.
mId.
mId.
J9JC9B0M
R52M9UH7
navigation,12’ (v) rights of third persons;128 and (vi) contracts.129

(c) Right to sub-surface: Rights over lands are indivisible and,
consequently, requires a definitive and categorical classification.
Land cannot, therefore, be classified as half-agricultural and half
mineral.130 In the context of expropriation proceedings, the soil
has no value separate from that of the expropriated land.131 When
a landowner cannot dig upon his property motorized deep wells
and was prevented from doing so by the authorities, he is entitled
to recover the full compensation for the land because the nature
of the easement deprives the owner of its normal beneficial use.132
(d) Right to hidden treasure: A hidden treasure is: (i) any deposit
of money, jewelry, or other precious objects, which must be
hidden or unknown; and (ii) the lawful ownership of which must
not appear.133 If the finding of the treasure is by chance: (i) if the
finder is the owner of the property on which the treasure is found,
the treasure is all his;134 and (ii) if the finder is a trespasser, the
treasure solely belongs to the owner of the property on which
the treasure is found; but if the finder is not a trespasser, the
finder is entitled to one-half (!6) of the treasure and the other
half goes to the owner of the property.135 If the search for the
hidden treasure is deliberate, “treasure hunting” permit must be
obtained from the National Heritage Commission if the activity
is for the purpose of recovering treasures which are of cultural
and historical values;139 otherwise, the permit must be obtained
from the Department of Environment and Natural Resources.132
127Art. 437, NCC.

’’“Art. 431, NCC; cited in Castro v. Monsod, 641 SCRA 486 (2011).
129Ayala Corporation v. Ray Burton Dev. Corp., G.R. No. 126699, August 7,1998; see also
Ayala Corporation v. Rosa Diana Realty and Development Corp., G.R. No. 134284, December 1,
2000.
'“Republic v. CA, 160 SCRA 228 (1988) and Republic V. Rural Bank of Kabakan, Inc.,
664 SCRA 233 (2012).
•’’Republic v. Rural Bank of Kabakan, Inc., 664 SCRA233 (2012).
’’’National Power Corporation v. Ibrahim, 526 SCRA 149 (2007).
’’’Art. 439, NCC.
”4Art. 438, par. 1,NCC.
’’’Art. 438, par. 2, NCC.
”9R.A. No. 8492, otherwise known as the National Museum Act of 1998.
”’DENR A.O. No. 2002-04, as amended by DENR A.O. No. 2004-2003, in relation to
E.O. No. 35, dated September 15, 2001.
J9JC9B0M
R52M9UH7
4) Accession
4.1 Basic Concept: (a) Definition: Accession is the right of the owner
of a thing to become the owner of everything that is produced
thereby or which may be inseparably attached or incorporated
thereto, either naturally or artificially.138 (b) Kinds of accession:
(1) accession discreta is the right of the owner of a property
to whatever is produced thereby or to the fruits of the same;13’
and (2) accession continua is the right to acquire whatever is
attached or incorporated naturally or artificially to our things.'"
(c) Forms of accession continua: Accession continua may refer
to immovable property or movable property. Accession continua
with regard to immovable property may either be accession
industrial or accession natural. Accession industrial may take
the form of building, planting or sowing, while accession natural
may either be alluvion, avulsion, change of course of river, or
formation of islands. Accession continua with respect to movable
property may either be adjunction or conjunction, commixtion
or confusion, and specification. Adjunction or conjunction may
furthermore take place by inclusion or engraftment, soldadura or
attachment, tejido or weaving,pintura or painting, or escritura or
writing.
4.2 Accession Ditcreta-. (a) Basic rule: Accession is the right of
the owner of a thing to become the owner of everything that
is produced thereby or which may be inseparably attached or
intzzrporzted thereto, either naturally or artificially?" To the
owner belongs the natural fruits, industrial fruits, and civil
fruiti.-" (b) Exceptions: (1) in usufruct, the usufructuary shall
be entitled to all the natural, industrial, and civil fruits of the
property in usufruct;1" (2) in lease of rural land, the lessee is
entitled to the natural and industrial fruits of the thing leased
while the lessor is entitled to civil fruits in the form of the rent
paid by the lessee;1** (3) in antichresis, the creditor acquires the
right to receive the fruits of an immovable of his debtor, with the
obligation to apply them to the payment of the interest, if owing,
'"Art. 440, NCC.

'”3 Sanchez Roman, 89.
'*2 Del Vise 33.
141 Art. 440, NCC.
'"Art. 441, NCC.
'"Art. 526, NCC.
'“Arts. 1654, and 1676, par. 2, NCC.
J9JC9B0M
R52M9UH7
BOOK 11. — PROPERTY 173
and thereafter to the principal of his credit;14’ (4) a possessor

in good faith is entitled to the fruits received by him before his
possession is legally interrupted;'" and (5) fruits naturally falling
upon adjacent land belong to the owner of the said land and not
to the owner of the tree.'47 (c) Three kinds of fruits: (1) Natural
fruits: the spontaneous products of the soil, or those that appear
without the intervention of human labor, such as the wild fruits
in the forest, herbs, and common grass, and the young and other
products of animals, such as milk, hair, wool, horn, hide, eggs,
and animals dung or manure.'48 If the young or offspring is a
product of animals belonging to different owners, "the young
belongs to the owner of the female parent, " in the absence of
agreement to the contrary, based on the maxim partus sequitur
ventrem—the offspring follows the condition of the mother.'4’ (2)
Industrial fruits: Those produced by lands of any kind through
cultivation or labor. ““ (3) Civil fruits: The rents of buildings, the
price of leases of lands and other property and the amount of
perpetual or life annuity or other similar income.1’1 Rent is a civil
fruit that belongs to the owner of the property producing it by
right of accession. Hence, in case of dispute over its ownership
the rightful recipient of the disputed rent should be the owner
of the subject lot at the time the rent accrued.152 Bank interests
also partake of the nature of civil fruits under Article 442 of the
Civil Code. Since these are considered fruits, ownership thereof
should be due to the owner of the principal.'” (d) Expenses in
production. Catherine, and preservation: Where the recipient of
the fruits was not the same person who incurred the expenses
in connection with its production, gathering, and preservation,
the former has the obligation to pay the expenses made by the
latter in the production, gathering and preservation of the fruits,
whether the latter acted in good faith or in bad faith.'54 But
this rule applies only when the fruits are already harvested and
'■“Art. 2132, NCC.

'■“Art. 544, NCC.
'"Art. 681, NCC.
'“Art. 442, par. 1,NCC.
'"US v. Caballero, 25 Phil. 356 (1913).
““Art. 442, par. 2, NCC.
“'Art. 442, 3rd par., NCC.
“2PNB v. Marafton, 700 SCRA 297 (2013).
““Republic v. Holy Trinity Realty Development Corp., G.R. No. 172410, April 14, 2008.
“‘Art. 443, NCC.
J9JC9B0M
R52M9UH7
gathered since Article 443 refers to the person "who receives the
fruits."
4.3 Industrial Accession: (A) Article 447: Applies when Landowner
(LO) builds, plants, or sows on his land with materials belonging
to Owner of Materials (OM). Three situations: (1) when both
acted in good faith or in bad faith, LO must appropriate materials
but must pay for its value; (2) when LO acted in good faith and
OM acted in bad faith, the latter will lose his materials without
the right to be indemnified, and he will be liable to pay damages;
(3) when LO acted in bad faith and OM acted in good faith, the
latter has the option of demanding the value of his materials plus
damages, or demanding the return of his accessory thing in any
event, i.e., even if injury is caused thereby to the land, at the
expense of LO, plus damages. (B) Article 448: Applies when
Builder, Planter, or Sower (BPS) builds, plants, or sows on the
land of another (LO) with his own materials and both acted in
good faith, (a) Concept of BPS in good faith: (1) Limited
definition: The builder believes that he is the owner of the land or
that by some title he has the right to build thereon, or that, at
least, he has a claim of title thereto,'55 such as when the builders
constructed their house on the adjacent lot because the geodetic
engineer erroneously pointed to said lot as the one purchased by
the builders.156 (2) Expanded definition: Where the builders knew
that they were not the owners of the land but they constructed
improvements on the land of another with the consent of the
owner,15’ such as when the landowner allowed his or her children
to construct their house on the land he or she owns.15" The
foregoing rule does not apply when the one who gave consent to
the construction was a complete stranger to the builders.15’ (3)
Involving right of repurchase: Article 448 is inapplicable in cases
involving contracts of sale with right of repurchase. When the
"'Community Cagayan, Inc. v. Nanol, 685 SCRA 453 (2012); Republic V. Ballocanag,
572 SCRA 436 (2008); Barbosa v. Hernandez, 527 SCRA 99 (2007); Rosales v. Castelltort, 472
SCRA 114 (2005).
‘“Rosales v. Castelltort, 472 SCRA 114 (2005).
wCited in Aquino v. Aguilar, 760 SCRA 444 (2015) and Community Cagayan, Inc. v.
Nanol, 685 SCRA 453 (2012); see also Automat Realty and Development Corp. v. Dela Cruz, Sr.,
737 SCRA 395 (2014); Department of Education v. Casibang, 782 SCRA 326 (2016) and Belvis,
Sr. v. Erola, G.R. No. 239727, July 24,2019.
‘“Macasaet v. Macasaet, 439 SCRA 625 (2004); Sarmiento v. Agana, 129 SCRA 122
(1984); Javier v. Javier, 7 Phil. 261 (1907).
“’Padilla, Jr. v. Malicsi, 804 SCRA 18 (2016).
J9JC9B0M
R52M9UH7
vendee a retro introduced improvements on the subject property

prior to repurchase, Articles 1606 and 1616 require the vendor a
retro to also pay the necessary and useful expenses made on the
thing sold.'“ (4) Involving contract of lease: When the lessee
introduced an improvement on the leased promises, the applicable
law is Article 1678 and not Article 448.161 Under Article 1678, the
lessor has the option of appropriating the useful improvements
by paying one-half ('/:) of their value at that time or to allow the
lessee to remove the improvements. In the removal of the useful
improvements, the lessee can cause damage to the leased
premises so long as the injury is related to the removal. In case of
ornamental improvement, the lessor has the option of
appropriating the ornaments by paying their full value at that
time or to allow the lessee to remove the ornamental objects, if
the removal can be done without damaging the leased premises.
(5) Involving usufruct: When a usufructuary introduced useful
improvements or ornaments on the property subject matter of the
usufruct, the applicable laws are Articles 579 and 580, not Article
448.'“ Under these provisions, the usufructuary may remove the
improvements if it will not injure the principal thing, or he may
offset such improvements against any damage he may have
caused to the property. (6) Involving Condominium Act: When a
condominium unit owner introduced an improvement on his unit,
Article 448 does not apply but the Condominium Act and the
Master Deed and the By-Laws of the condominium corporation.'"
(7) When ownership of land is lost: Article 448 is applicable
when the landowner loses ownership of his land because of non
payment of real estate taxes to settle the controversy with respect
to the improvement on the land.1" (8) When builder is co-owner:
Ordinarily, Article 448 does not apply because he is a builder
owner. By way of exception, the provision applies to one whose
house, despite having been built at the time he was still co-owner,
overlapped with the land of another.165 (9) Successor-in-interest:
‘“Narvaez v. Alciso, 594 SCRA 60 (2009).

"’'Parilla v. Pilar, 509 SCRA 420 (2006), citing Geminiano v. CA, 259 SCRA 344,
351 (1996); see also Programme Incorporated v. Province of Bataan, 492 SCRA 529 (2006);
SulosaNayon, Inc. v. Nayong Pilipino Foundation, 576 SCRA 655 (2009); Mores v. Yu-Go, 625
SCRA 290 (2010).
'“Moralidad v. Femes, 497 SCRA 532 (2006).
'“Leviste Management System, Inc. v. Legaspi Towers 200, Inc. v. 860 SCRA 355 (2018).
‘“Pecson v. CA, 244 SCRA 407 (1995).
'“Spouses del Campo v. Abesia, 160 SCRA 379 (1988); Ignao v. I AC, 193 SCRA 17, 23
(1991); and Heirs of the Late Joaquin Limense v. K/u. de Ramos, 604 SCRA 599 (2009).
J9JC9B0M
R52M9UH7
Article 448 can be invoked by the successor-in-interest of the

builder in good faith.166 (b) Two options of landowner: (1) to
appropriate as his own the works, sowing, or planting after
payment to the builder, planter, or sower the necessary and useful
expenses, and in proper cases, expenses for pure luxury or mere
pleasure, incurred by the latter; or (2) to oblige the one who built
or planted to pay the price of the land, if the value of the land is
not considerably more than that of the building or trees, and the
one who sowed, the proper rent.167 Options belong to landowner
because his right is older,166 and such rule is in accord with the
principle of accession, i.e., that the accessory follows the
principal and not the other way around.169 But the option is
preclusive. He cannot for instance, compel the owner of the
building to remove the building from the land without first
exercising either option. It is only when the owner chooses to sell
his land, and the builder or planter fails to purchase it (and its
value is not more than the value of the improvements), that the
owner may remove the improvements from the land.170 (c) Option
of aonronriation: Landowner must pay the necessary and useful
expenses, and in the proper case, expenses for pure luxury or
mere pleasure.171 The basis of indemnity is the current market
value of the improvements at the time of the election of the
option.177 Pending payment of the indemnity, the builder is
entitled to a right of retention of the property.177 Accordingly, the
builder cannot be compelled to pay rentals during the period of
retention nor be disturbed in his possession by ordering him to
'“Technogas Philippines Manufacturing Corp. v. Court of Appeals, 268 SCRA 5 (1997).

167Art. 448 and 453, NCC; See also Tuatis v. Spouses Escol, 604 SCRA 471 (2009) and
Espinoza v. Mayandoc, 828 SCRA 601 (2017).
'“Depra v. Dumlao, 136 SCRA 475,483 (1985), died In Rosales v. Castelllort, 472 SCRA
114(2005).
“’Community Cagayan, Inc. v. Nanol, 685 SCRA 453 (2012); Arangote v. Maglunob, 579
SCRA 620 (2009).
'’Torbela v. Rosario, 661 SCRA 633 (2011); Briones v. Macabagdal, 626 SCRA 300
(2010); Benedictov. Flores, 632 SCRA 446 (2010); Arangote v. Maglunob, 579 SCRA 620 (2009);
see also Technogas Philippines Manufacturing Corp. V. CA, 268 SCRA 5,17 (1997); citing Ignacio
v. Hilario, 76 Phil. 605 (1946) and Sarmiento v. Agana, 129 SCRA 122 (1984).
l71Ballatan v. CA, 304 SCRA 34,46 (1999).
l77Pecson v. CA, 244 SCRA 407,416 (1995); reiterated in Tuatis v. Escol, 604 SCRA 471
(2009) and Benedicto v. Flores, 632 SCRA 446 (2010); Javier v. Concepcion, Jr., 94 SCRA 212
(1979); Sarmiento v. Agana, 129 SCRA 122 (1984); and De Guzman v. Dela Fuente, 55 Phil. 501
(1930).
'’’Pilipinas Colleges, Inc. v. Garcia Timbang, el al., 106 Phil. 247,253 (1959).
J9JC9B0M
R52M9UH7
vacate.174 (d) Option of selling land: Can only be exercised

against the builder or planter and only when the value of the land
is not considerably more than that the building or planting;
otherwise, the builder or planter can only be compelled to pay
proper rent. In determining the price of the land, the price must
be fixed at the “prevailing market value” at the time of the
election of the option.”5 In the event the builder or the planter
refuses to pay the price of the land, the landowner does not
automatically become the owner of the improvements without
paying any indemnity.”6 The options available to him are the
following: (i) to choose option of appropriation; (ii) to enter into
a voluntary lease contract with builder or planter;”7 (iii) the
landowner may demand for the demolition of what has been built
or planted;”8 or (iv) to apply for an order from the court for the
sale of the land and improvement in a public auction applying the
proceeds thereof first to the payment of the value of the land and
the excess, if any, to be delivered to the owner of the house in
payment thereof?” (C) Articles 449-452: Applies when the
land of another (LO) with his own materials and he acted in bad
faith while the LO acted in good faith, (a) Concept of builder in
bad faith: If BPS knew that he was not the owner of the land at
the time of the building, planting, and sowing and the landowner
had no knowledge of what he did at that time, such as when the
buyers of a parcel of land constructed a house thereon even if
they were not innocent purchasers for value,150 or the builder’s
occupation of the subject property was by mere tolerance?81 (b)
Three ontions of landowner: (1) The right to appropriate whatever
has been built, planted, or sown in bad faith without need of
paying indemnity,ls: plus damages,18’ and that the builder in bad
”4Nuguid v. CA, 452 SCRA 243 (2005).

”5P<Za. de Roxas v. Our Lady’s Foundation, Inc., 692 SCRA 578 (2013), citing Ballatan v.
CA, supra', see also Department of Education v. Casibang, supra.
’’“Filipinas Colleges, Inc. v. Garcia Timbang, 106 Phil. 247,253 (1959).
’’’Miranda v. Fadullon, 97 Phil. 801 (1955), cited in Pilipinas Colleges, Inc. v. Garcia
Timbang, supra.
’’"Ignacio v. Hilario, 76 Phil. 605 (1946).
’’’Bernardo v. Bataclan, 66 Phil. 590 (1938).
'“Heirs of Victorino Sarili v. Lagrosa, 713 SCRA 726 (2014).
'"Esmaquel v. Coprada, 638 SCRA 428 (2010); see also Heirs of Cipriano Trazona v.
Heirs of Dionisio Canada, 712 SCRA 300 (2013) and Resuena v. CA, 454 SCR A 42 (2005).
'“Art. 449, NCC.
183Art. 451, NCC.
J9JC9B0M
R52M9UH7
faith has no right to a refund of any improvement built therein."4

If there are pending fruits, the landowner will likewise be entitled
to appropriate them without need of paying any indemnity.185 (2)
The right to demand the demolition of whatever has been built,
planted, or sown in bad faith in any event186 —even if damages
will be caused by the separation—plus damages.187 (3) The right
to compel the builder or planter in bad faith to pay the price of the
land,188 even if the price of the land is considerably more than the
building or trees, plus damages.189 (c) Only right of BPS in bad
faith: Reimbursement of necessary expenses of preservation of
the land.™ However, being a builder in bad faith, he does not
have the right of retention over the premises.191 (D) Article 453:
Applies when Builder, Planter, or Sower (BPS) builds, plants, or
sows on the land of another (LO) with his own materials and both
acted in bad faith. The bad faith of each other is cancelled out.
Hence, the rights of one and the other shall be the same as though
both had acted in good faith.,92As a consequence, the rules in
Article 448 will be applicable. (E) Article 454: Applies when
land of another (LO) with his own materials and he acted in good
faith while the LO acted in bad faith. The provisions of Article
447 of the NCC shall apply.193 As a consequence, BPS has two
options: (1) to demand the value of his materials and reasonable
compensation for his labor, plus damages; or (2) to demand the
return of his materials in any event, plus damages. Bad faith may
only be attributed to a landowner when the act of building,
planting, or sowing was done with his knowledge and without
opposition on his part.194 (Fl Article 455: Applies when Builder,
Planter, or Sower (BPS) builds, plants, or sows on the land of
another (LO) using materials belonging to another person (OM).
There are two scenarios: (1) If OM acted in bad faith, he loses his
'“Aquino v. Aguilar, 760 SCRA 444 (2015) and Nil A v. Baello, 703 SCRA 333 (2013).
"“Art. 449. NCC.
'“Art. 450, NCC.
'“’Art. 451, NCC.
"“Art. 450, NCC.
“’Art. 451, NCC.
"“Art. 452, NCC.
1,1 Aquino v. Aguilar, 760 SCRA 444 (2015).
"'An. 453, NCC.
“'Art. 454, NCC.
""Dinglasan-Delos Santos v. Abejon, 821 SCRA 132 (2017), citing An. 453, NCC.
J9JC9B0M
R52M9UH7
materials in favor of LO without any right whatsoever and he is

liable for damages.195 If BPS acted in good faith, he may claim
from LO a reasonable compensation for his labor; otherwise, he
is not entitled to such compensation. (2) If OM acted in good
faith, he must be paid the value of his materials.196 BPS is
primarily liable to make such payment, while LO is subsidiarily
liable. This subsidiary liability of LO will attach only if the
following conditions are met: (i) BPS is insolvent; and (ii) LO
chooses to appropriate the building, planting, or sowing. If BPS
pays the materials, the rights and obligations of BPS and LO to
each other shall be determined by applying Articles 448-454. If
LO pays the materials, he will have to pay BPS for the latter’s
labor depending on his good faith or bad faith.
4.4 Natural Accession: (A) Alluvium: (a) Distinguished from
accretion: Alluvium is the soil deposited on the estate fronting
the river bank;197 while accretion is the process whereby the soil
is deposited along the banks of rivers.19’ If the process is gradual
and imperceptible, it is alluvium; when the process is sudden
and abrupt, it is a case of avulsion, (b) Rule on alluvium: The
additional soil deposit becomes private property and shall belong
to the owner of the land contiguous to the river, creek, stream,
or lake.199 (c) Requisites: For the foregoing rule to apply, the
following requisites must be present: (1) that the accumulation
of soil or sediment be gradual and imperceptible; (2) that it be
the exclusive result of the action of the waters; and (3) that the
land where the accretion takes place is adjacent to the bank of
the river, creek, stream, or lake shore.206 The drying up of the
river is not accretion.261 The process of drying up of a river to
form dry land involved the recession of the water level from
the river banks. In accretion, the water level did not recede and
’’’Art. 455, NCC.

I96M.
'’’Heirs of Emiliuno Navarro v. I AC, 268 SCR A 74, 85 (1997).
'’"Delos Reyes v. Municipality of Kalibo, Aklan, 856 SCRA 408 (2018).
'"Art. 457, NCC and Art. 84, Spanish Law of Waters.
266Art. 457, NCC and Art. 84, Spanish Law of Waters; Delos Reyes v. Municipality of
Kalibo, Aklan, 856 SCRA 408 (2018); Daclison v. Baytion, 789 SCRA 56 (2016); Republic v.
Santos 111, 685 SCRA 51 (2012); Fernando, Jr. v. Acuna, 657 SCRA 499 (2011); New Regent
Sources, Inc. v. Tanjuatco, Jr., 585 SCRA 329 (2009); Heirs of Emiliuno Navarro v. IAC, supra,
at p. 85; PiJa. de Nazareno v. CA, 257 SCRA 589 (1996); Meneses v. CA, 246 SCRA 374 (1995);
Rcynante v. CA, 207 SCRA 794 (1992); Binalay v. Manalo, 195 SCRA 374(1991).
’“'Republic v. Santos III, 685 SCRA 51 (2012).
J9JC9B0M
R52M9UH7
was more or less maintained.202 Alluvion must be the exclusive

work of nature.202 Where there land was formed with the help of
human intervention, it becomes part of the public domain.204 (d)
Ownership is acquired ipso jure: The right of the owners of the
land adjacent to rivers, creeks, streams, or lakes to the accretion
which they receive by virtue of the action of the waters of the
river is ipso jure.™ However, the accretion to registered land
does not preclude acquisition of the additional area by another
person through prescription.206 (B) Avulsion: (a) Definition: It is
the accretion which takes place when the current of a river, creek,
or torrent segregates a known portion of land from an estate on
its banks and transfers it to another estate.202 (b) Rule on avulsion:
The owner of the land from where the portion is detached retains
the ownership thereof but he is required to physically' remove the
same within two years.202 In case of uprooted trees, a mere claim
by the owner within six months is sufficient to retain ownership
of the tree.20* (c) Requisites: (i) it takes place only along the
banks of rivers, creeks, streams, and lakes; (ii) it is caused only
by the force of the current of the water independently of the act
of man; (iii) the deposit of soil is sudden and abrupt: and (iv) the
detached portion can be identified. In the absence of evidence,
how ever, that the change in the course of river was sudden or that
n occurred through avulsion, the presumption is that the change
was gradual and caused by accretion and erosion.220 (C) Change
of Co ;rse of R ivers: (a; Rule: Rivers and their natural beds are
property of public dominion of the State.2" (b) Exception: Riser
beds which are abandoned through the natural change in the
course of the waters ipso facto belong to the owners whose lands
are occupied by the new course in proportion to the area lost.2'2
However, the owners of the lands adjoining the old bed shall
have the right to acquire the same by paying the value thereof.
mld See also Delos Reyes v. Municipality of Kalibo, Aklan, supra.

“‘Republic v. CA, 132 SCRA 514,520 (1984).
204 (Wa De Nazareno v. CA, 257 SCRA 589 (1996), citing Tiongco v. Drector of Lands,
16C.A. Rep. 211.
“’Roxas v. Tuason, 9 Phil. 408.
’“Reynante v. CA, 207 SCRA 794, 799-800 (1992).
“’3 Manrcsa, 6th Ed., 243.
"An. 459, NCC.
"Art. 460, NCC.
2'"C.N. Hodges v. Garcia, 109 Phil. 133.
“'Art. 502, Water Code of the Phil.
2l2Art. 461, NCC; Degayo v. Magbanua-Dinglasan, 755 SCRA I (2015).
J9JC9B0M
R52M9UH7
which value shall not exceed the value of the area occupied by
the new bed.215 (c) Requisites: The claimant must prove three key
elements by clear and convincing evidence: (1) the old course of
the river or creek, (2) the new course of the river or creek, and (3)
the change of course of the river or creek from the old location
to the new location by natural occurrence.214 Article 461 will still
apply even if the change in the course of the river was the result
of a deliberate act on the part of the government.215 However,
the provision does not apply when the drying up of the river
was without the intervention of the government but was actually
caused by the dumping of garbage therein by the people of the
surrounding neighborhood.216 (d) When river simply dries up: If
the river simply dries up and did not change its course or without
opening a new bed, Article 461 will not apply.217 Instead, the
/ dried-up river bed continues to belong to the State,218 whether the
I drying up of a river is by reason of nature or a result of the active
intervention of man.21’ (D) Formation of Islands: (a) Article 463:
When the current of a river divides itself into branches, leaving
a piece of land or part thereof isolated, thus forming an island,
the owner of the land retains his ownership over the island, (b)
Article 464: Islands formed on the seas within the jurisdiction
of the Philippines, on lakes and on navigable or floatable rivers,
shall belong to the State, as patrimonial property.220 (c) Article
465: An island formed through in non-navigable or non-floatable
rivers shall become private property, as follows: (i) the island so
formed belongs to the owners of the margins or banks nearest to
the island; (ii) if the island is in the middle of the river, it shall
belong to the owners of both margins, in which case it shall be
divided longitudinally in halves; (iii) if, however, a single island
thus formed be more distant from one margin than from the other,
the owner of the nearer margin shall be the sole owner.221
’"Art. 46I.NCC.
’"Halting v. Reyes, 678 SCR A 52.1 (2012).
•’"Baes V. CA, 224 SCRA 562 (1993).
’“Ronquillo v. CA, 195 SCRA 433 (1991).
’’’Republic v. Santos III, 685 SCRA 51 (2012).
’“W. See atm Fernando, Jr. v. Acuna, 657 SCRA 499 (2011), Republic v. CA, 132 SCRA
214 (1984), and Celestial v. Cachopero, 413 SCRA 469 (2003).
’'’Celestial v. Cachopero, 413 SCRA 469 (2003) and Ronquillo v. CA, 195 SCRA 433
(1991).
”°3 Manresa, 6th Ed., 256.
”'Art. 465, NCC.
E
J9JC9B0M
R52M9UH7
4.5 Accession Continua with Respect to Movables: (A) Adjunction:

(a) Concept: 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,222
but each preserving its own nature, (b) If effected in good
faith: The owner of the principal thing acquires the accessory
by indemnifying the former of the value of the accessory.223
However, if the accessory is much more precious than the
principal, its owner may demand its separation, even though the
thing to which it has been incorporated may suffer some injury.222
(c) If effected in bad faith: (1) by the owner of the accessory, he
shall lose his thing and he shall be liable for damages;225 or (2)
by the owner of the principal, the owner of the accessory has the
option of: (i) demanding payment for the value of the accessory,
plus damages; or (ii) demanding separation, even if the same will
result in injury to the principal thing, plus damages.226 The second
option, however, does not apply if the same is not practicable
as in the case of paintings (which cannot be separated from
the canvass) or writings (which cannot be separated from the
paper). In such a situation, the owner of the accessory is limited
only to the first option of demanding payment for the value of
the accessory.222 (B) Commixtion or confusion: (a) Concent:
Commixtion or confusion is the 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,
(bl When co-ownership arises: if the mixture was caused by: (1)
chance or fortuitous event;22* (2) by the will of both owners;22’
and (3) by the will of only one owner acting in good faith.230
In all these cases, each owner shall acquire a right proportional
to the part belonging to him, bearing in mind the value of the
things mixed or confused.“' (c) When caused in bad faith: If the
“3 Sanchez Roman, 98.

223Art. 466, NCC.
“Art. 469,2nd par., NCC.
“Art. 470, 1st par., NCC.
“Art. 470,2nd par., NCC.
“3 Manresa, 6th Ed., 289.
“Art. 472, NCC.
mId.
““Art. 473, 1st par., NCC.
“'Arts. 472-473, NCC.
J9JC9B0M
R52M9UH7
commixtion or confusion was caused by only one owner acting

in bad faith, he loses the thing belonging to him thus mixed or
confused, besides being obliged to pay indemnity for the damages
caused to the owner of the thing with which his own was mixed
or confused.232 (C) Specification: (a) Concent: Specification is
the imparting of a new form to the material of another.233 (b) If
worker acted in good faith: he shall appropriate the thing thus
transformed as his own, indemnifying the owner of the material
for its value.234 The exception to this rule is when the material is
more precious than the transformed thing or more valuable, in
which case, its owner may, at his option: (1) appropriate the new
thing to himself after paying indemnity for the value of the work;
or (2) demand indemnity for the material.233 (c) If worker acted
in bad faith: the owner of the material has two options: (1) to
appropriate the work for himself without paying anything to the
maker; or (2) to demand of the latter that he indemnify him for
the value of the material and the damages he may have suffered.
The exception is in case the value of the work, for artistic or
scientific reasons, is considerably more than that of the material,
the owner of the material cannot appropriate the work.236
5) Quieting of Title and Ruinous Buildings and Trees

5.1 Quieting of Title: (a) Definition: It is a common-law remedy
for the removal of any cloud or doubt or uncertainty on the
title to real property by reason of any instrument, record, claim,
encumbrance, or proceeding that is apparently valid or effective,
but is, in truth and in fact, invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title.237 (b) Nature
of action: An action to quiet title is characterized as a proceeding
quasi in rem. Actions quasi in rem deal with the status, ownership,
or liability of a particular property but which are intended to
2,2Art. 473, 2nd par., NCC.

23j3 Sanchez Roman 100.
2,4 Art. 474, 1st par., NCC.
233Art. 474, 2nd par., NCC.
”6Art. 474, last par., NCC.
23,De Guzman v. Tabango Realty, Inc., 750 SCR A 271 (2015); Heirs of Margarita Prodon
v. Heirs of Maximo S. Alvarez, 704 SCRA465 (2013); Phil-Ville Development and Housing Corp,
v. Bonifacio, 651 SCRA327 (2011); Heirs of Enrique Toringv. Heirs of Teodosia Boquilaga, 631
SCRA 278 (2010); Oho v. Lim, 614 SCRA 514 (2010); Divinagracia v. Cometa, 482 SCRA 648
(2006); Calacala v. Republic, 464 SCRA 438 (2005); see also Baricualro v. CA, 325 SCRA 137
(2000); citing Vda. de Aviles v. Court of Appeals, 264 SCRA 473,478 (1996).
J9JC9B0M
R52M9UH7
operate on these questions only as between the particular parties

to the proceedings. Hence, the judgment therein is binding only
upon the parties who joined in the action.238 (c) Jurisdiction:
An action for the quieting of title is in the nature of a real
action—that is, an action that involves the issue of ownership
or possession of real property, or any interest in real property.
As such, jurisdiction is dependent on the assessed value of the
property in dispute.23’ (d) Two requisites: For an action to quiet
title to prosper, two indispensable requisites must concur: (1) the
plaintiff or complainant has a legal or equitable title or interest
in the real property subject of the action; and (2) the deed, claim,
encumbrance, or proceeding claimed to be casting a cloud on his
title must be shown to be in fact invalid or inoperative despite
its prima facie appearance of validity or legal efficacy.2" Legal
title denotes registered ownership, while equitable title means
beneficial ownership.241 Thus, if the plaintiffs claim the property
as their own as a result of acquisitive prescription, the same
would give them the requisite equitable title.242 (e) Cloud on title:
A cloud on a title exists when: (1) there is an instrument, record,
claim, encumbrance, or proceeding; (2) which is apparently valid
or effective; (3) but is in truth and in fact invalid, ineffective,
voidable, or unenforceable; and (4) may be prejudicial to the
“‘Phil-Ville Development and Housing Corp. v. Bonifacio, 651 SCRA 327 (2011); B.E.
San Diego, Inc. v. Alzul, 524 SCRA 402 (2007), citing Realty Sales Enterprises v. IAC, 154 SCRA
328 (1987).
“’Salvador v. Patricia, Inc., 808 SCRA 130 (2016). See also Heirs of Valeriano S. Concha,
Sr v. Lumocso, 540 SCRA 1 (2007).
240Filipinas Eslon Manufacturing Corp. v. Heirs of Basilio Llanes, G.R. No. 194114, March
27 2019; Desiderio Dalisay Investments, Inc. v. Social Security System, 860 SCRA 554 (2018);
Heirs of Delfin and Maria Tappa v. Heirs of Jose Bacud, 788 SCRA 13 (2016); Heirs of Liberato
CasliUcjos v. LaTondcna Incorporada, 797 SCRA 540 (2016); Heirs of Datu Dalandag Kali v. Pia,
759 SCRA232(2015); Aquino v.Quiazon,753 SCRA98 (2015); DeGuzman v. fabango Realty,
Inc., 75° SCRA 271 (2015); Quintos v. Nicolas, 726 SCRA 482 (2014); Heirs of Margarita Prodon
v Heirs of Maximo S. Alvarez, 704 SCRA 465 (2013); Mananquil v. Moico, 686 SCRA 123
(2012); National Spiritual Assembly of the Baha'is of the Philippines v. Pascual, 676 SCRA 143
(2012): Phil-Ville Development and Housing Corp. v. Bonifacio, 651 SCRA 327 (2011); Eland
Philippines, Inc. v. Garcia, 613 SCRA 66 (2010); Clado-Reyes v. Limpe, 557 SCRA 400 (2008);
■ ucasan v. PD1C, 557 SCRA 306 (2008); Rumarate v. Hernandez, 487 SCRA 317 (2006); Calacala
v Republic, 464 SCRA 438 (2005).
’41Basa v. Loy Vda. de Seryl Loy, 864 SCRA 96 (2018) and Mananquil v. Moico, 686
SCRA 123 (2012).
“’Residents of Lower Atab & Teacher's Village, Barangay Sto. Tomas Proper, Baguio City
Sta. Monica Industrial & Development Corp., 738 SCRA 450 (2014).
v.
J9JC9B0M
R52M9UH7
title sought to be quieted.2,1’ Generally, such cloud is not created

by mere verbal assertion of ownership. However, where there
is factual basis, such as a claim of right based on acquisitive
prescription, has been held to constitute a removable cloud on
title.244 (f) Not collateral attack on title: Raising the invalidity of
a certificate of title in an action for quieting of title is NOT a
collateral attack because it is central, imperative, and essential
in such an action that the complainant shows the invalidity of
the deed which casts cloud on his title.24’ (g) Prescriptive period:
(1) If plaintiff not in possession: In an action to quiet title, the
plaintiff need not be in possession of the property.246 If plaintiff is
not in possession, the action is indubitably a real action and shall
prescribe after 30 years.247 (2) If plaintiff is in possession: The
filing of an action to quiet title is imprescriptible if the disputed
real property is in the possession of the plaintiff because he may
wait until his possession is disturbed or his title is attacked before
taking steps to vindicate his right.248
5.2 Ruinous Buildings and Falling Trees: (a) Rule on ruinous
buildings: Owners of buildings, walls, columns, or other
constructions in danger of falling are obliged to either demolish
it or to execute the necessary work in order to prevent it from
falling.24’ If he does not comply with the foregoing obligation,
the administrative authorities may order the demolition of the
structure at his expense, or to take measures to insure public
safety.2’0 Further, if by reason of lack of necessary repairs, a
building or structure causes damage resulting from its total or
24)Ocnmpo v. Ocampo, Sr., 830 SCRA418 (2017); Heirs of Delfin and Maria Tappa v. Heirs
of Jose Bacud, 788 SCRA 13 (2016); Phil-Ville Development and I lousing Corp. v. Bonifacio, 651
SCRA 327 (2011).
244Tandog v. Macapagal, 532 SCRA 550 (2007).
24’Filipinas Eslon Manufacturing Corp. v. Heirs of Basilio Llanes, G.R. No. 194114, March
27, 2019, citing Sarmiento v. Court of Appeals, 507 Phil. 101, 113 (2005). See also OAo v. Lim,
614 SCRA 514 (2010) and Roman Catholic Archbishop of San Fernando v. Soriano, Jr., 671 Phil.
308 (2011).
-’"‘Art. 477, NCC.
^’Republic v. Mangotara, 624 SCRA 360 (2010) and Jamcsv. Eurcm Realty Development
Corp., 707 SCRA 454 (2013).
24"Syjuco v. Bonifacio, 745 SCRA 468 (2015), citing Faja v. Court of Appeals, 166 Phil.
429, 438 (1977). See also Alino v. Heirs of Angelica A. Lorenzo, 556 SCRA 139 (2008); Heirs
of Marcela Salonga Bituin v. Caoleng, Sr., 529 SCRA 747 (2007); Rumarate v. Hernandez, 487
SCRA 317 (2006); Ragasa v. Roa, 494 SCRA 95 (2006) and Pingol v. CA, 226 SCRA 118 (1993).
“’Art. 482, par. I, NCC.
2!0Arl. 482, par. 2, NCC.
J9JC9B0M
R52M9UH7 3
partial collapse, the proprietor thereof shall be responsible for

the damages?” (b) Rule on falling trees: Whenever a large tree
threatens to fall in such a way as to cause damage to the land or
tenement of another or to travelers over a public or private road,
the owner of the tree shall be obliged to fell and remove it; and
should he not do so, it should be done at his expense by order
of the administrative authorities.252 In paragraph 3 of Article
2191 of the NCC, proprietors are liable for the falling of trees
situated at or near highways or lanes, if the same is not caused
by force majeure. Under Article 483 of the NCC, however, the
owner thereof shall be deemed liable even if the reason for the
fall be fortuitous event, such as typhoon or earthquake, because
in this case the owner is already negligent for failing to take the
necessary measures to insure public safety.
6) Co-ownership
6.1 Basic Principles: (a) Definition: Co-ownership is defined as the

right of common dominion which two or more persons have in
a spiritual part of a thing, not materially or physically divided?”
(b) Requisites: (1) plurality of subjects, who are the co-owners; (2)
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; and (3) recognition of ideal shares, which
determines the rights and obligations of the co-owners?” (c)
Consequences: (1) Rule: As a consequence, a co-owner of an
undivided parcel of land is an “owner of the whole, and over
the whole he exercises the right of dominion, but he is at the
same time the owner of a portion which is truly abstract.”2” The
underlying rationale is that until a division is actually made,
the respective share of each cannot be determined, and every
co-owner exercises, together with his co-participants, joint
ownership of the pro indiviso property, in addition to his use and
enjoyment of it?56 (2) Right to use entire thing: A co-owner is
“'Art. 2190, NCC.

“2Art. 483, NCC.
253Vagilidad v. Vagilidad, Jr.. 507 SCRA 94 (2006).
“’Sanchez v. CA, 404 SCRA 540 (2003).
“’Torres. Jr. v. Lapinid, 742 SCRA 646 (2014); Quintos v. Nicolas. 726 SCRA 482 (2014);
gizal v. Naredo, 668 SCRA 114 (2012); De Guia v. CA, 413 SCRA 114 (2003).
“‘Anzures v. Venlanilla, G.R. No. 222297, July 9, 2018; Quijano v. Amante, 737 SCRA
552 (2014); Alcjandrino v. CA, 295 SCRA 536 (1998), and Aguilar v. CA, 227 SCRA 472, 480
(1993).
J9JC9B0M
R52M9UH7
entitled to possess and enjoy the entire property. Hence, he cannot

be ejected from the property.”7 (3) Limitations: (i) it is used for
the purpose intended; (ii) it must be used in such a way as not
to injure the interest of the other co-owners; and (iii) such use
does not prevent the other co-owners from making use thereof
according to their own right.”8 Hence, if there is an agreement
to lease the house, the co-owners can demand rent from the co
owner who dwells in the house,”’ but the latter cannot be ejected
from the property.2" (d) Cannot claim definite portion: (1) Rule:
By the nature of a co-ownership, a co-owner cannot point to
specific portion of the property owned in common as his own
because his share therein remains intangible.241 (2) Exception:
Where the transferees 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 entitles the possessor
to the definite portion which he occupies.242 (3) Effect of sale of
concrete portion: Whether the disposition involves an abstract
or concrete portion of the co-owned property, the sale remains
validly executed. What will be affected on the sale is only his
proportionate share, subject to the results of the partition. The
co-owners who did not give their consent to the sale stand to be
unaffected by the alienation.242 (e) Sources of co-ownership: (1)
law; (2) contract; (3) succession - where there are two or more
heirs, the whole estate of the decedent is, before its partition,
owned in common by such heirs, subject to the payment of debts
of the deceased;244 and (4) occupation - such as when two or
more persons catch a wild pig or get forest products244 or when
a hidden treasure is accidentally discovered by a stranger, who
is not a trespasser, on the land of another.244 If the source of co-
ownership is contract, the law does not make a distinction as to
“’Anzures v. Ventanilla, G.R. No. 222297, July 9, 2018.

"“Art. 486, NCC.
”’De Guia v. CA, 413 SCR A 114 (2003).
’"Anzures v. Ventanilla, G.R. No. 222297, July 9,2018.
“'Dailisan v. CA, 560 SCRA 351 (2008); Vda. de Ape v. CA, 456 SCRA 193 (2005).
242 ft/a. de Cabrera v. CA, 267 SCRA 339 (1997), reiterated in Del Campo v. CA, 351
SCRA 1 (2001)and Inalvez v. Nool, 789 SCRA 489 (2016).
“’Torres, Jr. v. Lapinid, 742 SCRA 646 (2014).
244Art. 1078, NCC.
“’Punzalan v. Boon Liat, 44 Phil. 320.
’“Art. 438, 2nd par., NCC.
J9JC9B0M
R52M9UH7
how the co-owner derived his/her title, may it be through gratuity

or through onerous consideration. In other words, a person who
derived his title and was granted co-ownership rights through
gratuity may compel partition.’6’ However, mere construction
of a house on another’s land, in the absence of agreement, does
not create a co-ownership, regardless of the value of the house.
Instead, the situation will be governed by Articles 448-454 of
the Civil Code.’61 (f) Share in benefits and charges: The share
of the co-owner in the thing owned in common is determined
by their agreement and, in default thereof, such share shall be
presumed to be equal.’69 As to share in benefits and charges, the
same should be in proportion to his interest in the co-ownership.
Any stipulation to the contrary is void.”0
6.2 Consent Requirement: (a) Action in ejectment: (1) Rule: Any
one of the co-owners may bring an action in ejectment.”1 A co
owner may thus bring an ejectment action without joining the
other co-owners, the suit being deemed instituted for the benefit
of all.”2 (2) Must benefit all: The foregoing rule applies so long
as the suit is instituted for the benefit of all.”3 If the action is
for the benefit of the plaintiff alone who claims to be the sole
owner, the other co-owners are indispensable parties who must
be impleaded.”4 (3) Meaning of “ejectment’’: The term "action
in ejectment" includes all kinds of actions for the recovery of
possession, including an accion pttbliciana and a reinvindicatory
action.”3 It will also include an action for revival of judgment if
’’’Logrosa v. Azares, G.R. No. 217611, March 27,2019.

“’Victoria v. Pidlaoan, 791 SCRA 16 (2016).
“’Art. 485,2nd par., NCC.
”°Art. 485,1st par., NCC.
’’'Art. 487, NCC.
’’’Clemente v. Republic, G.R. No. 220008. Feb. 20, 2019; String v. Plaza, 166 SCRA 84,
85 (1988); citing 11 Tolentino, Civil Code ofthe Philippines, 157 (1983 Ed.).
’’’Plasabas v. CA (Special Former Ninth Div.), 582 SCRA 686 (2009) and Adlawan v.
Adlawan, 479 SCRA 275 (2006).
’"Baloloy v. Hular, 438 SCRA 80 (2004). See also Adlawan v. Adlawan. supra: Plasabas
v- CA (Special Former Ninth Div.), 582 SCRA 686 (2009); Heirs of Albina Ampil v. Manahan,
684 SCRA 130 (2012).
’’’Catedrilla v. Lauron, 696 SCRA 341 (2013); Heirs of Albina Ampil v. Manahan, 684
SCRA 130(2012); Plasabas v. CA (Special Former Ninth Div.), 582 SCRA 686 (2009); Wee v. De
Castro, 562 SCRA 695 (2008); Adlawan v. Adlawan, 479 SCRA 275 (2006); Baloloy v. Hular, 438
SCRA 80 (2004); De Guia v. CA, 413 SCRA 114, 125 (2003).
J9JC9B0M
R52M9UH7
it results into the recovery of property.276 (4) Effect of judgment:

While a co-owner may bring an action in ejectment without
the others, any adverse judgment cannot prejudice the rights of
the unimpleaded co-owners but any judgment of the court in
favor of the co-owner will benefit the others.277 (b) Repair for
preservation and taxes: (1) Rule: Any repair for the preservation
of the property owned in common may be made at will by one
of the co-owners278 and he has the right to demand contribution
from the others for the expenses of preservation and to the
taxes.27’ (2) Option of co-owner obliged to contribute: Instead
of contributing to such expenses, a 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.280 (3) Illustration: A co-owner who redeems
the property in its entirety during the redemption period does
not make him the owner of all of it. The property remains in a
condition of co-ownership as the redemption does not provide
for a mode of terminating a co-ownership.281 But the one who
redeemed has the right to be reimbursed for the redemption price
and until reimbursed, holds a lien upon the subject property for
the amount due.282 Such advance payments are in the nature of
necessary expenses for the preservation of the co-ownership.2”
(c) Expenses for improvement or embellishment: Must be decided
by the majority.284 The term "majority of co-owners" means the
vote of the co-owners representing the controlling interest in the
object of co-ownership.2” (d) Acts of alteration: (1) Concept: An
act of alteration is one that affects the substance of the thing286 and
changes its essence and nature.287 Alterations include any act of
276Basbas v. Sayson, 656 SCRA 151 (2011) and Clidoro v. Jalmanzar, 729 SCRA 350
(2014).
’’’Plasabas v. CA (Special Former Ninth Div.), 582 SCRA 686 (2009); Tanjuatco v. Gako,
Jr., 582 SCRA 200 (2009); Resuena v. CA, 454 SCRA 42 (2005); Baloloy v. Hular, 438 SCRA
80 (2004).
’’“Art. 489, NCC.
’’’Art. 488, NCC.
’“Art. 488, NCC.
“'Paulmitan v. CA, 215 SCRA 867 (1992), citing Adille v. CA, 157 SCRA 455 (1988).
“’Cabales v. CA, 531 SCRA 691 (2007), ciling Paulmitan v. CA, supra.
“’Tugboy v. Tigol, Jr., 626 SCRA 341 (2010).
“’Art. 489, NCC.
“’Art. 492, 2nd par.
2863 Manresa, 6th Ed., 447; cited in II Caguioa, 137 (1966 Ed.).
“’ll Tolentino, Civil Code, 192 (1992 Ed.).
J9JC9B0M
R52M9UH7
strict dominion or ownership and any encumbrance or disposition

has been held implicitly to be an act of alteration.288 (2) Unanimous
consent required: Consent of all co-owners is required to the
making of an alteration on the thing owned in common, even
though benefits for all would result from such act.28’ However,
the other co-owners may go to court for appropriate relief should
any of the co-owners unreasonably withhold his consent and the
same is clearly prejudicial to the common interest.290 (3) Effect
of unauthorized alteration: The act is illegal and invalid and the
other co-owners can compel the erring co-owner to undo what
has been done, at the latter’s expense, in addition to recovery
of damages, (e) Acts of administration: (1) Concept: Those acts
which do not affect the essence, form and substance, such as
modifications and changes required by the nature of the thing
for its exploitation and enjoyment.291 (2) Requires majority vote:
With respect to acts of administration and better enjoyment of
the thing owned in common, the resolution of the majority of the
co-owners shall be sufficient.292
6.3 Rights Over Ideal Share: (a) Nature of right: A co-owner has
absolute ownership of his undivided and pro-indiviso share in
the co-owned property.292 As such, he has the right to alienate,
assign, or mortgage it, and even to substitute another person in its
enjoyment, except when personal rights291 are involved.292 In the
same way, he cannot also be forced to sell his ideal share in the co-
ownership by invoking Article 491 of the Civil Code.296 Insofar as
the sale of co-owned properties is concerned, there is no common
interest that may be prejudiced should one or more of the co
owners refuse to sell his or her ideal share.297 (b) Effect of sale of
entire property or sale of concrete portion: As a mere part-owner,
288Arambulo v. Nolasco, 720 SCRA 95 (2014) and Cruz v. Calapang. 544 SCRA 512 (200K).
289Art. 491.NCC.
M/d.
29l3 Manresa 476-477; cited in II Tolentino, Civil Code, 195 (1992 Ed.).
292Art. 492, lstpar.,NCC.
!,)Torres, Jr. v. Lapinid, 742 SCRA 646 (2014); City of Mundaluyong Aguilnr, 350
SCRA 499 (2001).
2MThe term “personal rights" refers to the personal relations of one co-owner to the others,
as when the family residence is used by the children as co-owners, [see II Padilla, Civil Code of
the Philippines, 300-301 (1972 Ed.); 11 Tolentino, Civil Code ofthe Philippines, 203 (1992 Ed.)].
292Art. 493, NCC; Nufable v. Nufable, 309 SCRA 692, 700 (1999).
™Arambulo v. Nolasco, 720 SCRA 95 (2014).
297/</.
J9JC9B0M ■■
R52M9UH7
a co-owner cannot alienate the shares of the other co-owners.

The prohibition is premised on the elementary rule that “no one
can give what he does not have”—nemo dat quod non habet.™
Likewise, a co-owner has no right to sell or alienate a concrete,
specific or determinate part of the thing owned in common,
because his right over the thing is represented by a quota or ideal
portion without any physical adjudication.2” However, a sale of
the entire property by one co-owner without the consent of the
other co-owners100 or a sale of a concrete portion of the co-owned
property without the consent of the others,101 is not null and void
for it is well-established that the binding force of a contract must
be recognized as far as it is legally possible to do so. Quando res
non valet ut ago, valeat quantum valere potest. But the sale will
affect only his own share but not those of the other co-owners
who did not consent to the sale.102 Stated otherwise, what the
vendee obtains by virtue of such a sale are the same rights as the
vendor had as co-owner, and the vendee merely steps into the
shoes of the vendor as co-owner101 and acquires a proportionate
abstract share in the property held in common.™ Consequently,
whether the disposition involves an abstract or concrete portion
of the co-owned property or the sale of the entire property, the
sale remains validly executed.105 However, what will be affected
on the sale is only his proportionate share, subject to the results
of the partition. The co-owners who did not give their consent to
the sale stand to be unaffected by the alienation.106 (c) Right of
’“’Mercado v. CA, 240 SCRA 616, 620 (1995); see also Nufable v. Nufabte, supra and
Aromin v. Floresca, 496 SCRA 785 (2006)
’’’Heirs of Roger Jarque v. Jarque, G.R. No. 196733, Nov. 21,2018, citing Carvajal v. CA,
112 SCRA 237 (1982). See also Hagosojos v. CA, 159 SCRA 175 (1987).
’““Republic v. Heirs of Fnuicisca Dignos-Sorono, 549 SCRA 58 (2008) and Bailon-Casilao
v.CA, I60SCRA 738(1988).
101 Lopez v. Vda. de Cuaycong, 74 Phil. 601 (1944).
’“’Augusto v. Uy, G.R. No. 218731, Feb. 13, 2019; Mactan-Cebu International Airport
Authority v. Unchuan, 791 SCRA 581 (2016); Torres, Jr. v. Lapinid, 742 SCRA 646 (2014);
Republic v. Heirs of Francisea Dignos-Sorono, 549 SCRA 58 (2008); Aguirre v. CA, 421 SCRA
310, 323-324 (2004); Corinthian Really, Inc. v. CA, 394 SCRA 260, 268 (2002); Del Campo v.
CA, 351 SCRA 1, 8 (2001); Tomas Claudio Memorial College, Inc. v. CA, 316 SCRA 501 (1999);
Paulmitan v. CA, 215 SCRA 866,872-873 (1992); and Bailon-Casilao v. CA, 160 SCRA 738, 745
(1988).
30iUda. de Figuracion v. Figuracion-Gcrilla, 690 SCRA 495 (2013), citing Aguirre v. CA,
421 SCRA 310 (2004).
llwExtraordinary Development Corp. v. Samson-Bico, 738 SCRA 147 (2014), citing Del
Campo v. CA, 351 SCRA 1 (2001).
’“’Torres, Jr. v. Lapinid, supra.
MId.
J9JC9B0M
R52M9UH7
legal redemption: (1) When available: The law grants a co-owner

the exercise of the said right of redemption when the shares of the
other owners are sold to “a third person.”’07 A third person, within
the meaning of Article 1620 of the NCC, is anyone who is not a
co-owner30’ or a stranger to the co-ownership.309 (2) Requisites:
(i) there must be a co-ownership; (ii) one of the co-owners sold
his right to a stranger; (iii) the sale was made before the partition
of the co-owned property; (iv) the right of redemption must be
exercised by one or more co-owners within a period of 30 days to
be counted from the time that he or they were notified in writing
by the vendee or by the co-owner vendor; and (v) the vendee
must be reimbursed for the price of the sale.”0 For this right to be
exercised, co-ownership must exist at the time the conveyance
is made by a co-owner and the redemption is demanded by
the other co-owner or co-owners.’" (3) Requirement of written
notice: A co-owner desirous of exercising his right of legal
redemption is given a period of 30 days from the notice in writing
by the prospective vendor, or by the vendor, as the case may be.”2
The requirement of written notice is mandatory,”’ but there is
no required form. So long, therefore, as the latter is informed
in writing of the sale and the particulars thereof, the 30 days for
redemption start running, and the redemptioner has no real cause
to complain.”4 It can be in the form of a copy of deed of sale,”5 a
copy of the summons,”6 or a copy of the Sheriff’s Certificate of
Sale.’” (4) Notice must come from vendor: The notice in writing
must come from the vendor and that notice given by the vendee
“’Basav. Aguilar, 117 SCRA 128, 130-131 (1982), cited in Pilapil v. CA, 250SCRA 566,
576 (1995), Fernandez v. Tanin, 391 SCRA 653, 659 (2002) and Galvez v. CA, 485 SCRA 346
(2006); see also Art. 1620, NCC.
»‘W.
’"Gochan v. Maricao, 709 SCRA 438 (2013), citing Reyes v. Concepcion, 190 SCRA 171
(1990).
”°Arts. 1620 and 1623, NCC; Calma v. Santos, 590 SCRA 359 (2009); Aguilar v. Aguilar,
478 SCRA 187 (2005).
’"Avila v. Barabat, 485 SCRA 8 (2006); Uy v. CA. 246 SCRA 703 (1995).
’"Art. 1623, NCC.
’’’Pascual v. Ballesteros, 666 SCRA 297 (2012); Barcellano v. Batlas, 657 SCRA 545
(2011); Gosiengfiao Guillen v. CA, 589 SCRA 399 (2009); Cua v. Vargas, 506 SCRA 374 (2006).
’"Bayan v. Bayan, G.R. No. 220741, August 14,2019.
’’’Conejero v. CA, 123 Phil. 605 (1966).
’’“Francisco v. Boiser, 332 SCRA 792 (2000).
’’’Bayan v. Bayan, supra.
J9JC9B0M
R52M9UH7
(buyer) should not be taken into account.’1’ (d) No pre-emptive

right: What the law grants to a co-owner is a right of redemption
and not pre-emption. By the very nature of the right of “legal
redemption,” a co-owner’s right to redeem is invoked only after
the shares of the other co-owners are sold to a third party or
stranger to the co-ownership.11’
6.4 Extinguishment of Co-ownership: (a) Causes: (1) merger; (2)
prescription; (3) destruction of thing or loss of right; and (4)
partition.”0 Redemption by a co-owner of the property in its
totality during the period of redemption does not vest in him
ownership over it since redemption is not a mode of terminating
a co-ownership.’21 Such redemption will simply entitle him to
collect reimbursement from the remaining co-owners pursuant
to the provisions of Article 488 of the NCC, considering that
redemption entails a necessary expense;’22 and until reimbursed,
he holds a lien upon the subject property for the amount due.’21
However, when the redemption is made after the period of
redemption, it is actually a repurchase. Hence, the erstwhile co
owner who purchased the property will become exclusive owner
thereof.’24 (b) Prescription: (1) Rule: A co-owner cannot acquire
by prescription the share of the other co-owners absent a clear
repudiation of co-ownership duly communicated to the other
co-owners.’25 The reason is that the possession of a co-owner
is like that of a trustee and shall not be regarded as adverse to
the other co-owners but in fact as beneficial to all of them.’26
(2) When prescription lies: If the co-owner actually holding the
property asserts exclusive dominion over it against the other
’l’Butte v. Manuel Uy & Sons, Inc., 4 SCRA 526 (1962) and Francisco v. Boiser, 332
SCRA 792 (2000).
’'’Reyes v. Concepcion, 190 SCRA 171 (1990).
”°3 Manresa, 6th Ed., 486; 2 Castan, 8th Ed., 318.
Adille v. CA, 157 SCRA 455 (1988); see also Paulmitan v. CA, 215 SCRA 866 (1992),
Mariano v. CA, 222 SCRA 736 (1993), Cruz v. Leis, 327 SCRA 570 (2000), Cabales v. CA, 531
SCRA 691 (2007), and Taghoy v. Tigol, Jr., 626 SCRA 341 (2010).
’’’Adille v. CA, supra; Cabales v. CA, supra; Taghoy v. Tigol, Jr., supra.
’’’Cabales v. CA, supra; Taghoy v. Tigol, Jr., supra.
”4Tan v. CA, 172 SCRA 660 (1989).
’’’Art. 494, NCC; Vda. de Figuracion v. Figuracion-Gcrilla, 690 SCRA 495 (2013); Heirs
of Juanita Padilla v. Magdua, 630 SCRA 573 (2010); Mariano v. De Vega, 148 SCRA 342 (1987);
Mariategui v. CA, 205 SCRA 337 (1992).
’’’Heirs of Feliciano Yambao v. Heirs of Hermogenes Yambao, 789 SCRA 361 (2016);
Heirs of Jose Reyes, Jr. v. Reyes, 626 SCRA 758(2010); Fangonil-Herrera v. Fangonil, 531 SCRA
486 (2007); Galvez v. CA, 485 SCRA 346 (2006); and Salvador v. CA, 243 SCRA 239 (1995).
J9JC9B0M
R52M9UH7
co-owners, the corollary of the rule is that he can acquire sole

title to it after tire lapse of the prescribed prescriptive period.327
Thus, prescription, as a mode of terminating a relation of co-
ownership, must have been preceded by repudiation of the co-
ownership;328 and absent a clear repudiation of the co-ownership,
a co-owner cannot acquire by prescription the share of the other
co-owners.32’ (3) Requisites of effective repudiation: (i) the co
owner has performed unequivocal acts of repudiation amounting
to an ouster ofthe cestui que trust or the other co-owners; (ii) such
positive acts of repudiation have been made known to the cestui
que trust or the other co-owners; (iii) the evidence thereon must
be clear and convincing;330 and (iv) he has been in possession
through open, continuous, exclusive, and notorious possession of
the property for the period required by law.331 Filing by a trustee
of an action in court against the trustor to quiet title to property,
or for recovery of ownership thereof, held in possession by the
former, may constitute an act of repudiation of the trust reposed
on him by the latter.332 Likewise, the issuance of the certificate of
title solely in the name ofthe co-owner possessor would constitute
an open and clear repudiation of the co-ownership,333 unless he
allowed the other co-owner to build her house on the subject
property without any opposition from him. Such act constitutes
an implied recognition of the co-ownership, which in turn
negates the presence of a clear notice of repudiation to the ousted
co-owner.334 However, the sole fact of a co-owner declaring the
land in question in his name for taxation purposes and paying the
land taxes did not constitute an unequivocal act of repudiation
amounting to an ouster of the other co-owner and could not
constitute adverse possession as basis for title by prescription.335
327Pangan v. CA, 166 SCRA 375,382 (1988).

328Adille v. CA, 157 SCRA 455 (1988).
’’’Heirs of Segunda Maningding v. CA, 276 SCRA 601 (1997).
330Heirs of Feliciano Yambao v. Heirs of Hermogenes Yambao, 789 SCRA 361 (2016);
Vda. de Figuration v. Figuracion-Gerilla, supra', Heirs of Juanita Padilla v. Magdua, supra',
Fangonil-Herrera v. Fangonil, 531 SCRA 486 (2007); Salvador v. CA, 243 SCRA 239 (1995);
Delima v. CA, 201 SCRA 641.
331 Vda. de Figuration v. Figuracion-Gerilla, supra-. Heirs of Jose Reyes, Jr. v. Reyes, 626
SCRA 758 (2010) and Galvez v. CA, 485 SCRA 346 (2006).
332Pangan v. CA, 166 SCRA375,382 (1988).
333Pangan v. CA, supra.
mVda. de Figuracion v. Figuracion-Gerilla, 690 SCRA 495 (2013).
335Heirs of Jose Reyes, Jr. v. Reyes, 626 SCRA 758 (2010), citing Laguna v. Levantino,
71 Phil. 566 (1941), Guillen v. CA, 179 SCRA 789, 798 (1989), Bicarme v. CA, 186 SCRA 294
(1990).
J9JC9B0M
R52M9UH7
(c) Partition: (1) Concept: Partition is the separation, division,

or assignment of a thing held in common among those to whom
it may belong.336 Every act which is intended to put an end to
indivision among co-heirs and legatees or devisees is deemed
to be a partition, although it should purport to be a sale, an
exchange, a compromise, or any other transaction.337 (2) Rule:
A co-owner may demand at any time the partition of the thing
owned in common, insofar as his share is concerned.338 As a
consequence, an action to demand partition is imprescriptible or
cannot be barred by laches.33’ In the event that there is a conflict
between dismissal with prejudice under Rule 17, Section 3 of
the Rules of Court and the right granted to co-owners to demand
partition at any time under Article 494 of the Civil Code, the
latter must prevail. To construe otherwise would diminish the
substantive right of a co-owner through the promulgation of
procedural rules.340 (3) When action no longer for partition: As
long as the co-ownership is recognized, an action to compel
partition will not prescribe and may be filed at any time agains
the actual possessor by any of the other co-owners.341 From th
moment one of the co-owners claims that he is the absolute ano
exclusive owner of the properties and denies the others any share
therein, the question involved is no longer one of partition, but
of ownership.342 In such case, the imprescriptibility of the action
for partition can no longer be invoked or applied when one of
the co-owners has adversely possessed the property as exclusive
owner for a period sufficient to vest ownership by prescription.343
(4) Prescriptive period: (i) If by acquisitive prescription, a co
owner acquires ownership of real property after 30 years;344 or (ii)
if by extinctive prescription (statute of limitations), it has been
held that the action for reconveyance by a co-owner of his share
prescribes in 10 years, the action being based on an implied or
336Art. 1079, NCC.

337Art. 1082, NCC.
338Art. 494, NCC.
339Monteroso v. CA, 553 SCRA 66 (2008); Fangonil-Herrera V. Fangonil, supra; Salvador
v.CA.243 SCRA 239.
"’Quintos v. Nicolas, 726 SCRA 482 (2014).
"'Pangan v. CA, 166 SCRA 375, 382 (1988).
"2Delima v. CA, 201 SCRA 641 (1991).
343M.
344Art. 1137, NCC.
J9JC9B0M
R52M9UH7
constructive trust,1" counted from the date of the issuance of the

title in the name of the co-owner possessor?16 (5) When partition
not allowed: (i) By agreement-An agreement among the owners
to keep the thing undivided is valid.147 However, such agreement
must not exceed 10 years;118 otherwise, the agreement shall be
void but only as to the period beyond such maximum.11’ However,
the period of 10 years may be extended by a new agreement.1’0
(ii) By will of grantor-A donor or testator may prohibit partition
for a period not exceeding 20 years."' (iii) By law - such as the
partition of a family home unless there is a compelling reason to
do so.1’2 (iv) When partition would render the thing unserviceable
for the use for which it is intended.1’1 (v) Whenever the thing is
essentially indivisible and the co-owners cannot agree that it be
allotted to one of them who shall indemnify the others, it shall
be sold and its proceeds distributed.1’1 This is resorted to when:
(1) the right to partition the property is invoked by any of the
co-owners, but because of the nature of the property it cannot be
subdivided, or its subdivision would prejudice the interests of the
co-owners, and (2) the co-owners are not in agreement as to who
among them shall be allotted or assigned the entire property upon
proper reimbursement of the co-owners.1’’
7) Ownership of Waters
7.1 Property of Public Dominion: (a) Ownership: All waters in
their natural beds are considered property of public dominion,1’6
whether or not the waters are found on private lands,1” including
’"Delimav. CA, 201 SCRA641 (1991); Segura v. Segura, 165 SCRA 368 (1988); Heirs of
Jose Olviga v. Court of Appeals, 227 SCRA 330 (1993).
"‘Jaramil v. CA, 78 SCRA 420 (1977).
"’Art. 494,2nd par., NCC.
"'W.
"’Oliveras v. Lopez, 168 SCRA 431 (1988).
’’“Art. 494,2nd par., NCC; see also Art. 1083, NCC.
"'Art. 494,3rd par., NCC.
’"Art. 159, FC; Patricio v. Dario III, 507 SCRA 438 (2006).
’"Art. 495, NCC.
"’Art. 498, NCC.
"’Aguilar v. Court of Appeals, 227 SCRA 473 (1993).
"‘Sec. 2, Art. XII, 1987 Phil. Constitution; Art. 3, Water Code of the Philippines; See II
Tolentino, Civil Code oflhe Philippines, 219 (1992 Ed.).
"’Arts. 5 and 6, Water Code of the Philippines.
J9JC9B0M
R52M9UH7
subterranean or ground waters.”8 (b) Appropriation of watnrc- The

privilege to appropriate and use water is one which is exclusively
granted and regulated by the State through water permits issued
by the National Water Resources Board (NWRB). Once granted,
these water permits continue to be valid save only for reasons
spelled out under the Water Code itself.”’ Conversely, the power
to modify, suspend, cancel, or revoke water permits already
issued also rests with NWRB.360 (c) Water permit: Appropriation
of water is not authorized without a "water permit," which is
a privilege granted by the government to appropriate and use
water and evidenced by a document known as “water permit.”36'
A water permit, however, need not be secured in the following
instances: (1) for use of waters found on private lands by the
owner thereof but only for domestic purposes;362 and (2) use of
natural bodies of water for any of the following: (i) appropriation
of water by means of hand-carried receptacles; and (ii) bathing
or washing, watering, or dipping of domestic or farm animals,
and navigation of watercrafts or transportation of logs and other
objects by floatation.363
8) Possession
8.1 Concent and Kinds: (a) Definition and requisites: (1) Definition:
Possession is the holding of a thing or the enjoyment of a right.361
(2) Object: Only things and rights which are susceptible of being
appropriated may be the object of possession.363 (3) Requisites:
In order that there be possession, two things are paramount: (i)
there must be occupancy, apprehension, or taking; and (ii) there
must be intent to possess (animus possidendi).M (b) Possession
in one’s own name or in that of another: It is not necessary that
the owner or holder of the thing exercises personally the rights
of possession. Rights of possession may be exercised through
’’“See Art. 6(d), Water Code of the Philippines.

’’’City ofBatangas v. Philippine Shell Petroleum Corp., 826SCRA297 (2017).
’“/</.
36lSee Art. 13, Water Code of the Philippines.
362&e Art. 6, id.
363SeeArt. 14, id.
364Art. 523, NCC.
363Art. 530, NCC.
366Yu v. Pacleb, 512 SCRA 402 (2007), citing II Tolentino, Civil Code of the Philippines,
239 (1992 Ed.); see also So v. Food Fest Land, Inc., 617 SCRA 541 (2010).
J9JC9B0M
R52M9UH7
agents.367 Hence, possession may be exercised in one’s own

name or in that of another.368 Possession in another’s name is
possession by a person without any right of his own and one
which is strictly of an agent; while possession in one’s own
name embraces all kinds of possession anchored on a juridical
title or right, e.g., possession by the owner himself, possession
by a lessee, or a mere usufructuary, (c) Possession in concept
of owner or in concept of holder: (1) Concept: A possessor in
the concept of holder acknowledges in another a superior right
which he believes to be ownership, whether his belief be right or
wrong;369 while a possessor in the concept of an owner may be the
owner himself or one who claims to be so,370 provided he does not
acknowledge in another a superior right. (2) Effects of possessor
in concept of owner: (i) it raises a disputable presumption of
ownership;371 (ii) it creates a disputable presumption that the
possessor has just title, which he cannot be obliged to show;372 and
(iii) it may ripen into ownership thru acquisitive prescription373
upon compliance with the other requisites mentioned in Article
1118 of the NCC. (d) Possession in good faith or in bad faith:
(11 Concept: A possessor is considered in good faith if he is not
aware that there exists in his title or mode of acquisition any
flaw which invalidates it.376 On the other hand, a possessor in
bad faith is one in possession of property knowing that his title
thereto is defective.373 Thus, a possessor by mere tolerance is not
a possessor in good faith.376 One whose interest is merely that
of a holder, such as a mere tenant, agent, or usufructuary, is not
qualified to become a possessor in good faith.377 (2) Presumption
of good faith: Good faith is always presumed378 and continues
36TSanlos v. Manalili, 475 SCRA 679 (2005).

368Art. 524, NCC.
’‘’Carlos v. Republic of the Phil., 468 SCRA 709 (2005).
”*Art. 433, NCC.

372Art. 541, NCC.
’"Art. 540, NCC.
373Art. 526, NCC; PNB v. De Jesus, 411 SCRA 557 (2003); see also Heirs of Marcelino
Cabal V. Cabal, 497 SCRA 301 (2006); Ochoa v. Apeta, 533 SCRA 235 (2007).
’’’Escritor, Jr. v. IAC, 155 SCRA 577 (1987).
’’“Resuena v. CA, 454 SCRA 42, 53 (2005); Pada-Kilario v. CA, 322 SCRA 481 (2000);
Refugia v. CA, 258 SCRA 347 (1996).
’’’Parilla v. Pilar, 509 SCRA 420 (2006); Macasaet v. Macasaet, 439 SCRA 625 (2004).
’’“Art. 527, NCC.
J9JC9B0M
R52M9UH7
to subsist until facts exist which show that the possessor is

already aware that he wrongfully or improperly possesses the
thing.37’ Whatever may be the cause or the fact from which it can
be deduced that the possessor has knowledge of the defects of
his title or mode of acquisition, it must be considered sufficient
to show bad faith.380 (3) Effects upon fruits already received
bv possessor: A possessor in good faith is entitled to the fruits
received by him before his possession is legally interrupted;’"1
while a possessor in bad faith has the obligation to reimburse the
legitimate possessor for everything that he may have received
and those which the legitimate possessor could have received.”2
But whether the possessor is in good faith or in bad faith, he is
entitled to recover from the legitimate possessor the expenses
he incurred in the production, gathering, and preservation of
the fruits upon return of the same.353 (4) Effects upon fruits still
pending: If the possessor was in good faith, the possessor and
the owner shall have a right to a part of the net harvest and each
shall divide the expenses of cultivation, both in proportion to the
time of their respective possessions. If the owner does not want
to pay his share of the expenses, he may, at his option, allow the
possessor to finish the cultivation and gathering of the growing
fruits (in lieu of his part of such expenses), in which case, the
owner will not have any share in the harvest. If the owner chooses
this option and the possessor refuses to accept the concession
"for any reason whatever," the latter shall lose the right to be
indemnified in any other manner.354 If he was a possessor in bad
faith, he will lose the fruits in favor of the legitimate possessor,35’
without the right to be indemnified. However, he is still entitled
to recover the necessary expenses he incurred or the preservation
of the land.350 (5) Effects unon necessary expenses: Necessary
expenses are those incurred not for improvement but for the
preservation of the thing and are intended not to increase the
value thereof but to prevent it from becoming useless.38’ Whether
’’’Art. 528, NCC; Lacap v. Lee, G.R. No. 142131, December 11,2002.
’“Wong v. Carpio, 203 SCRA 118 (1991).
’“'Art. 544, NCC.
’“Art. 549, NCC; NHAv. Manila Seedlings Bank Foundation, Inc., 794 SCRA 1 (2016).
383Art. 443, NCC.
354Art. 545, NCC.
385Art. 549, NCC.
’“See Art. 452, NCC.
’"’Rivera v. Roman Catholic Archbishop of Manila, 40 Phil. 717.
J9JC9B0M
R52M9UH7
in good faith or in bad faith, a possessor is entitled to the refund

of necessary expenses incurred by him.’88 The only difference is
that only a possessor in good faith is entitled to retain the thing
until he has been reimbursed therefor.’8’ (6) Effects upon useful
expenses: Useful expenses are those incurred to give greater
utility or productivity to the property.”0 These expenses increase
the value of the thing and results in improvements, called useful
improvements.”1 Only the possessor in good faith is entitled
to the refund of useful expenses.”2 In making the refund, the
owner (or the person who has defeated the possessor in good
faith in the possession) has the option: (i) to refund the amount
of the expenses; or (ii) to pay the increase in value which the
thing may have acquired by reason of the useful expenses.’” The
possessor in good faith may, in lieu of reimbursement for the
useful expenses, remove the useful improvements but subject to
compliance with the following requisites: (i) The removal can be
done without damage to the principal thing;”4 and (ii) The owner
does not choose to appropriate the improvements by refunding
to the possessor in good faith the useful expenses in the manner
discussed above.’” A possessor in bad faith, on the other hand,
has no right in relation to the useful expenses that he incurred.
He is not entitled to its refund and he has no right to remove
the useful improvements.”6 (7) Effects upon expenses for pure
luxury: Whether in good faith or in bad faith, a possessor is not
entitled to a refund of the expenses incurred by him for pure
luxury or mere pleasure, called “ornamental expenses.”’” Both
kinds of possessors are entitled, however, to a right of removal
of the ornaments with which they embellished the principal
thing, provided that such principal will suffer no injury.”8 If the
388Art. 546,1st par., NCC.

mld.
”°II Tolentino, Civil Code, 1992 Ed., 294.
”'&eArt.547,NCC.
mArt. 546,2nd par., NCC.
mId.
394Art. 547, NCC.
’’’Art. 547, NCC.
3WMWSS v. CA, 143 SCRA 623 (1986); citing Paras (1984) Vol. 11, pp. 436-437; Padilla
(1972) Vol. 11, PP- 457-458; Caguioa (1966) Vol. 11, p. 201; Jurado (1981) Civil Law Reviewer,
p. 250; Tolentino (1972) Vol. 11, p. 547.
P ’’’Arts. 548 and 549, NCC.
”*/</.
J9JC9B0M
R52M9UH7
owner, however, exercises his option to retain possession of the

ornaments by reimbursing the value thereof to the possessor, the
latter’s right of removal may not be exercised. If the possessor is
in good faith, the extent of the refund shall be the actual amount
expended.3” If the possessor is in bad faith, on the other hand, the
extent of the refund shall be limited to the value of the ornament
at the time the owner enters into the possession of the property,400
irrespective of the amount actually spent by the possessor in bad
faith.
8.2 Acquisition and Loss of Possession: (a) Modes of acquisition:
(1) By material occupation - applicable only to corporeal ob
jects, including tradition brevi manu and tradition constitution
possessorium; (2) By exercise of right - applicable to acquisition
of possession over rights; (3) By subjecting the thing or right to
the action of our will - not involving material apprehension but
connotes a degree of control sufficient to subject the thing to the
action of one’s will, including tradition simbolica and tradition
longa manu; and (4) By proper acts and legal formalities - any
juridical act by which possession is acquired or to which the law
gives the force of acts of possession, such as donations, succes
sion, execution, and registration of public instruments, inscrip
tion of possessory information titles, and the like.40' (b) Doctrine
of constructive possession: (1) Concent: The possession and cul
tivation of a portion of a tract under claim of ownership of all
is a constructive possession of all, if the remainder is not in the
adverse possession of another."2 (2) Requisites for annlication:
(i) the alleged possessor must be in actual possession of a portion
or part of the property; (ii) he is claiming ownership of the whole
area; (iii) the remainder of the area must not be in the adverse
possession of another person; and (iv) the area claimed must be
reasonable, (c) When possession not acquired: (1) If acquired
through force or intimidation, as long as there is a possessor who
objects thereto;"' (2) acts which are merely tolerated;404 and (3)
3”Art. 548, NCC.

40°Art. 549, NCC.
"'Mangaser v. Ugay, 744 SCRA 13 (2014); Bunyi v. Factor, 591 SCRA 350 (2009);
Quizon v. Juan, 554 SCRA 601, 612 (2008); Habagat Grill v. DMC-Urban Property Developer,
Inc., 454 SCRA 653 (2005).
""Ramos v. Director of Lands, 39 Phil. 175 (1918).
""Art. 536, NCC.
404Art. 537, NCC.
J9JC9B0M
R52M9UH7
acts which are executed clandestinely and without the knowledge

of the possessor of a thing.405 (d) Conflict in possession de facto:
(1) Present possessor shall be preferred; (2) if there are two pos
sessors, the one longer in possession is preferred; (3) if the dates
of possession are the same, the one who presents a title; and (4) if
all the foregoing conditions are equal, the thing shall be placed in
judicial deposit pending determination of its possession or own
ership through proper proceedings.406 (e) Modes of losing pos
session: (1) By abandonment,407 which requires two requisites:
(i) the spes recuperandi (hope of recovery or recapture) must be
gone; and (ii) the animus revertendi (intent to recover) must be
finally given up;408 (2) by assignment,400 (3) by destruction or loss
of the thing;410 and (4) by possession of another4" - if the posses- .
sion of another lasts for more than one year, only possession de
facto is lost but not the real right of possession (possession de
jure), which is not lost until after the lapse of 10 years.412
8.3 Possession of Movables: (a) Doctrine of irrevindicabilitv of
movables: Possession of movables acquired in good faith does
not only create a presumption of ownership but it is already
equivalent to title.4" For possession of movables to be considered
equivalent to title, the following requisites must be present: (1)
the movable property must be acquired in good faith;414 and (2)
the possession must be in the concept of owner. As a consequence,
possession of the movable cannot anymore be recovered from the
present possessor, (b) Exceptions to irrevindicabilitv: (1) When
the owner has lost the thing, or (2) when he has been unlawfully
deprived thereof.415 If the owner has lost a movable, or if he has
been unlawfully deprived thereof, he has a right to recover it, not
only from the finder, thief, or robber, but also from third persons
who may have acquired it in good faith from such finder, thief,
40!An. 537, NCC.

“Art. 538, NCC.
“’Art. 555(1), NCC.
“US v. Rey, 8 Phil, 500(1907).
“Art. 555(2), NCC.
"°Art. 555(3), NCC.
‘"Art. 555(4), NCC.
‘"Art. 555(4), NCC.
‘"Art. 559,1 st par., NCC.
"‘Art. 559, 1st par., NCC.
‘"Art. 559, par. 2, NCC.
J9JC9B0M
R52M9UH7
or robber,416 without need of reimbursing the price paid therefor.

However, if the third person acquired it in good faith at a public
sale, the owner cannot obtain its return without reimbursing the
price paid therefor.417 The term “unlawful deprivation” in Article
559 is not limited to cases of theft or robbery (or unlawful taking)
but includes cases where there has been abuse of confidence.418
But the term “unlawful deprivation” may not be unduly stretched
to cover situations where there is a contract of purchase and
sale between two persons and the buyer therein fails to pay
the purchase price but nonetheless alienates the thing sold in
favor of the present possessor who acted in good faith.41’ (c)
Possession over animals: (1) Kinds of animals: (i) wild animals
— those which are found in their natural freedom, such as wild
boars and horses roaming the forest; (ii) domesticated or tamed
animals - those which were formerly wild but which have been
subdued and retained the habit of returning to the premises of the
possessor or owner;470 and (iii) domestic animals - those which
are bom or reared under the control and care of man. (2) When
possession over animals is lost: (i) As to wild animals - they are
considered possessed only while they are under one’s control and
once they recover their natural freedom they cease to be under
one’s possession, (ii) As to domesticated or tamed animals -
they will be regarded as such so long as they retain the habit of
returning to the premises of the possessor and possession thereof
is not immediately lost by the simple fact that the animals are
no longer under the control of the possessor. Under the law, the
possessor or owner of domesticated animals has a period of 20
days counted from the occupation by another person within which
to reclaim them. After the expiration of this period, the animals
can no longer be recovered from its present possessor, (iii) As to
domestic animals - they are considered personal property and the
rules on personal property will apply.
4l6Aznar v. Yapdiangco, 13 SCRA 486 (1965).

4l7Art. 559, par. 2, NCC.
4"Cntz v. Pahati, 52 O.G. 3253; Aznar v. Yapdiangco, 13 SCRA 486 (1965).
4l’EDCA Publishing & Distributing Corp. v. Santos, 184 SCRA 614 (1990); Asiatic
Commercial Corp. v. Ang, Vol. 40, O.G. S. No. 15, p. 102; Tagatac v. Jimenez, Vol. 53, O.G. No.
12, p. 3792.
420Art. 560, NCC.
J9JC9B0M
R52M9UH7
9) Usufruct
9.1 Basic Principles: (a) Definition: It is the right to enjoy the
property of another temporarily, including both the jus utendi
and the jus fruendi, with the owner retaining the jus disponendi
or the power to alienate the same.421 (b) Object of usufruct: It may
be constituted over a corporeal object or rights. With respect to
rights, it may be the object of usufruct provided that: (1) it is not
strictly personal;422 (2) it is not intransmissible;423 and (3) it has
its own independent existence.424 Hence, a servitude cannot be
the object of usufruct because it has no existence independent of
the tenements.425 (c) Characteristics: (1) it entitles the holder of
the usufruct (called the “usufructuary”) to exercise the rights to
enjoy the property (jus utendi)426 and to receive the fruits thereof
(jus fruendi)','11 (2) it is a right enjoyed over another’s property, a
jus in re aliena', (3) it is a real right, which may be exercised over
a real or personal property; (4) it is of a temporary character128
since, as a rule, the right is extinguished upon the expiration
of the period for which it was constituted42’ or upon the death
of the usufructuary;430 (5) it ordinarily obliges the usufructuary
to preserve the form and substance of the thing subject to
usufruct, except in the following instances where there is no
such obligation: (i) when the law or the title creating the usufruct
provides that the usufructuary is not so obliged;431 (ii) when
the usufruct includes things which, without being consumed,
gradually deteriorate through wear and tear;432 and (iii) when
the usufruct includes things which cannot be used without being
consumed.433 (d) Classifications of usufruct: (1) As to manner of
42lMoralidad v. Femes, 497 SCRA 532 (2006), citing Hemedes v. CA, 316 SCRA 309
(1999).
422Art. 564, NCC.
m!d.
424II Tolentino, Civil Code, 1992 Ed„ 318.
,2sld„ citing 2 Valverde 412.
426Art. 562, NCC.
427Art. 566, NCC.
428De Buen, Derecho Comitn, 3rd Ed., Vol. 1,255.
429Art. 603(2), NCC.
4’°Art. 603(1), NCC.
n,Id.
432Art. 573, NCC.
433Art. 574, NCC.
J9JC9B0M
R52M9UH7
creation: (i) legal usufruct - that which is constituted by law,"

such as those existing in favor of parents over the property of their
minor children living in their custody and under their parental
authority;4” (ii) voluntary - that which is constituted by the will
of private persons expressed in acts inter vivos, such as contracts
and donations, or expressed in a last will and testament;4’6 and
(iii) mixed - that which is constituted by prescription.4’7 (2) As to
subject matter: (i) proper or normal - when it is constituted over a
non-consumable thing; or (ii) improper or abnormal - when it is
constituted over a consumable thing,4’9 or over a non-consumable
which gradually deteriorates.
9.2 Rights of Usufructuary: (a) Rights included: Usufruct includes
the right to enjoy the property of another temporarily, including
both the jus utendi and the jus fruendi.*” Hence, he may lease
the object held in usufruct which the owner must respect so long
as the usufruct exists.440 However, the owner of the property
retains the jus disponendi or the power to alienate, encumber,
transform, and even destroy the same.441 Hence, the owner may
validly mortgage the property in favor of a third person;442 may
impose, without the consent of the usufructuary, a voluntary
easement upon the tenement or piece of land held in usufruct;44’
and may construct any works and make any improvements of
which the immovable in usufruct is susceptible, or make new
plantings thereof if it be rural.444 He may not, however, exercise
such right in a manner that will have an adverse effect upon the
usufructuary, (b) Extent of usufructuary rights: If the usufruct is
over a woodland, the usufructuary may cut trees on the land as the
owner was in the habit of doing or in accordance with the custom
of the place, as to the manner, amount, and season.44’ In case of
4,4Art. 563, NCC.

"’Art. 226, FC.
•'“Art. 563, NCC.
•”M.
•'*2 Castan, 9th Ed., 492-494; Art. 574, NCC.
•’’Moralidad v. Sps. Femes, 497 SCRA 532 (2006), citing Hemedes v. Court of Appeals,
316 SCR A 309 (1999).
440N 11A v. CA. 456 SCRA 17 (2005), citing Art. 572, NCC.
■“'Hemedes v. CA, 316 SCRA 309 (1999).
442M.
u,See Art. 689, NCC.
"Art. 595, NCC.
■“’Art. 577, 2nd par., NCC.
J9JC9B0M
R52M9UH7
usufruct over fruit-bearing trees and shrubs, the usufructuary has

the full and unfettered right to gather the fruits from the tree but
he does not have the right to cut trees. However, he may make
use of the dead trunks, as well as those uprooted by accident,
but with the corresponding obligation to replace them with new
plants.4* If the usufruct is over an action to recover property, be it
real or personal, the usufructuary has the right to bring the action,
and to oblige the owner thereof to give him the authority for such
purpose and to furnish him whatever proof the owner may have.44’
As to the fruits, the usufructuary is entitled to all the natural,
industrial, and civil fruits of the property in usufruct.*4’ Natural or
industrial fruits which are still pending or ungathered at the time
that the usufruct begins belong to the usufructuary, and he has no
obligation to refund to the owner of any expenses incurred by the
latter in connection with the cultivation and production of such
fruits.44’ With respect to natural or industrial fruits which are still
pending or ungathered at the time the usufruct terminates, the
same shall belong to the owner of the property but the latter shall
be obliged to reimburse the usufructuaiy the ordinary expenses
of cultivation, for seeds and other similar expenses incurred by
the usufructuary.4” (c) Right to improvements introduced: He has
no right to reimbursement, for if the rule were otherwise, then the
usufructuary might improve the owner out of his property.4’1 He
may, however, at his option: (1) remove the improvements if such
removal is possible without damage to the property;4” or (2) he
may set-off the improvements against any damage he has caused
to the property held in usufruct.4” The right of the usufructuary to
remove the improvements is potestative with him. He cannot be
prevented from choosing it or he may not be compelled to do it.
(d) Right to alienate usufructuary right: (1) Rule: A usufructuary
may alienate or encumber his right of usufruct without the
consent of the owner of the property whether by onerous or
gratuitous title.4’4 All such contracts, however, shall terminate
"‘Art. 575, NCC.

"’Art. 578, NCC.
"’Art. 566, NCC.
"’See Art. 567, NCC.
4”M.
4”Moralidad v. Pemes, 497 SCRA 532 (2006), citing Arts. 579 and 580, NCC.
4”Art. 579, NCC.
4”Art. 580, NCC.
454 Art. 572, NCC.
J9JC9B0M
R52M9UH7
upon the expiration of the usufruct.4” The transfer or alienation

of the right of usufruct does not result in the termination of the
relation between the usufructuary and the naked owner.4” Hence,
the former shall be personally liable to the latter for any damage
to the thing in usufruct caused by the fault or negligence of the
transferee or lessee.457 (2) Usufructuary right which may not be
alienated: (i) the legal usufruct of the parents over the fruits and
income of the property of unemancipated children pursuant to
Article 226 of the Family Code, since the same is to be devoted
primarily to the child’s support and secondarily to the collective
needs of the family; (ii) the usufruct granted to a usufructuary
in consideration of his person to last during his lifetime, since
the usufruct is a matter of personal quality;458 and (iii) when the
enjoyment of the property held in usufruct is acquired through
caucion juratoria, inasmuch as the basis is the need of the
usufructuary.45’
9.3 Obligations of Usufructuary: (A) At Commencement of
Usufruct: (a) Obligations: (1) to make an inventory of all the
property covered by the right of usufruct; and (2) to give security
or bond.460 (b) Effect of failure to comnlv: It will only prevent
usufructuary from exercising his right of usufruct but it will not
result in the termination of the usufruct. The owner may, if he
so desires, retain in his possession the property in usufruct as its
administrator.461 If the owner prefers not to retain possession of
the property, he may demand instead: (1) that the immovables be
placed under administration; (2) that the movables he sold and its
proceeds be invested in safe securities; (3) that the public bonds,
instruments of credit payable to order or bearer be converted into
registered certificates or deposited in a bank or public institution;
or (4) that the capital or sums in cash be invested in safe
securities.467 (c) Effect of compliance: Aller compliance with the
foregoing obligations, the effects thereof shall relroact, however,
to the day of the constitution of the usufruct.4''1 (d) Exflltplioil
455W.
456ll Tolentino, Civil Code ofdie Phil., 325 (1992 Ed.).
‘’’Art. 590, NCC.
45,1I Caguioa, Civil Code ofdie Phil., 234-235 (1966 Ed.).
‘557<Z
‘“'Art. 583, NCC.
“‘Art. 586, last par., NCC.
467Art. 586. 1st par., NCC.
‘'•'Art. 588, NCC.
J9JC9B0M
R52M9UH7
D8 PRE-BAR REVIEWER IN CIVIL LAW
from obligation to give security: (1) when the donor has reserved
the usufruct of the property donated;461 and (2) in case of legal
usufruct of the parents over the property of their minor children
living in their custody and under their parental authority, except
when the parents contract a second marriage165 or when the market
value of the property or the annual income of the child exceeds
P50,000.166 (e) When usufructuary may be relieved of obligation
to give security: (1) when no one will be injured thereby;46’ and
(2) when the enjoyment of the property subject of the usufruct is
to be acquired through caution juratoria.** Caution juratoria
refers to the promise under oath made in court by the usufructuary
who has not given security for the purpose of acquiring the use
of the following: (i) furniture necessary for his use; (ii) dwelling
house; or (iii) implements, tools, and other movable property
necessary for an industry or vocation in which he is engaged.169
In this kind of usufruct, the usufructuary has no right to alienate
his usufructuary right or lease the same for that would mean that
he does not need the house or the furniture or the implements.170
(B) During Life of Usufruct: (a) In general: (1) the obligation
to preserve its form and substance;171 (2) in the performance of
the foregoing obligation, he is required to observe the diligence
of a good father of a family;472 and (3) to further carry out the
foregoing obligation, the law specifically tasks the usufructuary:
(i) to make ordinary repairs on the property held in usufruct;175
(ii) to pay the annual charges and taxes which are imposed on
the fruits of the property held in usufruct;174 (iii) to notify the
owner of the need of urgent extraordinary repairs;475 (iv) to
pay the expenses, costs, and liabilities for suits involving the
usufruct;176 and (v) to notify the owner of any act of a third person
161Art. 584, NCC.

“5W.
166Art. 225, Family Code.
“’Art. 584, NCC.
“'Art. 587, NCC.
“’Art. 587, NCC.
™II Tolentino, Civil Code ofthe Phil., 337 (1992 Ed.); citing 4 Manresa 473-474,479.
171 Art. 562, NCC.
172Art. 589, NCC.
175Art. 592, NCC.
171Art. 596, NCC.
175Art. 593, NCC.
176Art. 602, NCC.
J9JC9B0M
R52M9UH7
that may be prejudicial to the rights of the owner.4” (b) Ordinary

and extraordinary repairs: It is the obligation of the usufructuary
to make the ordinary repairs needed by the thing given in
usufruct,4’8 while extraordinary repairs, on the other hand, shall
be made at the expense of the owner.4” Repair is “ordinary” if
two requisites are satisfied: (i) it is required by the wear and tear
due to the natural use of the thing; and (ii) it is indispensable for
the preservation of the thing.480 If both requisites are not satisfied,
the repair is “extraordinary.” If the need for extraordinary repairs
is urgent and indispensable for the preservation of the thing, the
law imposes an obligation upon the usufructuary to notify the
owner of the need of such repairs.481 If after such notice, the owner
still fails to make the extraordinary repairs, the usufructuary is
then authorized to make them, in which case, he acquires the
following rights in connection therewith: (1) the right to demand
of the owner, at the termination of the usufruct, the increase in
value which the immovable may have acquired by reason of the
repair;482 and (2) the right to retain the property held in usufruct
pending the reimbursement by the owner of such expenses.481 (c)
Payment of annual charges and taxes: Payment of annual charges
and taxes and of those considered as a lien on the fruits, shall be
at the expense of the usufructuary;484 while taxes imposed directly
on the capital shall be at the expense of the owner,481 such as real
estate taxes.486 If the taxes directly imposed on the capital are
advanced by the usufructuary, he is entitled to recover the same
from the owner at the termination of the usufruct,487 with the right
to retain the property held in usufruct until he is reimbursed.488 (d)
Obligation to notify owner of prejudicial acts: The usufructuary is
4”Art. 601, NCC.

4,8Art. 592, 1st par., NCC.
4”Art. 593, NCC.
4“Art. 592,2nd par., NCC.
48IW.
482Art. 594, 2nd par., NCC.
“'See Art. 612, NCC.
484Art. 596, NCC.
481Art. 597, NCC.
486See Mercado v. Rizal, 67 Phil. 608 (1941); Bislig Bay Lumber Co., Inc. v. Provincial
Government of Surigao, 100 Phil. 303 (1956); Board of Assessment Appeals of Zamboanga del
Sur v. Samar Mining Company, Inc., 37 SCRA 734 (1971).
mld.
488See Art. 612, NCC.
I
J9JC9B0M
R52M9UH7
obliged to notify the owner of any act of a third person, of which

he may have knowledge, which may be prejudicial to the “rights
of ownership.”'” If he fails in this obligation, he shall be liable to
the owner for damages, as if such act had been cause through his
own fault.450 (C) At termination of usufruct: (a) Return of thing:
Upon the termination of the usufruct, he is obliged to deliver the
same to the owner unless the usufructuary is entitled to exercise
the right to retain the property.4’1 (b) Right of retention: Upon the
termination of the usufruct, the usufructuary is entitled to a right
of retention until payment of the following: (1) sums that may
have been advanced by the usufructuary for payment of taxes
which are imposed directly on the capital;492 and (2) the increase
in the value which the immovable acquired by reason of the
extraordinary repairs paid for by the usufructuary.4”
9.4 Causes of Extinguishment of Usufruct: (1) By the death of
the usufructuary, unless a contrary intention clearly appears;
(2) by expiration of the period for which it was constituted, or
by fulfillment of any resolutory condition provided in the title
creating the usufruct; (3) by merger of the usufruct and ownership
in the same person; (4) by renunciation of the usufructuary;
(5) by total loss of the thing in usufruct; (6) by the termination
of the right of the person constituting the usufruct; and (7) by
prescription.494 In cases where the usufruct is granted for the time
that may elapse before a third person attains a certain age, the
usufruct shall subsist for the number of years specified, even if the
third person should die before the period expires.4” For example,
if “0” creates a usufruct over his property in favor of “U” to last
until the child of “U” (“C”), who is five years old, reaches the age
of 18 years old, the usufruct will continue for another eight years
even if “C” dies at the age of 10. Exception: When such usufruct
has been expressly granted only in consideration of the existence
of the third person, the usufruct is extinguished upon the latter’s
death. In the foregoing example, if the usufruct was constituted
“’Art. 601, NCC.
"'An. 612, NCC.

''“Arts. 597 and 612, NCC.
"'Arts. 594 and 612, NCC.
''“Art. 603, NCC.
"’Art. 606, NCC.
J9JC9B0M
R52M9UH7
BOOK 11. — PROPERTY 211
by “O” to help “U” pay for the support of “C,” the usufruct is
extinguished upon the death of the latter. However, a usufruct is
not extinguished by bad use of the thing held in usufruct.496
10) Easement
10.1 Concept: (a) Definition: Easement 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.497 Servitude, on the other hand, is defined as
an encumbrance imposed upon an immovable for the benefit of
another immovable belonging to a different owner498 or for the
benefit of a community, or of one or more persons to whom the
encumbered estate does not belong.499 (b) Characteristics: (1) It is
a real right that falls upon the property itself and inseparable from
the estate to which it actively or passively belongs;500 therefore,
it cannot be alienated or mortgaged separately from the estate
to which it forms part;501 (2) the right consists of a limited use
and enjoyment of the thing without possession and gives rise to
an action in rem in favor of the owner of the tenement of the
easement and against any possessor ofthe servient estate;5" (3) the
right is always enjoyed over an immovable property—the term
“immovable" in Article 613 of the NCC should be understood in
its ordinary or vulgar connotation, i.e., referring to those which
are, by their nature, cannot be moved from one place to another
such as lands, buildings, and roads;505 (4) it is a right which is
enjoyed over another’s property, orjura in re aliena,m hence: (i)
it is impossible to have an easement over one’s own property; (ii)
if there is a merger in the same person of the ownership of the
496Art. 610, NCC.

“Pilar Development Copp- v. Dumadag, 693 SCRA 96 (2013); Heirs of the Late Joaquin
Limense v. Krfa. de Ramos, 604 SCRA 599 (2009); Privatization and Management Office v.
Legaspi Towers 300, Inc., 593 SCRA 382 (2009); Unisource Commercial and Development Corp,
v. Chung, 593 SCRA 230 (2009); Valdez v. Tabisula, 560 SCRA 332 (2008); Private Development
Corp, of the Phil. v. CA. 475 SCRA 591 (2005); see also Arts. 613 and 614, NCC.
“Art. 614, NCC.
i0“Art. 617, NCC.
501 Solid Manila Corp. v. Bio Hong Trading Co., 195 SCRA 748 (1991).
5O!I1 Caguioa, Civil Code ofdie Phils., 262 (1966 Ed.).
Caguioa, Civil Code ofthe Phils., 263 (1966 Ed.).
5<MAmorv. Florentino, 74 Phil. 403 (1943).
J9JC9B0M
R52M9UH7
dominant and servient estates, the easement is extinguished;’”

and (iii) an acknowledgment of the easement is an admission that
the property belongs to another;’06 and (5) it is indivisible, even
if the servient and dominant estates are divided between two or
more persons, the easement or the servitude continues to attach
to the estates originally affected.’07 (c) Kinds of easement: fl) As
to recipient of benefit: (i) Real or praedial easement - where the
easement is for the benefit of another immovable belonging to a
different owner,W! the immovable in favor of which the easement
is established is called “dominant estate”; that which is subjected
thereto, the “servient estate;”’” or (ii) Personal easement - where
the easement is for the benefit of a community, or of one or more
persons to whom the encumbered estate does not belong,510 or the
easement pertains to persons without a dominant estate.”' (2) As
to source: (i) Legal or compulsory easement - those constituted
by law which has for its object either public use or the interest of
private persons;’12 or (ii) Voluntary easement - those constituted
by will or agreement of the parties;”3 but it is only the owner
who can create a servitude that will bind the servient estate. (3)
As to manner of exercise: (i) Continuous easement - if its use
is, or may be, incessant without the intervention of any act of
man, like the easement of drainage”4 or easement of light and
view; or (ii) Discontinuous easement - if it is used at intervals
and it depends on the act of man, like the easement of right of
way;’1’ (iii) Apparent easement - those which are made known
and are continually kept in view by external signs that reveal the
use and enjoyment of the same,”6 such as a road (which reveals
a right of way) and a window (which evidences a right to light
and view); or (iv) Non-apparent easement - those which show
505Art. 631(1), NCC; Salimbangon v. Tan, 610 SCRA 426 (2010).

’“Bogo-Medellin Milling Co., Inc. v. CA, 407 SCRA 518 (2003).
Art. 618, NCC.
’“Art. 613, 1st par., NCC.
’"Art. 613,2nd par., NCC.
’’“Art. 614, NCC.
’"Solid Manila Corp. v. Bio Hong Trading Co., Inc., 195 SCRA 748 (1991).
’"Pilar Development Corp. v. Dumadag, supra-. La Vista Association, Inc. v. CA, 278 SCRA
498(1997).
’l3La Vista Association, Inc. v. CA, 278 SCRA 498 (1997).
’"Arts. 615,646, NCC.
’’’Arts. 615,646, NCC.
"‘Art. 615,4th par., NCC.
J9JC9B0M
R52M9UH7
no external indication of their existence,’" such as an easement

of not building beyond a certain height;’"1 (v) Positive easement
- that which imposes upon the owner of the servient estate the
obligation of allowing something to be done on his property
(servitutes in patendo), such as an easement of right of way; or
(vi) Negative easement - 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 (servilities in non
faciendo),in such as an easement not to build higher (altius non
tollendi).™
10.2 Acquisition of Easement: (a) Modes of acquisition: Either
by title or by prescription. All kinds of easements, whether
continuous or discontinuous, apparent or non-apparent, positive
or negative, can be acquired by title.”1 "Title” refers to a juridical
justification for the acquisition of a right, such as law, a will,
a donation, or a contract.”’ As to prescription, only continuous
and apparent easements may be acquired by virtue thereof.”' In
other words, the easement must be both continuous and apparent.
For example, an easement of right of way is not acquirable by
prescription because it is always a discontinuous easement.”4
However, an easement of light and view can be acquired through
prescription counting from the time when the owner of the
dominant estate formally prohibits the adjoining lot owner from
blocking the view of a window located within the dominant
estate.”’ (b) Through prescription: (1) Period: 10 years;”6 (2)
When easement is positive: Period is counted from the day on
which the owner of the dominant estate commenced to exercise it
upon the servient estate;”713) When easement is negative: Period
is counted from the day on which the owner of the dominant
’"Ari. 615, 5lh par.. NCC.

”KBogo-Mcdellin Milling Co. v. CA, siipni.
’"'Art. 616, NCC.
”°.SW Amor v. Tolentino, G.R. No. L-48384. October 11, 1943.
"'Arts. 620 and 622. NCC.
’•’’Alolino v. Flores, 788 SCRA 92 (2016).
“’Art. 620, NCC.
“’Bogo-Medellin Milling Co., Inc. CA, 4(17 SCRA 518 (20(13); Bicol Agro-Industrial
Producers Cooperative, Inc. (BAPCI) Obias, 603 SCRA 173 (2009); Alolino v. Flores, 788
SCRA 92 (2016).
’“Alolino V. Flores, 788 SCRA 92 (2016).
“'■Art. 620, NCC.
’“An. 621, NCC.
J9JC9B0M
R52M9UH7
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 easement.528 To illustrate, if
easement of light and view is made upon one’s own wall, the
easement, being a negative one, is acquired by prescription
only after the lapse of 10 years 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
easement.529 If made on the wall of the neighbor, being a positive
easement, the 10-year prescriptive period commences from the
time of the opening of the window, (c) Easement bv annarent
sign or legal presumption: (1) Situation applicable: Article 624
applies in situations wherein two or more estates were previously
owned by a singular owner, or even a single estate but with two or
more portions being owned by a singular owner.530 At that time,
or prior to the division of ownership, there exists between the
two estates an apparent sign of easement. Originally, therefore,
there is no true easement that exists as there is only one owner.531
Hence, at the outset, no other owner is imposed with a burden.”2
Subsequently, one estate or a portion of the estate is alienated
in favor of another person, wherein, in that estate or portion of
the estate, an apparent visible sign of an easement exists. (2)
When easement exists: According to Article 624, there arises a
title to an easement of light and view, even in the absence of
any formal act undertaken by the owner of the dominant estate,
if this apparent visible sign, such as the existence of a door and
windows, continues to remain and subsist, unless, at the time the
ownership of the two estates is divided: (i) the contrary should
be provided in the title of conveyance of either of them, or (ii)
the sign aforesaid should be removed before the execution of the
deed.513 (3) Requisites for application of Article 624: (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
mSupra.
,2,See Cortes v. Yu-Tibo, supra.
’“Garcia v. Santos, G.R. No. 228334, June 17,2019.
”'M.
mld.
™!d.
I
J9JC9B0M
R52M9UH7
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;534 (iv) that the ownership over the two estates
is later on divided, either by alienation or partition; and (v) that
at the time of division of ownership, nothing is stated in the
document of alienation or partition contrary to the easement nor
is the sign of the easement removed before the execution of the
document. Under Article 624 the existence of the apparent sign
has for all legal purposes the same character and effect as a title of
acquisition of the easement.535 (4) Exception to rule on negative
easement: Jurisprudence has recognized that Article 624 is an
exception carved out by the Civil Code that must be taken out of
the coverage of the general rule that an easement of light and view
in the case of windows opened in one’s own wall is a negative
easement that may only be acquired by prescription, tacked from
a formal prohibition relayed to the owner of the servient estate.531’
(d) Proof of easement: The absence of a document or proof
showing the origin of an easement which cannot be acquired by
prescription may be cured by a deed of recognition by the owner
of the servient estate or by a final judgment.537
10.3 Rights and Obligations: (a) Effect on owner of servient estate: An
easement gives the holder of the easement an incorporeal interest
on the property but grants no title thereto.535 Hence, the owner of
the servient estate retains the ownership of the portion on which
the easement is established, and may use the same in such a
manner as not to affect the exercise of the easement.53’ However,
he may not exercise some of his property rights for the benefit
of the person who was granted the easement of right of way;5"
hence, he may not enclose his property, nor obstnict or hinder
the free passage over the servient estate, (b) Rights of owner
of dominant estate: Upon the establishment of an easement, all
the rights necessary for its use are considered granted.541 The
534ll Ciiguioa, Civil Code of die Phil., 1966 Ed., 276, citing the Decision of the Supreme
Court of Spain of May 27, 1899.
535Amor v. Tolentino, 74 Phil. 404 (1943).
’“Garcia v. Santos, G.R. No. 228334, June 17, 2019.
533Art. 623, NCC.
’’’Bogo-Medellin Milling Co. v. CA, 407 SCRA518 (2003).
’’’Mercader, Jr. v. Bardillas, 794 SCRA 387 (2016); Art. 630, NCC.
““Reyes v. Valentin, 750 SCRA 379 (2015).
“'Art. 625, NCC.
J9JC9B0M
R52M9UH7
owner of the dominant estate shall have the right to make any
works on the servient estate if the same be necessary for the
use and preservation of the servitude,542 subject to the following
limitations: (1) the work must be necessary for the use and
preservation of the servitude; (2) the work is done at the expense
of the owner of the dominant estate; (3) the work can be done
without altering the servitude or rendering it more burdensome;
(4) the owner of the servient estate is first notified of the intended
work; and (5) the time and manner of making the work should
be the most convenient to the owner of the servient estate or it is
done in such a manner that it causes the least inconvenience to
the owner of the servient estate.545 (c) Limitations upon rights of
owner of dominant estate: (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 contemplated; (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; and (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. Any violation of
the above constitutes impairment of the easement.544
10.4 Modes of Extinguishment of Easement: (1) Merger - because
easement is a right enjoyed over another’s property; hence, ifthere
is a merger in the same person of the ownership of the dominant
and servient estates, the easement is extinguished;545 (2) non-use
- for easement to be extinguished under this mode, it is necessary
that the non-use must have lasted for a period of 10 years;546 if the
easement is discontinuous, the 10-year period is 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;547
wlArt. 627, NCC.

545Art. 627, NCC.
^Goldcrest Realty Corp. v. Cypress Gardens Condominium Corp., 584 SCRA435 (2009).
M5Art. 631(1), NCC; Salimbangon v. Tan, 610 SCRA426 (2010).
546Art. 631(2), NCC.
547Art. 631(2), NCC.
J9JC9B0M
R52M9UH7
(3) impossibility of use; (4) expiration of term; (5) fulfillment

of condition; (6) renunciation; (7) 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; (8) annulment or rescission of title constituting
the easement; (9) termination of the right of the grantor; (10)
abandonment of the servient estate; and (11) eminent domain.548
10.5 Legal or Compulsory Easement: (A) Easement of drainage of
waters: (a) When easement exists: When, based on the physical
condition of two estates, waters descend naturally and without
the intervention of man from a higher estate (the dominant estate)
to a lower estate (the servient estate).54’ (b) 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.550 (c) Obligations of
higher estate: The owner of the higher estate may not construct
works which will increase the burden or increase the natural
flow.551 (B) Easement for public use: The banks of rivers and
streams and the shores of the seas and lakes throughout their
entire length and within a zone of three meters in urban areas, 20
meters in agricultural areas and 40 meters in forest areas, along
their margins, are subject to the easement of public use in the
interest of recreation, navigation, floatage, fishing, and salvage.552
But no person shall be allowed to stay in this zone longer than
what is necessary for recreation, navigation, floatage, fishing, or
salvage or to build structures of any kind.553 (C) Easement of
Aqueduct: (a) When easement exists: If a person wishes to use
upon his estate any water of which he can dispose, he shall have
the right to make it flow through intervening estates.554 (b)
Requisites: (1) that he who wants to establish the easement of
aqueduct must be able to prove that he can dispose of the water;
(2) he must also prove that it is sufficient for the use for which it
is intended; (3) the proposed right of way is the most convenient
5484 Manrcsa, 5th Ed., 590.

!4’Ongsiako v. Ongsiako, G.R. No. L-7510, March 30, 1957.
’’“Art. 637, 1st par., NCC; Art. 50, Water Code of the Phil.
’’’Art. 637, 2nd par., NCC; Art. 50, Waler Code of the Phil.
”!Art. 51, Water Code of the Phil.
’«/</.
”4Art. 642, NCC.
J9JC9B0M
R52M9UH7
and the least onerous to third persons affected; and (4) he must
indemnify the owners of the servient estates (intervening estates),
as well as the owners of the lower estates upon which the waters
may filter or descend.555 (c) Nature of easement: The easement of
aqueduct shall be considered as continuous and apparent, even
though the flow of the water may not be continuous, or its use
depends upon the needs of the dominant estate, or upon a schedule
of alternate days or hours.556 Hence, an easement of aqueduct
may be acquired either by title or by prescription.557 (D)
Compulsory Easement of Right of Wav: (a) Requisites: (1) that
the dominant estate is surrounded by other immovables and has
no adequate outlet to a public highway (Art. 649, par. 1); (2)
there must be payment of proper indemnity (Art. 649, par. 1); (3)
that the isolation was not due to acts of the proprietor of the
dominant estate (Art. 649, par. 4); and (4) that 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 (Art.
650).55’ In A MA Land, Inc. v. Wack Wack Residents’ Association,
Inc.,™ the Court cited an additional requisite: that the right of
way must be absolutely necessary for the normal enjoyment of
the dominant estate by its owner. However, in Reyes v. Ramos,™
the Court explained that while the aspect of necessity may not be
specifically included in the requisites for the grant of compulsory
easement under the Civil Code, however, this goes into the
question of “least prejudice.” (b) Requirement of isolation: An
owner cannot, by his own act, isolate his property from a public
highway and then claim an easement of way through an adjacent
estate.561 However, the mere fact that the purchaser of a parcel of
land knew that the property he was buying was already surrounded
by other immovables, leaving him no adequate ingress or egress
’’’Arts. 642 and 643, NCC.

556Art. 646, NCC.
517Art. 620, NCC.
’“Williams v. Zerda, 820 SCRA 497 (2017); Calimoso v. Roullo, 781 SCRA 624 (2016);
Reyes v. Valentin, 750 SCRA 379 (2015); Diclioso, Jr. v. Marcos, 647 SCRA 495 (2011);
Quintanilla v. Abangan, 544 SCR A 494 (2008); Lee v. Carreon, 534 SCRA 218 (2007); Woodridge
School, Inc. v. ARB Constmction Co., Inc., 516 SCRA 176 (2007); Mejorada v. Vcrtudazo, 535
SCRA 578 (2007); Francisco v. IAC, 177 SCRA 527 (1989), citing Bacolod-Murcia Milling Co.,
Inc. v. Capital Subdivision, Inc., 17 SCRA 731, 735-736.
’”831 SCRA 328(2017).
’“750 SCRA 379 (2015).
’"'Francisco v. IAC, 177 SCRA 527 (1989).
J9JC9B0M
R52M9UH7
to a public highway, cannot prevent him from demanding later on

a compulsory right of way.562 (c) Requirement of inadequacy of
outlet to public hiehwav: The convenience of the dominant estate
has never been the gauge for the grant of compulsory right of
way. The true standard for the grant of the legal right is
adequacy.561 Hence, when there is already an existing adequate
outlet from the dominant estate to a public highway, even if the
said outlet, for one reason or another, be inconvenient, the need
to open up another servitude is entirely unjustified.56* (d) At point
least prejudicial: The least prejudice criterion must prevail over
the shortest distance criterion.565 Least prejudice is about the
suffering of the servient estate, not of the dominant estate.566 (e)
Who may claim right of wav: It is the owner, or any person who
by virtue of a real right may cultivate or use any immovable
surrounded by other immovables pertaining to other persons,
who is entitled to demand a right of way through the neighboring
estates.56’ While a usufructuary is entitled to demand a right of
way pursuant to Article 649, a mere lessee does not enjoy the
same right. With respect to the latter, his action is against the
lessor who is bound to maintain him in the enjoyment of the
property.568 (f) Effect of opening adequate outlet: The opening of
an adequate outlet to a highway can extinguish only legal or
compulsory easements, not voluntary easements.56’ (E) Easement
of Light and View: (a) Concept: It is an easement whereby the
dominant estate enjoys the right to have free access to light, a
little air, and a view overlooking the adjoining estate, i.e., the
servient estate.570 It has two components. The easement of light or
jus luminum has the purpose of admitting light and a little air, as
in the case of small windows, not more than 30 square centimeters,
at the height of the ceiling joists or immediately under the
’“Williams v. Zcrda, 820 SCRA 497 (2017).

’“Reyes v. Ramos, 750 SCRA 379 (2015) and Dichoso, Jr. v. Marcos, 647 SCRA 495
(2011).
’“/</.
’“Williams v. Zerda, 820 SCRA 497 (2017); Calimoso v. Roullo, 781 SCRA 624 (2016);
Quimen v. CA, 257 SCRA 163 (1996).
’“Reyes v. Ramos, 750 SCRA 379 (2015).
’6,Art. 649, NCC.
’6,1I Tolentino. Civil Code ofthe Phil., 387 (1992 Ed.).
’“Unisource Commercial and Development Corp. v. Chung, 593 SCRA 230 (2009), citing
La Vista Association, Inc. v. CA, 278 SCRA 498,514 (1997).
’’“Garcia v. Santos, G.R. No. 228334, June 17, 2019, citing II Paras, Civil Code of the
Philippines, 17 cd., 2013, p. 715.
J9JC9B0M
R52M9UH7
220 PRE-3AR REVIEWER IN CIVIL LAW
ceiling.57' On the other hand, the easement of view or servid

timbre prospectus has the principal purpose of affording view, as
in the case of full or regular windows overlooking the adjoining
estate.572 As held by jurisprudence, the easement of light and view
is intrinsically intertwined with the easement of the servient
estate not to build higher or altius non tollendi. These two
necessarily go together “because an easement of light and view
requires that the owner of the servient estate shall not build to a
height that will obstruct the window.”573 (b) Two kinds of
windows: (1) regular or full or direct view windows — those
openings which are made on a wall parallel or almost parallel to
the line that divides the estates, in such a way that the neighboring
tenement can be seen without putting out or turning the head; or
(2) restricted, or oblique or side view windows - those openings
in a wall which form an angle to the boundary line, and therefore
of necessity requires in order to see the neighboring tenement to
thrust the head out of the opening and look to the right or left.574
(c) Observation of certain distances in direct views: (1) General
rule - when a window or any similar opening affords a direct
view of an adjoining land, the distance between the wall in which
such opening is made and the border of the adjoining land should
be at least two meters:575 (2) Exception - in a situation wherein an
easement is established or recognized by title or prescription,
affording the dominant estate the right to have a direct view
overlooking the adjoining property, i.e., the servient estate, as in
the case of Article 624, the owner of the servient estate cannot
build thereon at less than a distance of three meters, not two
meters, from the property line.’76 (d) Distance requirement in
oblique views: with respect to the side or oblique views upon or
towards such conterminous property, the law requires that the
distance be 60 centimeters.577 (F) Easement of Drainage of
Buildings: (a) Concept: The easement of drainage ol buildings is
the right to divert or empty the rainwaters from one’s own roof or
shed to the neighbor’s estate, either drop by drop or through
"'Supra.
mld.
'"id.. citing Amor v. Tolentino, supra.
’"Garcia v. Sanios, G.R. No. 228334, June 17,2019.
’”/</; see Art. 670, NCC.
”‘/d; jccArt. 673, NCC.
577Art. 670, NCC.
J9JC9B0M
R52M9UH7
conduits.5™ (b) Requisites: An easement of drainage may be

demanded subject to compliance with the following requisites:
(i) the yard or court of a house must be surrounded by other
houses (“the dominant estate”) and it is not possible to give an
outlet through the house itself to the rain collected therefrom; (ii)
the outlet to the water must be at the point of the contiguous lands
or tenements (“the servient estate”) where its egress may be
easiest; (iii) the conduit for the drainage must be established in
such manner as to cause the least damage to the servient estate:
and (iv) proper indemnity must be paid to the owner of the
servient estate.5” (G) Intermediate Distances for Planting: (a)
Required distances: (1) that required by local ordinances; (2) in
default thereof, two meters from the dividing line of the estate in
case of tall trees and at least 50 centimeters in case of shrubs or
small trees.580 (b) Right to cut branches: If the branches of any
tree should extend over a neighboring estate, the owner of the
latter does not have the right to cut the branches extending on his
property. Instead, he may demand that the protruding branches be
cut off by its owner. If his demand is not acted upon, he has to go
to court to seek authority for the cutting of the protruding
branches.581 (c) Right to cut roots: with respect to the roots of a
neighboring tree which penetrated into the land of another, the
owner of the latter may himself cut off the roots found within his
property. (H) Easement of Lateral Subjacent Support: (a)
Concept: The right of lateral and subjacent support is the right to
have land supported by the adjoining land or the soil beneath.585
Support is lateral when the supported 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 it.581
(b) Obligation ofservient estate: The law prohibits any excavation
upon one’s land if the same will deprive any adjacent land or
building of sufficient lateral or subjacent support.584 In addition,
the law prohibits any stipulation or testamentary provision
57"2 Caslan, 9lh Ed., 594.

’’’Art. 676. NCC.
’““Art. 679, NCC.
’“'Art. 680, NCC.
>>2Black's Law Dictionary, 5th Ed., 795.
m Restatement ofthe Law of Torts, Vol. 1V, p. 184.
’“Art. 684, NCC.
J9JC9B0M
R52M9UH7
allowing such kind of excavation.’85 Any such stipulation or

testamentary provision is expressly declared to be void.584 (c)
Annotation not necessary: An annotation of the existence of the
subjacent and lateral support is no longer necessary. It exists
whether or not it is annotated or registered in the registry of
property. A judicial recognition of the same already binds the
property and the owner of the same, including her successors-in-
interest. Otherwise, every adjoining landowner would come to
court or have the easement of subjacent and lateral support
registered in order for it to be recognized and respected.587
10.6 Voluntary Easement: (a) Concept: A voluntary easement may
only be constituted upon the will of the owner of the servient
estate, (b) If property held in usufruct: The naked owner may
impose any servitude on his property even without the consent of
the usufructuary.588 (c) If co-owned property: Unanimous consent
of all co-owners is required in order to constitute a voluntary
easement upon the same.589
11) Nuisance
11.1 Concept and Kinds: (a) Definition: A nuisance is defined as “any
act, omission, establishment, business, condition of property, or
anything else which: (1) Injures or endangers the health or safety
of others; or (2) Annoys or offends the senses; or (3) Shocks,
defies or disregards decency or morality; or (4) Obstructs
or interferes with the free passage of any public highway or
street, or any body of water; or (5) Hinders or impairs the use
of property.””0 For example, a house constructed on a vacant
barrio road is a nuisance per se because any establishment
that obstructs or interferes with the free passage of any public
highway or street, or any body of water is a nuisance.”1 The law
on nuisance is a restriction or limitation upon ownership and a
manifestation of the principle that every person should so use
his property as not to cause damage or injury to others—"sic
’“Art. 685, NCC.

584M.
’•’Castro v. Monsod, 641 SCRA 486 (2011).
’••Art. 689, NCC.
’•’Art. 691,1st par., NCC.
”°Art. 694, NCC; Rana v. Wong, 727 SCRA 539 (2014), citing AC Enterprises, Inc. v.
Frabcllc Properties Corp., 506 SCRA 625 (2006).
59lAlolino v. Flores, 788 SCRA 92 (2016).
J9JC9B0M
R52M9UH7
utere tuo ut alienum non laedas. "in (b) Kinds of nuisance: (1)
As to object it affects: (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 private rights and produces damages to but
one or a few persons;”4 (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;”’ (2) As to susceptibility to
summary abatement: (i) Nuisance per se (or nuisance at law) -
that which is a nuisance under any and all circumstances, because
it constitutes a direct menace to public health or safety, and, for
that reason, may be abated summarily under the undefined law of
necessity;”6 (ii) Nuisance per accidens (or nuisance in fact) - that
which will become a nuisance depending upon certain conditions
and circumstances, and its existence being a question of fact,
it cannot be abated without due hearing thereon in a tribunal
authorized to decide whether such a thing does in law constitute a
nuisance.’” The traditional test for determining the existence of a
nuisance perse is whether the nuisance has become dangerous at
all times and under all circumstances to life, health, or property.”’
(c) Doctrine of attractive nuisance: One who maintains on his
premises dangerous instrumentalities or appliances of a character
likely to attract children in play, and who fails to exercise ordinary
care to prevent children from playing therewith or resorting
thereto, is liable to a child of tender years who is injured thereby,
even if the child is technically a trespasser in the premises.’”
11.2 Remedies Attains! Nuisance: (a) Remedies in general: (1)
abatement, either judicial or summary; (2) civil action for
’’‘Lebaycn v. A.S. Diaz Electric Service, Inc., I CA Rep. 178.

’’’Cruz v. Pandacan Hiker’s Club, inc., 778 SCRA 385 (2016).
”4Cruz v. Pandacan Hiker’s Club, Inc., supra; see also Rana v. Wong, id, citing AC
Enterprises, Inc. v. I'rabclle Properties Corp., id.
Black s Law Dictionary, 5th Ed., 961.
’’’Aquino v. Municipality of Malay, Aklan, 737 SCRA 145 (2014).
’’’North Greenhills Association, Inc. v. Morales, 837 SCRA 28 (2017), citing Rana v.
Wong, supra. See also Cruz v. Pandacan Hiker’s Club, Inc., supra.
’’“Suddeth v. Knight, 280 S.C. 540, 545, 314 S.E.2d 11, 14 (Ct. App. 1984); Blacks Law
Dictionary, 1094 (7th Ed., 1999).
’’’’Hidalgo Enterprises, Inc. Balandan, 48 O.G. 2641 (1932) and Taylor v. Manila
Electric, 16 Phil. 8.
J9JC9B0M
R52M9UH7
recovery of damages, in case of injury to a private person; and (3)

criminal prosecution, in case of public nuisance, (b) Summary
abatement: Unless a nuisance is a nuisance perse, it may not be
summarily abated.600 In a number of cases,60' the Supreme Court
clarified, however, that the abatement of a nuisance without
judicial proceedings is possible only if it is a nuisance per se.
Unless a thing is a nuisance perse, however, it may not be abated
via an ordinance, without judicial proceedings.602 Such ordinance
is null and void because it violates the guarantee of due process
under the Constitution.605 Generally, LGUs have no power to
declare a particular thing as a nuisance unless such a thing is
a nuisance per se.m For example, the Court struck down the
ordinance passed by the City Council of Manila prohibiting the
operation of sauna parlors, massage parlors, karaoke bars, night
clubs, day clubs, super clubs, discotheques, cabarets, dance halls,
motels, and inns within the Ermita-Malate area because these
establishments are not a nuisance per se.™ However, mayors
are empowered to order the closure and removal of illegally
constructed establishments for failing to secure the necessary
building permits, whether the building constituted a nuisance
per se or a nuisance per accidens."* (c) Who may abate- Under
Article 700 of the NCC, it is the City and/or the Municipal Health
Officer who is charged with the responsibility of abating public
nuisances. The chief executive of the local government, like the
Punong Barangay, is not authorized to determine the propriety of
a summary abatement.607 A private person may likewise abate a
public nuisance which is specially injurious to him by removing,
or if necessary, by destroying the thing if it is a nuisance per se;
prior to the abatement, it is necessary: (1) that demand be first
made upon the owner or possessor of the property to abate the
nuisance; (2) that such demand has been rejected; (3) that the
v. Wong, supra.
No - 'p°raynov. Jovellanos, 495 SCRA 185(2006); City of Manila v. Judge t acuio ir r n
'■ “c L~-
^Lucena Grand Central Terminal, Inc. v. Jac Liner, Inc., supra.

^Salao v. Santos, supra.
Âquino v. Municipality of Malay, Aklan, 737 SCRA 145 (2014).
^City of Manila v. Judge Laguio, Jr., supra.
Aquino v. Municipality of Malay, Aklan, supra.
’cniz v. Pandacan Hiker’s Club, Inc., 778 SCRA 385 (2016).
J9JC9B0M
R52M9UH7
abatement be approved by the district health officer and executed

with the assistance of the local police; and (4) that the value of
the destruction does not exceed P3,000.“3
12) Modes of Acquiring and Transmitting Ownership

12.1 Modes of Acquisition of Ownership: (a) Seven Modes: (1)
Occupation; (2) Law; (3) Donation; (4) Tradition; (5) Intellectual
Creation; (6) Prescription; and (7) Succession - OLDTIPS.™ (b)
Original and derivative mode: (1) Original mode - when they
result in the independent creation of a new right of ownership,
independent of the ownership of a definite third person, such
as occupation, acquisitive prescription, law, and intellectual
creation; (2) Derivative mode - those which depend on the
existence of the right of another person, such as succession,
donation, and tradition.
12.2 Law as Mode: (a) Concept: Those special legal provisions which
directly vest ownership or real rights in favor of certain persons,
independently of the other modes of acquiring and transmitting
ownership or other real rights, (b) Examples: (1) Fruits naturally
falling upon adjacent land belong to the owner of said land;610
and (2) When a person who is not the owner of a thing sells or
alienates and delivers it, and later the seller or grantor acquires
title thereto, such title passes by operation of law to the buyer or
grantee.6"
12.3 Tradition or Delivery: (a) Mode distinguished from title: Mode
is the legal means by which dominion or ownership is created,
transferred, or destroyed, but title is only the legal basis by which
to affect dominion or ownership.612 Title is every juridical act,
right, or condition which gives a means to the acquisition of
ownership and other real rights but which in itself is insufficient
to produce them.611 (b) Contracts only create title: Contracts,
under our laws, only constitute titles or rights to the transfer
or acquisition of ownership, while delivery or tradition is the
“"Art.712.NCC.
““Art. 681, NCC.
‘"Art. 1434, NCC.
‘"San Lorenzo Development Corp. v. CA, 449 SCRA 99 (2005), citing Villanueva,
Philippine Law on Sales, 1995 Ed., 5.
6II3 Sanchez Roman 200.
J9JC9B0M
R52M9UH7
mode of accomplishing the same.614 It is tradition or delivery, as

a consequence of contracts, that actually transfers ownership.615
(c) Concept: (1) Definition: Tradition (traditio) or delivery,
as a mode of acquiring and transmitting ownership and other
real rights, refers to the transfer of possession accompanied
by an intention to transfer ownership or other real rights. (2)
Requisites: (i) pre-existence of the right to be transmitted in
the estate of the grantor, the same being a derivative mode of
acquiring ownership; (ii) just cause or title (causa traditionis)
for the transmission, such as sale; (iii) intention on the part of
the grantor to grant and on the part of the grantee to acquire;
(iv) capacity to transmit (on the part of the grantor) and capacity
to acquire (on the part of the grantee); and (v) an act which
gives it outward form, physically, symbolically, or legally. (3)
Importance of intention to deliver: In all forms of delivery, it is
necessary that the act of delivery, whether constructive or actual,
should be coupled with the intention of delivering the thing. The
act, without the intention, is insufficient.616 The critical factor in
the different modes of effecting delivery, which gives legal effect
to the act, is the actual intention of the vendor to deliver, and
its acceptance by the vendee. Without that intention, there is no
tradition.617 (d) Kinds of tradition (delivery): (1) Real tradition
(physical or actual delivery) - it takes place when the thing is
placed in the control and possession of the grantee, which, if it
is movable, is when the thing is transferred from hand to hand
and, if immovable, by certain material and possessory acts by
the grantee in the presence and with the consent of the grantor,
such as gathering fruits or entering upon the property which are
generally called taking possession.6"1 (2) Constructive (feigned)
tradition - delivery may likewise exist even when the change of
possession is not actual or material but represented by other signs
or acts indicative thereof, in which case the tradition is classified
as a constructive one. (3) Quasi-tradition - Used to indicate the
transfer of rights or incorporeal things through the exercise of
the rights by the grantee with the acquiescence of the grantor,
(e) Forms of constructive delivery: (1) Traditio simbolica - the
6USan Lorenzo Development Corp. v. CA, supra.

t,sld.
616Union Motor Corporation v. CA, G.R. No. 117817, July 20, 2001, citing Norkis
Distributors, Inc. v. CA, 193 SCRA 694,698 (1991).
bnld.
6I“2 Caslan, 9th Ed., 227-228.
J9JC9B0M
R52M9UH7
transfer of ownership is effected by the delivery of symbols or

things which represent those to be delivered. Thus in the second
paragraph of Article 1498 of the NCC, it is provided that "with
regard to movable property, its delivery may also be made by the
delivery of the keys of the place or depository where it is stored
or kept." In case of immovable property, symbolic delivery is
effected by the execution of a public instrument. The execution
of a public instrument is recognized by law as equivalent to
the delivery of the thing which is the object of the contract.61’
Exception: There is no delivery notwithstanding the execution
of a public instrument when: (i) the instrument itself expresses
or implies that delivery was not intended; or (ii) by other means
it is shown that such delivery was not effected, because a third
person was actually in possession of the thing, in which case
fiction yields to reality—the delivery has not been effected.620 (2)
Traditio longa manti- the transfer of ownership is effected by the
grantor by simply pointing out to the grantee the things which
are being transferred and which at the time must be within their
sight. (3) Traditio brevi manti - where the grantee has already
acquired actual control or possession of the thing, as when the
thing is leased to him, in which case, a mere declaration on the
part of the grantor that the grantee shall now hold the thing which
is already in his control and possession, as owner, operates as
a form of delivery. (4) Traditio constitution possessorium -
where delivery is effected by a mere declaration on the part of
the transferor that he will hold the thing for the transferee, and
this may take place when the owner of the thing alienates it but
continues possessing it under another contract or capacity, such
as a lessee for example.
12.4 Acquisitive Prescription: (a) Concept and requisites: Prescription
is a mode of acquiring ownership and other real rights through
the lapse of time in the manner and under conditions laid down
by law, namely, that the possession should be in the concept
of an owner, public, peaceful, uninterrupted, and adverse.621
Possession is open when it is patent, visible, apparent, notorious,
“’Addison v. Felix and Tioco, 38 Phil. 404,408 (1918).

"20M.
""Heirs of Bicnvcnido and Araceli Tanyag v. Gabriel, 669 SCRA 284 (2012); Tan v.
Ramirez, 626 SCRA 327 (2010); Imuan v. Cereno, 599 SCRA 423 (2009); Aguirre v. Heirs of
Lucas Villanueva, 505 SCRA 855 (2006); Heirs of Marcelino Cabal v. Cabal, 497 SCRA 301
(2006); see also Arts. 1106 and 1118, NCC.
J9JC9B0M
R52M9UH7
22K PR I -BAR REVIEWER IN CIVIL LAW
and not clandestine/'” It is continuous when uninterrupted,

unbroken, and not intermittent or occasional;625 exclusive when
the adverse possessor can show exclusive dominion over the
land and an appropriation of it to his own use and benefit;624 and
notorious when it is so conspicuous that it is generally known
and talked of by the public or the people in the neighborhood.625
(b) Two kinds of acquisitive prescription: It is either ordinary
or extraordinary. (1) Ordinary - requires possession of things in
good faith and with just title for the time fixed by law.626 For
purposes of prescription, the law requires that just title must be
proved; it is never presumed.627 (2) Extraordinary - does not
require just title and good faith.625 (c) Period of prescription: (1)
Movable - four years if ordinary; eight years if extraordinary.62’
(2) Immovable - 10 years if ordinary'; 30 years if extraordinary.650
(d) When prescription does not lie: (I) In case of registered land:
Prescription does not run against registered land. Thus, under
Sec. 47 of P.D: No. 1529, otherwise known as the Property
Registration Decree, it is specifically provided that "no title to
registered land in derogation ofthat ofthe registered owner shall
be acquired by prescription or adverse possession. ”‘JI However,
in Heirs of Anacleto B. Nieto v. Municipality of Meycattayan,
Bulacan,1,12 the Court recognized the jurisprudential thread
that while it is true that a Torrens title is indefeasible and
imprescriptible, the registered landowner may lose his right
to recover possession of his registered property by reason of
laches.6” (2) In case of property of public dominion: It is clear that
“Director of Lands v. Intermediate Appellate Court, 209 SCRA 214, 224 (1992).
mld.
a,ld.
''"Id.', see also Republic v. Northern Cement Corp.. 861 SCRA 50 (2018); Heirs ol
Bicnvenido and Araceli Tayag v. (Jabriel, supra; Heirs of Marcelina Ar/adon-Crisologo v, Ration,
532 SCRA 39) (2007); I’elbcl Manufacturing Corp. v. CA, 497 SCRA 185 (2006).
626Art. 1117, NCC.
“’Art. 1131, NCC.
“•Art. 1137, NCC.
“’Art. 1132, NCC.
““Art. 1137, NCC.
“'Heirs ol Leopoldo Vencilao, Sr. v. CA, 288 SCRA 574 (1998); see also Pangasinan v.
Disonglo-Abnazora, 761 SCRA 220 (2015); Lausa v. Quilaton, 767 SCRA 399 (2015).
“’540 SCRA 100, 107(2007).
'•"CiliiiK De Vera-Cruz v. Miguel, 468 SCRA 506, 5)8 (2005); Heirs of Juan and Ines
Panganiban v. Dayrit, 464 SCRA 370, 379-380 (2005); and Vila, de Cabrera v. CA. 335 Phil. 19,
34(1997).
J9JC9B0M
R52M9UH7
property of public dominion, which generally includes property

belonging to the State, cannot be the object of prescription or,
indeed, be subject of the commerce of man?'4 However, where
lands of the public domain are patrimonial in character, they are
susceptible to acquisitive prescription, pursuant to Article 1113
of the NCC.“S (3) In case of trust: A trustee cannot acquire by
prescription the ownership of property entrusted to him.“‘ That
rule applies squarely to express trusts. The basis of the rule is
that the possession of a trustee is not adverse. Not being adverse,
he does not acquire by prescription the property held in trust?”
The rule of imprescriptibility of the action to recover property
held in trust may possibly apply to resulting trusts as long as
the trustee has not repudiated the trust?35 Exception: Acquisitive
prescription may bar the action of the beneficiary against the
trustee in an express trust for the recovery of the property held
in trust where (i) the trustee has performed unequivocal acts
of repudiation amounting to an ouster of the cestui que trust;
(ii) such positive acts of repudiation have been made known to
the cestui que trust; and (iii) the evidence thereon is clear and
conclusive?39 (4) In case of following relationships: Prescription
does not nin between husband and wife, even though there be a
separation of property agreed upon in the marriage settlements
or by judicial decree.““ Neither does prescription run between
parents and children, during the minority or insanity of the latter,
and between guardian and ward during the continuance of the
guardianship."1
12.5 Pectination: (a) Concept and requisites: (1) Concept: It is a
mode of acquiring ownership by the seizure or apprehension
of things corporeal which have no owner with the intention of
acquiring them and according to the rules laid down by law."2
(2) Requisites: (i) the thing must be res nullius—that is. a thing
which either never had an owner, or which, by virtue of a previous
abandonment (dereliction), has not an owner at the time of its
“"Heirs ol'Murio Mulubanan v. Republic, 587 SCRA 172 (2009).

“’/</.
“‘Brian Vda. de Esconde v. CA, 323 Phil. 81. 89 (1996).
““Buan Vda. de Esconde v. CA, supra.

‘"Id.
““Art. 1109, lstpar.,NCC.
“‘Art. 1109, 2nd par., NCC.
"23 Sanchez Roman 209.
J9JC9B0M
R52M9UH7
occupation; (ii) it must be appropriable by nature or one that can

be seized or apprehended (or it must be corporeal); (iii) it must be
brought into the actual possession or control of the one professing
to acquire it; and (iv) the person must acquire it with the intention
of acquiring ownership. He must therefore have the necessary
capacity to consent.”3 (b) Hunting or fishine: However, the right
to hunt and to fish is regulated by special laws.644 This mode does
not apply to animals classified as rare, threatened, or endangered
species.”3 (c) Swarm of bees: The owner of a swarm of bees has
a right to pursue them to another’s land, with the obligation of
indemnifying the possessor of the latter for the damage.”6 In case
the owner of the swarm of bees fails to pursue the swarm, or if
he initially makes a pursuit but he ceases to do so within two
consecutive days, the law considers him as to have abandoned
ownership of the swarm of bees,”7 in which case, the swarm
becomes res mdlius and ownership thereof may now be acquired
by the owner of the estate by way of occupation.”8 (d) Wild and
domesticated or tamed animals: (1) Rule as to wild animals:
Those which are found in their state of natural freedom. They are
without an owner or res nullius. Hence, ownership thereof may
be acquired by occupation. However, once they recover their
natural freedom or once they are restored to their original state of
being free, they cease to be under one’s possession and will again
become res nullius. (2) Rule as to domesticated or tamed animals:
Those which were formerly wild but have been subdued and
retained the habit of returning to the premises of the possessor.”’
So long as they retain the habit of returning to the premises of
the possessor, the ownership over these animals is not affected
by the simple fact that they are no longer under the control of the
present possessor-owner. The possessor-owner of domesticated
animals has a period of 20 days counted from the occupation
by another person within which to reclaim them. If after the
expiration of this period the possessor-owner fails to reclaim
”’3 Sanchez 210; 2 Castan 140.

6+4Art. 715, NCC.
”’R.A. No. 9147, otherwise known as the “Wildlife Resources Conservation and Protection
Act”; R.A. No. 8550, otherwise known as the "Philippine Fisheries Code of 1998”; and Fisheries
Administrative Order Nos. 202 and 208.
”6Art. 716, NCC.
“’Art. 716, NCC.
utld.
“’See Art. 560, NCC.
J9JC9B0M
R52M9UH7
them, the ownership over these animals is considered to have

been abandoned and the animals become res nullius. (e) Hidden
treasure: A hidden treasure is any hidden and unknown deposit of
money, jewelry, or other precious objects, the lawful ownership
of which does not appear.630 It is considered, in law, as res nullius
and may thus be acquired by occupation. The treasure belongs
wholly to the finder if found upon one own’s ground; but if found
or discovered by chance in another’s property and the finder is
not a trespasser, the treasure is equally divided between the finder
and the owner of the ground.631 (f) Abandoned and lost movable:
(13 Abandoned movable: The property is considered abandoned
if the spes recuperandi (hope of recovery or recapture) is gone
and the animus revertendi (intent to recover) is given up.63’ It
becomes res nullius and may be acquired by occupation. (2)
Lost movable: Where the property is not abandoned but it is now
under the control of another person. In order to acquire ownership
through occupation, there are rules to be followed. The finder, far
from becoming owner of the thing found, is bound to return it
to its previous owner, if known, or to immediately deposit the
same with the mayor of the city or municipality where the finding
has taken place, if the owner is unknown.633 If the finder fails to
comply with these procedural requirements and appropriates for
himself the movable property he found, he shall be liable for the
crime of theft.634 If the lost property is turned over to the mayor,
the latter is then required to make a public announcement of such
finding for two consecutive weeks in a manner he deems best.633
If after six months, the owner does not appear, the thing found,
or its value, shall be awarded to the finder, with the obligation to
reimburse the expenses incurred in the publication.636 It is only
after compliance with the foregoing rules that the finder shall
acquire ownership of the thing found by occupation. If the owner
appears on time, he shall be obliged, however, to pay, as a reward
to the finder, one-tenth (1/10) of the sum or of the price of the
thing found.637
‘"Art. 439, NCC.

651 Art. 438, NCC.
“U.S. v. Rey, 8 Phil. 500 (1907).
634Art. 308(1), RPC.
“’Art. 719, 2nd par., NCC.
636Art. 719,4th par., NCC.
“’Art. 720, NCC.
J9JC9B0M
R52M9UH7
12.6 Intellectual Creation: (a) Concent: Intellectual property refers

to creations of the mind: inventions, literary and artistic works,
and symbols, names, images, and designs used in commerce.6’*
(b) Time of acquisition of ownership: The author, the composer,
the painter, the sculptor, or other artists, the scientists, and the
inventors acquire ownership over their works from the moment of
their creation6” even before the same are published, copyrighted,
or patented.660 Being the owner thereof, the creator has absolute
control over his work and he may do anything with it as he
pleases, including the right to share it with others. He also enjoys
the exclusive right to its publication—but this exclusive right is
limited only to the first publication."' Unless placed under the
protection of the Intellectual Property Law, once published,
the work is dedicated to the public, and the author loses the
exclusive right to control subsequent publications by others."2 (c)
Ownership over letters: (1) Ownership over material or physical
object (the letter itself) - it is owned by the person to whom it is
addressed and delivered; (2) Ideas or contents - it is owned by
the author or writer (the sender). As a consequence, while the
recipient may have the control and possession of the physical
letter itself by virtue of his ownership of the same, the author’s
consent is required in case of publication or dissemination of the
letter."’ In addition, the copyright also belongs to the author or
writer (the sender).66*
13) Donation
13.1 Concent and Requisites: (a) Definition: It is an act of liberality
whereby a person disposes gratuitously of a thing or right in
favor of another, who accepts it."’ It may also be defined as “a
gratuitous contract whereby the donor divests himself, at present
and irrevocably, of the thing given in favor of the donee.”6"
(b) Requisites: (1) essential reduction of the patrimony of the
“Bwww.wipo.int/about-ip/en/-Relrieved date: June 29,2017.

6MArt. 721, NCC.
660Art. 722, NCC.
“'Santos v. McCullough Printing Co., 12 SCRA 321; Filipino Society of Composers,
Authors and Publishers, Inc. v. Tan, 148 SCRA 461.
MId.
“’Art. 723, NCC.
“*Sec. 178.6, R.A.No. 8293.
“’Art. 725, NCC.
“‘Concurring opinion of J. Antonio in Alejandro v. Geraldez, 78 SCRA 245, 266.
J9JC9B0M
R52M9UH7
donor; (2) increase in the patrimony of the donee; and (3) intent
to do an act of liberality or animus donandi.1*1 Donative intent
is presumed present when one gives a part of one’s patrimony
to another without consideration, and it is not negated when
the person donating has other intentions, motives, or purposes
which do not contradict donative intent “8 For a donation to
exist, however, the intent to donate must be effectively carried
out. Hence, a mere declaration of an intention or desire to donate
is not a donation.669 (c) Donation is a mode of acquisition: Our
Civil Code treats donation as a contract that transfers ownership.
As explained by the Court in Liguez v. Lopez,m donation does
not need to be completed by tradition since Article 712 prescribes
that ownership and rights therein are acquired and transmitted by
donation, succession—and in consequence of certain contracts—
by tradition, thereby implying that donation is not one of the
contracts requiring tradition.
13.2 Classifications of Donation: (a) As to time of effectivitv: (1)
Donation inter vivos - When the donation takes effect during the
donor’s lifetime or independently of the donor’s death or when
the full or naked ownership (nuda proprietas) of the donated
properties passes to the donee during the donor’s lifetime, not
by reason of his death but because of the deed of donation.671 (2)
Donation mortis causa - When the donation takes effect only
upon the donor’s death or when the full or naked ownership of
the donated properties will pass to the donee only because of
the donor’s death.6’7 (b) Donation mortis causa: (1) Concept: It
is in reality a devise, if it involves real property; or a legacy,
if it involves personal property. (2) Formalities: It partakes of
the nature of a testamentary provision. As such, the same must
be executed in accordance with the requisites on solemnities of
wills and testaments under Articles 805 and 806 of the New Civil
Code; otherwise, the donation is void and would produce no
“’Heirs of Rosendo Sevilla Florencio v. Heirs of Teresa Sevilla de Leon, 425 SCRA
447, 458-459 (2004); citing Republic v. Guzman, 326 SCRA 90, 95 (2000). See also Abello v.
Commissioner of Internal Revenue, 452 SCRA 162, 168 (2005).
“’Abello v. Commissioner of Internal Revenue, 452 SCRA 162, 170(2005).
“’See Jutic v. Court of Appeals, 153 SCRA 269 (1987); and Aldaba v. Court of Appeals,
27 SCRA 263.
6,“G.R. No. L-l 1240, February 13, 1958.
671 Alejandro v. Geraldez, 78 SCRA 245,253; citing Bonsato v. Court of Appeals, 95 Phil.
481.
mId.
J9JC9B0M
R52M9UH7
effect. Unless and until the donation is probated, i.e., proved and
allowed in the proper court, no right to the subject property has
been transmitted to the donee.673 (3) Characteristics: (i) Conveys
no title or ownership to the transferee before the death of the
transferor or what amounts to the same thing, that the transferor
should retain the ownership (full or naked) and control of the
property while alive; (ii) Before his death, the transfer should also
be revocable by the transferor at will, adnutuum; but revocability
may be provided for indirectly by means of a reserved power in
the donor to dispose of the properties conveyed; and (iii) The
transfer is void if the transferor should survive the transferee.6’4
(4) Determination of nature of donation: Crucial in determining
whether the donation is inter vivos or mortis causa is the
determination ofwhether the donor intended to transfer ownership
over the properties upon the execution of the deed.675 If the donor
intends to transfer the ownership of the property donated upon
the execution of the donation, as reflected from the provisions
contained in the donation, then it is inter vivos; otherwise, it is
merely mortis causa, or made to take effect after death.676 (c)
Classification of donation inter vivos: (1) pure or simple donation
- Where the underlying cause is plain gratuity677 or pure liberality
(no strings attached);67* (2) remuneratory or compensatory
donation - made for the purpose of rewarding the donee for past
services, which services do not amount to a demandable debt;‘”
(3) conditional or modal donation - where the donation is made
in consideration of future services or where the donor imposes
certain conditions, limitations, or charges upon the donee, the
value of which is inferior than that of the donation given;66" and
(4) onerous donation - that which imposes upon the donee a
reciprocal obligation or, to be more precise, this is the kind of
‘’’Bascara v. Javier, 759 SCRA 105 (2015).

‘’’Villanueva v. Branoco, 640 SCRA 30« (2011); Del Rosario v. Ferrer, 630 SCRA 683
(2010); Ganuelas v. Cawed, 401 SCRA 447, 455-456 (2003); citing Auslria-Magai v. CA, 375
SCRA 556. See also Bonsalo v. CA, supra, and Alejandro v. Geraldez, supra, 254-255.
675Reyes v. Mosqueda, 187 SCRA 661, 671 (1990). See also Auslria-Magai v. CA, 375
SCRA 556; ciling Geslopa v. CA, 342 SCRA 105, 110.
6 ‘Castro v. CA, 27 SCRA 1076, 1082 (1969); cited in National Treasurer of the Phil. v.
Prfa. de Meimban, 131 SCRA 264, 269 (1984).
‘’’Republic v. Silim, 356 SCRA I; ciling Art. 725, NCC.
‘’"Lagazo v. Court of Appeals, 287 SCRA 18, 24. Also in De Luna v. Abrigo, 181 SCRA
150,155(1999).
"“Id.. citing An. 726, NCC.
““Republic v. Silim. supra, citing Arts. 726 and 733, NCC.
J9JC9B0M
R52M9UH7
donation made for a valuable consideration, the cost of which is

equal to or more than the thing donated.6*1 Of all the foregoing
classifications, donations of the onerous type are the most
distinct. This is because, unlike the other forms of donation, the
validity of and the rights and obligations of the parties involved
in an onerous donation is completely governed not by the law
on donations but by the law on contracts.6*2 (d) Governing law
of donation inter vivos: (1) Simple and remuneratory donations
— both are true donations because the underlying consideration
is the pure liberality of the donor; hence, they are both governed
by the law on donations, as follows: (i) as to formalities, both
shall be governed by Articles 748 and 749; (ii) as to effect of
impossible condition, the condition is simply considered not
imposed and the donation remains valid (Art. 727). (2) Onerous
donations - it is completely governed not by the law on donations
but by the law on contracts,6*2 as follows: (i) as to formalities,
it is obligatory in whatever form it may have been entered into
(Art. 1356); (ii) as to effect of impossible condition, the donation
becomes void (Art. 1183). (3) Conditional or modal donations -
the rules of contract govern the onerous portion of donation; the
rules of donation only apply to the excess, if any.6*4
13.3 Perfection. Capacity of Parties, and Formalities: (a) Effects
of perfection: (1) the donee becomes the absolute owner of
the property donated;6*2 and (2) it is generally considered
irrevocable.6*6 (b) When acceptance must be made: The
acceptance must be made during the lifetime of the donor. Upon
the death of either the donor or the donee prior to the perfection
of the donation, the offer of donation becomes ineffective.6*7 (c)
Capacity of donor: (1) Requisites: (i) he must be in possession
of the capacity to contract; (ii) he must have the capacity to
dispose of his property;6** and (iii) he must not be specifically .
prohibited to make a donation.6*9 (2) Cannot donate future
’/</., citing Art. 733, NCC. See also De Luna v. Abrigo, supra, p. 156.
"W See also Art. 733, NCC.
"Art. 733, NCC.
"Calanasan v. Dolorito, 710 SCRA 505 (2013).
“’Del Rosario v. Ferrer, 630 SCRA 683 (2010).
'“‘I'da. de Arceo v. CA. 185 SCRA 489; cited in Quilala v. CA. 371 SCRA311.
"Art. 1323, NCC.
“*Art. 735, NCC.
"See Art. 739, NCC and Art. 87, FC.
J9JC9B0M
R52M9UH7
property: Donations cannot comprehend future property.650 The

law requires that the donor be the owner of the property donated
at the time of the donation; otherwise, such donation is void,
even if accepted, following the rule that “no one can give what he
does not have”—nemo dat quod non habet. (3) Reckoning period
of donor’s capacity: The donor’s capacity shall be determined as
of the time of the making of the donation.651 (4) Double donation:
Not legally possible in this jurisdiction652 because donation
is a mode of acquiring ownership, (d) Capacity of donee: (1)
Mere juridical capacity is sufficient. (2) Prohibited donations:
(i) donations between those who were guilty of adultery or
concubinage at the time of the donation;653 (ii) donations between
those who were found guilty of the same criminal offense, if the
donation is made in consideration thereof;™ (iii) those made to
public officers or their spouses, descendants, and ascendants, if
the donation is made by reason of their office;653 (iv) donations
made to those who are incapacitated to succeed by will;656 (v)
donations between the spouses during the marriage, whether
the donation be made directly or indirectly, except moderate
ones given on the occasion of any family rejoicing;6” and (vi)
donations between those who are living together as husband
and wife without a valid marriage, whether the donation be
made directly or indirectly."6 In the first, no previous criminal
conviction is necessary since the guilt of the donor and the donee
may be proved by preponderance of evidence in a civil action
for declaration of nullity of the donation;655 while in the second,
a previous criminal conviction is necessary, (e) Formalities
in donations of personal property: If the value of the donated
property does not exceed P5.000, there is no required form. If
the donation is made orally, there must be simultaneous delivery
of the thing or of the document representing the right donated;
"“Art. 735, NCC.

"'Art. 737, NCC.
"'Separate (Concurring) Opinion of Justice Vitug in Hemedes v. CA, 316 SCRA 347,
376-377.
“Art. 739(1), NCC.
“Art. 739(2), NCC.
“Art. 739(4), NCC.
“Art. 1027( I), (2), (3), (5), and (6), NCC, in relation to Art. 740, NCC.
“Art. 87, FC.
"‘Art. 87, FC.
“Last paragraph. Art. 739, NCC.
J9JC9B0M
R52M9UH7
otherwise, the donation is void.’"" If the value of the donated

property exceeds P5,000, both the donation and the acceptance
must be in writing; otherwise, the donation shall be void.’’1 (I)
Formalities in donations of real property: Regardless of its value,
the donation and the acceptance of the same should be in a public
instrument; otherwise, the donation is void.’” The acceptance may
be made in the same deed of donation or in a separate instrument.
If the acceptance is in a separate public instrument, the donor
shall be notified in writing of such fact. Both instruments must
state the fact of such notification.’” There are, therefore, three
requisites for the validity of a simple donation of a real property,
to wit: (1) it must be made in a public instrument; (2) it must
be accepted, which acceptance may be made either in the same
Deed of Donation or in a separate public instrument; and (3) if
the acceptance is made in a separate instrument, the donor must
be notified in an authentic form, and the same must be noted in
both instruments.7” The purpose of the formal requirement for
acceptance of a donation is to ensure that such acceptance is duly
communicated to the donor.’” Hence, even if the requirements
of notification and notation are not complied with in cases
where the acceptance is made on a separate instrument, the
donation remains valid if the donor is nonetheless aware of the
acceptance™ or the donor had actual knowledge of the same.’”
On the other hand, in the absence of evidence whatsoever that
the claimed donation had been accepted, the requirements of
notice and notation should be strictly applied.™ It is enough,
between the parties to a donation of an immovable property, that
the donation be made in a public instrument but, in order to bind
third persons, the donation must be registered in the Registry
of Property.™'’ However, such registration in the Office of the
’““Art. 748. 2nd par., NCC.

’"'Art. 748, 3rd par., NCC.
’“’Art. 749, NCC,
’“Arungote v. Maglunob, 579 SCRA 620 (2009).

’“’Homeowners Association ofTalayan Village, Inc. v. J.M. Tuason & Co., Inc., 774 SCRA
315(2015).
’““Pajarillo v. Intermediate Appellate Court, 176 SCRA 340 (1989).
’"’Republic v. Silim, 356 SCRA 1 (2001)
’““Legasto v. Verzosa, 54 Phil. 766, and Santos v. Robledo, 28 Phil. 245.
’"“Shopper's Paradise Realty & Development Corp. v. Roque, 419 SCRA 93, 98 (2004).
J9JC9B0M
R52M9UH7
Register of Deeds or in the Assessor’s Office is not necessary for

the donation to be considered valid and official.710
13.4 Reduction and Revocation: (a) Extent of donation: A donation is
subject to the following limitations: (1) The donor cannot give
by donation more than what he can give by will,7" or it must
not impair the legitimes of his compulsory heirs. If he does, so
much of what is donated as exceeds what he can give by will is
deemed “inofficious” and the donation is reducible to the extent
of such excess, though without prejudice to its taking effect in
the donor’s lifetime or the donee’s appropriating the fruits of the
thing donated.717 (2) He must reserve, either in full ownership or
in usufruct, sufficient means for the support of himself and all
relatives who, at the time of the acceptance, are by law entitled
to be supported by the donor,713 otherwise, the donation is subject
to a corresponding reduction at the instance of “any person
affected" and only to the extent necessary for the support of
the donor and his relatives entitled to be supported by him. (b)
Generally irrevocable: As a rule, once the donation is accepted (or
perfected), it is generally considered irrevocable.714 Exceptions: A
donation inter vivos may be revoked only on grounds allowed by
law, as follows: (1) subsequent appearance of a child;71’ (2) non
fulfillment of charges imposed in the donation;716 (3) ingratitude
of the donee;717 and (4) the fact that the donation is inofficious.711
(c) Subsequent appearance of child: (1) Requisites: (i) when
the donor made the donation, he had no child; and (ii) after the
donation, he had a child, whether legitimate, illegitimate or
adopted, or the child whom he believed to be dead turned out to
be alive.719 (2) Extent of reduction or revocation: The provisional
legitime of the child should be computed at the time of the
child’s appearance and the donation should be correspondingly
’"Heirs of Roscndo Sevilla Florencio v. Heirs of Teresa Sevilla de Leon, 425 SCRA 447,
459 (2004).
’"Art. 752, NCC.
7l7Fda. deTupas v. Br. XLIII, RTC of Negros Occidental, 144 SCRA 622,624-625, clllng
Art. 771, NCC; see aha Santos v. Alana, 467 SCRA 176 (2005).
’"Art. 750, NCC.
’"Gestopa v. CA, 342 SCRA 105,114.
’"Art. 760, NCC.
"‘Art. 764, NCC.
7l7Art. 765, NCC.
’"Art. 752, NCC.
,19Art. 760, NCC.
J9JC9B0M
R52M9UH7
reduced or revoked to the extent that the provisional legitime of

the child, at that time, has been impaired. (3) Prescriptive period:
The action for reduction or revocation is subject to a four-year
prescriptive period from the time of the appearance of the child.720
(d) Acts of ingratitude: (1) Instances of acts of ingratitude: (i) If
the donee should commit some offense against the person, the
honor or the property of the donor, or of his wife or children
under his parental authority; (ii) If the donee imputes to the donor
any criminal offense, or any act involving moral turpitude, even
Mr
though he should prove it, unless the crime or the act has been
committed against the donee himself, his wife or children under
his authority; or (iii) If the donee unduly refuses to give support
to the donor when the former is legally or morally bound to give
support to the latter.’21 (2) Prescriptive period: One year, counted
from the time the donor had knowledge of the fact and it was
possible for him to bring the action.’22 (e) Inofficious donations:
(1) Concept: A donation is inofficious if it exceeds what the
donor may give by will, or when it prejudices the legitimes of the
donor’s compulsory heirs. (2) Extent of reduction or revocation:
In determining whether the donation is inofficious or not, recourse
must be had to the rules established by the Civil Code for the
determination of the legitime and, by extension, of the disposable
portion, taking into consideration the estimated net value of the
donor’s property at the time of his death.’22 (3) Who may revoke:
Only those who at the time of the donor’s death have a right to
the legitime and their heirs and successors-in-interest may ask for
the reduction of inofficious donations.724 (4) Prescriptive period:
The action for reduction or revocation of an inofficious donation
prescribes in 10 years following Article 1144 of the New Civil
Code.’25 (f) failure to comply with conditions: (1) Meaning of
condition: According to the Court, the condition referred to in
Article 764 refers to obligations or charges imposed by the donor
on the donee,720 making the donation onerous.727 (2) Prescriptive
’-’"Art. 763, NCC.

”'Art. 765, NCC.
’’-’Art. 769, NCC.
”’IZ</<1. de Tupas v. Br. XL1II, RTC of Negros Occidental, 144 SCRA 622,626.
724Art. 772, 1st par., NCC.
’"Imperial v. CA, 316 SCRA 393 (1999) and Santos v. Alana. 467 SCRA 176 (2005).
’’"Dissenting Opinion of J. Davide in Central Philippine University v. Conn of Appeals,
246 SCRA 511, 520, citing 11 Tolentino, Civil Code. 1983 Ed.. 535.
”’De Luna v. Abrigo, 181 SCRA 150, 156(1990).
J9JC9B0M
R52M9UH7
period: 10 years counted from the time within which the donee
must comply with the conditions/obligations of the donation.™
(3) When to count 10-vear period: The accrual of the cause of
action is from the expiration of the time within which the donee
must comply with the conditions or obligations of the donation.™
Where the donee is burdened with the obligation to utilize the
land donated for school purposes, the Court ruled that from
the nature and circumstances of the condition of the subject
donation, a period is contemplated by the donors, except that if
no period was fixed in the donation, resort to Article 1197 of the
New Civil Code is necessary.730 However, resort to Article 1197
will no longer be applicable if more than a reasonable period has
already been allowed to the donee to avail of the opportunity to
comply with the condition, even if it be burdensome, to make the
donation in its favor forever valid, but the donee still failed to
do so.731 (4) When donation provides for automatic revocation: A
donation that provides for automatic revocation in case of failure
to comply with the condition imposed is valid.732 A judicial
finding that the revocation is proper is only necessary when the
other party actually goes to court for the specific purpose of
challenging the propriety of the revocation.”3
™Supra.
™Secrctary of Education v. Heirs of Ruftno Dulay, Sr., 480 SCRA 452 (2006).
73OW.
731/d See also Central Philippine University v. CA, 246 SCRA 511 (1995).
732De Luna v. Abrigo, supra, and Roman Catholic Archbishop of Manila v. CA, 198 SCRA
300 (1991); Dolar v. Barangay Lublub (Now P.D. Monfort North) Municipality of Dumangas, 475
SCRA 458 (2005); Zamboanga Barter Traders Kilusang Bayan, Inc. v. Plagata, 567 SCRA 163
(2005); and Province of Camarines Sur v. Bodega Glassware, 821 SCRA 295 (2017).
mld.
J9JC9B0M
R52M9UH7
.-,i ■
BOOK III. — SUCCESSION
1) Basic Principles
1.1
1,1 Basic Concepts: (a) Definition of succession: Succession is a
mode of acquisition by virtue of which the property, rights, and
obligations to the extent of the value of the inheritance of a
■ person are transmitted through his death to another or others
either by his will or by operation of law.1 (b) Elements: (1) causal
element, which is the death of the decedent; (2) objective element,
which is the inheritance; (3) subjective element - the decedent
and those who are called to succeed him, either by the decedent’s
express will or by provision of law; and (4) acceptance of the
inheritance by the person called to the succession, (c) Causal
element - death: (1) Importance of death: The rights to the
succession are transmitted from the moment of the death of the
decedent.2 The moment of death is the determining point when an
heir acquires a definite right to the inheritance.3 (2) Consequences:
(i) The inheritance vests immediately upon the decedent’s death
without a moment’s interruption.4 Ownership over the inheritance
passes to the heirs at the precise moment of death—not at the
time the heirs are declared, nor at the time of the partition, nor at
the distribution of the properties. There is no interruption between
the end of the decedent’s ownership and the start of the heir/
legatee/devisee’s ownership.5 (ii) At that precise time, the heir is
already legally deemed to have acquired ownership of his/her
share in the inheritance, and not at the time of declaration of
heirs, or partition, or distribution. Thus, there is no legal bar to an
heir disposing of his/her hereditary share immediately after such
'An. 774, NCC.

’Art. 777, NCC.
’Edudes v. Edades, 99 Phil. 675 (1956).
’Huebang v. Alo, 772 SCRA 36 (2015).
'id.
241
J9JC9B0M
R52M9UH7
death." (iii) The right of the State to collect the inheritance tax (or
estate tax) accrues at the moment of death, notwithstanding the
postponement of the actual possession and enjoyment of the
estate by the heir, and the tax is based on the value of the property
at that time, regardless of any subsequent appreciation or
depreciation.7 (iv) The capacity of the heir is determined as of the
time the decedent died (Art. 1034); the legitime is to be computed
as of the same moment (Art. 908), and so is the inofficiousness
of the donation inter vivos (Art. 771). Similarly, the legacies of
credit and remission are valid only in the amount due and
outstanding at the death of the testator (Art. 935), and the fruits
accruing after that instant are deemed to pertain to the legatee
(Art. 948).8 (3) Interest before death: Prior to the death of the
decedent, the right of the heirs to his properties is but a mere
expectancy, or merely inchoate.’ Article 1347, paragraph 2 of the
Civil Code characterizes a contract entered into upon future
inheritance as void.10 A contract may be classified as a contract
upon future inheritance, prohibited under the second paragraph
of Article 1347, where the following requisites concur: (i) that
the succession has not yet been opened; (ii) that the object of the
contract forms part of the inheritance; and (iii) that the promisor
has, with respect to the object, an expectancy of a right which is
purely hereditary in nature." (4) Kind of death contemplated: For
purposes of opening one’s succession, the death may either be
natural (physical) demise or presumptive death. In case of
presumptive death for purposes of opening the succession, a
judicial declaration is not required and courts are without
authority to issue the same.12 For purposes of opening one’s
succession, death may be presumed in the following situations:
(a) Ordinary Absence - If a person has been absent, it being
unknown whether or not he still lives, he shall be presumed dead
after an absence of 10 years. If he disappeared after the age of 75
"Salitico v. Heirs of Felix, G.R. No. 240199, April 10,2019.

’Lorenzo v. Posadas, 64 Phil. 353.
‘Butte v. Manuel Uy and Sons, Inc., 114 Phil. 443, 448-449 (1962), cited in Calalang-
Pamlan v. Calalang-Garcia, 725 SCRA 402 (2014).
’J.L.T. Agro, Inc. v. Balansag, 453 SCRA 211 (2005).
l0Arrogante v. Deliarte, 528 SCRA 63 (2007).
"Ferrer v. Diaz, 619 SCRA 226 (2010); Arrogante v. Deliarte, supra', J.L.T. Agro, Inc. v.
Balansag, supra.
l2Tadeo-Malias v. Republic, 862 SCRA 788 (2018).
J9JC9B0M
R52M9UH7
BOOK III. —SUCCESSION 243
years, an absence of five years shall be sufficient.13 Death is

presumed to have taken place on the last day of the period of
absence required by law.14 (b) Qualified Absence - A person is
presumed dead for all purposes, including the division of the
estate among the heirs under the following situations: (i) a person
onboard a vessel lost during a sea voyage, or an airplane which is
missing, who has not been heard of for four years since the loss
of the vessel or airplane; (ii) a person in the armed forces who has
taken part in war, and has been missing for four years; and (iii) a
person who has been in danger of death under other circumstances
and his existence has not been known for four years.13 In these
cases, the presumptive death is fixed on the very day of the
.1 occurrence of the event from which death is presumed; and if
such date cannot be fixed, the court determines the middle of the
period in which the event could have happened.'6 (d) Objective
element - inheritance: (1) Concept: The inheritance includes all
the property, rights, and obligations of a person which are not
extinguished by his death.” Succession is the mode oftransmitting
the inheritance by reason of death; while inheritance is what is
transmitted upon death. (2) As to properties: Only those still
existing and owned by the decedent shall be included in the
inheritance. (3) Rights and obligations: (i) purely personal rights
are not transmissible to the heirs, hence, not part ofthe inheritance;
(ii) patrimonial rights are generally included, except as otherwise
provided by law or by the will of the testator, such as usufruct
and personal servitudes; and (iii) rights and obligations arising
from contracts are generally transmissible to the heirs unless they
are not transmissible by reason of their nature, by express
agreement of the parties, or by express provision of law.1* (4)
Monetary obligations: It is the estate or the mass of property,
rights and assets left by the decedent, instead of the heirs directly,
that becomes vested and charged with the payment of the money
debts of the decedent.” It is only what is left of the estate after the
payment of debts that are transmitted to the heirs. Hence,
l3Art. 390, par. 2, NCC.

,4I Tolentino, Civil Code of the Philippines, 691, 1987 Ed.
"Art. 391, NCC.
16I Tolentino, Civil Code of the Philippines, 691-692, 1987 Ed.
”Art. 776, NCC.
"Art. 1311, par. l.NCC.
"Limjoco v. Intestate Estate of Pedro Fragrante, 80 Phil. 776 (1948).
J9JC9B0M
R52M9UH7
monetary obligations of the decedent are not included in the

inheritance, (e) Subjective element: (1) Decedent/Testator: The
person whose property is transmitted through succession is called
“decedent.” whether or not he left a will. If he left a will, he is
also called the “testator.”20 (2) Successors: The successors of the
decedent in succession are called heirs, devisees, or legatees. (3)
Heirs and kinds: Those who are called upon to succeed by
universal title on the whole estate or to an aliquot portion thereof,
either by will or by operation of law, are called “heirs.”21 In turn,
there are three kinds of heirs: (i) voluntary heirs, or those called
upon to succeed only by express will of the testator to the portion
of the estate which the testator can freely dispose of; (ii)
compulsory heirs, or those called upon to succeed by operation of
law to a portion of the estate known as the “legitime,” of which
they cannot be deprived by the testator except by way of a valid
disinheritance; and (iii) legal or intestate heirs, or those called
upon to succeed by operation of law in case the decedent dies
without a valid will, or to some portion of the estate not disposed
of by will. (4) Devisees and legatees: A devisee is a person to
whom a gift of particular real property is given by virtue of a
will.22 On the other hand, a “legatee” is a person to whom a gift
of particular personal property is given by virtue of a will.21 (5)
Distinctions between voluntary heir and devisee/legatee: (i) a
voluntary heir (VH) succeeds to the whole estate or to an aliquot
portion thereof; while a devisee/legatee (D/L) is given
individualized items of property;24 (ii) at the precise moment of
death, VH become absolute owners of their undivided aliquot
share; but with respect to the individual properties of the estate,
they become co-owners and do not know which properties will
be adjudicated to them yet until partition and distribution; while
D/L bequeathed specific properties do not require court
adjudication to identify which particular properties become theirs
and title over these particular properties vests on the legatee or
devisee from the very moment of the testator’s death;25 and (3) in
case of preterition of a compulsory heir in the direct line, the
:oArt. 775, NCC.

21 Art. 782, par. l.NCC.
“Art. 782, par. 2, NCC.
21M.
“Justice J.B.L. Reyes, Observations on lhe New Civil Code, XV Lawyer’s Journal, No.
11, Nov. 30, 1950.
“Hacbang v. Alo, 772 SCRA 36 (2015).
J9JC9B0M
R52M9UH7
BOOK III. — SUCCESSION 245
institution of VH shall be annulled in its entirety, but the devises

and legacies shall remain valid insofar as the legitimes are not
impaired.26
1.2 Kinds of Succession: (a) Testamentary succession - that which
results from the designation of an heir, made in a will executed
in the form prescribed by law;27 (b) Legal or intestate succession
- that which takes place if a person dies without a will, or with
a void will, or one which has subsequently lost its validity;2’
(c) Mixed succession - that effected partly by will and partly
by operation of law,2’ and it may take place in the following
scenarios: (1) if the testator did not dispose of the entire estate,
that part which is not disposed of in the will shall be distributed
following the rules of intestate succession; (2) in case there is
preterition where the institution of heirs is annulled in its entirety
but there are devises and legacies, the portion of the estate that
would have been given to the instituted heirs shall be distributed
instead in accordance with the rules of intestate succession; and
(3) in case a portion of the estate becomes vacant and substitution,
accretion, or representation cannot take place; (d) Compulsory
succession - that which takes place compulsorily by operation of
law with respect to the legitime in favor of compulsory heirs.
1.3 Laws Governing Succession: (a) National law of decedent:
Article 16, par. 2 and Article 1039 of the Civil Code render
applicable the national law of the decedent, in intestate or
testamentary successions, with regard to the following aspects:
(1) the order of succession; (2) the amount of successional rights;
(3) the intrinsic validity of the provisions of the will; and (4) the
capacity to succeed.10 For example, the Court ruled that being a
foreign national, the intrinsic validity of Audrey O’Neill’s will,
especially with regard as to who are her heirs, is governed by her
national law, i.e., the law of the State of Maryland, as provided in
Article 16 of the Civil Code.31 In another case,32 the Court ruled
that the Philippine law on legitime does not apply if the decedent
is a foreigner because the issues of the intrinsic validity of the
26Art. 874, NCC.

2,Art. 779, NCC.
“Heirs of Ignacio Conti v. CA, 300 SCRA 345 (1988), citing Art. 960, par. I, NCC.
“Art. 780, NCC.
"Bellis v. Bellis, 126 Phil. 726 (1967).
3'Ancheta v. Guersey-Dalaygon, 490 SCRA 140 (2006).
"Bellis v. Bellis, supra.
J9JC9B0M
R52M9UH7
provisions of his will and the amount ofsuccessional rights should

be governed by the decedent’s national law. If the issue involves
any of the items mentioned above, the applicable law is the law
in force at the time of the decedent’s death, in the event that the
law has been changed. This is because the moment of death is
the determining point when an heir acquires a definite right to
the inheritance,33 hence, any change in the law with regard to
who are the heirs, the amount of successional rights, the intrinsic
validity of the testamentary provisions, and capacity to succeed
shall not result in the impairment of any right, (b) Forms and
solemnities of wills: (1) General rule: The forms and solemnities
of wills shall be governed by the laws of the country in which
they are executed.34 When a Filipino is in a foreign country, he is
authorized to make a will in any ofthe forms establ ished by the law
of the country in which he may be. Such will may be probated in
the Philippines.33 (2) Exception: Joint wills executed by Filipinos
in a foreign country shall not be valid in the Philippines, even
though authorized by the laws of the country where they may
have been executed.36 If the law governing forms and solemnities
has been changed, the applicable law shall be the law in force at
the time of the execution of the will.” (c) Testamentary capacity:
It is the national law of the person concerned that governs on
the matter of legal capacity,38 including the issue of testamentary
capacity. Additionally, it is the law in force at the time of the
execution of the will that determines whether or not the testator
has the requisite testamentary capacity. If he has the requisite
testamentary capacity at that time, any supervening incapacity
brought about by changes in the law does not invalidate an
effective will.3’ In the same way, the will of an incapable shall
not be validated by the supervening capacity brought about by
changes in the law.40
"Edades v. Edades, 99 Phil. 675 (1956).

"Art. 17, par. 1, NCC.
33Art. 815, NCC.
"Art. 819, in relation to Art. 818, NCC.
"Art. 795, NCC.
"Art. 15, NCC.
"Art. 801, NCC.
wId.
J9JC9B0M
R52M9UH7
2) Wills in General
2.1 Concept: (a) Definition: A will is an act whereby a person is
permitted, with the formalities prescribed by law, to control
to a certain degree the disposition of this estate, to take effect
after his death.41 A will is also defined as "a personal, solemn,
revocable andfree act by which a capacitated person disposes of
his property and rights and declares or complies with duties to
take effect after his death. ”42 (b) Requirement of disposition of
estate: It is not the essence of a will. For example, the Court ruled
that before the “expressed wishes of the deceased” may govern
the matter of his funeral pursuant to Article 307 of the Civil
Code, any inferences as to such wishes should be established by
some form of testamentary disposition.43 If the will disposes of
the estate, the conduct of probate becomes mandatory because
Article 838 of the Civil Code provides that "no will shall pass
either real or personal property unless it is proved and allowed
in accordance with the Rules of Court. ” Hence, a will which
does not contain any disposition of property does not have to be
probated. In Seangio v. Reyes;44 it was ruled that an instrument
which only provides for the disinheritance of a compulsory
heir should be probated because the disinheritance is an act
of disposition in itself since it results in the disposition of the
testator’s property in favor of those who would succeed in the
absence of the disinherited heir.
2.2 Characteristics of Wills: (1) It is an act mortis causa - meaning, it
takes effect only upon the death of the testator; (2) it is essentially
revocable - a will is essentially ambulatory; and at any time
prior to the testator’s death, it may be changed or revoked45
because it is not yet effective during the testator’s lifetime; (3)
it is an individual act - because Philippine laws do not allow
Filipino citizens to make a joint will regardless of the place of
1
its execution;46 (4) it is a unilateral act - because a will takes
effect upon the death of the testator even if the testamentary I
dispositions become inoperative by reason of the renunciation
4l Art. 783. NCC.

42Vitug v. CA, 183 SCRA 755, 758 (1990); citing 111 Tolentino, Civil Code, 1973 Ed., 26.
4,Valino v. Adriano, 723 SCRA 1 (2014).
“508 SCRA 177 (2006).
45Caiiiza v. CA, 268 SCRA 640 (1997), cited in Heirs of Rosendo Lasam v. Umengan, 510
SCRA 496 (2006).
“Art. 819, in relation to Art. 818, NCC.
J9JC9B0M
R52M9UH7
of the heirs, devisees, or legatees designated therein;47 (5) it is

a free act; otherwise, the will is void;48 (6) it is a free or solemn
act - because Philippine laws provide for certain formalities
that must be followed in the execution of wills;4’ (6) the right
is purely statutory - the right to dispose of property by will is
not natural but statutory;50 and (7) it is strictly a personal act -
it cannot be left in whole or in part to the discretion of a third
person, or accomplished through the instrumentality of an agent
or attorney,51 referring to the decisions or wishes contained
therein. Corollary to this rule, the testator cannot leave to the
discretion of a third person the following: (i) the duration or
efficacy of the designation of heirs, devisees, or legatees; (ii)
the determination of the portions which they are to take, when
referred to by name;52 and (iii) the determination of whether or
not a testamentary disposition is to be operative.53 Exception:
The testator may entrust to a third person the implementation of
the details of a testamentary disposition where the former left a
specific property or sums of money to a specified class or cause,
provided that the following requisites are complied with: (i) the
testator was the one who specified the class or cause who will
be the recipient of the property; and (ii) the testator has already
specified in the will the property or the amount of money to be
given to said class or cause."
2.3 Important Rules of Interpretation: (1) The intent or the will
of the testator is the supreme law in succession. Hence,
testate succession has always been preferred over intestacy.55
Consequently, upon the discovery and probate of the decedent's
will, the letters of administration shall be revoked and the intestate
proceedings shall be suspended.56 Additionally, an interpretation
that will render a testamentary disposition operative takes
precedence over a construction that will nullify a provision of
"An. 832, NCC.

"Art. 839 (3), (4), (5), and (6), NCC.
"Lee v. Tambago, 544 SCRA 393 (2008).
“Herreros v. Gil, G.R. No. L-3362, March 1, 1951.
"Art. 784, NCC.
"Art. 875, NCC.
"Art. 787, NCC.
"Art. 786, NCC.
“Hacbang v. Alo, 72 SCRA 36 (2015).
“Sec. 1, Rule 82, 1997 Rules of Court.
J9JC9B0M
R52M9UH7
the will.” (2) If there is an ambiguity, whether patent or latent,

the same may be resolved by determining the intention of the
testator by examining the words of the will and/or resorting to
parol or extrinsic evidence, but excluding the oral declarations
of the testator as to his intention.’8 The ambiguity is patent if
it appears upon the face of the instrument; it is latent when it
cannot be seen from a mere perusal of the will but appears only
upon consideration of extrinsic circumstances. (3) Properties
acquired during the interval between the execution of the will
and the death of the testator are not, as a rule, included among
the properties disposed of,” unless it should expressly appear in
the will itself that such was the intention of the testator,60 such
as when the will covers or speaks of the “whole estate” or the
“entire inheritance.”61 (4) Every devise or legacy shall cover all
the interest which the testator could devise or bequeath in the
property disposed of, unless it clearly appears from the will that
the testator intended to convey a less interests (5) If the testator,
heir or legatee owns only a part of, or an interest in the thing
bequeathed, the legacy or devise shall be understood limited to
such part or interest, unless the testator expressly declares that he
gives the thing in its entirety.63 When he expressly states that he
bequeaths the entire property, it must appear that he does so with
knowledge that the thing partly belongs to another; otherwise,
the legacy or devise is void under Article 930 of the NCC.
2.4 Testamentary Capacity and Witnesses: (a) Who are capacitated:
As a rule, all natural persons are qualified to make a will
unless: (I) he is expressly prohibited by law;“ (2) he is below
18 years of age at the time of its execution;6’ or (3) he is of
unsound mind at the time of its execution.66 If the testator has
no testamentary capacity, the will is void, (b) Soundness of
mind: (1) Reckoning noint: The test of testamentary capacity is
’’Bulunay, Jr. v. Martinez, 64 SCRA 452 (1975), citing Arts. 788 and 791, NCC.
’“Art. 789, NCC.
’’Art. 793, NCC.
“/</.
61II Vitug, Civil Law. 2003 Ed., 175.

“Art. 794, NCC.
“Art. 929, NCC.
“Art. 796, NCC.
“Art. 797, NCC.
“Art. 798, NCC.
J9JC9B0M
R52M9UH7 1
at the time of the making of the will.67 Supervening incapacity

does not invalidate an effective will.68 (2) Test of soundness of
mind: The three things that the testator must have the ability
to know to be considered of sound mind are as follows: (i) the
nature of the estate to be disposed of, (ii) the proper objects of
the testator’s bounty, and (iii) the character of the testamentary
act.6’ Hence, mere weakness of mind or partial imbecility from
disease of body or from age does not render a person incapable
of making a will;70 nor is the state of being forgetful,” provided
that he has the ability to know the three things mentioned above.
(3) Presumption of soundness of mind: There is a presumption
in favor of soundness of mind, unless one month or less before
the execution of the will, the testator was publicly known to be
insane.72 (c) Qualifications of witnesses: A holographic will need
not be witnessed.” Hence, the requirement of witnesses applies
only to ordinary wills. An ordinary will is required to be attested
and subscribed by at least three witnesses.74 The requirement
as to the number of witnesses is mandatory. If less than three
witnesses attested and subscribed to an ordinary will, the same
is void.” The following are not qualified to become a witness to
an ordinary will: (1) a person below 18 years of age; (2) a person
who is of unsound mind; (3) a blind person; (4) a deaf or dumb;
(5) an illiterate, or unable to read and write;76 (6) those convicted
of falsification of a document, perjury, or false testimony;77 and
(7) those not domiciled in the Philippines,7" if the will is executed
here in the Philippines. If the will is executed abroad, the testator
is allowed to follow the formalities of the place of execution.
Hence, it is the law of the place of execution that will apply in
determining the necessity of witnesses and their qualifications.
“’Alsua-Betts v. CA, 92 SCRA 332 (1979).

‘"Art. 801, NCC.
■"Ortega v. Valmonte, 478 SCRA 247 (2005). See also Art. 799, par. 2, NCC.
’"Alsua-Betts v. CA, 92 SCRA 332 (1979).
11 Baltazar v. Laxa, 669 SCRA 249 (2012), citing Torres and Lopez, de Bueno v. Lopez, 48
Phil. 772 (1926); and Sancho v. Abella, 58 Phi 1.728 (1933).
12Art. 800, NCC.
71Art. 810, NCC.
,4Art. 805, NCC.
’’Lee v. Tambago, 544 SCRA 393 (2008) and Aluad v. Aluad, 569 SCRA 697 (2008).
’‘Art. 820, NCC.
’’Art. 821(2), NCC.
’•Art. 821(1), NCC.
J9JC9B0M
R52M9UH7
If a person is made a beneficiary in the will (either as an heir,

legatee, or devisee), or his spouse, parent, or child, such person
does not become disqualified to become a witness™ but the heir,
devisee, or legatee becomes incapacitated to inherit from the
testator,80 unless there are three other competent witnesses to
such will.81 However, a mere charge on the estate of the testator
for the payment of debts due at the time of the testator’s death
does not prevent his creditors from being competent witnesses to
his will.82
3) Kinds and Formalities of Wills

3.1 Kinds ofWills: (a) Two kinds of wills: Under the Civil Code, there
are two kinds of wills which a testator may execute.” (1) Ordinary
or attested/notarial will: The first kind is the “ordinary or attested
will,” the execution of which is governed by Articles 804 to 809 of
the Civil Code.84 The ordinary will must be acknowledged before
a notary public by a testator and the attesting witnesses. Hence, it
is likewise known as a “notarial will.”83 (2) Holographic will: The
other kind of will is the “holographic will,” which Article 810
of the Civil Code defines as one that is entirely written, dated,
and signed by the testator himself. This kind of will, unlike the
ordinary type, requires no attestation by witnesses."6 Hence, if the
will is not entirely written in the testator’s own handwriting the
same must comply with the formalities required of an ordinary
will to be valid, (c) Common formal requirements: Both wills are
required to be: (1) in writing, except that a holographic will is
required to be written entirely in the testator’s own handwriting;
and (2) it must be executed in a language or dialect known to
the testator." If the will is executed in a language or dialect not
known to the testator, the will is void88 and cannot be probated.6’
There is no statutory' requirement to state in the will itself that
”An. 823, NCC.

“Ans. 1027(4) mid 823, NCC.
"'Art. 823, NCC.
82Art. 824, NCC.
"’Canada v. CA, 222 SCRA 781 (1993).
“M
also in Lee v. Tambago, 544 SCRA 393 (2008).
“Canada v. CA, supra.
"Canada v. CA, supra, citing Art. 804, NCC.
“Suroza v. Uonrado, 110 SCRA 388 (1981).
"’Acop V. Piraso, 52 Phil. 660 (1929).
J9JC9B0M
R52M9UH7
the testator knew the language or dialect used in the will.”

This is a matter that a party may establish by proof aliunde.9'
But there must be proof of compliance with such requirement
and the burden of proof is incumbent upon those who presented
the will for probate.92 In some cases, this lack of evidence was
considered cured by presumption of knowledge of the language
or dialect used in the will, as where the will was executed in a
certain province or locality in the dialect currently used in such
province or locality, in which the testator was a native or resident,
the presumption arises that the testator knew the dialect so used,
in the absence of evidence to the contrary.” In another case,94
where the will was in Spanish, the fact that the testatrix was a
“mestizo espaflola," was married to a Spaniard, made several
trips to Spain, and some of her letters in her own handwriting
submitted as evidence by the oppositor were in Spanish, gave
rise to the presumption that she knew the language in which the
will was written, in the absence of proof to the contrary.
3.2 Additional Formalities in Ordinary Wills: (1) it must be
subscribed at the end thereof, by the testator himself or by the
testator’s name written by some other person in his presence, and
by his express direction;95 (2) it must be attested and subscribed
by at least three credible witnesses in the presence of the testator
and of one another;99 (3) the testator or the person requested
by him to write his name must also sign every page, except
the last, on the left margin in the presence of the witnesses;”
(4) the witnesses must sign every page on the left margin in the
presence of the testator and of one another;99 (5) all pages must be
numbered correlatively in letters on the upper part of each page;99
(6) it must contain an attestation clause which expressly states
"Testate Estate of the Late Alipio Abada v. Abaja, 450 SCRA 264 (2005), citing Lopez
v. Liboro, 81 Phil. 429 (1948); see also Testate Estate of Jose J. Javellana v. Javellana, G.R. No.
L-13781, January 30, I960.
"Id.
“Testate Estate of Jose J. Javellana v. Javellana, supra.
nId., citing Abangan v, Abangan, 40 Phil. 476(1919) and Gonzales v. Laurel, 46 Phil, 750
(1923).
“Reyes v. Zuniga Vda. de Vidal. 91 Phil. 127 (1952).
95Art. 805, NCC, par. 1, NCC.
97Art. 805, par. 2, NCC.

"Id.
”ld.
J9JC9B0M
R52M9UH7
the following: (i) the number of pages used upon which the will
is written; (ii) the fact that the testator signed the will and every
page thereof, or caused some other person to write his name,
under his express direction, in the presence of the instrumental
witnesses; (iii) the fact that the witnesses witnessed and signed
the will and all the pages thereof in the presence of the testator
and of one another;100 and (7) it must be acknowledged before a
notary public by the testator and the witnesses.101
3.3 Requirement of Signature bv Testator: (a) Where to sign: He must
sign all pages containing testamentary dispositions on the left
hand margin; but on the last page, he must sign at the end of the
will. The end of the will is after the last testamentary disposition
(called the “logical end”). If signed at this portion, the will is
valid because the non-dispositive portions are not “essential”
parts of the will.102 Where the signature is followed by dispositive
provisions, even the portion of the instrument preceding the
signature cannot be probated, because the instrument must be
considered as a whole.103 (b) Two wavs of signing: He may sign it
personally or he may cause another person to write his name in his
presence and by his express direction, (c) If he signed personally:
The requirement is satisfied not only by the customary written
signature but by a thumbprint or thumbmark or other mark
affixed by him."” It is a matter of taste or preference since both
ways are good.105 However, a cross written after the testator’s
name is not a sufficient signature, unless it has been proven that it
was the testator’s habitual signature or there was an explanation
given why he used a cross when he knew how to sign.10*1 The
Court explained that the mere sign of the cross could not be
likened to a thumbmark as it does not have the trustworthiness of
the latter.107 (d) If he signed thru another: (1) Requisites: (i) the
testator’s name is written by some other person in his presence
'“Art. 805, par. 3, NCC.

■ 101 Art. 806, NCC,
"“Mitra V. Sublan-Guevarra, 862 SCRA32 (2018).
"“Ill Tolentino, Civil Code ofthe Philippines. 70 (1992 Ed.).
'“Matias v. Salud, G.R. No. L-10751, June 23, 1958; De Gala v. Gonzales and Ona, 53
Phil. 104 (1929); Dolar v. Diancin, 55 Phil. 479 (1930); Payad v. Tolentino, 62 Phil. 848 (1936);
Neyra v. Neyra, 76 Phil. 296 (1946); and Lopez v. Liboro, 81 Phil. 429 (1948).
"“Lopez v. Liboro, supra.
'“Garcia v. Lacuesta, 90 Phil. 189 (1951) and Matias v. Salud, supra.
mId.
J9JC9B0M
R52M9UH7
and by his express (not necessarily written) direction;108 (ii) such

person signed the will and every page thereof in the presence
of the testator and the instrumental witnesses;109 (iii) the person
requested by the testator signs the testator’s name, not his;"0
otherwise, the will cannot be allowed;1" and (iv) the fact that
the testator caused some other person to write his name in his
presence and by his express direction and also in the presence of
the instrumental witnesses is stated in the attestation clause."2 If
any of the foregoing requirements is not complied with, the will
is void. (2) Where to write testator’s name: The third person must
write the testator’s name at the end of the will"2 and not merely
in the body of the attestation clause."4 (3) Who may sign: It is
immaterial who writes the name of the testator, even one of the
subscribing or attesting witnesses may sign for the testator."8
3.4 Will Must be Attested and Subscribed bv Three Witnesses: (a)
Distinction between attestation and subscription: Attestation
consists in witnessing the testator’s execution of the will in order
to see and take note mentally that those things are done which the
statute requires for the execution of a will and that the signature
of the testator exists as a fact. On the other hand, subscription
is the signing of the witnesses’ names upon the same paper for
the purpose of identification of such paper as the will which was
executed by the testator."0 Attestation is the act of the senses,
while subscription is the act of the hand. The former is mental,
the latter mechanical."’ (b) If last nage also contains attestation
—ause: If *he last page (or end of the will) also contains the
attestation clause and it is signed by the witnesses only on the
left-hand margin, the will is void because an unsigned attestation
clause results in an unattested will. The signatures of the
witnesses on the left-hand margin only satisfy the requirement
108Art. 805, par. 1,NCC.

IMArt. 805, pars. 2 and 3, NCC. .
"°£r parte Santiago, 4 Phil. 692 (1905); Ex parte Arcenns. 4 Phil. 700 (1905); Guison
v. Concepcion, 5 Phil. 551 (1906); Balonan v. Abellana, 109 Phil. 359 (I960), citing Hand V.
Cabacungan, 21 Phil. 461 (1912).
'"Band v. Cabacungan, supra.
"2Art. 805, par. 3, NCC.
"J/n re Will of Siason, 10 Phil. 504 (1908).
'"Guison v. Concepcion, 5 Phil. 551 (1906).
'"Abaya v. Zalamero. 10 Phil. Rep., 357 (1908).
"‘Taboadav. Rosal, 1I8SCRA 195(1982).
"’Canada v. CA, 222 SCRA 781 (1993).
J9JC9B0M J
R52M9UH7
of subscription but not the requirement of attestation. Hence,

the will is void."’ On the other hand, if the witnesses signed
the attestation clause itself but not the left-hand margin of the
page containing such clause, the will is still valid because both
the requirements of attestation and subscription are satisfied."’
(c) Number of witnesses mandatory: The requirement as to the
number of instrumental witnesses is mandatory. If less than three
witnesses attested and subscribed thereto, the will is void.110 If
a witness, or his/her spouse, parent, or child, has been made a
devisee or a legatee in the will to which he/she acts as a witness,
he/she does not thereby become disqualified as a witness but the
legacy or devise is void, unless there are three other witnesses
to such will.121 On the other hand, the requirement of three
witnesses is not satisfied if one of the three witnesses also acted
as the notary public himself before whom the will was supposed
to have been acknowledged because the effect thereof is that
there is only two attesting witnesses to the will.122
3.5 Signature of Testator and Witnesses on All Pages in Each
Other’s Presence: (a) Signing of all pages: The testator or the
person requested by him to write his name must sign every page
on the left margin, except the last page which is required to be
signed at the end thereof, in the presence of the witnesses.12’ The
witnesses must also sign every page on the left margin in the
presence of the testator and of one another.124 The failure of all
three witnesses to sign the left margin of every page, even when
the testator’s signature appears thereon, is a fatal defect.125 The
law refers expressly to “page” and not to sheet or leaf or folio. A
sheet has two pages, the front and the reverse. If both pages of
the sheet or leaf contain testamentary dispositions, it is necessary
that both front and reverse sides should bear the signatures of
the testator and of each of the witnesses; otherwise, the will is
void.120 (b) Sinning on left margin is directory: The location of
""Aztielu v. CA, 487 SCRA 119 (2006) and Cagro v. Cagro, 92 Phil. 1032 (1953).
"’/</.
l20Lee v. Tambago, 544 SCRA 393 (2008); and Aluad v. Aluad, 569 SCRA 697 (2008).
,2lArt. 823, NCC.
l!2Cruz v. Villasor, 54 SCRA 31 (1973).
122Art. 805, par. 2, NCC.
124M.
l25Aspe v. Prieto, 46 Phil. 700 (1922).
l20/n re Estate of Saguinsin, 41 Phil. 875 (1920) and Vda. de Enriquez v. Abudja, G.R. No.
L-7188, August 9, 1954.
J9JC9B0M
R52M9UH7
the marginal signatures is not mandatory in character, provided,

of course, that such signatures are present in every page of the
will.137 In requiring such signature, the law evidently has for its
object to avoid the substitution of any of said sheets, thereby
changing the testator’s disposition. Hence, the purpose of the law
is satisfied regardless of the location of the marginal signatures.13’
(c) Signing in each other’s presence: The true test of “presence
of the testator and the witnesses” in the execution of a will is
not whether they actually saw each other sign, but whether they
might have been seen each other sign, had they chosen to do so,
by merely casting his eyes in the proper direction and without
any physical obstruction to prevent his doing so.13’ Thus, in a
case where one of the witnesses, after signing the will, was about
to leave the house when he saw the third witness in the act of
affixing the latter’s signature but did not actually see the signing,
it was ruled that the will was signed in his presence.130 But where
one subscribing witness was in the outer room at the time when
the testator and the other subscribing witnesses attached their
signatures to the instrument in the inner room, the will was
considered not signed in each other’s presence.131
3.6 All Pages Must be Numbered Correlativelv: (a) Mandatory
requirement: All pages of the will shall be numbered
correlatively.133 The purpose of the law in prescribing the
paging of wills is to guard against fraud, and to afford means of
preventing the substitution or of defecting the loss of any of its
pages.133 Considering the purpose of the requirement, even if one
of the pages was not numbered but the authenticity thereof and
the genuineness of the signatures of the testator and the witnesses
thereon are not questioned, the will is still valid, (b) How pages
must be numbered: The law requires that the pages be numbered
in letters, such as “one,” “two,” “three,” etc. However, it was
ruled that the requirement of the law is sufficiently complied with
l37Abangan v. Abangan, 40 Phil. 476; Avera v. Garcia, 42 Phil. 145 (1921); Nayve v. Mojal,
47 Phil. 153; and Antonio v. Anlonio, 47 Phil. 6.
mld.
lwNera v. Rimando, 18 Phil. 451 (1911) and Jaboneta v. □uslilo, 5 Phil. 541 (1906).
IMJaboneta v. Guslilo, supra.
13lNera v. Rimando, supra.
,,JArt 805, par. 2, NCC.
,33Lopcz v. Liboro, 81 Phil. 429 (1948), citing Abangan v. Abangan, 40 Phil. 476.
J9JC9B0M
R52M9UH7
if the folios were paged with the letters “A,” “B,” “C,” etc.,134 or
in Arabic numerals,135 or in any form of identification.136 (c) Place
of page number: The law requires that the page number be placed
on the upper part of each page. However, the location of the page
number is not important. If the paging should be placed in the
lower part, the testament is not void for this sole reason.137
3.7 Requirement of Attestation Clause: (a) Effect of absence: The
complete absence of attestation clause would result in the
invalidity of the will.138 In this regard, an unsigned attestation
clause results in an unattested will.13’ (b) Concent: An attestation
clause refers to that part of an ordinary will whereby the attesting
witnesses certify that the instrument has been executed before
them and that compliance with the essential formalities required
by law has been observed.1" (c) Act of witnesses: Since it is
a declaration made by the witnesses and not by the testator, it
need be signed only by the witnesses and not by the testator.141
However, an attestation clause that is made by the testator himself
substantially complies with the requirements of the law where
it contains all the facts required to be stated therein and signed
by all the witnesses together with the testator.143 (d) Contents of
attestation clause: It should state the following: (1) the number of
the pages used upon which the will is written; (2) that the testator
signed, or expressly caused another to sign, the will and every
page thereof in the presence of the attesting witnesses; and (3)
that the attesting witnesses witnessed the signing by the testator
of the will and all its pages, and that said witnesses also signed
the will and every page thereof in the presence of the testator and
of one another.143 (e) Effect of omission to state total number of
paces: The purpose of the law in requiring the clause to state the
number of pages is to safeguard against possible interpolation or
'“Aldaba v. Roque, 43 Phil. 379(1922).

llJUnson v. Abella, 43 Phil. 494; Nayve v. Mojal, 47 Phil. 152; Martir v. Martir, 70 Phil. 89.
"’Lopez v. Liboro, supra.
l3,Unson v. Abella, 43 Phil. 504 (1922).
'“Caneda v. CA, 222 SCRA 781,790 (1993), citing In re Estate ofNeumark, 46 Phil. 841
(1923).
’’’Azuela v. CA, 487 SCRA 119 (2006); Aluad v. Aluad, 569 SCRA 697 (2008).
citing Vda. de Ramos, et al. v. CA, 81 SCRA 393 (1978).
'"Abangan v. Abangan, 40 Phil. 476 (1919).
'"Cuevas v. Achacoso, G.R. No. L-3497, 18 May 1951, citing Aldaba v. Roque, 43 Phil.
378 (1922); see also Gonzales v. Carungcong, G.R. Nos. L-3272-73, November 29, 1951.
l43Art. 805, par. 3, NCC.
J9JC9B0M
R52M9UH7
omission ofone or some of its pages and to prevent any increase or

decrease in the pages.144 If the attestation clause does not state the
number of pages but the same is stated elsewhere in the will, such
as in the Acknowledgement, the Court ruled that the requirement
of the law was substantially complied with following the rule in
Article 809.'45 The Court explained that the rule of substantial
compliance in Article 809 must be limited to disregarding those
defects that can be supplied by an examination of the will itself.146
However, there could have been no substantial compliance with
the requirements under Article 805 if there is no statement in the
attestation clause or anywhere in the will itself as to the number
of pages which comprises the will.147 (f) Effect of failure to state
that all pages were signed: If the attestation clause failed to state
that all the pages thereof were signed by the testator and all the
witnesses but a mere examination of the signatures shows that
every page thereof were actually signed, the requirement of
the law has been complied with.148 Here, the rule of substantial
compliance applies. The rule of substantial compliance in
Article 809 must be limited to disregarding those defects that
can be supplied by an examination of the will itself: whether all
the pages are consecutively numbered; whether the signatures
appear in each and every page; whether the subscribing witnesses
are three or the will was notarized. All these are facts that the
will itself can reveal, and defects or even omissions concerning
them in the attestation clause can be safely disregarded.14’ (g)
Effect of failure to state that will was signed in each other’s
presence or that testator caused another to sign for him: The rule
on substantial compliance under Article 809 does not apply in the
following situations: (1) if the attestation failed to state that the
testator signed the will in the presence of the witnesses;'50 (2) if
the attestation clause failed to state that the witnesses signed the
I44Caneda v. CA, 222 SCRA 781 (1993), citing In The Matter of the Estate of Sanguisin,
41 Phil. 875 (1920); In re Will ofAndrada, 42 Phil. 180 (1921); see also Azuela v. CA, 487 SCRA
119 (2006); and Lopez v. Lopez, 685 SCRA 209 (2012).
l45Mitra v. Sablan-Cuevarra, 862 SCRA 32 (2018); Taboada v. CA, 118 SCRA 195 (1982);
and Singson v. Florentino, 92 Phil. 161 (1952).
,46Caneda v. CA, supra.
147Azuela v. CA, supra', see also Echavez v. Dozen Construction and Development Corp.,
632 SCRA 594 (2010).
l4,Nayve v. Mojal, 47 Phil. 152.
*4’Caneda v. CA, supra, cited in Azuela v. CA, 487 SCRA 119 (2006).
'“Testate Estate of Paula Toray, G.R. No. L-2415, July 31,1950; Gil v. Murciano. G.R. No.
L-3362, March I, 1951; Uy Coque v. Sioca, 43 Phil. 405.
J9JC9B0M
R52M9UH7
will in the presence of the testator,1’1 or in the presence of each

other;1’2 (3) or if the attestation failed to state the fact that the
testator did not personally sign the will, but requested another
person to write his name thereon, upon his express direction
and in his presence.1” In the foregoing situations, the omission
is fatal because the attestation clause is the only evidence of
such fact and evidence aliunde is not admissible to supply the
omission.154 (h) Effect of discrepancy in number of pages: Where
the Acknowledgment states that the will consists of seven pages,
including the acknowledgment, but the will actually consists of
eight pages including its acknowledgment, the Court refused to
apply the rule on substantial compliance underArticle 809 because
the discrepancy cannot be explained by mere examination of the
will itself but through the presentation of evidence aliunde.'55
3.8 Requirement of Acknowledgment: (a) Requirement: The will
must be acknowledged before a notary public by the testator
and the three instrumental witnesses.1’6 A notarial will that is
not acknowledged before a notary public by the testator ant
the instrumental witnesses is void and cannot be accepted fo:
probate.157 If the will is acknowledged before a notary public
only by the testator and not by the instrumental witnesses, the
same is void.158 Hence, if the notary public is also one of the three
witnesses, the requirement of acknowledgment is not complied
with because he cannot split his personality into two so that one
will appear before the other to acknowledge his participation
in the making of the will.15’ (b) Concept: If the testator and the
witnesses appeared before the notary public and avow to the
certifying officer the authenticity of their signatures and the
voluntariness of their actions in executing the testamentary
disposition, the requirement of acknowledgment is satisfied.
The notary public is not required to sign and affix his seal in the
presence of the testator and the witnesses because those acts are
151Quinto v. Morata, 54 Phil. 481.

l52Rodriguez v. Alcala, 55 Phil. 150 (193); Uy Coque v. Sioca, supra.
'’’Garcia v. Lacuesta, 90 Phil. 489.
l54Caneda v. CA, 222 SCRA 781 (1993).
’’’Lopez v. Lopez, 685 SCRA 209 (2012).
‘“Art. 806, NCC.
’’’Guerrero v. Bihis, 521 SCRA 394 (2007).
158Garcia v. Gatchalian, G.R. No. L-20357, November 25, 1967.
’’’Cruz v. Villasor, 54 SCRA 31 (1973).
J9JC9B0M
R52M9UH7
not part of the acknowledgment itself nor of the testamentary

act.'60 In the same way, Article 806 of the NCC does not contain
words requiring that the testator and the witnesses should
acknowledge the testament on the same day or occasion that it
was executed.161 Hence, the conflict between the dates appearing
on the notarial will does not invalidate the document, because
the law does not even require that a notarial will be executed
and acknowledged on the same occasion.162 (cl Acknowledgment
outside the place of commission: An acknowledgment taken
outside the territorial limits of the notary public’s jurisdiction
is void as if the person taking it were wholly without official
character.163 Outside of the place of his commission, a notary
public is bereft of power to perform any notarial act—he is not a
notary public.164 As such, a will which has been acknowledged by
the testatrix and the instrumental witnesses before a notary public
acting outside the place of his commission is void and cannot
be accepted for probate.165 (d) Mere jurat is fatally defective: A
will which does not contain an acknowledgment but a mere jurat
is fatally defective, as the express requirement of Article 806
is that the will be “acknowledged” and not merely subscribed
and sworn to.166 (e) Absence of residence certificate invalidates
will: The absence of notation of the residence certificates of
the notarial witnesses and the notation of the testator’s expired
residence certificate in the same acknowledgment make the
acknowledgement fatally defective and invalidates the will.'67
3.9 Snecial Requirements If Testator is Blind. Deaf, or Deaf-Mute:
(a) If testator is blind: (1) Requirement: A blind person is not
incapacitated to make his will. If the testator is blind, the will
should be read to him twice; once, by any one of the witnesses
thereto, and then again, by the notary public before whom it is
acknowledged.The foregoing rule applies not only to blind
testators but also to those who, for one reason or another, are
""Javdlana v. Ledesma, 97 Phil. 258 (1955).

"'Id.
'“Ortega v. Valmontc, 478 SCRA 247 (2005).
'“Guerrero v. Bihis, 521 SCRA 394 (2007).
“M
'"Id.
'“Azuela v. CA, 487 SCRA 119 (2006).
'“Lee v. Tambago, 544 SCRA 393 (2008).
'“Art. 808, NCC.
J9JC9B0M
R52M9UH7
incapable of reading their wills, either because of poor or

defective eyesight or because of illiteracy.169 (2) Effect of failure
to comply; If the foregoing requirements are not complied with,
the will is void.170 However, in a case where it was the lawyer
who drafted the will, who read the same aloud to the testator
and read them only once but it was read aloud in the presence
of the testator, the three instrumental witnesses and the notary
public, and the testator subsequently affirmed that the contents
thereof corresponded with his instructions, the Court held that
the requirement of the will has been sufficiently complied with.1’1
(b) If testator is deaf or deaf-mute: A deaf or deaf-mute is not
incapacitated to make his will. Where the testator is deaf or deaf-
mute, the law requires that he must personally read the will, if
able to do so. Otherwise, he should designate two persons who
would read the will and communicate its contents to him in a
practicable manner.172
3.10 Formalities Required in Holographic Wills: (a) Concept and
requisites: (1) Concept: A holographic will must be entirely
written, dated, and signed “by the hand of the testator himself.”172
It is subject to no other form, and may be made in or out of the
Philippines, and need not be witnessed.174 (2) Requisites: (i) it
must be entirely handwritten by the testator; (ii) it is dated by
the hand of the testator; and (iii) it is signed by the hand of the
testator himself.'” (3) Requirement of date: When there is no
appearance of fraud, bad faith, undue influence, and pressure and
the authenticity of the will is established, the will is still valid
even if the date contains only the month and year. The same is
considered valid compliance with Article 810.176 (4) Requirement
of signature: The signature must be by the hand of the testator.
Hence, signing by means of thumbprint is not allowed, (b) Effect
of insertion in another’s handwriting: If words written by another
person were inserted among the words written by the testator,
the following shall be the consequences: (1) if written after the
'MAlvurudo v. Guviola, 226 SCRA 348 (1993); Garcia v. Vasquez, supra.

mId.
"'Id.
1,2Art. 807, NCC.
1,1Art. 810, NCC.
'"Scangio v. Reyes, 508 SCRA 177 (2006).
1,5Art. 810. NCC.
'"Roxas De Jesus v. De Jesus, 134 SCRA 245 (1985).
J9JC9B0M
R52M9UH7
execution of the will: (i) and not validated by the testator with his
full signature, the will remains valid and the insertion is void; or
(ii) and validated by the testator with his full signature, the will
becomes void because the insertion becomes part of the will;'”
(2) if written contemporaneously to the execution of the will,
then the will is void because the insertion becomes part of the
will.'” (c) Rules when there are several dispositions: (1) Rule:
Dispositions of the testator written below his signature must be
dated and signed by him to make them valid as testamentary
dispositions.'” (2) Effect if not complied with: If one disposition
below the signature of the testator is not dated, even if signed, that
particular disposition will be void, without affecting the validity
of the others or of the will itself.'80 However, when a number of
dispositions appearing in a holographic will are signed without
being dated, and the last disposition has a signature and date, such
date validates the dispositions preceding it, whatever be the time
of prior dispositions.181 (d) Insertion, cancellation, erasure, or
alteration: In case of insertion, cancellation, erasure, or alteration
in a holographic will, the testator must authenticate the same by
his full signature;'82 otherwise, the same is considered not made
but the will is not invalidated.'8’ However, where the testator
himself crossed out the name of the heir named, and substituted
the name of another, without authentication, it was held that this
did not result in making the person whose name was crossed as
heir.184
3.11 Laws Governing Formalities of Wills: (a) When executed by
Filipinos: (1) Rule: When a Filipino is in a foreign country, he
is authorized to make a will in any of the forms established by
the law of the country in which he may be.'8’ Being valid, such
will may be probated in the Philippines.186 (2) Exception: Joint
wills executed by Filipinos in a foreign country shall not be valid
1 ”111 Tolentino, Civil Code of the Philippines, 115(1979 Ed.).

mld.
1’’Art. 812, NCC.
'“Ill Tolentino, Civil Code. 115 (1992 Ed.).
""Art. 813, NCC.
'“Art. 814, NCC.
'“Kalaw v. Relova, 132 SCRA 237 (1984).
'“Id.
'“Arts. 17 and 815, NCC.
'“Art. 815, NCC.
J9JC9B0M
R52M9UH7
in the Philippines, even though authorized by the laws of the

country where they may have been executed.'" A joint will is
one where the same instrument contains the wills of two or more
persons and is jointly signed by them. It is different from mutual
wills, which are separate wills of two persons for their reciprocal
benefit. What the law expressly prohibits is the making of joint
wills either for the testators’ reciprocal benefit or for the benefit
of a third person.™ Hence, the separate wills of the spouses
which contain essentially the same provisions and pertain to
property which in all probability are conjugal in nature may be
probated jointly.18’ (b) When executed by aliens: (1) The will of
an alien who is abroad produces effect in the Philippines if: (i)
made with the formalities prescribed by the law of the place in
which he resides; (ii) made according to the formalities observed
in his country; or (iii) made in conformity with the formalities
prescribed in the Philippines.190 (c) The will of an alien made
in the Philippines shall produce effect in the Philippines if: (i)
executed in accordance with the law of the country of which he
is a citizen; and (ii) which might be proved and allowed by the
law of his own country.'91 The prohibition against the making of
a joint will applies only to citizens of the Philippines.'93 The wills
of foreigners made in the Philippines shall be valid if executed in
accordance with the law of the country of which he is a citizen or
subject and which might be proved and allowed by the law of his
own country,'93 even if made in the form of a joint will.
4) Codicils and Subsequent Wills

4.1 Codicil: (a) Concept: A codicil is a supplement or addition to
a will, made after the execution of a will and annexed to be
taken as a part thereof, by which any disposition made in the
original will is explained, added to, or altered.'94 A codicil may
also revoke a previous will1” or cause its republication.1’6 If the
'"Art. 819, in relation to Art. SIS, NCC.

'aVda. de Perez v. Tolete, 232 SCRA 722 (1994).
"‘■‘Id.
'"Art. 816, NCC.
1,1 Art. 817, NCC.
192Art. 819, in relation to Art. 818. NCC.
1,3Art. 817, NCC.
194 Art. 825, NCC.
1,5Art. 830(2), NCC.
''"’Art. 836. NCC.
J9JC9B0M
R52M9UH7
later instrument makes dispositions independent of those in the

original will, without explaining or modifying such original will,
then it is a new will, not a codicil, (b) Form required: In order that
a codicil may be effective, it shall be executed as in the case of a
will.197 If the will to which a codicil refers is a holographic will,
the law does not require that the codicil be also in the form of a
holographic will.
4.2 Incorporation by Reference: The law allows documents and
papers to be incorporated or be made part of an ordinary will
by mere reference provided the following requisites are present:
(1) the document or paper must exist at the time of the execution
of the will; (2) the document or paper must be clearly described
and identified in the will, stating among others the number of
pages; (3) the document or paper must be identified by clear
and satisfactory proof as the document or paper referred to in
the will; and (4) the document or paper must be signed by the
testator and the witnesses on each and every page, except in case
of voluminous books of account or inventories.198
5) Revocation of Wills
5.1 Revocabilitv of Wills: (a) Rule: A will may be revoked by the
testator at any time before his death.199 In other words, a will is
essentially ambulatory; at any time prior to the testator’s death,
it may be changed or revoked.200 Any waiver or restriction of the
right to revoke the will is void.201 This rule holds true even if such
previous will had already been probated.202 (b) Laws governing
validity of revocation: (1) If revocation is done outside the
Philippines: (i) by a person not domiciled in the Philippines, the
revocation is valid when it is done according to the law of the
place where the will was made or the law of the place in which
the testator had domicile at the time of revocation;205 (ii) by a
person domiciled in the Philippines, the revocation must be done
in accordance with Philippine laws. (2) If revocation is done in
197Art. 826, NCC.

198Art. 827, NCC.
'"Art. 828, NCC.
“Caniza v. CA, 268 SCRA 640 (1997), cited in Heirs of Rosendo Lasam v. Umengan,
510 SCRA 496 (2006).
201 An. 828, NCC.
202Alsua-Betts v. CA, 92 SCRA 332 (1979), citing Palacios v. Palacios, 106 Phil. 739.
“‘An. 829, NCC.
J9JC9B0M
R52M9UH7
BOOK 111. —SUCCESSION 265
the Philippines, it must be done in accordance with Philippine

laws, whether the testator be domiciled in the Philippines or not."4
(c) Modes of revoking wills in Philippines: (I) by implication of
law; (2) by subsequent will, codicil, or subsequent instrument; or
(3) by physical destruction."’
5.2 Revocation bv Implication of Law: (a) How it takes place: When
certain acts or events take place subsequent to the making of
a will which nullify or render inoperative either the will itself
or some testamentary disposition therein, (b) Instances when it
takes place: (1) Upon the termination of the subsequent marriage
in Article 41 of the FC through the filing of the affidavit of
reappearance, the spouse who contracted the marriage in bad faith
shall be disqualified to inherit from the innocent spouse by testate
and intestate succession;"6 hence, any testamentary disposition
in the will of the innocent spouse in favor of the guilty' spouse
shall be revoked by implication of law; (2) If both spouses of
the subsequent marriage referred to in Article 41 of the Family
Code acted in bad faith, testamentary dispositions by one in favor
of the other are revoked by operation of law;"’ (3) In case of
annulment, the spouse who contracted the marriage in bad faith
shall be disqualified to inherit from the innocent spouse by testate
and intestate succession;208 hence, any testamentary disposition
in the will of the innocent spouse in favor of the guilty spouse
shall be revoked by implication of law; (4) Upon issuance of the
decree of legal separation, provisions in favor of the offending
spouse made in the will of the innocent spouse shall be revoked
by operation of law;200 (5) In case of preterition of compulsory
heirs in the direct line, whether living at the time of the execution
of the will or bom after the death of the testator; in which case
the institution of heirs shall be annulled but without affecting
the devises and legacies;2" (6) When the heir, devisee, or legatee
commits any of the acts of unworthiness which by express
provision of law will incapacitate him to succeed; in which ease
any testamentary disposition in favor of such heir, devisee, or
204Art. 829, NCC.

"’Art. 830, NCC.
’“Art. 43(5), FC.
"’Art. 44, FC.
"“Art. 50, in relation io An. 43(5), FC.
"’Art. 63(4), FC.
’"Art. 854, NCC.
J9JC9B0M
R52M9UH7 1
legatee is revoked;2" (7) When in the testator’s will there is a

legacy of a credit against a third person or of the remission of
a debt of the legatee and, subsequently after the execution of
the will, the testator brings an action against the debtor for the
payment of his debt, the legacy is considered revoked;212 and
(8) When the testator transforms the thing bequeathed in such a
manner that it does not retain either the form or denomination it
had, or when he alienates by any title or for any cause the thing
bequeathed or any part thereof, or when the thing bequeathed
is totally lost during the testator’s lifetime or after his death
without the heir’s fault, in which cases, the legacy is considered
revoked.213
5.3 Revocation by Subsequent Instrument: (a) How it takes place:
A will may be revoked by some will, codicil, or other writing
executed as provided in case of wills.214 The subsequent
instrument must also be executed following the formalities of a
will. An example of other writing is donation mortis causa, which
is required to be executed in the form of a last will and testament.
The revocation may be done either expressly or impliedly,
(b) Express revocation: (1) Concent: When the subsequent
instrument contains a revocatory clause expressly declaring the
revocation of the will or a part thereof. (2) Effect of disallowance
of subsequent instrument: There is no revocation of the previous
will if the subsequent instrument is disallowed because of failure
to comply with the formalities required of a will, inasmuch as
the revocatory clause in the subsequent instrument is void.21’
(3) Effect if subsequent instrument is valid but inoperative: The
revocation takes effect if the subsequent instrument is valid as to
formalities even if the will shall thereafter become inoperative
because of: (i) incapacity of the heirs, devisees, or legatees
designated therein; or (ii) renunciation or repudiation.216 (4) If
revocation is based on false or illeeal cause: The revocation of
a will based on a false cause or illegal cause is null and void.217
For the rule to apply, it is necessary that the fact or cause, with
’"Art. 1032, NCC.

"’See Arts. 935 and 936, NCC.
"’Art. 957, NCC.
214Art. 830(2), NCC.
"’Samson v. Naval, 41 Phil. 838 (1918) and Molo v. Molo, 90 Phil. 37 (1951).
"‘Art. 832, NCC.
"’Art. 833, NCC.
J9JC9B0M
R52M9UH7
regard to which the mistake was made, must appear upon the face
of the instrument, (c) Implied revocation: Subsequent instrument
contains no revocatory clause but its provisions are totally
incompatible with the previous will. Subsequent wills which do
not revoke the previous ones in an express manner, annul only
such dispositions in the prior wills as are inconsistent with or
contrary to those contained in the later wills.21’
5.4 Revocation bv Physical Destruction: (a) How it takes place: (1)
burning; (2) tearing; (3) cancelling; (4) obliterating the will;21’ or
(5) other forms of physical destruction, (b) Requisites: (i) At the
time of performing it, testator must have testamentary capacity;
(ii) destruction must be with intent to revoke (animus revocandi)-,
(iii) there must be evidence ofthe overt act of physical destruction;
and (iv) the revocation must have been a completed act. Animus
revocandi alone is not sufficient. It must be accompanied by the
overt physical act of burning, tearing, obliterating, or cancelling
the will carried out by the testator or by another person in his
presence and under his express direction.220 (c) Destruction
bv another person: The physical destruction need not be done
personally by the testator. The physical destruction may be done
by some other person provided the following requisites are
complied with: (i) the document destroyed was in fact the will
of the deceased; (ii) the overt act was at the decedent’s express
direction; and (iii) that the same was done in the presence of
said decedent.221 If the destruction by another person was not
authorized by the testator, the will is not revoked and parol
evidence is competent to prove the contents or provisions of the
will pursuant to Rule 77 of the Rules of Court.222 However, Rule
77 contemplates the probate of lost or destroyed attested/notarial
wills only. With respect to a holographic will, the same cannot
be probated in case it has been lost or destroyed and there was
no copy left, even if the loss or destruction was unauthorized.221
However, if there is a photostatic or Xerox copy left, then the
will may still be probated.224 (d) Doctrine of “dependent relative
2l,Art. 831, NCC.

“’Art. 830(3), NCC.
““Testate Estate of Adriana Maloto v. CA, 158 SCRA 451 (1988).
See also Art. 830(3), NCC.
222Timbol v. Manalo, 6 Phil. 254; Rule 77, Rules of Court.
!220an v. Yap, 104 Phil. 509 (1958).
“’Rodelas v. Aranza, 119 SCRA 16 (1982).
J9JC9B0M
R52M9UH7
revocation”: Where the act of physical destruction is connected

with the making of another will so as fairly to raise the inference
that the testator meant the revocation of the old to depend upon
the efficacy of a new disposition intended to be substituted, the
revocation will be conditional and dependent upon the efficacy of
the new disposition; and if, for any reason, the new will intended
to be made as a substitute is inoperative, the revocation fails and
the original will remains in full force.225 This is the “doctrine of
dependent relative revocation.”
6) Republication and Revival of Wills

6.1 Revival of Wills: (a) Concept: It is the process of renewing or
restoring, by operation of law, the operative force of a will which
has been lost because the will has been previously revoked by
implication of law or by a subsequent instrument, (b) If previous
will was revoked by subsequent instrument: If a previous will
was revoked expressly by a second will, the revocation of the
second will does not revive the first will.226 Hence, the force of
the previous will can only be re-established thru republication
either: (i) by reproducing the contents of a previous will (to
be republished) in a subsequent will; or (ii) by execution of
a codicil referring to the previous to be republished.227 On
the other hand, if a previous will was revoked impliedly by a
second will and the latter will is also revoked, the previous will
is automatically revived.22" (c) If previous will was revoked by
implication of law: In legal separation, provisions in favor of the
offending spouse made in the will of the innocent spouse shall
be revoked by operation of law upon the issuance of the decree
of legal separation.22’ However, upon the issuance of a decree of
reconciliation, the decree of legal separation is set aside.250 As
a consequence, the provisions in favor of the olfending spouse
made in the will of the innocent spouse are automatically revived.
6.2 Republication of Wills: (a) Concept: It is the re-execution or re
establishment, by a positive act of the testator, of the force of a
“5Molo v. Molo, 90 Phil. 37 (1951), citing Gardner, pp. 232,233.

“‘Art. 837, NCC.
wld.
“"Ill Tolentino, Civil Code of die Philippines, 145-146 (1992 Ed.); 11 Vitug, Civil Code,
200 (2003 Ed.).
“’Art. 63(4), FC.
2J0Sec. 23, Rule on Legal Separation; Art. 66(2), NCC.
J9JC9B0M
R52M9UH7
will which has been lost either because the will is void or it has
been previously revoked, (b) Two wavs of republishing wills: (1)
by reproducing the contents of a previous will (to be republished)
in a subsequent will;231 or (2) by execution of a codicil referring to
the previous will to be republished.232 The execution of a codicil
referring to a previous will has the effect of republishing the will
as modified by the codicil.233 If the previous will is void as to its
form, it can only be republished by reproducing the provisions
thereof in a subsequent will.234 There is no other way.
7) Probate of Wills
7.1 Concept: (a) Definition: To probate a will means to prove before
some officer or tribunal, vested by law with authority for that
purpose, that the instrument offered to be proved is the last will
and testament of the deceased person whose testamentary act
it is alleged to be; and that it has been executed, attested, and
published as required by law, and that the testator was of sound
and disposing mind. It is a proceeding to establish the validity of
the will.235 The probate is either: (1) ante mortem - that which is
had during the lifetime of the testator; or (2) post mortem - that
which is had after the death of the testator, (b) When probate
mandatory: So long as the will involves disposition of property,
the conduct of probate is mandatory. This is pursuant to the rule
in Article 838 that “no will shall pass either real or personal
property unless it is proved and allowed in accordance with the
Rules of Court.”231' Even if the will does not make an affirmative
act of disposition of the testator’s property but only provides for
the disinheritance of a compulsory heir, the probate of the will
cannot be dispensed with because the disinheritance is an act of
disposition in itself. The disinheritance results in the disposition
of the property of the testator in favor of those who would succeed
in the absence of the disinherited heir. Unless the will is probated,
the disinheritance cannot be given effect.237 Following this rule,
23lArt. 835, NCC.

232Art. 836, NCC.
mld.
i,4Art. 835, NCC.
“’Heirs of Rosendo Lasam v. Umengan, 538 SCRA 496 (2006), citing III Tolentino, Civil
Code ofthe Philippines, 1992 Ed., 147.
2,iId., citing Cafliza v. CA, 268 SCRA 640 (1997).
237Seangio v. Reyes, 508 SCRA 177 (2006).
J9JC9B0M
R52M9UH7
in testate succession, there can be no valid partition among the

heirs until after the will has been probated.23’ The heirs may not
disregard the provisions of the will unless those provisions are
contrary to law. Neither may they do away with the presentation
of the will to the court for probate, because such suppression of
the will is contrary to law and public policy. The law enjoins the
probate of the will and public policy requires it, because unless
the will is probated and notice thereof given to the whole world,
the right of a person to dispose of his property by will may be
rendered nugatory.23’ (c) Prescription and estoppel inapplicable:
Following the rule that probate is mandatory and is a matter of
public policy,240 a petition for probate is not subject to the statute
of limitations241 nor may it be prevented by the application of the
principle of estoppel.242 In one case,243 the heirs of the deceased
agreed to partition the estate, which was approved by the court in
estate proceedings; but three years after, a document purporting
to be the decedent’s last will and testament was discovered. It
was held therein that the probate of the will was not barred by
the intestate settlement of estate proceedings. But once probated,
an action for the “annulment” of a will may be barred by res
judicata and prescription.244
7.2 Issues in Probate Proceedings: (a) General rule: It should be
noted that probate proceedings deal generally with the extrinsic
validity of the will sought to be probated,243 particularly on the
following aspects: (1) whether the will submitted is indeed,
the decedent’s last will and testament; (2) compliance with
the prescribed formalities for the execution of wills; (3) the
testamentary capacity of the testator; and (4) the due execution
’’"Union Bank of the Phil. v. Santibanez, 452 SCRA 228 (2005). citing Vda. de Kilayko v.
Tengco, 207 SCRA 600 (1992).
’’’Guevarra v. Guevarra, 74 Phil. 479 (1943).
’"“Seangio v. Reyes, 508 SCRA 177 (2006). citing Guevarra v. Guevarra, 74 Phil. 479
(1943); Baluyut v. Pailo, 163 Phil. 81 (1976); Roberts v. Leonidas, 214 Phil. 30 (1984).
24lGuevana v. Guevarra, supra.
’"’Alsua-Betts v. CA, 92 SCRA 332 (1979); citing Testate Estate of the Late Procopia
Apostol Bcnedicta Obispo v. Obispo, 50 O.G. 614 (1979). See also Testate Estate of the Late
Alipio Abada v. Abaja, 450 SCRA 264 (2005), citing Fernandez v. Dimagi ba, 128 Phil. 450 (1967).
'"’Testate Estate of Adriana Maloto v. CA, 158 SCRA 451 (1988).
’"Gallanosa v. Arcangel. 83 SCRA 676 (1978).
’"’Dorotheo v. CA, 320 SCRA 12 (1999), citing Ajero v. CA, 236 SCRA 488 (1994); Acain
v. IAC, 155 SCRA 100 (1987); Pastor v. CA, 122 SCRA 85 (1983). See also Baltazar v. Laxa, 669
SCRA 249 (2012), citing Pastor, Jr. v. CA. 122 SCRA 85 (1983).
J9JC9B0M
R52M9UH7
of the last will and testament?46 Under the Civil Code, due
execution includes a determination of whether the testator was
of sound and disposing mind at the time of its execution, that
he had freely executed the will and was not acting under duress,
fraud, menace, or undue influence, that the will is genuine and
not a forgery,24’ that he was of the proper testamentary age, and
that he is a person not expressly prohibited by law from making a
will?48 (b) Exception: As a rule, courts in probate proceedings are
limited to pass only upon the extrinsic validity of the will sought
to be probated24’ and the intrinsic validity is not considered since
the consideration thereof usually comes only after the will has
been proved and allowed?30 However, the rule on probate is not
inflexible and absolute. Under exceptional circumstances, the
Court had, on more than one occasion, passed upon the intrinsic
validity of a will even before it had been authenticated?3' as
follows: (1) when the parties agree that the intrinsic validity be
first determined, the probate court may do so;232 (2) when the
defect of the will is apparent on its face or when the testamentary
provisions are of doubtful legality and the probate of the will may
become a useless ceremony if it is intrinsically invalid?33 and (3)
when the issue of intrinsic validity of the will is determinative
of the necessity of conducting the probate proceeding, then
practical consideration dictates that the probate court should first
resolve such issue; otherwise, the probate of the will may become
a useless ceremony?34 Examples of the third exception are the
following: (i) when the issue presented during probate is whether
the instrument is a donation inter vivos or mortis causa',™ or (ii)
when the issue presented during the probate is the preterition of
a compulsory heir in the direct line and the will does not contain
any devises or legacies, because if the claim is true, the conduct
see also Ajero v. CA, 236 SCRA 488 (1994).

’’’Dorotheo v. CA, supra, citing Mercado v. Santos, 66 Phil. 215.
24“/</., citing Arts. 796-798, NCC..
24’Reyes v. CA, 281 SCRA 277 (1997), citing Ajero v. CA, 236 SCRA 488 (1994) and
Cayetano v. Leonidas, 129 SCRA 522 (1984).
23“/<Z
23lAlsua-Betts v. CA, 92 SCRA 332 (1979).
’’’Reyes v. CA, 281 SCRA 277 (1997), ciling Nuguid v. Nuguid, 17 SCRA 499 (1966).
’’’Reyes v. CA. supra, ciling Nepontuceno v. CA, 139 SCRA 206 (1985) and Balanay v
Martinez, 64 SCRA 452 (1979).
’’’Morales v. Olondriz, 783 SCRA 151 (2016).
"’Del Rosario v. Ferrer, 630 SCRA 683 (2010).
J9JC9B0M
R52M9UH7
of separate proceedings to determine the intrinsic validity of its

testamentary provisions would be superfluous.256 However, if
there are devises and legacies in the will, the probate court may
not pass upon the issue of preterition.
7.3 Grounds for Disallowance of Wills: (1) failure to comply with the
formalities required by law; (2) testator was insane or otherwise
mentally incapable of making a will at the time of its execution;
(3) will was executed through force or undue duress, or the
influence of fear or threats; (4) will was procured by undue and
improper pressure and influence on the part of the beneficiary
or of some other person; (5) signature of testator was procured
by fraud; (6) testator acted by mistake or did not intend that the
instrument he signed should be his will at the time of affixing his
signature thereto;“7 and (7) testator was below 18 years of age at
the time of the execution of the will.258 When a will is declared
void because it has not been executed in accordance with the
formalities required by law, but one of the intestate heirs, after
the settlement of the debts of the deceased, pays a legacy in
compliance with a clause in the defective will, the payment is
effective and irrevocable.25’ It is a case of natural obligation.
7.4 Effect of Allowance of Wills: The probate of a will is conclusive
as to its due execution and extrinsic validity.260 The matters of
due execution of the will and the capacity of the testator acquires
the character of res judicata and cannot again be brought into
question, all juridical questions in connection therewith being
for once and forever closed. Such final order makes the will
conclusive against the whole world as to its extrinsic validity
and due execution.261 The intrinsic validity is another matter and
questions regarding the same may still be raised even after the
will has been authenticated.262
7.5 Probate of Wills of Foreigners: Our laws do not prohibit the
probate of wills executed by foreigners abroad although the same
“‘Nuguid v. Nuguid, 17 SCRA 499 (1966) and Morales v. Olondriz, 783 SCR A 151 (2016).
“’Art. 839, NCC.
“‘Art. 797, NCC.
“’Art. 1430, NCC.
’“Sec. 1, Rule 75. Rules of Court
261 Dorothco v. CA, 320 SCRA 12 (1999).
262/d., riling Estate of Hilario M. Ruiz v. CA, 252 SCRA 541; Maninung v. CA, 114 SCRA
473 (1982); Coronado v. CA, 191 SCRA 814. See also Casladeda v. Alemany, 3 Phil. 426.
J9JC9B0M
R52M9UH7
have not as yet been probated and allowed in the countries of

their execution. This is because a foreign will can be given legal
effects in our jurisdiction pursuant to Article 816.“’
8) Testamentary Succession: Legitime

8.1 Extent of Power to Dispose of Estate: (a) Not an absolute
right: The right of a person to dispose of his property by will
is not natural but statutory.’” Hence, Congress may provide
for limitations. The basic limitation on the testator’s power to
dispose of his estate is the concept of legitime, which refers
to that part of the testator’s hereditary estate which he cannot
dispose of because the law has already reserved it in favor of
the testator’s compulsory heirs.’65 The testator cannot deprive
his compulsory heirs of their legitime, except by way of a valid
disinheritance.’66 (b) Extent of testator’s right to dispose of his
estate: If the testator has no compulsory heirs, he may dispose
by will of all his estate or any part thereof in any manner
that he pleases and in favor of any person having capacity to
succeed,’67 in which case the entire estate is the disposable free
i
portion. On the other hand, if the testator has compulsory heirs,
he may dispose of his estate provided he does not deprive his
i compulsory heirs of their legitime.’65 He can only dispose of the
remaining portion of the estate after satisfying the legitime of
all compulsory heirs, which remaining portion is known as the
disposable free portion, (c) Testator cannot deprive compulsory
heirs of their legitime: The testator cannot deprive his compulsory
heirs of their legitime, except by way of a valid disinheritance.’6’
Testamentary dispositions that impair or diminish the legitime of
the compulsory heirs shall be inofficious or excessive and may be
I reduced upon the petition of the compulsory heir concerned.’70
What may be given in favor of a voluntary heir, devisee, or
legatee is only the disposablefree portion. Hence, the concepts of
institution of heirs, legacies and devises, substitution, conditions
“’Paluganos v. Palaganas, 640 SCRA 538 (2011).

’“Art. 738, NCC; Herreros v. Gil, G.R. No. L-3362, March 1, 1951.
“’Art. 886, NCC, cited in Arellano v. Pascual, 638 SCRA 826 (2010).
“’’Art. 904, par. 1, in relation to Art. 915, NCC.
“’Art. 842, par. I, NCC.
’“Art. 842, par. 2, NCC.
“’Art. 904, par. I, in relation to Art. 915, NCC.
”°Art. 907, NCC.
J9JC9B0M
R52M9UH7
and terms are applicable only to the disposable free portion, (d)
Testator cannot affect legitime: The testator cannot impose any
charge, burden, encumbrance, condition, or substitution of any
kind whatsoever upon the legitimes.271 Should he do so, the same
shall be considered as not imposed.272 The foregoing can only
be validly imposed upon the disposable free portion. Exception:
The only encumbrance that the testator may validly impose upon
the legitime is the prohibition against partition for a period not
exceeding 20 years.272 (e) Future legitime cannot be renounced
or compromised: Every renunciation or compromise as regards a
future legitime between the person owing it and his compulsory
heirs is void, and the latter may claim the same upon the death of
the former.27,1
8.2 Compulsory Heirs: (a) Kinds of compulsory heirs: (1) Primary
compulsory heirs - those who have precedence over and exclude
the secondary compulsory heirs;275 ( 2) Secondary compulsory
heirs - those who succeed only in the absence of the primary
heirs;276 and (3) Concurring compulsory heirs - those who succeed
together with the primary or secondary compulsory heirs.277
(b) Primary and secondary compulsory heirs: (1) Legitimate
decedent - the primary compulsory heirs are the legitimate
children and/or descendants; while the secondary compulsory
heirs are the legitimate parents and/or ascendants. (2) Illegitimate
decedent - his children or their descendants, whether legitimate
or illegitimate, will exclude the decedent’s illegitimate parents.
In other words, the illegitimate parents are compulsory heirs
only when the deceased does not have descendants, whether
legitimate or illegitimate.271 (c) Concurring compulsory heirs:
The surviving spouse and illegitimate children or the latter’s
descendants are concurring compulsory heirs. However, when
the decedent is illegitimate and he dies without leaving legitimate
descendants but he is survived by his illegitimate children
2,1 Arts. 904. par. 2 and 872, NCC.

2,2Art. 872, NCC.
2,JArt. 1083, NCC.
2,2Art. 905, NCC.
275Arellano v. Pascual, 638 SCRA 826 (2010), citing 111 Tolentino, Civil Code of the
Philippines. 252 (1992 Ed.).
mId.
mld.
n‘Art. 903, NCC.
J9JC9B0M
R52M9UH7
or the latter’s descendants, such illegitimate children or their

descendants shall exclude the decedent’s illegitimate parents, (d)
Collateral relatives are not compulsory heirs: With the exception
of the surviving spouse who is related to the decedent by affinity,
all compulsory heirs are relatives of the decedent in the direct
line. The collateral blood relatives, starting from the decedent’s
brothers and sisters, are not compulsory heirs.
8.3 Primary Comnulsorv Heirs: (a) Legitimate children or their
descendants: fl) Adopted children included: An adopted child is
considered a legitimate child of the adopter ‘‘for al! intents and
purposes and as such entitled to all the rights and obligations
provided by law to legitimate sons/daughters born to them
without discrimination of any kind,and these rights include
the right to the legitime and other successional rights granted
under the Civil Code.“° However, a mere ampun-ampunan,
without the benefit of formal (judicial) adoption, is neither
a compulsory nor a legal heir’81 because of such relationship
alone. (2) Conceived child included: A conceived child is
already a compulsory heir entitled to a legitime, provided it
be born later under the conditions required in Article 41 of the
Civil Code.’8’ (3) Even if from different marriages: Legitimate
children and their descendants succeed the parents and other
ascendants, without distinction as to sex or age, and even if they
should come from different marriages.’8’ (b) Rule of proximity:
In the legitimate descending line, the children exclude the
grandchildren and great-grandchildren of the decedent following
the rule of proximity—that the nearest in degree excludes the
more remote, except in cases where representation is proper.”4 If
all the legitimate children are living and with capacity to succeed
and none of them have been disinherited, only such children
succeed, to the exclusion of the other Ic; mate descendants,
(c) Subject to right of representation: In the event of vacancy
among the children by reason of predecease, disinheritance, or
mld.
““Art. 174(3), FC.
“’Lint v. I AC, 166 SCR A 451; Manuel v. Ferrer, 247 SCR A 476, citing Sotto v. Sotto, 43
Phil. 688; Aranda v. Coneepcion, 99 Phil. 709; Delgado Vda. de dela Rosa v. Heirs of Marciana
Rustia Vda. de Damian, 480 SCRA 334.
“’Quimiguing v. Icao, 34 SCRA 132; Art. 1025, par. 2,NCC.
“’Art. 979, NCC.
’“Art. 962, par. 1, NCC.
J9JC9B0M
R52M9UH7
incapacity, representation is allowed by law if the child who died

ahead of the testator, or who is disinherited or incapacitated, has
a child who may take his place.285 The legitime of the child who
died ahead of the testator, or who is disinherited or incapacitated,
shall go to his child or children.286 Hence, whenever there is
succession by representation, the division of the estate shall
be made per stirpes, in such a manner that the representative
or representatives shall not inherit more than what the person
they represent would inherit, if he were living or could inherit.287
However, if representation cannot take place because the one who
predeceased, was disinherited, or incapacitated does not have a
descendant who can represent him, the following shall be the
rules: (1) in case of predecease or disinheritance, the child who
died ahead or who is disinherited is no longer counted because
he is no longer a compulsory heir; (2) in case of incapacity, he
is still counted as one of the compulsory heirs but his share
of the legitime shall be given to the legal heirs of the testator
following the rules of intestate succession. In the latter case, his
share cannot accrue to the other children because the right of
accretion cannot take place with respect to the legitime.288 (d)
If vacancy is bv reason of repudiation: In the event that one of
the children is unwilling to accept the inheritance, his share in
the legitime cannot go to his children by representation because
“heirs who repudiate their share may not be represented.”2*’
Instead, his share of the legitime shall be distributed by intestacy
to the legal heirs of the testator. His share cannot accrue to the
other children because the right of accretion cannot take place
with respect to the legitime.290 The foregoing rule will only be
applicable if only one or some of the children repudiated their
shares. On the other hand, in case all the children survive but
all of them repudiated their inheritance, their legitimes cannot
go to their respective children by representation because heirs
who repudiate their share may not be represented.201 Instead, the
relatives next in degree, the grandchildren, shall inherit in their
’“Arts. 981,923, and 1035, NCC.

’“Art. 970, NCC.
“’Art. 974, NCC.
“‘Art. 1021. NCC.
“’Art. 977, NCC.
““Art. 1021, NCC.
“'Art. 977, NCC.
J9JC9B0M
R52M9UH7
own right as compulsory heirs.’” Hence, the division of the estate

shall be made per capita, or in equal portions, (e) Adopted cannot
be represented: If the child who died ahead of the testator, or
who is disinherited or incapacitated, is an adopted child, he may
not be represented by his descendants because the law requires
the representative to be capable of succeeding the decedent.’” In
adoption, the descendants of the adopted are total strangers to
the adopter because the relationship established by adoption is
limited solely to the adopter and the adopted.’94
8.4 Secondary Compulsory Heirs: (a) Legitimate parents or
ascendants: They are compulsory heirs only in case of absence of
legitimate children or descendants of the decedent.’” (b) Rule of
proximity: Among the ascendants, the rule of proximity applies
in determining who shall be entitled to a legitime; and in the
ascending line, the rule of proximity applies absolutely because
the law does not allow representation in the ascending line.’’6 If
both parents of the testator are living, the legitime reserved for
the legitimate parents shall be divided between them equally.’”
If one of the parents should have died, the whole legitime of
the ascendants shall pass to the survivor.’” If the testator leaves
neither father nor mother, but is survived by ascendants of equal
degree of the paternal and maternal lines, the legitime shall be
divided equally between both lines.’” If the ascendants should be
of different degrees, it shall pertain entirely to the ones nearest in
degree of either line.™
8.5 Concurring Compulsory Heirs: (a) Surviving spouse: (1) Void
marriage: If the marriage is void, the parties are not actually
spouses and the surviving party is not entitled to the successional
rights granted to a surviving spouse. A void marriage can still be
questioned even after the death of either party,”' and such issue
’’’Art. 969. NCC.

’’’Art. 973, NCC.
“‘Teotico v. Del Vai, 13 SCRA 406 (1965); Santos, Jr. v. Republic, 21 SCRA 379 (1967);
Sayson v. CA, G.R. Nos. 89224-25. January 23, 1992.
’’’Art. 887, NCC.
’“Art. 972, par. I. NCC.
’’’Art. 890, I st par., NCC.
”■/</.
“’Art. 972, 2nd par., NCC.
’"'Niftal v. Bayadog, 328 SCRA 122 (2000).
J9JC9B0M
R52M9UH7
may be raised during the settlement of the estate of the deceased

spouse.302 (2) Decree of legal separation: In case a decree of legal
separation is issued and it is the innocent spouse who died, the
surviving spouse (who is the offending spouse) is disqualified
to inherit from the deceased in succession by operation of
law.303 Hence, the surviving spouse is not a compulsory heir
of the deceased spouse, (b) Illegitimate children: (1) Filiation
must be established: Illegitimate children are compulsory heirs
of their parents;34* but only those who can duly establish their
filiation with the decedent upon the latter’s death are entitled to
successional rights.303 But an action to compel recognition may
also be integrated with an action to claim inheritance.304 The
two causes of action, one to compel recognition and the other
to claim inheritance, may be joined in one complaint.307 (2)
Illegitimate children may be represented: Upon the death of the
illegitimate child, his right to the legitime is transmitted to his
descendants, whether legitimate or illegitimate.308 Hence, in case
the illegitimate child predeceased his illegitimate parent, he can
be represented by his descendants, whether they are legitimate
or illegitimate, with respect to his legitime. The law also allows
representation of the illegitimate child by his descendants in case
of disinheritance3" and incapacity.310
8.6 Estate of Illegitimate Decedent: (a) When illegitimate parents
become compulsory heirs: If the testator is an illegitimate
person and he is survived by a descendant, whether legitimate
or illegitimate, the illegitimate parents are not compulsory heirs
and they are not entitled to any legitime whatsoever.311 Thus, the
illegitimate parents of the decedent can only become compulsory
heirs, if surviving alone, or with the surviving spouse of the
decedent.312 (b) Other illegitimate ascendants are not compulsory
heirs: Only the parents of illegitimate children are entitled
w-Enrico v. Heirs of Sps. Medinaceli, 534 SCRA 418 (2007).

w’Art. 63(4), FC.
xhArt. 176, FC.
501Art. 887, par. 3, NCC, In relation to Art. 175, FC.
>«Tayag v. CA, 209 SCRA 665 (1992) and Guy v. CA. 502 SCRA 151 (2006).
»’W.
»>Art. 902, NCC.
w-Art.923.NCC.
>'“Art. 1035, NCC.
ti'Art. 903, NCC.
>'!Art. 903, NCC.
J9JC9B0M
R52M9UH7
to legitime; the other ascendants are excluded, even when the

parents have predeceased them. In illegitimate filiation, the right
to succeed in the ascending line terminates with the parents of
the deceased illegitimate child."’ The other ascendants, like the
grandparents, are no longer compulsory heirs.
8.7 Amount of Legitime: (A) If Only One Class Survives: (a)
General rule: When compulsory heir(s) of the same kind survive
alone, without the concurrence of other kinds of compulsory
heirs, the legitime is one-half (!6) of the hereditary estate;’14 the
other one-half ('/a) is disposable free portion, (b) Exception: The
legitime is not one-half (A) but one-third ('/j) of the hereditary
estate, when the only surviving compulsory heir is the spouse
and the marriage was in artictilo mortis but the spouse who was
at the point of death at the time of the marriage died within three
months from the celebration of the marriage;’1’ the other two-
thirds (%) of the estate is disposable free portion, (c) Exception to
exception: In the foregoing situation, the legitime of the surviving
spouse is still one-half (A) of the hereditary estate when, prior to
the articulo mortis marriage, the parties lived as husband and wife
for more than five years."" (B) When Concurring Compulsory
Heir (CH) Survives with Legitimate Child/Descendant (LC D):
(a) When LC/D survive with surviving spouse (SS): If there is
only one LC, the legitime of the LC is one-half (‘/a); SS. one-
fourth (A); the other one-fourth (A) is disposable free portion."
Should there be several LCs. the legitime of the LCs is one-
half (A), to be divided equally among them;"8 SS is entitled
to a portion equal to the legitime of each LC;"’ the remaining
portion is disposable free portion, (b) When LC D survive with
illegitimate children descendants (1LCDI: the legitime ot LC
is one-half (’, ■•) of the hereditary estate, to be divided equally
between them;"’ while the legitime of each 1LC is one-halt (';)
ofthe share of each LC."' If the estate is insufficient to satisfy
11 '111 leleiuino. Civil Code oflhe Philippines, 332 (1979 Ed.).

"’Arts. 888, 1st par., 889, 1st par., 900, 901. and 903. NCC.
"’Art. 900. par. 2. NCC.
""Art. 900, par. 2. NCC.
"’Arts. 888, par. I and 892. par. I, NCC.
""Art. 888, 1st par., NCC.
"’An. 892. 2nd par.. NCC.
’-'"Art. 888, 1st par.. NCC.
"'Art. 895, NCC. as amended by Art. 176, FC.
J9JC9B0M
R52M9UH7
the legitimes of all, the legitimes of the LC cannot be impaired.

Hence, the other one-half (14) of the estate shall be divided
equally among the ILC. Therefore, there is no disposable free
portion, (c) When LC/D survive with SS and ILC: Follow the
rules mentioned above. However, if the hereditary estate is not
sufficient to satisfy the legitimes of all compulsory heirs: (1) the
legitime of the legitimate children cannot be impaired; and (2)
the legitime of the surviving spouse shall have preference over
those of the illegitimate children.’22 Hence, the remaining portion
of the estate after satisfying the legitimes of LC and SS shall
be divided equally among the ILC. (C) When Concurring CH
Survive with Legitimate Parents/Ascendants (LP/A): (a) When
LP/A survive with SS: LP/A, one-half (14) of hereditary estate;
SS, one-fourth (!4); disposable free portion, one-fourth (!4).’“
(b) When LP/A survive with ILC: LP/A, one-half (14); ILC, one-
fourth (14); disposable free portion, one-fourth (14).’24 (c) When
LP/A survive with SS and ILC: LP/A, one-half (14); SS, one-
eighth ('/«); ILC, one fourth (14); disposable free portion, one-
eighth ('/»).’“ (D) When SS Survives with ILC: SS, one-third
(14); ILC, one-third (14); disposable free portion, one-third (’/j).
(E) When Illegitimate Parents (1LP) Survive with SS: ILP, one-
fourth (14); SS, one-fourth (14); disposable free portion, one-half
('/’)•
8.8 Disposable Free Portion: (a) Extent of disposable free portion:

If the testator has no compulsory heirs, his entire estate is
disposable free portion.’20 If he has compulsory heirs, what is left
after satisfying the legitimes of all compulsory heirs shall be the
disposable free portion.’” Testamentary dispositions that impair
or diminish the legitime of the compulsory heirs shall be reduced
on petition of the same, insofar as they may be inofficious or
excessive.’2" (b) What mav be done as to disposable free portion:
The testator may validly institute heirs (referred to as “voluntary
heirs”), devisees, or legatees only insofar as the disposable free
portion is concerned. In addition, the testator may validly impose
a burden, charge, encumbrance, condition, or substitution only
’“Art. 895, last par., NCC.

“’Arts. 889, par. 1 and 893, par. I, NCC.
’"Arts. 889, par. 1 and 896, NCC.
’’’Arts. 889, par. 1 and 899, NCC.
’"Art. 842, 1st par., NCC.
’’’Art. 842,2nd par., NCC.
“‘Art. 907, NCC.
J9JC9B0M
R52M9UH7
with respect to the disposable free portion. He cannot impose

the same upon the legitime.529 Should he do so, the same shall be
considered as not imposed.550 The only encumbrance that he may
validly impose upon the legitime is prohibition against partition
for a period not exceeding 20 years.551 (c) Satisfy legitime first:
In testamentary succession, the legitime of the compulsory heirs
must first be satisfied before the remaining portion of the estate
can be distributed in accordance with the express will of the
testator. To illustrate, the testator left a will leaving his entire
estate to “S,” his son, and to “B,” one of his five brothers. He
also left a legacy of Pl million to his friend, “F.” At the time of
his death, his hereditary estate was valued at PIO million. Here,
satisfy first the legitime of S, which is one-half of the estate, orP5
million. The remaining P5 million is disposable free portion, out
of which the legacy of Pl million to F will have to be satisfied.
After satisfying the legacy to F, the remaining P4 million shall be
divided equally between S and B, as voluntary heirs.
8.9 Computation of Legitime: (a) Procedures: (1) The value of
the property which remains at the time of the decedent’s death
shall be determined.552 If the decedent was married, his property
shall consist of his exclusive property and his share in the net
assets of the absolute community and conjugal property after
liquidation; (2) All debts and charges which are not imposed
in the will shall be deducted,555 and if the debt or charge arises
for the first time from the will itself as a unilateral act of the
testator, it is non-deductible."4 The difference between the assets
and the liabilities shall then constitute the net hereditary estate;
(3) To the net value of the hereditary estate shall be added the
value of all donations by the testator that are subject to collation,
at the time he made them,555 whether in favor of a compulsory
heir or strangers, the value of which is determined at the time
when the donations were made. The total value obtained after
adding the value of all donations to the net hereditary estate is
the distributable estate, which is the basis for computing the free
“‘‘Arts. 872 and 904, 2nd par.. NCC.

“°M.
55lArl. 1083, NCC.
552Art. 908, NCC.
mtd.
’“HI Tolentino, Civil Code ofthe Philippines. 331 (1992 Ed.).
555Art. 908, NCC.
J9JC9B0M
R52M9UH7
portion and the legitime: (4) After the amount of the distributable
estate has been determined, and the legitime and the free portion
ascertained, donations which had been brought to collation
should next be imputed and charged against the corresponding
portion of the estate, (b) Rules in imputation of donations: (1)
Donations given to compulsory heirs should be charged to their
legitime.”6 Those donations made to strangers shall be charged
to that part of the estate which the testator could have disposed
by his last will;’” the latter shall be reduced insofar as they are
inofficious;”8 (2) Donations shall be respected as long as the
legitime can be covered, reducing, or annulling, if necessary, the
devises or legacies made in the will;”9 (3) The reduction of the
devises and legacies shall be pro rata, without any distinction
whatever except when the testator has directed that a certain
devise or legacy be paid in preference to others; it shall not suffer
any reduction until after all others devises and legacies have
been applied in full to the payment of the legitime;340 (4) If, after
annulling the legacies and devises, the legitimes cannot yet be
fully paid, then the donations must be reduced or annulled, as
the case may be, annulling or reducing the more recent ones.”1
In case of concurrence of legitimes, donations inter vivos and
devisesand legacies, the rule in Article 911 applies, in which case,
the devises and legacies shall be reduced pro rata, without any
distinction whatever. However, when the question of preference
is exclusively among the legatees and devises themselves, either
because there is no compulsory heir or the testator has already
provided in his will sufficient property to cover the legitime,
the rule in Article 950 of the NCC applies. There is an order of
preference to be followed under Article 950 if the question of
preference is exclusively among the legacies and devises.
9) Reserva Troncal or Reserva Lineal

9.1 Concent - Snecial kind of intestate succession: The reservatario
inherits from the prepositus by way of intestate succession.
However, it is a special kind of intestate succession for the
’“Arts. 909 and 910, NCC.

’’’Art. 909, NCC.
”’/</.; .uv also Arts. 752, 771, and 772, NCC.
’’’Art. 911(1), NCC.
""Art. 911(2), NCC.
“'Art. 773, NCC.
J9JC9B0M
R52M9UH7
following reasons: (1) its purpose is to assure return of reservable

property to the third-degree relatives belonging to the line from
which the property originally came upon the happening of the
resolutory condition;542 (2) the property is not immediately
inherited by the reservatario but takes a “detour” through the
reservista, thereby giving rise to the reservation before its
transmission to the reservatario;545 (3) while the reservatario
inherits the property from the prepositus upon the death of the
reservista, the reservatario is not required to be living at the time
of the death of the prepositus; and (4) in reserva troncal, not all
relatives of the prepositus within the fifth degree of relationship
can inherit the reservable property but only those within the third
degree of relationship.
9.2 Three Lines of Transmission: (1) First transmission from Origin
to Prepositus - The origin is either an ascendant of the prepositus
or his brother or sister. The prepositus, in turn, is a descendant
of the origin or his brother or sister. The mode of transmission
is through gratuitous title.544 (2) Second transmission from
Prepositus to Reservista - The reservista is another ascendant
(not the origin) of the prepositus. If the one who inherited from
theprepositus is a collateral relative, there is no reserva troncal.™
The mode of transmission is thru succession by operation of
law (either intestate succession or compulsory succession),546
meaning the reservista inherited from the prepositus either as a
legal or compulsory heir. (3) Third transmission from reservista
to reservatario - The reservatario inherits from the prepositus,
not from the reservista, by way of intestate succession, if at the
time of the death of the reservista the reservatario exists. To be
a reservatario; (i) he must be a third-degree blood relative of
the prepositus; (ii) he must come from the same bloodline where
the property came from, meaning, he must be a blood relative
of the origin;’47 and (iii) among the various reservatarios, apply
the rules of intestate succession to determine who shall inherit
J42Mendoza v. Delos Santos, 694 SCRA 74 (2013), citing De Papa V. Camacho, 144 SCRA
281 (1986).
"’De Papa v. Camacho, 144 SCRA 281 (1986).
’"Art. 891, NCC.
"’Mendoza v. Delos Santos, 694 SCRA 74 (2013).
"’’Art. 891, NCC.
"’Mendoza v. Delos Santos, supra.
J9JC9B0M
R52M9UH7
the property from the piepositus.3n For example, if the surviving

relatives of the prepositus are his paternal uncle and a nephew,
the latter shall exclude the former, applying the rule in Article
1009 that the absence of brothers, sisters, nephews, and nieces
of the decedent is a precondition to the other collaterals (uncles,
cousins, etc.) being called to the succession.34’
9.3 Requisites of Reserva Troncal: In order that a property may be
impressed with a reservable character the following requisites
must exist: (1) that the property was acquired by a descendant
from an ascendant or from a brother or sister by gratuitous
title; (2) that said descendant died without an issue (legitimate
descendants); (3) that the property is inherited by another
ascendant by operation of law; and (4) that there are relatives
within the third degree belonging to the line from which said
property came.3”
9.4 Rights ofReservista: (a) Nature ofinterest ofreservista: During his
lifetime, the reservista is the owner of the reservable property.351
However, his ownership is subject to a resolutory condition - that
at the time of his death, there must be a living reservatario.332 If
the resolutory condition is not fulfilled, the property forms part
of the estate of the reservista upon his death. If the resolutory
condition is fulfilled, the property shall not form part of the estate
of the reservista because it will be inherited by the reservatario
from the prepositus by way of intestate succession. Reserva
troncal is a case of delayed succession.353 (b) Nature of interest of
reservatario: During the lifetime of the reservista, the interest of
the reservatario is merely inchoate.154 (c) Disposition of property
bv reservista: Since he is the owner of the property, he can
dispose of the property by way of disposition inter vivos but the
disposition is subject to the same resolutory condition. If later
on the resolutory condition is not fulfilled, the transferee’s title
34BPadura v. Baldovino, 104 Phil. 1065 (1958), cited in De Papa v. Camacho, 144 SCRA
281 (1986).
34’Abellana v. Ferraris, 122 Phil. 319 (1965).
35(1Chua v. CF1 of Negros Occidental, Branch V, 78 SCRA 412 (1977).
35lMendoza v. Delos Sanios, supra, citing Edroso v. Sablan, 25 Phil. 295, 307-308 (1913).
’“Gonzales v. CF1 of Manila, supra, citing Sienes v. Esparcia, 1 SCRA 750 (1961).
’’’Padura v. Baldovino, 104 Phil. 1065 (1958); De Papa v. Camacho, 144 SCRA 281
(1986), citing Art. 1009, NCC.
354Gonzales v. CFI of Manila, 104 SCRA 479 (1981).
J9JC9B0M
R52M9UH7
BOOK 111. — SUCCESSION 285
would become absolute.355 Upon the happening of the resolutory

condition, the reservatario becomes, by operation of law, the
owner of the reservable property.356 Hence, he may impugn
any disposition inter vivos made by the reservista in favor of
a third person who acted in bad faith. However, the reservable
character of a property may be lost to innocent purchasers for
value.357 Hence, during the reservista’s lifetime, the reservatario
can preserve his interest over the property by compelling the
annotation of his right in the registry of property even while the
reservista is alive.358 In fact, in reserva troncal, the reservista has
the duty to reserve and to annotate the reservable character of
the property on the title.359 The reservista can likewise dispose
of the property by way of disposition mortis causa, which is
also subject to the same resolutory condition. If the resolutory
condition is fulfilled, the disposition becomes ineffective because
the property does not form part of the estate of the reservista.™
10) Testamentary Succession: Rules Applicable to Disposable

Free Portion
10.1 Institution of (Voluntary) Heirs: (a) Concept: The institution of
heir is an act by virtue of which a testator designates in his will
the person or persons who are to succeed hint in his property and
transmissible rights and obligations.361 However, a will shall be
valid even though it should not contain an institution of heir or
even if the institution does not comprise the entire estate.363 If the
will provides only for legacies or devises but no institution of
heir, the remainder of the estate after payment of the legacies and
devises shall pass to the legal heirs by intestate succession.363 If
the institution does not comprise the entire estate, the remainder
“’Gonzales v. CFI of Manila, supra, citing Lunsod v. Ortega, 46 Phil. 664; Gueco v.
Lacson, 118 Phil. 944; Mono v. Nequia, 93 Phil. 120.
““Mendoza v. Delos Santos, 694 SCRA 74 (2013), citing Gonzales v. CFI of Manila, 104
SCRA 479 (1981).
“’Dizon v. Galang, 48 Phil. 601 (1926).
“’Gonzales v. CFI of Manila, supra, citing Ley Hipotecaria de Ultramar, Arts. 168, 199;
Edrosov.Sablan, 25 Phil. 295(1913).
“’Mendoza v. Delos Santos, supra, citing Sumaya v. I AC, 201 SCRA 178 (1991).
’“Gonzales v. CFI of Manila, 104 SCRA 479 (1981).
36lArt. 840, NCC.
363Art. 841, par. l.NCC.
363Art. 841, par. 2, NCC.
J9JC9B0M
R52M9UH7
of the estate shall pass to the legal heirs.364 (b) Designation of

heir: (1) Rule: The heir must be designated by his name and
surname.3" (2) Effect of omission of name: The institution is still
valid if the testator has designated the heir "in such a manner
that there can be no doubt as to who has been instituted. ”366 (3)
If two persons have same names: If two or more persons have
the same names, the testator must indicate some circumstance
by which the instituted heir may be known.367 If among persons
having the same names and surnames, there is a similarity of
circumstances in such a way that, even with the use of other proof,
the person instituted cannot still be identified, none of them shall
be an heir.361 (4) Effect of error: An error in the name, surname,
or circumstances of the heir shall not vitiate the institution when
it is possible, in any other manner, to know with certainty the
person instituted?69 In other words, proof aliunde or extrinsic
evidence (other than the oral declaration of the testator as to his
intention) is admissible to ascertain the intention of the testator,
(c) Disposition in favor of unknown persons: (1) General rule:
Every disposition in favor of an unknown person shall be void?70
(2) Exceptions: (i) If the identity can become certain by some
event or circumstance, the disposition is valid;371 however, the
event or circumstance must appear in the will itself and it cannot
be shown by extrinsic evidence, either oral or documentary?72
(ii) A disposition in favor of a definite class or group of persons
shall be valid, provided that the testator already specifies the
class or cause and the specific property or amount of money to be
given to them?73 (iii) A disposition in favor of the poor in general,
without designation of particular persons or of any community,
shall be valid and shall be understood to be in favor of the poor
living in the locality designated by the testator or, in the absence
of such designation, in favor of the poor living in the domicile
1WM
“’Art. 843, NCC.
«Art'843,2nd P^-NCC.
i«An'843,15lPar-.NCC.
JMArt-844, par. 2, NCC.
W- 1st par., NCC.
“Art. 845, NCC.
’”I" Tolentino, Civil Code ofthe Philippines. 176 (1992 Ed.).

Art. 845, NCC.
J9JC9B0M
R52M9UH7
of the testator at the time of his death.374 (iv) A disposition made

in general terms in favor of the testator’s relatives in the form
of a legacy or devise is valid and shall be understood to be in
favor of the testator’s nearest blood relatives.373 (d) Institution
without designation of shares: If the heirs are instituted without
designation of shares, they shall inherit in equal parts.”6 This
rule applies only to the disposable free portion. Hence, if one of
the voluntary heirs is also a compulsory heir, his legitime must
first be satisfied and only the disposable free portion shall be
distributed equally among the voluntary heirs. Example: Testator
instituted as sole heirs to his entire estate his son (S) and his
brother (B). One-half (‘/i) of the estate shall be the legitime of S
and the remaining one-half (16) of the estate shall be distributed
equally between S and B, in equal shares, (e) Some individually
designated, others collectively: When the testator institutes
some heirs individually and others collectively as when he
says "I designate as my heirs J and B and the children of C. "
those collectively designated (the children of C, in the example)
shall be considered as individually instituted, unless it clearly
appears that the intention of the testator was otherwise.3” This
rule applies only to the disposable free portion. Hence, if some
of the voluntary heirs are also compulsory heirs, their legitimes
must first be satisfied and only the disposable free portion shall
be distributed in the manner provided in Article 847. Example:
The testator instituted as sole heirs to his entire estate his children
A, B, and C and the children of his deceased child D. D has two
children (E and F). Estate is P2 million. The legitimes of the
compulsory heirs should first be satisfied. Hence, one-half (14)
of the estate or Pl million shall be divided equally among A, B,
C, and D, each getting P250.000 as their legitime. The share of
D shall go to E and F, by representation, each getting PI25,000
as their legitime. The disposable free portion ol’Pl million shall
be divided equally among A, B C, E, and F pursuant to Article
847. (f) Institution of brothers and sisters: If the testator institutes
his brothers and sisters, and he has some of full blood and others
of half blood, the inheritance shall be distributed equally, unless
>uld
373Art. 959. NCC.
’’“Art. 846, NCC.
1,7An. 847, NCC.
J9JC9B0M
R52M9UH7
a different intention appears.”8 (g) Instituting a nerson and

the latter’s children: When the testator calls to the succession
a person and the latter’s children, they are all deemed to have
been instituted simultaneously and not successively,”’ unless the
contrary intention appears. As a consequence, they shall inherit
in equal parts. For example, the testator instituted as sole heirs
his brother, B, and the latter’s children, and B has four children,
all five of them shall succeed in equal parts, (h) Institution based
on false cause: (1) General rule: The institution is still valid and
the false cause is considered as not written.’80 (2) Exception: The
institution shall be annulled if it appears from the will that the
testator would not have made such institution if he had known
the falsity of such cause.’81 (3) Requisites for exception to apply:
(i) cause for the institution of heirs must be stated in the will; (ii)
cause must be shown to be false; and (iii) it must appear from
the face of the will that the testator would not have made such
institution if he had known the falsity of the cause.’82
10.2 Preterition: (a) Concept: Preterition consists in the omission of a
compulsory heir from the will, either because he is not named or,
although he is named as a father, son, etc., he is neither instituted
as an heir nor assigned any part of the estate without expressly
being disinherited—tacitly depriving the heir of his legitime.’8’
Preterition is a concept of testamentary succession and requires a
will.184 (b) Requisites: (1 )The heir omitted must be a compulsory
heir in the direct line, whether ascending or descending.385 The
omission of any compulsory heir, except the surviving spouse,’86
is preterition because all compulsory heirs are in the direct line,
including an adopted child,367 an illegitimate child,388 a conceived
’’“Art. 848, NCC.

’’’Art. 849, NCC.
““Art. 850, NCC.
"'Id.
’“Austria v. Reyes, 31 SCRA 754 (1970).
’“Morales v. Olondriz, G.R. No. 198994, February 3, 2016, citing Nuguid v. Nuguid, 17
SCRA 449 (1966) and Aznar v. Duncan, 17 SCRA 590; see also JLT Agro, Inc. v. Balansag,453
SCRA 211 (2005), citing Aznar v. Duncan, supra.
’“Heirs of Policarpio M. Ureta, Sr. v. Heirs of Liberate M. Ureta, 657 SCRA 555 (2011).
’“Art. 854, par. I, NCC.
’“Acain v. IAC, 155 SCRA 100 (1987).
”’/</.
’“Morales v. Olondriz, 783 SCRA 151 (2016).
J9JC9B0M
R52M9UH7
child,38’ and legitimate ascendants;390 (2) there must be total or

complete omission - meaning the heir did not also receive any
legacies, devises, or advances on his legitime,391 or the testator
allotted to a descendant a share less than the legitime since there
was no total omission of a forced heir,3’2 or the testamentary
dispositions do not cover the entire estate and something has
been left undisposed of;3’3 (3) the omitted compulsory heir
must survive the testator, 394 unless he can be represented by his
descendant; and (4) the omission of a compulsory heir in the
will must be by mistake, inadvertence, or through an oversight,
and not intentional, otherwise it will be a case of invalid
disinheritance.3’5 (c) Effects of pretention: (1) Effects: Preterition
shall annul entirely the institution of heirs, but the legacies
and devises remain valid insofar as they are not inofficious.396
Hence, if a will does not institute any devisees or legatees, the
preterition of a compulsory heir in the direct line will result in
total intestacy.3’7 (2) Distinguished from invalid disinheritance:
Invalid disinheritance shall also “annul the institution of heirs,”
but only “insofar as it may prejudice the person disinherited.”398
Otherwise stated, in ineffective disinheritance the nullity is
limited to that portion of the estate of which the disinherited heirs
have been illegally deprived.399 The omission of the surviving
spouse in the will is not a case of preterition but a case of invalid
disinheritance.
10.3 Substitution of Heirs: There are two kinds of substitution: simple
and fideicommissary. (A) Simple substitution: (a) Definition:
It is the appointment of another heir so that he may enter into
the inheritance in default of the heir originally instituted.400
’“’Quintiguing v. Icao, 34 SCRA 132 (1970).

’““Nuguid v. Nuguid, 17 SCRA 449 (1966).
391 Morales v. Olondriz, supra.
392JLT Agro. Inc. v. Balansag, 453 SCRA 211 (2005); citing Reyes-Barretto v. Barretto-
Datu, 125 Phil. 501.
’’’Ill Tolentino, Civil Code of die Philippines, 1992 Ed., 329.
’"Art. 854, par. 2, NCC.
3MSee 111 J.B.L. Reyes and Puno, Outline of Civil Law. 54; HI Tolentino, Civil Code ofdie
Philippines, 174-175 (1973 Ed.); Il Vitug, Civil Law, 213-217 (2003 Ed.); see also Concurring
Opinion of J. Melencio-Herrera in Acain v. IAC, 155 SCRA 100, 112.
)96Art. 854, par. l.NCC.
’"Morales v. Olondriz, supra, citing Nuguid v. Nuguid, supra.
’’“Nuguid v. Nuguid, supra, 458.
mld.
"“Art. 857, NCC.
J9JC9B0M
R52M9UH7
(b) Variations: (1) Brief - when two or more persons are

designated by the testator to substitute for only one heir;"1 (2)
Compendious - when there is only one person designated to
substitute for two or more heirs;"2 or (3) Reciprocal - when two
or more persons are reciprocally substitutes for each other, the
substitution is called reciprocal."3 (c) When simple substitution
takes nlace: In cases of; (1) predecease; (2) repudiation; or (3)
incapacity."1 If the simple substitution is without a statement of
the cases to which it refers, the same shall comprise the three
cases mentioned above (incapacity, predecease, or renunciation),
unless the testator has otherwise provided.405 (d) Effects of simple
substitution: The substitute is subject to the same charges and
conditions imposed upon the instituted heir, unless: (1) the
testator has expressly provided in the will the contrary; or (2)
the charges or conditions are personally applicable only to the
heir instituted."6 (B) Fideicommissarv substitution: (a) Concept:
In a fideicommissary substitution (FS), the first heir is strictly
mandated to preserve the property and to transmit the same later
to the second heir."7 (b) Requisites for substitution to become
fideicommissarv: (1) A first heir (known as the “fiduciary heir”)
called primarily to the enjoyment of the estate; (2) a second heir
(called the “fideicommissary heir”) to whom the property is
transmitted by the first heir; and (3) an obligation clearly imposed
upon the first heir to preserve and transmit to the second heir the
whole or part of the estate."" (c) Requisites for validity of FS: (1)
It must be expressly made"" - either by giving it such name, or
by imposing upon the first heir (fiduciary) the absolute obligation
to deliver the inheritance to a second heir (fideicommissary);410
(2) the substitution must not go beyond one degree from the
fiduciary411 - meaning, the second heir must be related to and be
"‘Art. K6<)(2), NCC.
"'Art. 862(3), NCC.

“'Art. 859, par. I, NCC.
"’Art. 859, par. 2, NCC.
""Art. 862, NCC.
"’Art. 863, NCC; Rabadilla v. CA, 334 SCRA 522 (2000).
"“Art. 863, NCC; De Perez v. Garchitorena, 54 Phil. 431 (1930).
""Art. 865, par. I, NCC.
■"“Art. 867( I), NCC; see also Crisologo v. Singson, 4 SCRA 491 (1962).
"'Art. 863, NCC.
J9JC9B0M
R52M9UH7
one generation from the first heir;412 hence, the fideicommissary

heir can only be either a parent or a child of the fiduciary heir for
they are the only relatives who are one generation or degree from
the fiduciary;415 (3) the fiduciary and the fideicommissary heirs
must be living at the time of the death of the testator;4'4 and (4) the
substitution must not burden the legitime.415 (d) Effects of invalid
FS: The fideicommissary substitution clause is considered as not
written or not imposed but the validity of the institution of the
first heir (the fiduciary) is not affected.416 (e) Effects of valid FS:
Upon the death of the testator, the first heir (fiduciary) acquires
only the right of usufruct while the second heir (fideicommissary)
acquires the naked ownership.417 Thus, the fiduciary is obliged to
preserve and to transmit the property to the fideicommissary.41’
The fideicommissary heir does not succeed the fiduciary for
he acquires his right directly from the testator upon the latter’s
death.41’ Thus, even if he should die before the fiduciary, his right
simply passes to his heirs.42” Since the fideicommissary is already
the naked owner of the property upon the death of the testator,
he can validly dispose of the property even during the lifetime
of the fiduciary provided that the disposition should not impair
the usufructuary right of the fiduciary, (f) Prohibition against
alienation: The law allows the testator to prohibit the alienation
of the inheritance (pertaining to the disposable free portion) for
a period not exceeding 20 years.421 If the prohibition exceeds 20
years, it will be considered valid only for 20 years but invalid as
to the excess.422 The same prohibition cannot be imposed upon
the legitime.425
■"’Ramirez v. Vda. de Ramirez, 111 SCRA704 (1982), citing III Tolentino, Civil Code of
the Philippines, 193-194 (1973 Ed.).
4,5W.
4,4/<Z.
4l5Art. 864, NCC.
■"’Art. 868, NCC.
4l,Crisologo v. Singson, 4SCRA49I (1962).
4l“Art. 863, NCC.
"’Art. 866, NCC.
42UM.
41lArt. 870, NCC.
422Rodriguez v. CA, 137 Phil. 371 (1969); see o/soOrendain, Jr. v. Trusteeship of the Estate
of Doha Margarita Rodrigucz, 591 SCRA 285 (2009).
425Art. 904, par. 2, NCC.
J9JC9B0M
R52M9UH7
10.4 Accretion in Testamentary Succession: (a) Concept: Accretion is

a right by virtue of which, when two or more persons are called
to the same inheritance, devise, or legacy, the part assigned to
the one who renounces or cannot receive his share, or who died
before the testator, is added or incorporated to that of his co
heirs, co-devisees, or co-legatees.424 (b) Accretion in testamentary
succession: In testamentary succession, accretion cannot take
place with respect to the legitime. Instead, accretion can only
take place with respect to the disposable free portion,425 either by
express will of the testator or by operation of law. (c) Requisites
for accretion by operation of law with respect to DFP: (1) There
are two or more voluntary heirs, devisees, or legatees who are
called to the same inheritance, same portion or same property; and
(2) there is a vacancy in the inheritance as a result of predecease,
incapacity, or repudiation.426 The words “one-halffor each " or
"in equal shares" or any other parts which, though designating
an aliquot part, do not identify it by such description as shall
make each heir the exclusive owner of determinate property, shall
not exclude the right of accretion.427 In case of money or fungible
goods, if the share of each heir is not earmarked, there shall be a
right of accretion.428 When the right of accretion cannot take place
with respect to the disposable free portion, the vacant portion
of the instituted heirs, devisees, or legatees, if no substitute has
been designated, shall pass to the legal heirs of the testator, who
shall receive it with the same charges and obligations.42’ (d) How
co-heirs, co-devisees, or co-legatees divide the vacant share: In
accretion, the heirs to whom the portion goes take it in the same
proportion that they inherit.4’0
10.5 Condition, Mode, and Term: (a) Power to impose condition,
mode or term: The testator is free to impose any condition, mode
or term on testamentary dispositions, whether the same is an
institution of heir, or a devise or a legacy.431 This applies only to
the disposable free portion because the testator is prohibited from
424Art 1015, NCC.

42iArt. 1021, NCC.
426Art. 1016, NCC.
427Art. 1017, par. 1,NCC.
421Art 1017, par. 2, NCC.
429Art 1022, NCC.
4)"Art. 1019, NCC.
4,lArts. 871 and 882, NCC.
J9JC9B0M
R52M9UH7
I
imposing upon the legitime any burden, encumbrance, charge,

term, condition, or substitution of any kind whatsoever.432 Should
he do so, the same is to be considered as not imposed.433 There is
only one exceptional encumbrance which the testator can validly
■ impose upon the legitime—he can forbid the partition of the
inheritance, including the legitime, for not more than 20 years.434
(b) Conditional testamentary disposition: When the acquisition
or extinguishment of successional rights is made to depend
■
upon the happening or non-happening of a future and uncertain
event, the testamentary disposition is conditional. (1) Suspensive
condition: Successional rights are transmitted only upon the
happening of the condition, although the effects thereof retroact
to the moment of the testator’s death.435 Hence, the capacity of
the conditional heir, devisee, or legatee must be determined, not
only at the time of the testator’s death, but also at the time of the
happening of the condition.436 Consequently, if the heir, devisee,
or legatee dies before the happening of the condition, although he
dies after the testator’s death, his capacity to succeed terminates
and thus renders the testamentary disposition inoperative and
without effect. (2) Resolutory condition: Successional rights are
acquired immediately upon the death of the testator but subject to
extinction upon the happening of the condition.437 If the condition
is fulfilled, the instituted heir, devisee, or legatee, as the case may
be, loses his right over the inheritance and the same shall be
passed on to those who are legally entitled to it—the substitute
(if one is provided), or the co-heir with a right of accretion or the
legal heirs, as the case may be. (3) Potestative condition: When
the fulfillment of the condition depends exclusively upon the
will of the heir, devisee, or legatee and must be performed by
him personally.438 A purely potestative condition must be fulfilled
after the testator’s death as soon as the heir, devisee, or legatee
learns of the testator’s death.435 This rule does not apply if the
following requisites are present: (i) the condition was already
complied with at the time he learns of the testator’s death; and (ii)
432Arts. 872 and 904, NCC.

433Art. 872, NCC.
434Art. 1083, NCC.
433Arts. 1181 and 1187, in relation to Art. 884, NCC.
436Art. 1034, NCC.
437Art. 1181, in relation to Art. 884, NCC.
4386 Sanchez Roman 615.
43’Art. 876, I st par., NCC.
J9JC9B0M
R52M9UH7
the condition is of such a nature that it cannot be fulfilled again.440

If the potestative condition consists in not doing or not giving
something, the instituted heir, devisee, or legatee is entitled to the
immediate delivery of the property after the testator’s death upon
giving ofa security or bond, known as "caucionmuciana. "w Ifthe
required security or bond is not given, the property shall be placed
under administration442 and shall remain therein until the security
is given. If the condition is violated, the heir, devisee, or legatee
must return the property, together with the fruits and interest443 in
favor of those who are legally entitled to it—the substitute (if one
is provided), or the co-heir with a right of accretion or the legal
heirs, as the case may be. In case the property or its fruits and
interest cannot be returned, the security shall have to answer for
the liability. (4) Casual and mixed condition: A casual condition
is one whose fulfillment depends exclusively upon chance and/or
upon the will of a third person. A mixed condition, on the other
hand, is partly dependent upon the will of the heir, devisee, or
legatee and partly upon chance and/or the will of a third person.
As a rule, a casual or mixed condition is deemed fulfilled if the
condition already occurs, whether before or after the testator’s
death, unless the testator provides otherwise.444 If at the time of
the execution of the will, the condition is already fulfilled and
the testator is unaware thereof, the condition is deemed complied
with already.443 However, if the testator had knowledge that the
condition is already fulfilled at the time of the execution of the
will, the condition must be fulfilled again unless it is of such
nature that it can no longer exist or be complied with again.446 (5)
Effect of impossible condition: Impossible conditions and those
contrary to law or good customs in testamentary dispositions shall
be considered as not imposed and shall not affect the validity
of the dispositions.44’ The same rule applies even if the testator
provides the contrary.441 (i) Prohibition to marry: As a rule, an
"’Art. 876,2nd par., NCC.

“'Art. 879, NCC.
"’Art. 879, NCC.
“Art, 877, 1st par., NCC.
“‘Art. 877, 3rd par., NCC.
“’Art. 873, NCC.
J9JC9B0M
R52M9UH7
BOOK Ill. — SUCCESSION 295
absolute condition not to contract a first or subsequent marriage

is not a valid condition and shall be considered as not written.449
However, the prohibition to contract a subsequent marriage is
valid if it is imposed on the widow or widower by the deceased
spouse or by the latter’s ascendants or descendants, in which case,
the condition is valid.4’0 But the prohibition can only be imposed
I upon the disposable free portion and cannot be imposed upon the
legitime. If the prohibition to marry is not absolute but relative
I
with respect to persons, time, or place, such condition is valid
and must be complied with unless the testator practically renders
it impossible for the heir to marry at all. A prohibition to marry
someone is a valid condition and must be complied with unless its
performance becomes impossible, (ii) Disposition cantatoria: A
disposition captatoria is one which imposes as condition that the
heir shall make some provision in his will in favor of the testator
or of any other person. Such disposition is void,451 but the validity
of the other provisions, including the will itself, shall not be
affected, (c) Testamentary dispositions with term: (1) Suspensive
term: The successional right is immediately transmitted to the
heir, devisee, or legatee upon the death of the testator, although
the demandability of such right is suspended until the arrival
of the day certain designated by the testator. As a consequence,
even if the heir, devisee, or legatee should die before the term
arrives but he dies after the death of the testator, his own heirs are
entitled to succeed to his rights to the inheritance, which must be
delivered to them upon the arrival of the term.4” (2) Resolutory
term: The heir, devisee, or legatee can demand immediately for
the delivery of the inheritance, devise, or legacy subject to the
termination of his right upon arrival of the term. Upon arrival of
the term, the inheritance, devise, or legacy shall pass to the legal
heirs of the testator.4” (d) Modal testamentary disposition: A
"mode " imposes an obligation upon the heir, devisee, or legatee,
but it does not affect the efficacy of his rights to the succession.4’4
If the institution of heir, devisee, or legatee is modal, the latter
can claim immediate delivery of the inheritance subject to the
449Art. 874, NCC.

'"Art. 874, NCC.
4!lArt. 875, NCC.
452Art. 878, NCC.
4”/<Z
454Rabadilla v. CA, 334 SCRA 522.
J9JC9B0M
R52M9UH7
giving of security or bond for the compliance with the obligation.

If the security or bond is not given, the heir, devisee, or legatee
may not demand for the delivery of the inheritance because the
same is a condition sine qua non for its delivery.4” In case of
failure to comply with the mode or obligation, the heir, devisee,
or legatee shall be compelled to return whatever he may have
received by virtue of the institution or of the devise or legacy,
together with the fruits or interests.4” In case he cannot, the bond
or security can be made to answer for any deficiency.
10.6 Legacies and Devises: (a) Concept: Devises are gifts of real
property given by virtue of a will.4” On the other hand, legacies
are gifts of personal property given by will.458 In legacies and
devises, specific properties are given by will and not an aliquot
part of the estate, (b) If thing belongs to another: (1) And testator
erroneously believed it was his: If, at the time of the execution of
the will, the testator erroneously believed that the thing belonged
to him, the legacy or devise is void.45’ But if afterwards, the
thing is acquired by the testator by whatever title, the devise or
legacy becomes valid.4®1 (2) And testator was aware it was not
his: If the testator knew that the thing did not belong to him, the
legacy or devise is valid. Even if the thing belonged to another,
the testator may, in his will, order that the thing be acquired in
order that it be given to a legatee or devisee.461 If the testator did
not expressly order for its acquisition, the legacy or devise is still
valid because it is presumed that it was his intention that such
thing be acquired.412 The obligation to acquire may be imposed
upon a particular heir, devisee, or legatee. In the absence of
express designation, such obligation rests upon the executor
or administrator. If the thing cannot be acquired for whatever
reason, the legacy or devise remains valid and the heir or estate,
as the case may be, shall be obliged to give the just value of the
thing.415 (c) If thing is only partly owned by testator: 11) Rule: If
455Art. 882, NCC.

,Sbld.
457Art. 782, NCC.
mld.
“’Art. 930, NCC.
M/d.
“'Art. 931, NCC.
“2I1I Tolentino, Civil Code ofdie Philippines. 399 (1979 Ed.).
“’Art. 931, NCC.
J9JC9B0M
R52M9UH7
the testator, heir, or legatee owns only a part of or an interest in

the thing bequeathed, the legacy or devise shall be understood
to be limited to such part or interest.4" (2) Exception: Unless it
clearly appears from the will that the testator intended to convey
a less interest or the testator expressly declares that he bequeaths
or devises the thing in its entirety."’ For the latter exception to
apply, the following requisites must be present: (i) there must be
an express declaration to that effect appearing in the will itself;
and (ii) there must be knowledge on the part of the testator that
the thing belongs partly to a third person; otherwise, the legacy or
devise is void, (d) If thing already belonged to legatee or devisee:
(1) If, at the time of the execution of the will, the thing already
belonged to the legatee or devisee, the legacy or devise shall be
ineffective.4“ (2) If, at the time of the execution of the will, the
thing did not belong to the legatee or devisee but he subsequently
acquires it, the rules are as follows: (i) If the thing originally
belonged to a third person at the time of the execution of the will
and the testator did not know of such fact, the legacy or devise
is void, and it continues to be void, even if the legatee or devisee
subsequently acquires it by any title;"’ (ii) If the thing originally
belonged to a third person at the time of the execution of the will
and the testator knew of such fact, the legatee or devisee can
demand reimbursement from the heir or the estate if he acquired it
thru onerous title, but he can claim nothing by virtue of the legacy
or devise if he acquired it gratuitously."8 (e) Rule of preference
among legacies and devisees: When the question of preference is
exclusively among the legatees and devisees themselves and the
estate is not sufficient to cover all the legacies or devises, their
payment shall be made in the following order: (1) remuneratory
legacies or devises; (2) legacies or devises declared by the
testator to be preferential; (3) legacies for support; (4) legacies
for education; (5) legacies or devises of a specific, determinate
thing which forms part of the estate; and (6) all others pro rata.1"
In case of concurrence of legitimes, donations inter vivos and
devises and legacies, the rule of preference in Article 911 is
"’Art. 929. NCC.

"’Art. 929, NCC.
’“Art. 932, NCC.
"’Art. 930, NCC.
""Art. 933, 2nd par., NCC.
"’Art. 950, NCC.
J9JC9B0M
R52M9UH7
the one applicable, as follows: (1) donations shall be respected

as long as the legitime can be covered, reducing or annulling,
if necessary, the devises or legacies made in the will; (2) the
reduction of the devises or legacies shall be pro rata, without
any distinction whatever. However, if the testator has directed
that a certain devise or legacy be paid in preference to others, it
shall not suffer any reduction until the latter have been applied
in full to the payment of the legitime, (f) Revocation of legacy
or devise bv operation of law: (1) If the testator transforms the
thing bequeathed in such a manner that it does not retain either
the form or the denomination it had;4’0 (2) If the testator by any
title or for any cause alienates the thing bequeathed or any part
thereof, it being understood that in the latter case the legacy or
devise shall be without effect only with respect to the part thus
alienated.4’1 If after the alienation the thing should again belong
to the testator, even if it be by reason of nullity of the contract,
the legacy or devise shall not thereafter be valid, unless the
reacquisition shall have been effected by virtue of the exercise of
the right of repurchase.4’2 (3) If the thing bequeathed is totally lost
during the lifetime of the testator, or after his death without the
heir’s fault. Nevertheless, the person obliged to pay the legacy or
devise shall be liable for eviction if the thing bequeathed should
not have been determinate as to its kind, in accordance with the
provisions of Article 928 of the NCC.4”
11) Vacancies in Succession

11.1 Predecease: (a) Effect of death of successors: Death extinguishes
civil personality.4’4 As a rule, therefore, a successor who dies
before the decedent does not acquire any successional right
and transmits nothing to his own heirs, unless the right of
representation takes place.4” (b) Effect in succession bv will: A
voluntary heir, devisee, or legatee who dies before the testator
absolutely transmits nothing to his heirs,4’6 because the right of
representation does not apply to the disposable free portion. In
4’“Art. 957(1), NCC.

471 Art. 957(2), NCC.
mld.
m\n. 957(3), NCC.
4,4Art. 42, NCC.
473Art. 856, NCC.
"‘Art. 856, par. 1, NCC.
J9JC9B0M
R52M9UH7
case of vacancy, what may apply to the disposable free portion in

the order of applicability are the following: (1) substitution; (2)
accretion; or (3) intestate succession, (c) Effect in succession bv
operation of law: (1) If no representative: I f the heir (compulsory
or legal heir) dies without leaving a representative, he is no
longer counted as an heir because his death extinguishes his civil
personality.4- To illustrate: D, the decedent, had three children
(A. B. and C) but A predeceased D and he did not leave any
descendant. The legitime will only be divided between B and
C. (2) If representation takes place: A legitimate child of the
decedent may only be represented by a lezitimaa descendant,
but not by his illegitimate descendants because of the barrier
rule which prohibits the illegitimate children from inheriting
ab intestato from the estate of the legitimate relatives of their
parents.4-’ In the same way, an adopted child of the decedent may
not be represented by his descendants, who are total strangers to
the decedent, because the relationship established by adoption is
limited solely to the adopter and the adopted and does not extend
to the relatives of the adopting parents or of the adopted child,
except only as expressly provided for by law." However, if an
illegitimate child predeceased the decedent, he can be represented
by his descendants, whether legitimate or illegitimate, both with
respect to his legitime (in testamentary succession) and his share
as a legal heir (in intestate succession).440 In intestate succession,
if the decedent died without leaving descendants, ascendants,
illegitimate children, or a surviving spouse, the entire estate
shall be inherited by the decedent’s brothers and sisters or their
chi Idren.431 In this situation, if one of the brothers or sisters of the
decedent died ahead of him but such brother or sister left a child,
said nephew or niece shall inherit by right of representation.
According to Article 975 of the Civil Code, “when children of
one or more brothers or sisters of the deceased survive, they shall
inherit from the latter by representation, if they survive with their
uncles or aunts." However, if only nephews and nieces survive,
they shal I inherit in their own right, in equal portions.444 If the one
477 Art. 42, NCC.

4,‘Art. 992. NCC.
47*Teotico v. Del Vai, 13 SCRA 406 (1965); Santos, Jr. v. Republic, 21 SCRA 379 (1967).
4MArts. 902 and 990.
4,1 Arts. 1003 and 1009, NCC.
482Art. 975, NCC.
J9JC9B0M
R52M9UH7
i
I
s
who predeceased the decedent is an ascendant, his or her death
extinguishes his or her civil personality because there is no right
of representation in the ascending line.483
11.2 Valid Disinheritance: (a) Deprivation of legitime: The testator

cannot deprive his compulsory heirs of their legitime,484 except
in consequence of a valid disinheritance.483 If the will provides
only for valid disinheritance, in which case the estate shall be
distributed by way of intestate succession, the disinherited
heir cannot likewise inherit as a legal heir, (b) Effect of
disinheritance: (1) If no representative: If the compulsory heir
has no representative (or descendant), he is no longer counted
as an heir. To illustrate: D, the decedent, had three children (A,
B, and C) but A was validly disinherited and he does not have a
descendant. The legitime will only be divided between B and C.
(2) If representation takes place: The law allows the children and
descendants of the disinherited heir to represent him with respect
to his legitime. The disinherited parent, however, is prohibited
from having the usufruct or administration of the property which
constitutes the legitime.486 If the disinherited heir is a legitimate
child of the decedent, the latter may only be represented by his
legitimate descendants but not by his illegitimate descendants
because of the barrier rule. If the disinherited heir is an
illegitimate child, the latter may be represented by his legitimate
and illegitimate descendants. If the disinherited heir is an adopted
child, the latter’s descendants cannot represent him. (c) Requisites
for valid disinheritance: (1) The disinheritance must be effected
through a will;487 (2) the legal cause thereof shall be specified
in the will;488 ( 3) the cause must be one of those authorized by
law;48’ (4) the truth of the cause must be proven, if contradicted;4"
(5) the heir disinherited must be designated in such a manner that
there can be no doubt as to his identity; and (6) the disinheritance
must be unconditional and total. If all the foregoing requirements
are not satisfied, the disinheritance is invalid, (d) Effect of invalid
4,3Art. 972, par. 1,NCC.

4,5Art. 915, NCC.
484M.
487Art. 916, NCC; see also Seangio v. Reyes, 508 SCRA 177 (2006).
488Arts. 916 and 918; see also Seangio v. Reyes, supra.
48’Art. 918, NCC, in relation to Arts. 919,920, and 921, NCC.
JMArt. 918, NCC.
J9JC9B0M
R52M9UH7
disinheritance: The effect of an ineffective/invalid disinheritance

is the annulment of the institution of heirs insofar as it may
prejudice the legitime of the person disinherited, but the devises
and legacies and other testamentary dispositions shall be valid
to such extent as it will not impair said legitime.491 Hence,
the legitime of the invalidly disinherited heir shall simply be
restored. If the testator did not dispose of the entire free portion,
the part not disposed of shall be distributed by intestacy. As a
consequence, the invalidly disinherited heir will likewise receive
a share as a legal heir, in addition to his legitime, (e) Authorized
causes for disinheritance: (1) Causes common to all compulsory
heirs: (i) conviction by final judgment of an attempt against life
of the testator, his or her spouse, descendant, or ascendant;492
(ii) accusing the testator of a crime for which the law prescribes
imprisonment for six years or more, if the accusation has been
found groundless or false;493 (iii) when the heir causes the testator
to make a will, or to change one already made, by fraud, violence,
intimidation, or undue influence;494 (iv) unjustifiable refusal to
support the parent or ascendant who disinherits such child or
descendant, for disinheritance of children and descendants;493 to
support the children or descendants, for disinheritance of parents
or ascendants;496 and to support the children or the other spouse,
for disinheritance of a spouse.497 (2) Other grounds to disinherit
descendants: (i) when a child or descendant has been convicted
of adultery or concubinage with the spouse of the testator; (ii)
maltreatment of the testator by word or deed, by the child or
descendant; (iii) when a child or descendant leads a dishonorable
or disgraceful life; and (iv) conviction of a crime which carries
with it the penalty of civil interdiction.4™ (3) Other grounds to
disinherit ascendants: (i) when the parents have abandoned their
children or induced their daughters to live a corrupt or immoral
life, or attempted against their virtue; (ii) when the parent or
ascendant has been convicted of adultery or concubinage with
the spouse of the testator; (iii) the loss of parental authority for
4,1 Art. 918, NCC.

49!Arts. 919( 1), 920(2), and 921(1), NCC.
493Arts. 919(2), 920(3), and 921(2), NCC.
494Arts. 919(4), 920(5), and 921(3), NCC.
495Art. 919(5), NCC.
496Art. 920(7), NCC.
497Art. 921(6), NCC.
498Art. 919, NCC.
J9JC9B0M
R52M9UH7
causes specified in the Family Code; and (iv) an attempt by one

of the parents against the life of the other, unless there has been a
reconciliation between them.4” (4) Other grounds to disinherit a
spouse: (i) when the spouse has given cause for legal separation;
and (ii) when the spouse has given grounds for the loss of parental
authority.“° (f) Effect of subsequent reconciliation: A subsequent
reconciliation between the offender and the offended person
deprives the latter of the right to disinherit, and renders ineffectual
any disinheritance that may have been made.501 If disinheritance
has already been made on any of the grounds which are also
causes for unworthiness and there is subsequent reconciliation,
the disinheritance is already rendered ineffectual’02 and he can no
longer be declared incapacitated.
11.3 Capacity and Incapacity to Succeed: (a) Qualifications to
succeed: (1) Possession of juridical capacity,503 except: (i) a
testamentary disposition by the testator of the whole or part of
his property for prayers and pious works for the benefit of his
soul, in general terms and without specifying its application; and
(ii) testamentary provisions made in favor of the poor in general,
without designation of particular persons or community,’04 are
both valid. In the first exception, one-half (%) of the property shall
be delivered to the church or denomination to which the testator
may belong to be used for such prayers and pious works, and the
other half to the State, for the benefit of public schools, and public
charitable institutions and centers.50’ In the second exception, the
disposition shall be limited to the poor living in the domicile
of the testator at the time of his death, unless it clearly appears
that the intention was otherwise.506 (2) Not specially disqualified
by law.“7 (3) The heir, devisee, or legatee must be living at
the moment the succession opens.50' However, a child already
conceived at the time of the death of the decedent is capable of
499Art. 920, NCC.

““Art.921.NCC.
“'Art. 922, NCC.
mld.
“’Art. 37, NCC.
’“Art. 1030, par. l.NCC.
“’Art. 1029, In relation Io Art. 1013, NCC.
““Art. 1030,par. l.NCC.
“’Art. 1024, NCC.
““Art. 1025,par. l.NCC.
J9JC9B0M
R52M9UH7
succeeding, provided that it be bom later under the conditions

prescribed in Article 41 of the NCC."" (b) Reckoning point in
determining capacity: In order to judge the capacity of the heir,
devisee, or legatee, his qualification at the time of the death of
■ the decedent shall be the criterion.’10 Exception: If the institution,
devise, or legacy should be conditional and the condition is
I suspensive, the capacity is to be determined not only at the time
of the decedent’s death but also at the time of the fulfillment of
the condition.”1 Hence, the death of the heir, devisee, or legatee
before the happening of the suspensive condition renders the
I testamentary disposition inoperative and without effect; hence,
i such heir, devisee, or legatee does not transmit anything to his
own heirs, even if his death occurs after that of the testator.”2
I (c) Persons specially disqualified to succeed: (1) By reason of
public policy (applicable only in testamentary succession): (i)
those made in favor of a person with whom the testator was
guilty of adultery or concubinage at the time of the making of the
will; (ii) those made in consideration of a crime of which both
the testator and the beneficiary have been found guilty; and (iii)
those made in favor of a public officer or his spouse, descendants
and ascendants, by reason of his public office.’” (2) By reason
of possible undue influence (applicable only in testamentary
succession): (i) the priest who heard the confession of the testator
during his last illness, or the minister of the gospel who extended
spiritual aid to him during the same period;”4 (ii) the relatives of
such priest or minister of the gospel within the fourth degree, and
the church, order, chapter, community, organization, or institution
to which such priest or minister may belong;”’ (iii) a guardian
with respect to testamentary dispositions given by a ward in
his favor before the final accounts of the guardianship have
been approved, even if the testator should die after the approval
thereof;”" (iv) any attesting witness to the execution of a will, and
the spouse, parents, or children, or any one claiming under such
’'"Art. 1025, par. 2, NCC.

’'“Art. 1034, par. I, NCC.
’"Art. 1034, pur. 3, NCC.
’’’Ill Tolentino, Civil Code ofthe Philippines, 555 (1979 Ed.).
’’’Art. 739, in relation to Art. 1028, NCC.
”4Art. 1027(1), NCC.
’’’Art. 1027(2), NCC.
’"■Art. 1027(3), NCC.
J9JC9B0M
R52M9UH7
witness, spouse, parents, or children,517 unless there are three

other competent witnesses to such will;518 and (v) any physician,
surgeon, nurse, health officer, or druggist “who took care” of the
testator during his last illness.51’ (3) Bv reason of unworthiness I
(applicable to both testamentary and intestate succession): (i)
parents who have abandoned their children or induced their
daughters to lead a corrupt or immoral life, or attempted against
I
I
their virtue;520 (ii) any person who has been convicted ofan attempt
against the life of the testator, his or her spouse, descendants, or I
ascendants;521 (iii) any person who has accused the testator of a
crime for which the law prescribes imprisonment for six years
or more, if the accusation has been found groundless;522 (iv) any
heir of full age who, having knowledge of the violent death of
the testator, should fail to report it to an officer of the law within
a month, unless the authorities have already taken action - this
prohibition shall not apply to cases wherein, according to law,
there is no obligation to make an accusation;523 (v) any person
convicted of adultery or concubinage with the spouse of the
testator;524 and (vi) acts that will cause unworthiness in relation
to the testator’s will, as follows: causing the testator to make a
will or to change an existing will, preventing the decedent from
making a will or from revoking his will; supplanting, concealing,
or altering the testator’s will; or falsifying or forging a supposed
will of the decedent.525 (d) Effects of incapacity or unworthiness:
(1) If the incapacity is by reason of any of the causes enumerated
in Articles 1027 and 1028, only the shares given to voluntary
heirs, devisees, and legatees are affected, but not the legitime.
Thus, if the incapacitated person is both a compulsory heir and a
voluntary heir, devisee, or legatee at the same time, only his share
as a voluntary heir, devisee, or legatee is rendered vacant and
there is no right of representation (with respect to the disposable
free portion). What may apply to the disposable free portion in
“’Art. 1027(4), NCC.

’"’Art. 823, NCC.
’"An. 1027(5), NCC.
““Art. 1032(1), NCC.
“'Art. 1032(2), NCC.
“’Art. 1032(3), NCC.
“'Art. 1032(4), NCC.
“4Art. 1032(5), NCC.
“’Art. 1032(6), (7), (8), NCC.
J9JC9B0M
R52M9UH7
the order of applicability are the following: (i) substitution; (ii)

accretion; or (iii) intestate succession. (2) If the incapacity is
by reason of unworthiness in Article 1032, the effect thereof is
exclusion from the entire inheritance. In intestate succession and
testamentary succession (but with respect to the legitime only),
representation may take place if the unworthy heir is a legitimate
child or an illegitimate child and the former has a legitimate
descendant (because the unworthy heir may not be represented
by his illegitimate child pursuant to the barrier rule) and the
latter has a descendant, whether legitimate or illegitimate. If the
unworthy heir is an adopted child, he may not be represented
by his descendants because the latter are not related to the
decedent. If the right of representation cannot take place because
the unworthy heir has no descendant who can represent him,
the share of the incapacitated heir shall go to his co-heir or co
heirs by right of accretion, in case of intestate succession."’ In
testamentary succession, however, the right of accretion cannot
take place with respect to the legitime."’ Instead, the vacant part
shall pass to the legal heirs of the testator following the rules of
intestate succession. In intestate succession, if the unworthy heir
is a brother or sister, he may be represented by his children if the
latter concur with their uncles and aunts."* However, if all the
brothers or sisters of the decedent are incapacitated, the children
of these brothers or sisters succeed by their own right and not
by the right of representation."'1 (e) Effect of pardon upon act
of unworthiness: If the testator pardons the act of unworthiness,
either expressly or impliedly, the cause of unworthiness shall
be without effect.”0 There is express pardon when the decedent,
having knowledge of the cause, subsequently condones it in
writing.”1 There is implied pardon when the testator, having
knowledge of the existence of a cause, institutes the offender
as heir, devisee, or legatee.”2 (f) Prescriptive period of action to
recover: The action for a declaration of incapacity and for the
recovery of the inheritance, devise, or legacy shall be brought
within five years from the time the disqualified person took
"’Art. 968, NCC.

"’Art. 1021, NCC.
"“Ill Tolentino, Civil Code of die Philippines, p. 460 (1979 cd.).
p. 501.
""Art. 1033, NCC.
"'/</.
mld.
J9JC9B0M
R52M9UH7
possession thereof.”’ The action may be brought by anyone who

may have an interest in the succession.”4
11.4 Acceptance and Repudiation of Inheritance: (a) Requisites of
effective acceptance or repudiation: (1) the person accepting or
repudiating the inheritance must be certain of the death of the
person from whom he is to inherit; and (2) he must likewise
be certain of his right to the inheritance.’” (b) Who may effect
acceptance or repudiation: (1) Rule: If the heir, devisee, or legatee
is capacitated to act and has the free disposal of his property, he
may personally accept or repudiate the inheritance.”6 Deaf-mutes
who can read and write may accept or repudiate the inheritance
personally or through an agent.”7 A married woman of age may
repudiate an inheritance without the consent of her husband.’”
(2) As to minors and incapacitated persons: (i) as to acceptance,
it can be made by their parents or guardians;”’ and (ii) as to
repudiation, parents or guardians may repudiate the inheritance
left to their wards only by judicial authorization.540 (c) Manner
and formalities: (1) As to acceptance: It may be express or
implied (tacit).54' An express acceptance must be made in a public
or private document.542 A tacit acceptance is one resulting from
acts by which the intention to accept is necessarily implied, or
which one would have no right to do except in the capacity of an
heir,54’ such as when the heir sells, donates, or assigns his right to
a stranger, or to his co-heirs, or to any of them; or if he renounces
the same, even though gratuitously, for the benefit of one or more
of his co-heirs; or he renounces it fora price in favor of all his co
heirs indiscriminately (this is no renunciation at all);5" or ifwithin
30 days after the court has issued an order for the distribution
of the estate in accordance with the Rules of Court, the heirs,
devisees, and legatees failed to signify to the court having
’’’Art. 1040, NCC.

’"/rf.
’’’Art. 1043, NCC.
’’“An. 1044, par. I, NCC.
’’’Art. 1048, NCC.
’’"Art. 1047, NCC.
’’’Art. 1044, par. 2, NCC.
’"Arts. 1044, par. 2, and 1048, NCC.
’■"Art. 1049, par. I, NCC.
’’’Art. 1049, par. 2, NCC.
’’’Art. 1049, par. 3, NCC.
’"Art. 1050, NCC.
J9JC9B0M
R52M9UH7
jurisdiction whether they accept or repudiate the inheritance, in

which case, they are deemed to have accepted the inheritance.515
(2) As to repudiation: To be effective, the renunciation of an
inheritance must either be: (i) by way of a notarial document
(public document); (ii) by way of an authentic document (or one
whose genuineness is admitted or clearly proved); or (iii) by way
of a petition presented to the court having jurisdiction over the
testamentary proceedings?46 (d) Effect of death: If the heir should
I
die without having accepted or repudiated the inheritance his right
shall be transmitted to his heirs.54’ (e) Effect of repudiation if heir
is both testamentary and intestate heir: (1) if he repudiates the
inheritance in his capacity as a testamentary heir, he is deemed to
have repudiated the inheritance also as an intestate heir;5" and (2)
if he repudiates the inheritance as an intestate heir, without the
knowledge of his being a testamentary heir, he is not deemed to
have renounced as testamentary heir and may therefore accept it
in the latter capacity.54’ (f) Effects of acceptance or repudiation:
(1) Retroactive: The effects of the acceptance or repudiation shall
always retroact to the moment of the death of the decedent?50 even
if the institution of the heir is subject to a suspensive condition.
Successional rights in institutions with a suspensive condition are
transmitted only upon the happening of the condition, although
the effects retroact to the moment of the testator’s death?51 (2)
Irrevocability: The acceptance or repudiation of an inheritance,
once made, is irrevocable and cannot be impugned?52 except:
(i) when the acceptance or repudiation was made through any
of the causes which vitiate consent (fraud, undue influence,
violence, intimidation, or mistake); and (ii) when an unknown
will appears.553 ( 3) In testamentary succession with respect
to disposable free portion: If a voluntary heir, devisee, or
legatee repudiates his share, what may apply to the disposable
free portion in the order of applicability are the following: (i)
substitution; (ii) accretion; or (iii) intestate succession. (4) In
’“Art. 1057, NCC.

146Art. 1051, NCC.
!4’Art. 1053, NCC.
’“Art. 1055, 1st par., NCC.
’’"Art. 1042, NCC.
”'111 Tolentino, Civil Code ofthe Philippines. 1979 Ed„ 243 (1979 Ed.).
”2Art. 1056, NCC.
J9JC9B0M
R52M9UH7
testamentary succession with respect to legitime: Representation

cannot take place because “heirs who repudiate their share
may not be represented.”554 The vacant part cannot likewise go
to the other compulsory heirs by right of accretion because no
accretion is allowed with respect to the legitime.555 Instead, the
vacant part shall pass to the legal heirs of the testator, who shall
inherit the same in their own right as legal heirs. However, if all
the compulsory heirs in the first degree (the children) repudiated
their inheritance, their respective children (the grandchildren)
will become compulsory heirs, not by right of representation, but
by their own right.556 ( 5) In intestate succession: The share of the
person who repudiates the inheritance shall always accrue to his
co-heirs.557 However, the accretion shall be in favor of co-heirs
“of the same degree.”558 If the inheritance should be repudiated
by all the nearest relatives called by law to succeed, those of the
following degree shall inherit in their own right.55’
12) Modes of Filling Up Vacancies

12.1 Modes of Filling Up Vacancies: (1) Substitution; (2) Accretion;
(3) Right of representation; and (4) Intestate succession.
12.2 Substitution: It is a mode of filling up vacancies in succession
that is applicable only to the disposable free portion. It cannot be
imposed upon the legitime.5" Since substitution is pursuant to the
express will of the testator, it does not find application in intestate
succession. The concept is already discussed in Section 10.3 of
this Book.
12.3 Accretion: Accretion, as a mode of filling up vacancies in
succession, is applicable to both testamentary and intestate
succession, (a) Testamentary succession: As already discussed in
Section 10.4 of this Book, in testamentary succession, accretion
applies only to the disposable free portion. It cannot take place
with respect to the legitime.561 As a consequence, if the part
554An. 977, NCC.

555Art. 1021, NCC.
’“Art. 969, NCC.
’’’Art. 1018, NCC.
558Art. 968, NCC.
’’’Art. 969, NCC.
"Arts. 904, par. 2 and 872, NCC.
“'Art. 1021, NCC.
J9JC9B0M
R52M9UH7
repudiated by a compulsory heir be the legitime, or ifa compulsory

heir is incapacitated and he does not have a descendant to
represent him, the vacant part shall pass to the legal heirs of the
testator and they shall inherit in their own right.562 (b) Intestate
succession: (1) If vacancy is by reason of repudiation, the share
of the person who repudiates the inheritance shall always accrue
to his co-heirs,363 because there is no representation in case of
repudiation.’" However, if all heirs of the same degree repudiate
the inheritance, in which case the right of accretion cannot take
place, the relatives in the next degree shall inherit in their own
right and cannot represent the person or persons repudiating
the inheritance.’" (2) If vacancy is by reason of incapacity.
Article 968 provides that the vacant part shall accrue to the
other relatives of the same degree (accretion), unless the right
of representation can take place. Hence, in case of incapacity in
intestate succession, the rule is right of representation first before
accretion. In the following situations in intestate succession,
the law allows representation: (i) if the incapacitated heir is a
child or descendant of the decedent, he can be represented by
his children or descendants,’" subject to the application of the
barrier rule;’6’ and (ii) if the legal heirs of the decedent are his
brothers and sisters and one or some of them are incapacitated to
inherit, the incapacitated brother or sister can be represented by
his children but only when the latter concur with their uncles and
aunts.’68 If the right of representation cannot take place because
the incapacitated heir has no children or descendants who
may represent him, his share shall accrue to the other co-heirs
of the same degree.’6’ In this situation, there is a real vacancy.
(3) If the vacancy is by reason of predecease and the right of
representation cannot take place because the heir who died ahead
of the decedent has no child or descendant, the other heirs inherit
in their own right and not by accretion. In intestate succession,
accretion cannot take place by reason of predecease. Here, there
is no vacancy, (4) If the vacancy is by reason disinheritance
’"An. 1021, 2nd par., NCC.

’"Art. 1018, NCC.
’"Art. 977, NCC.
’"Art. 969, NCC.
’“Art. 1035, par. 1,NCC.
’"Art. 992, NCC.
’“Arts. 975 and 1005, NCC.
’"Art. 968, NCC.
J9JC9B0M
R52M9UH7
because the testator only provides for disinheritance in his will

but did not make an affirmative disposition of the estate, in which
case, the entire estate will have to be distributed following the
rules of intestate succession minus the disinherited heir, but the
latter may be represented by his children or descendants.570 On the
other hand, if the disinherited heir has no children or descendants
who may represent him, the other heirs shall inherit in their own
right and not by accretion. Here, there is no vacancy because the
disinherited heir is no longer counted as one of the legal heirs.
12.4 Right of Representation: (a) Concept: Representation is the right
created by fiction of law, by virtue of which the representative
is raised to the place and degree of the person represented, and
acquires the rights which the latter would have if he were living
or if he could have inherited.571 By right of representation, a
more distant blood relative of a decedent is, by operation of law,
"raised to the same place and degree " of relationship as that of
a closer blood relative of the same decedent. The representative
thereby steps into the shoes of the person he represents and
succeeds, not from the latter, but from the person to whose estate
the person represented would have succeeded.572 (b) Applicable
only in succession bv operation of law: Representation takes
place only with respect to inheritance conferred by law.573
Thus, representation takes place only in the following kinds
of succession: (1) in legal or intestate succession; or (2) in
testamentary succession, only with respect to the legitime. Stated
otherwise, only legal and compulsory heirs may be represented.
There is no right of representation with respect to a voluntary
heir, devisee, or legatee who succeeds only by virtue of the will,
(c) Who mav be represented: (1) As to legitime in testamentary
succession: Among the compulsory heirs, only the children or
descendants of the testator may be represented by his children
or descendants.574 The ascendants and the surviving spouse may
not be represented. There is no right of representation in the
ascending line.575 (i) As to the legitimate children or descendants,
they may only be represented by their legitimate descendants
’’“Art. 923, NCC; 111 Tolentino, Civil Code ofthe Philippines, pp. 386-387 (1979 ed.).
’’’Art. 970, NCC.
’’’Bagunu v. Piedad, 347 SCRA 71 (2000); ciling Arts. 970 and 971, NCC.
’’’ill Tolentino, Civil Code ofthe Philippines, 447 (1992 Ed.).
574Arts. 972, par. 1 and 902, NCC.
”’Art. 972, par. 1,NCC.
J9JC9B0M
R52M9UH7
but not by their illegitimate descendants. Under the barrier rule,

an illegitimate child is prohibited to inherit from the legitimate
relatives of his parents.”6 (ii) As to the illegitimate children,
they can be represented by their descendants, whether they are
legitimate or illegitimate.”7 (iii) An adopted child may not be
represented because the children or descendants of the adopted
are not related to the adopter. In adoption, the children of the
adopted are total strangers to the adopter because the relationship
established by adoption is limited solely to the adopter and the
adopted and does not extend to the relatives of the adopting
parents or of the adopted child. (2) In intestate succession:
(i) The children or descendants of the decedent may also be
represented.’” The ascendants and the surviving spouse may
■ not be represented. The same rules earlier discussed are also
applicable, (ii) In the collateral line, a brother or sister may be
represented by his children when the latter survive with uncles
and aunts with whom they concur in the succession.’” However,
if only nephews and nieces survive, they shall inherit in their
own right and not by representation.”0 The right of representation
does not apply, however, to “other collateral relatives within the
fifth civil degree,” who are sixth in the order of preference in
intestate succession.”1 Among collateral relatives, except only
in the case of nephews and nieces of the decedent concurring
with their uncles or aunts, the rule of proximity is an absolute
rule.’” (d) Causes for representation: Representation is proper
when the cause of the vacancy in succession are the following:
(1) predecease;’” (2) incapacity;’” and (3) disinheritance.’”
However, the law does not allow representation in case of
repudiation. The law provides that “heirs who repudiate their
share may not be represented.””6 Should the part repudiated be
the legitime, the other co-heirs shall succeed to it in their own
”6Art. 992. NCC.

’’’Art. 902, NCC.
’’“Arts. 972, par. 1 and 990, NCC.
’’’Arts. 975 and 1005, NCC.
’“Art. 975, NCC.
’•'Bagunu v. Piedad, 347 SCRA 71 (2000).
’“/</.
’•’Arts. 902,981,982, 990 and 1003, NCC.
’“Arts. 968,975, 1005, and 1035, par. 1, NCC.
’’’Arts. 923 and 970, NCC.
’“Art. 977, NCC.
J9JC9B0M
R52M9UH7
right, and not by right of accretion,587 meaning, the vacant part

shall be inherited by the legal heirs of the testator following the
rules of intestate succession. In intestate succession, the share of
the person who repudiates the inheritance shall always accrue to
his co-heirs588 and the heirs to whom the portion goes by the right
of accretion take it in the same proportion that they inherit.58’ If
there are several relatives of the same degree, and one or some
of them are unwilling to succeed, his portion shall accrue to the
others of the same degree.590 However, if the inheritance should
be repudiated by the nearest relative, should there be one only,
or by all the nearest relatives called by law to succeed, should
there be several, those of the following degree shall inherit in
their own right and cannot represent the person or persons
repudiating the inheritance.591 (e) Other principles governing
representation: (1) The representative is raised to the place and
the degree of the person represented and he acquires the rights
which the latter would have if he were living or if he could have
inherited.592 As a consequence, whenever there is succession by
representation, the division of the estate shall be per stirpes, in
such manner that the representative or representatives shall not
inherit more than what the person they represent would inherit,
if he were living or could inherit.595 (2) The representative
does not succeed the person represented but the one whom the
person represented would have succeeded.594 As consequences:
(i) in order that representation may take place, it is necessary
that the representative himself be capable of succeeding the
decedent;595 and (ii) the representative may represent a person
whose inheritance he has renounced.596 Following this rule, if
the person to be represented is a legitimate child, his illegitimate
child cannot represent him in the succession to the estate of the
grandfather’9’ because of the barrier rule. On the other hand, if the
’“’Art. 1021, par. 2, NCC.

’“Art. 1018, NCC.
’“’Art. 1019, NCC.
’“Art. 968, NCC.
”'Art. 969, NCC.
’’’Art. 970, NCC.
’’’Art. 974, NCC.
’■"Art. 972, NCC.
’’’Art. 973, NCC.
’’‘Art. 976, NCC.
’’’Leonardo v. CA, 120 SCRA 890; Diaz v. CA, 182 SCRA 427.
J9JC9B0M
R52M9UH7
person represented is himself illegitimate, he may be represented

by his descendants, whether they are legitimate or illegitimate.”8
In other words, an illegitimate grandchild can represent in the
succession to the estate of an illegitimate grandparent. However,
an adopted child cannot represent the adopter with respect to
the estate of the parents of the adopter because the relationship
created by the adoption is between only the adopting parents
and the adopted child and does not extend to the blood relatives
of either party.m In addition, since the capacity and right to
succeed of the representative must be determined in relation to
the decedent and not the person represented, a son who cannot
inherit from his father on the ground of unworthiness can still
inherit from his grandfather by representing his father, provided
he himself is not unworthy with regard to the said grandfather.600
13) Intestate or Legal Succession

13.1 When Intestate Succession Takes Place: (a) With respect
to the entire estate: (1) when a person dies without a will; or
when the will is void; or when the will has subsequently lost
its “efficacy;”"1 and (2) when the institution of heirs is annulled
because of preterition and there are no devises and legacies.
(b) Partial intestacy: (1) when the institution of heirs is annulled
because of preterition but there are devises and legacies;"’ (2)
when the will does not dispose of all the property belonging to the
testator;604 (3) when a (voluntary) heir repudiates the inheritance,
there being no substitution and no right of accretion takes place;608
(4) when a (voluntary) heir dies before the testator or when he is
incapable of succeeding, there being no substitution and no right
of accretion or representation takes place;606 (5) with respect to
the legitime, when a compulsory heir repudiates the inheritance
because representation may not take place;"’ (6) with respect to
’’“Arts. 902.989, and 990, NCC.

’’’Suyson v. CA, G.R. Nos. 89224-25, January 23,1992.
“’ll I Tolentino, Civil Code ofthe Philippines, 461-462 (1979 Ed.).
“'Art. 960(1), NCC.
“’Art. 854, NCC; Morales v. Olondriz, G.R. No. 198994, February 3,2016.
“’/</.
"HArt. 960(2), NCC.
“’/</.
““Art. 960(3), (4), NCC.
“’Arts. 977 and 1021, NCC.
J9JC9B0M
R52M9UH7 1
the legitime, when a compulsory heir is incapacitated to inherit

and he cannot be represented because he has no descendants;
(7) with respect to the vacant part only, when the suspensive
condition attached to the institution of heir does not happen or is
not fulfilled;605 (8) with respect to the vacant part only, when the
resolutory condition attached to the institution of heir happens,
there being no substitution and no right of accretion takes place;
and (9) with respect to the vacant part, when the resolutory
term attached to the institution of heir arrives, there being no
substitution and no right of accretion takes place.
13.2 Basic Rules of Intestate Succession: (1) Order of succession;
(2) Rule of preference of lines, concurrence, and exclusion;
(3) Rule of proximity, but subject to the right of representation;
(4) Rule of equal division, subject to the rule that relatives of the
full blood shall inherit double than that of the half blood; and
(4) the Barrier rule.
13.3 Relationship: (a) Determination of proximity: (1) Proximity of
relationship is determined by the number of generations. Each
generation forms a degree.™ (2) A series of degrees forms a line,
which may be either direct or collateral.610 (b) Direct line: (1)
A direct line is that constituted by the series of degrees among
ascendants and descendants.611 For example, parents, children,
and grandparents are within the direct line. The direct line is either
descending or ascending.612 The descending direct line unites the
head of the family with those who descend from him.613 (2) The
ascending direct line binds a person with those from whom he
descends.6” (c) Collateral line: A collateral line is that constituted
by the series of degrees among persons who are not ascendants
and descendants, but who come from a common ancestor.613 For
example, brothers and sisters are collateral relatives and their
common ancestors are their parents, (d) How to count decrees:
In the direct line, ascent is made to the common ancestor. Thus,
“"Art. 960(3), NCC.

“"Art. 963, NCC.
6l6Art. 964, par. I, NCC.
‘"Art. 964, par. 2, NCC.
6l,Art. 965, par. 2, NCC.
6liArt. 964, par. 3, NCC.
J9JC9B0M
R52M9UH7
the child is one degree removed from the parent, two from the
grandfather, and three from the great-grandparent.616 In the
collateral line, ascent is made the common ancestor and then
descent is made to the person with whom the computation is to be
made. Thus, a person is two degrees removed from his brother,
three from his uncle, four from his cousin, and so forth.61’ (e) Full
and half blood: Full blood relationship is that existing between
persons who have the same father and the same mother.616 Half
blood relationship is that existing between persons who have the
same father, but not the same mother, or the same mother, but not
the same father.61’
14) Simplified Rules of Intestate Succession: Estate of Legitimate

Decedent
14.1 Order of Succession
1": legitimate children and descendants;
2nd: legitimate parents and ascendants;
3rd: illegitimate children and descendants;
4th: surviving spouse;
5,h: brothers and sisters and/or nephews and nieces;
6*: other collateral relatives within the fifth civil degree;620
7,h: the State.
Under the Family Code, family relations, which is the
primary basis for succession, exclude relations by affinity."1 One
who is merely related by affinity to the decedent does not inherit
from the latter and cannot become a co-owner of the decedent’s
property."2 Thus, a surviving spouse is not an intestate heir of his
or her parent-in-law."2
"“Art. 966, pur. l.NCC.

"’Art. 966, par. 2, NCC.
"“Art. 967, par. I, NCC.
"’Art. 967, par. 2, NCC.
"’Bagunu v. Piedad, 347 SCRA 71 (2000).
“'Ining v. Vega, 703 SCRA407 (2013).
"2M.
"’Rosales v. Rosales, 148 SCRA 69 (1987).
J9JC9B0M
R52M9UH7
14.2 Rule No. 1: The direct line excludes the collateral line,624 but the
surviving spouse and the illegitimate children concur with the
direct line, (a) Effect of existence of direct line: The collateral
blood relatives (starting from the brothers and sisters) do not
inherit in intestate succession if the decedent is survived by either
legitimate descendants or ascendants.625 (b) Rule of concurrence:
However, the surviving spouse and the illegitimate children shall
always inherit together with either the legitimate descendants or
legitimate ascendants of the decedent.626 They are not excluded
by the direct line.
14.3 Rule No. 2: The direct descending line excludes the direct
ascending line. The ascendants will only inherit in the
absence of descendants.627 (a) Effect of existence of legitimate
descendants: The legitimate parents and other ascendants and
all collateral blood relatives do not inherit,628 but the surviving
spouse and illegitimate children shall inherit with the legitimate
descendants.62’ Hence, in the absence of a surviving spouse and
illegitimate children, the entire estate shall be inherited by the
legitimate descendants, (b) Rule of concurrence: The surviving
descendants.630 (1) If concurring with surviving snouse: Should
the spouse of the decedent survive with legitimate children or
descendants, the share of the surviving spouse shall be the same
as the share of each of the children,631 regardless of the number
of the children.632 (2) If concurring with illegitimate children:
The share of each legitimate child is double than the share of
an illegitimate child.633 To illustrate: There are two legitimate
and two illegitimate children and the estate is Pl.2 million. The
formula shall be [2x + 2x +x +x = PI.2 million]. Hence, the
share of each illegitimate child is P200.000; while the share of
each legitimate child is P400.000. Here, there is no impairment
“’Art. 1003, NCC.

t2!Id.
“‘Arts. 983, 991,996, 997,999, and 1000, NCC.
“’Art. 985, NCC.
“‘Arts. 985 and 1003, NCC.
“’Arts. 983, as amended by Art. 176, FC, 996 and 999, NCC.
““Ans. 983, as amended by Art. 176, FC, 996 and 999, NCC.
“'Art. 996, NCC.
“’Santillan v. Miranda, 14 SCRA 563 (1965).
"’Art. 983, NCC, as amended by Art. 176, FC.
J9JC9B0M
R52M9UH7
of the legitime of the legitimate children. Thus, the estate shall be

divided in the foregoing manner. However, if there is impairment
of the legitime of the legitimate children, the foregoing formula
cannot apply. Instead, their respective legitimes shall also be
their shares in intestate succession. To illustrate: If the estate is
P9 million and the decedent was survived by one legitimate child
and three illegitimate children. Following the formula above,
their shares would be [2x + x + x + x = P9 million.] This formula,
however, will impair the legitime of the legitimate child. Hence,
their legitimes shall also be their shares in intestate succession.
Accordingly, the legitimate child gets P4.5 million as his share,
while each of the illegitimate children shall receive Pl.5 million.
(3) If concurring with surviving spouse and illegitimate children:
Same rules as above. To illustrate: If the estate is P8 million and
the decedent was survived by his widow, two legitimate children
and two illegitimate children, the formula shall be [2x + 2x (shares
of the two legitimate children) + 2x (share of the widow) + x +
x (shares of the two illegitimate children) = P8 million]. Hence,
the share of each illegitimate child shall be Pl million; while the
share of each legitimate child and the surviving spouse shall be
P2 million, (c) Rule of proximity: Among the descendants, the
relative nearest in degree excludes the more distant ones except
when the right of representation properly takes place.614 As a
consequence, if all the children of the decedent survive, have
the capacity to inherit, no one is validly disinherited, and all are
willing to accept their shares in the inheritance, the grandchildren
and other descendants cannot inherit in any capacity. (1) Rule of
equal division: The children of the deceased shall always inherit
from him in their own right, dividing the inheritance in equal
shares, even if they should come from different marriages.6” An
adopted child is counted as one of the legitimate children and
he inherits in the same manner as them.616 (2) Subject to right of
representation: The rule of proximity in the direct descending line
is subject to the right of representation,617 in case of predecease,
incapacity, or disinheritance of one, some, or all of the children.
Since the person to be represented is a legitimate child, only the
legitimate natural descendants may represent. The illegitimate
6,4Art. 962, par. I, NCC.

611 Arts. 980 and 979, par. I, NCC.
“‘Art. 979, par. 2, NCC and Secs. 17 and 18, Domestic Adoption Act.
617Art. 972, par. I, NCC.
I
J9JC9B0M
R52M9UH7
and adopted children of the person represented cannot represent

because they are not capable of succeeding the decedent.6”
With respect to the illegitimate children, they are prohibited
under the barrier rule to inherit from the legitimate relatives of
the parents.6” As to the adopted children, they are not related
to the decedent because the relationship created by the adoption
is between only the adopting parents and the adopted child
and does not extend to the blood relatives of either party.610 (i)
Grandchildren inherit bv representation: As a rule, grandchildren
inherit by right of representation.611 In case of predecease,
incapacity, or disinheritance of one or some of the children,
but not all, and those who predeceased, were incapacitated or
disinherited have children or descendants, the children of the
deceased shall inherit in their own right, and the grandchildren
by right of representation.612 In case all the children died ahead of
the decedent, or were incapacitated or disinherited, and all have
their own children or descendants, the grandchildren and other
descendants shall inherit by right of representation (and not by
their own right), and if any one of them should have died, leaving
several heirs, the portion pertaining to him shall be divided
among the latter in equal portions.613 The division of the estate
shall be per stirpes, (ii) In case there is no representative: In case
of predecease or disinheritance of one of the children and the
right of representation cannot take place because the latter does
not have children or descendants, the other children shall inherit
in their own right and not by right of accretion. In other words,
the one who died ahead (predeceased) or was disinherited is no
longer counted as an heir. To illustrate: The decedent had three
children (A, B, and C) but A either died ahead of the decedent
or was validly disinherited (and that is the only provision in the
will). B predeceased the decedent, but he left a child, X. Here, A
is no longer counted as an heir and the estate is divided equally
between C, who inherits in his own right, and X, who shall inherit
by representing B. On the other hand, in case of incapacity of
one of the children and the right of representation cannot take
place because the latter does not have children or descendants,
“'Art. 973, NCC.

“’Art. 992, NCC.
“Sayson v. CA, G.R. Nos. 89224-25, January 23, 1992.
611 Arts. 981 and 982, NCC.
“Art. 981, NCC.
“Art. 982, NCC.
J9JC9B0M
R52M9UH7
the vacant portion shall go to the other children by right of

accretion.644 In accretion, the vacant share shall go to the co
heir of the same degree.645 To illustrate: The decedent had three
children, A, B, and C. A is incapacitated to inherit and he has no
children or descendants; while B predeceased the decedent, but
he left a child, X. Here, the estate of the decedent will still be
divided into three parts. C will get one-third (!6) by his own right.
The share of B will go to X, by right of representation. As to the
share of A, the same shall accrue in favor of his co-heir in the
same degree, that is, C. X is not entitled to accretion because he
is not of the same degree as C. (iii) In case of repudiation: An heir
who repudiates his share may not be represented.646 In intestate
succession, in case of repudiation by one or some, but not all, of
the children, the vacant share or shares shall always accrue to the
co-heirs.647 (iv) When grandchildren inherit in their own right: If
all the children survive the decedent, all are capacitated to inherit
and no one is validly disinherited, but all of them repudiate
their shares in the inheritance, the grandchildren shall inherit in
their own right,648 because accretion and representation cannot
take place.64’ This is the only situation where the grandchildren
will inherit in their own right. Since they will be inheriting in
their own right, the estate will be divided equally among the
grandchildren (per capita).
14.4 Rule No. 3 - Barrier or Iron Curtain Rule: (a) Prohibition under
barrier rule: An illegitimate child is prohibited to inherit ab
intestato from the estate of the legitimate children and relatives
of his father or mother; nor shall children or relatives inherit in
the same manner from the illegitimate child.650 The prohibition is
reciprocal, that is, the persons whom the illegitimate child cannot
succeed are also disqualified to succeed him. Hence, relatives on
the legitimate line have no right to inherit ab intestato from an
illegitimate relative. Following this rule, the legitimate collateral
relatives of the mother cannot succeed from her illegitimate
"4Art. 968, NCC.

"5/<Z
"‘Art. 977, NCC.
"’Arts. 1018 and 968, NCC.
"“Art. 969, NCC.
“’Arts. 968 and 977, NCC.
650Art. 992, NCC.
J9JC9B0M
R52M9UH7
child;651 the illegitimate daughter cannot succeed to the estate of

her deceased uncle, who is a legitimate brother of her natural
mother;652 and that the illegitimate children of an uncle, who
is a brother of the decedent’s father, cannot inherit from the
decedent ab intestato because the latter is a legitimate child.653
(b) Consequence of barrier rule in right of representation: An
illegitimate child has no right to succeed ab intestato from the
legitimate father or mother of his natural parent. Hence, an
illegitimate child has no right to represent his natural parent,
if the latter is a legitimate child. The determining factor is the
legitimacy or illegitimacy of the person to be represented.654 If
the person to be represented is an illegitimate child, then his
descendants, whether legitimate or illegitimate, may represent
him; however, if the person to be represented is legitimate, his
illegitimate descendants cannot represent him because the law
provides that only his legitimate descendants may exercise the
right of representation by reason of the barrier imposed under
Article 992.655 (c) No barrier rule in succession bv will: The
prohibition under the barrier rule is applicable only in succession
by operation of law. It does not apply to succession by will, (d)
Application of barrier rule between brothers and sisters: The law
prohibits reciprocal succession between illegitimate children
and legitimate children of the same parent, even though there
is unquestionably a tie of blood between them.656 Consequently,
the illegitimate children of a legitimate child cannot inherit
from the latter’s legitimate brother.652 In the same way, where
the illegitimate child had half-brothers who were legitimate, the
latter had no right to succeed to the former’s estate under the rules
of intestacy.65* On the other hand, if both are illegitimate children,
they can inherit ab intestato from each other.65’ They all stand on
the same footing before the law, just like legitimate children of
“'Cache v. Udan, 13 SCRA693.

652Anuran v. Aquino and Ortiz, 38 Phil. 29.
“’Grey v. Fable, 88 Phil. 128.
“Diaz v. I AC, 182 SCRA 427 (1990).
usld.
“‘Art. 992, NCC; Delgado Vda. de Dela Rosa v. Heirs of Marciana Rustic Vda. de Damian,
480 SCRA 334 (2006), citing III Tolentino, Civil Code ofthe Philippines, 493-494 (1979 Ed.).
“’Pascual v. Pascual-Bautista, 207 SCRA 561 (1992).
“‘Corpuz v. Corpuz, 85 SCRA 567 (1978).
“’Delgado Vda. de Dela Rosa v. Heirs of Marciana Rustia Vda. de Damian, supra.
J9JC9B0M
R52M9UH7
BOOK 111.— SUCCESSION 321
half-blood relation.660 Therefore, the rules regarding succession

of legitimate brothers and sisters should be applicable to them.
Full blood illegitimate brothers and sisters should receive double
the portion of half-blood brothers and sisters; and if ail are either
of the full blood or of the half blood, they shall share equally.661
14.5 Rule No. 4: In the absence of legitimate children or descendants,
the legitimate parents and ascendants shall inherit.662 They are
second in the order of succession, (a) Effect if ascendants inherit:
If there are ascendants, no collateral blood relatives (beginning
with the brothers and sisters) can inherit,663 but the surviving
spouse and the illegitimate children of the decedent shall inherit
with the ascendants.661 Hence, if the decedent has no legitimate
descendants, surviving spouse, and illegitimate children, the
entire estate shall be inherited by the legitimate ascendants, (b)
Rule of proximity: Among the ascendants, the rule of proximity
absolutely applies because there is no representation in the
ascending Iine.“’ If both the father and mother survive, they shall
inherit in equal shares.666 Should only one of them survive, the
share pertaining to the ascendant shall all pertain to the survivor"’
because the grandparents of the decedent are excluded. In default
of the father and mother, the ascendants nearest in degree shall
inherit.668 If there are surviving grandparents in the paternal
and maternal lines, one-half (!6) of the share pertaining to the
ascendants shall go to the paternal line and the other one-half
(‘/a) shall go to the maternal line. In each line the division shall
be made per capita.™' (c) Effect of predecease, disinheritance
incapacity of. or repudiation by an ascendant: In case of
predecease or disinheritance of an ascendant (example, the
father), the other ascendant entitled to inherit (the mother) shall
inherit in her own right and not by the right of accretion. The
rule is different in case of incapacity or repudiation. In the event
tMld.
“'Delgado Vila. de Dela Rosa v. Heirs orMarciana Rastia Vda. de Damian, supra.
“’Art. 985, NCC.
661 Art. 1003, NCC.
“'Arts. 991, 997, and 1000, NCC.
“’Art. 972, par. l.NCC.
“’Art. 986, par. 1, NCC.
“’Art. 986, par. 2, NCC.
“"Art. 987, par. l.NCC.
“’Art. 987, par. 2, NCC.
J9JC9B0M
R52M9UH7
I
that one of the parents is incapacitated or repudiates his or her

share, the vacant portion shall accrue in favor of the co-heirs,™
who shall be entitled to the said share in the same proportion
that they inherit.6’1 To illustrate: The decedent died intestate
survived by his legitimate parents, F and M; his spouse, W; and
his illegitimate children, X and Y. He left an estate worth Pl.2
million. F repudiated his share. Following the rules of intestate
succession, one-half (!4) of the estate, or P600,000 shall be the
share of the ascendants, to be divided equally between F and M;
the share of W is one-fourth (!4) of estate, or P300,000; and the
share of X and Y shall be Pl 50,000 each. Since F repudiated his
share (P300,000) his share shall accrue in favor of the co-heirs
M, W, X, and Y, in the same portion that they inherit, as follows:
M, P300;000; W, P300.000; and X and Y, Pl 50,000 each. Hence,
the proportion that M inherits is one-third (14) of the estate; W,
also one-third (14) of the estate; X and Y, also one-third (14) of the
estate. Therefore, M shall get an additional share of Pl00,000,
representing one-third (!4) ofP300,000, by right of accretion. W
will get the same share. X and Y, will be getting an additional
share of P50,000 each, (d) Rule of concurrence: The surviving
ascendants.6’2 (1) If surviving spouse concurs: If the widow or
widower survives with legitimate parents or ascendants, the
surviving spouse shall be entitled to one-half (14) of the estate,
and the legitimate parents or ascendants to the other half.672 (2) If
illegitimate children concur: If illegitimate children survive with
legitimate ascendants, one-half (!4) of the estate shall go to the
ascendants and the other one-half (14) of the estate shall go to
the illegitimate children, to be divided equally among them.™
(c) If both surviving spouse and illegitimate children concur:
If legitimate ascendants, the surviving spouse and illegitimate
children are left, the ascendants shall be entitled to one-half (!4)
of the estate; the surviving spouse, one-fourth (!4) of the estate;
and the other one-fourth (!4) shall go to the illegitimate children,
to be divided equally among them.6"
“Arts. 968 and 1018, NCC.

6.1 Art. 1019, NCC.
6.2 Arts. 997,991, and 100, NCC.
6,2Art. 997, NCC.
‘"Art. 991, NCC.
‘"Art. 1000, NCC.
J9JC9B0M
R52M9UH7
14.6 Rule No. 5: In the absence of legitimate descendants and

ascendants, the illegitimate children shall inherit the entire estate
of the deceased,676 if the deceased had no surviving spouse. If the
deceased left a widow or widower, the surviving spouse shall
inherit with the illegitimate children.677 (a) Effect if illegitimate
children survive: The collateral blood relatives of the decedent
(starting from the brothers and sisters) cannot inherit,6,1 but
the surviving spouse shall inherit together with the illegitimate
children.675 If a widow or widower survives with illegitimate
children, the surviving spouse shall be entitled to one-half (14)
of the estate, and the illegitimate children or their descendants,
whether legitimate or illegitimate, shall be entitled to the other
half, to be divided equally among them.660 (b) Representation
of illegitimate child: In case of predecease, incapacity, or
disinheritance of an illegitimate child, he can be represented
by his descendants, whether the descendants are legitimate or
illegitimate.68' (1) When illegitimate child has no representative
and vacancy is bv reason of predecease or disinheritance: He is no
longer counted and the other illegitimate children shall inherit by
their own right. (2) When illegitimate child has no representative
and vacancy is bv reason of incapacity or repudiation: He is
still allotted a share. However, the share rendered vacant by his
repudiation or incapacity shall accrue to the other co-heirs,ut who
shall take the same in the same proportion that they inherit.6"
To illustrate: The decedent died intestate, leaving an estate
worth Pl.2 million. He was survived by his wife, W, and three
illegitimate children, X, Y, and Z. Z, however, repudiated his
share or was incapacitated to inherit (and he has no descendants).
Following the rules of intestate succession, one-half (14) of the
estate, or P600.000, shall be the share of the wife; while the
remaining half shall be the shares of X, Y, and Z, each entitled to
P200.000. However, since X repudiated his share, his share will
accrue to W, Y, and Z, in the same proportion that they inherit: W,
•’’Art. 988, NCC.

‘"Art. 998, NCC.
‘’"Art. 1003, NCC.
‘"Art. 998, NCC.
“'Arts. 902, 989, and 990, NCC.

“’Arts. 968 and 1018, NCC.
“’Art. 1019, NCC.
J9JC9B0M
R52M9UH7
P600.000; Y and Z, P200,000 each. Hence, W gets by accretion

60% ofP200,000, orP120,000; while Y and Z shall get 20% each
of P200,000, or P40,000 each, (c) Illegitimate filiation must be
established: An illegitimate child, to be entitled to successional
rights from the putative or presumed parent, must prove his
filiation to the latter.684 (1) An action to compel recognition may
also be integrated with an action to claim inheritance.685 The two
causes of action, one to compel recognition and the other to claim
inheritance, may be joined in one complaint.686 (2) When filiation
ofan illegitimate child is established by a record of birth appearing
in the civil register or a final judgment, or in an admission of
filiation in a public document or a private handwritten instrument
signed by the parent concerned, the action for recognition may be
brought by the child during his or her lifetime,687 and even after
the death of the putative parent. On the other hand, if the action
is based upon open and continuous possession of the status of
an illegitimate child, or any other means allowed by the rules or
special laws, it may only be brought during the lifetime of the
alleged parent;688 otherwise, the action is already barred by the
death of the alleged parent.68’ Thus, upon the death of the putative
parent, the only evidence allowed under the law (to establish
illegitimate filiation) would be a record of birth appearing in the
civil register or a final judgment, or an admission of illegitimate
filiation in a public document or a private handwritten instrument
signed by the parent concerned.
14.7 Rule No. 6: In the absence of legitimate descendants and
ascendants, and illegitimate children and their descendants,
whether legitimate or illegitimate, the surviving spouse shall
inherit the entire estate, without prejudice to the rights of brothers
and sisters, nephews and nieces, should there be any.6'" The
surviving spouse is fourth in the order of succession, (a) Effect
if snouse survives: In the absence of legitimate descendants or
ascendants, and illegitimate descendants, the surviving spouse
shall inherit the entire estate to the exclusion of the collateral
“Paulino v. Paulino, 3 SCRA 730 (1961).

“Tiiyag v. CA, 209 SCRA 665 (1992), and Guy V. CA, 502 SCRA 151 (2006).
mId.
6,,Guy V. CA, 502 SCRA 151 (2006). See Art. 175, par. 2, NCC.
mld.
“’Uyguangco v. CA, 178 SCRA 684 (1989) and Ara v. Pizarro, supra.
"Arts. 995 and 1001, FC.
J9JC9B0M
R52M9UH7
blood relatives of the decedent, except the group of brothers and

sisters, nephews and nieces."11 (b) Rule of concurrence: Should
brothers and sisters or their children survive with the widow or
widower, the surviving spouse shall be entitled to one-half ('/a) of
the inheritance; and the brothers and sisters or their children shall
be entitled to the other half."’-’ (c) No representation of spouse:
There is no representation of the spouse. In case of predecease
and disinheritance of the spouse (and that is the only provision in
the will), the group of brothers and sisters, nephews and nieces,
shall inherit by their own right However, in case of incapacity
or repudiation by the surviving spouse, the vacant portion shall
accrue in favor of the co-heirs,”3 and the laner shall lake the
vacant share in the same proportion that they inherit."" (ci Effect
if marriage is void: The parties to a void marriage are not in tact
spouses. Since the parties are not spouses, they cannot inherit
from each other by way of intestate succession (as spouses),
unless they are relatives by consanguinity within the fifth degree
and the surviving spouse is the only relath e of the decedent. Any
interested party may still impugn the existence of a void marriage
even after the death of one of the spouses, and said marriage may
be questioned directly by filing an action attacking the \abditj
thereof (if celebrated under the Criil Code), or collaterally by
raising it as an issue in a proceeding for the settlement ofthe estate
of the deceased spouse.”’ Id) Effect of decree oflecai separation:
If a decree of legal separation is issued, the right of the innocent
spouse to inherit from the offending spouse is not affected. On the
other hand, if the innocent spouse is the decedent, the offending
spouse is disqualified to inherit by intestate succession.” In the
event of reconciliation between the spouses prior to the death of
the innocent spouse, the right of the offending spouse to inherit
as a legal heir shall depend upon the existence of a decree of
reconciliation. If the spouses simply reconciled in fact but
without a decree of reconciliation, the offending spouse remains
disqualified to inherit. However, if a decree of reconciliation is
obtained, the right of the offending spouse to inherit from the
""An. 1001, NCC.

“"Arts. 968 and 1018, NCC.
""Art. 1019, NCC.
M’Niilal v. Bayadog. 328 SCRA 122, 134 (2000); Garcia-Quiason v. Belen, 702 SCRA
707(2013).
""‘Art. 63(4), FC.
J9JC9B0M
R52M9UH7
innocent spouse by intestate succession is automatically restored.

This is because the decree of reconciliation has the effect of
setting aside the decree of legal separation.6”
14.8 Rule No. 7: If there are no descendants, ascendants, illegitimate
children, or a surviving spouse, the brothers and sisters, and
nephews and nieces shall succeed to the entire estate of the
deceased?” (a) Other collateral blood relatives are excluded: In
intestate succession, the collateral blood relatives of the decedent
are divided into two groups: (1) the group of brothers, sisters,
nephews, and nieces; and (2) the group of other collateral blood
relatives up to the fifth degree from the decedent. Any member
of the first group shall exclude the second group.6” Under
Article 1009, the absence of brothers, sisters, nephews, and
nieces of the decedent is a precondition to the other collaterals
(uncles, aunts, cousins, etc.) being called to the succession.™
(b) Full blood and half-blood brothers and sisters: Should the
only survivors be brothers and sisters of the full blood, they
shall inherit in equal shares.701 Should brothers and sisters of
the full blood survive together with brothers and sisters of the
half blood, the former shall be entitled to a share double that
of the latter.7" However, if only half-blood brothers and sisters
survive, some on the father’s and some on the mother’s side, all
shall inherit in equal shares without distinction as to the origin
of the property.7" The foregoing rules also apply to the nephews
and nieces. Therefore, the full blood nephews or nieces do not
exclude the half-blood nephews or nieces. The only difference
in their right of succession is provided in Article 1008, NCC,
in relation to Article 1006, NCC, which provisions, in effect,
entitle the nephews or nieces of full blood to a share double than
that of the nephews or nieces of half blood.7” (c) Application of
barrier rule: If all brothers and sisters are legitimate, they can
inherit from each other, whether they are full blood or half-blood
697Art. 66(2), FC; Sec. 23(d), Rule on Legal Separation (A.M. No. 02-11-11-SC).
"‘Arts. 1003 and 1009, NCC.
“Art. 1009, NCC.
’“'Abellana v. Ferraris, 14 SCRA 986.
’“'Art. 1004, NCC.
’"Art. 1006, NCC.
’"Art. 1007, NCC.
’"Bicomong v. Almanza, 80 SCRA 421.
J9JC9B0M
R52M9UH7
brothers and sisters.705 If some are legitimate brothers and sisters

while others are illegitimate brothers and sisters, the latter cannot
inherit from the former and vice-versa under the barrier rule. The
law prohibits reciprocal succession between illegitimate children
and legitimate children of the same parent, even though there
is unquestionably a tie of blood between them.™ On the other
hand, if all brothers and sisters are illegitimate children, they can
inherit ab intestato from each other.70’ (d) Right of representation
within this group: Within the group of brothers and sisters, and
nephews and nieces, the law allows representation only in favor
of the children of deceased brothers or sisters (the nephews and
nieces), whether they be of the full blood or half blood,™ but
only when they survive with their uncles or aunts.7” The nephews
and nieces shall inherit by right of representation, or per stirpes-,
while the brothers and sisters of the decedent shall inherit by their
own right, or per capita.™ The right of representation will also
apply if one or some of the brothers or sisters are incapacitated
to inherit, provided that their children concur with their uncles
and aunts.7" However, when only nephews and nieces survive,
they shall inherit by their own right, in equal portions.'1- The
same rule will also apply in case all the brothers and sisters are
incapacitated or all repudiated their shares in the inheritance. In
any of these cases, the nephews and nieces succeed by their own
right and not by the right of representation.'15
14.9 Rule No. 8: If there are no descendants, ascendants, illegitimate
children or their descendants, surviving spouse, or brothers,
sisters, nephews, and nieces, the other collateral blood relatives
shall succeed to the estate.71* (a) Only up to fifth decree: In the
collateral line, the right to inherit in intestate succession shall
not extend beyond the fifth degree of relationship from the
715Arts. 1004 and 1006. NCC.

’“Art. 992, NCC; Delgado Vda. de Dela Rosa s. Heirs ofMarriana Rasas lit i r,—i-
an, 4X0 SCRA 334 (2006), citing III Tolentino, Civil Code ofthe rr—pp.-ies 443-444,14'4 L
’'''Delgado I'du. de Dela Rosa v. Heirs of Mantiaaa Rasna T*aa. ar Dcana. rapru.
’“Art. 972. par. 2, NCC
’“Arts. 975 and 1005, NCC.
™/d
’"III Tolentino, Civil Code of the Philippines. p. 460 * 1979 ed L
’"Art. 975. NCC.
’"Ill Tollentino. supra, p. 501.
’“Arts. 1003 and 1009, NCC.
J9JC9B0M
R52M9UH7
decedent.7'5 (b) Rule of proximity is absolute rule: Within the

second group of collateral blood relatives, the rule of proximity is
an absolute rule.71’ Within this group, the right of representation
does not apply.717 Thus, a child of a deceased first cousin (S'*
degree) cannot inherit together with the decedent’s other first
cousins (4th degree), by representing his deceased parent.
Following the rule of proximity, the child of the deceased first
cousin is excluded by the decedent’s other first cousins. In fine, a
maternal aunt can inherit alongside a paternal uncle (both within
the 3"1 degree), and a first cousin of the full blood can inherit
equally with a first cousin of the half blood, but an uncle or an
aunt, being a third-degree relative, excludes the cousins of the
decedent, being in the fourth degree of relationship; the latter, in
turn, would have priority in succession to a fifth-degree relative.71’
(c) No preference within same degrees: Within the second group
of collateral blood relatives, the only rule is proximity. Hence,
relatives of the same degree shall succeed without distinction of
lines or preference among them by reason of relationship by the
whole blood.71’ For example, a child of the decedent’s nephew
(4th degree relative) and a first cousin (also 4lh degree relative)
will both inherit from the decedent because both are fourth
degree relatives of the decedent.
14.10 Rule No. 9: In default of persons entitled to succeed in accordance
with the laws of intestate succession, the State shall inherit the
whole estate.720 In our laws, the State is the ultimate heir, (a)
Escheat proceeding: In order that the State may take possession
of the property of the decedent, the procedure for the escheat
of property left without any heir under the Rules of Court must
be followed.721 Hence, the State does not ipso facto become
the owner of the estate left without an heir, (b) Distribution of
properties: (1) Pay debts and charges first; (2) thereafter, the
personal property shall be assigned to the municipality or city
where the deceased last resided in the Philippines; (3) the real
estate, on the other hand, shall be assigned to the municipality
,15Art. 1010, NCC.

7l‘Bagunu v. Piedad, 347 SCRA 71 (2000).
7I7M.
7l8Bagunu v. Piedad, supra.
7l’Art. 1009, par. 2, NCC.
720Art. 1011, NCC.
721Art. 1012, NCC.
J9JC9B0M
R52M9UH7
or city in which the same is situated; (4) if the deceased never

resided in the Philippines, the whole estate shall be assigned to
the respective municipalities or cities where the same is located;722
and (5) the municipalities or cities shall make use of the estate for
the benefit of public schools, and public charitable institutions
and centers, in such municipalities or cities.723 (c) Prescriptive
period for recovery by legal heirs: A person legally entitled to the
estate of the deceased may file a claim with the court within five
years from the date the property was delivered to the State.724
15) Simplified Rules of Intestate Succession: Estate of Illegitimate

Decedent
15.1 Rule No. 1: If there are legitimate children or their descendants,
the illegitimate parents shall not inherit.723 The legitimate des
cendants cannot exclude the decedent’s surviving spouse
and illegitimate children. As to the right of the legitimate
descendants, surviving spouse and illegitimate children to inherit
from the decedent, the same rules in succession to the estate of a
legitimate decedent are also applicable in succession to the estate
of an illegitimate decedent.
15.2 Rule No. 2: In the absence of legitimate descendants, next in
the order of succession are the illegitimate children or their
descendants. If there are illegitimate descendants, the illegitimate
parents cannot inherit.726 However, the surviving spouse shall
inherit together with die illegitimate descendants. If a widow
or widower survives with illegitimate children, such widow or
widower shall be entitled to one-half (!4) of the inheritance, and
the illegitimate children or their descendants, whether legitimate
or illegitimate, to the other half.727
15.3 Rule No. 3: In case there are no descendants, whether legitimate
or illegitimate, the illegitimate parents shall succeed to the entire
estate.721 However, if the decedent’s widow or widower survives
with the illegitimate parents, the surviving spouse shall be
722Art. 1013, NCC.

mId.
724Art. 1014, NCC.
’"Art. 993, NCC.
726Art. 993, NCC.
727Art. 998, NCC.
’"Art. 993, NCC.
J9JC9B0M
R52M9UH7
entitled to one-half ('/a) of the estate, and the illegitimate parents,

to the other half.729 Among the ascendants, only the parents of the
illegitimate child are granted successional rights to the estate of
the latter. In Article 993, the other ascendants of the illegitimate
decedent are not granted successional rights to the estate of the
latter. While an illegitimate child is allowed to inherit to the
estate of the illegitimate grandparents by representing his or her
illegitimate parents,730 the illegitimate grandparents do not have
the right to inherit from their illegitimate grandchildren. There is
no reciprocity of successional rights between them.
15.4 Rule No. 4: In case there are no children or descendants, whether
legitimate or illegitimate, and illegitimate parents, the illegitimate
decedent shall be succeeded by his or her surviving spouse, who
shall be entitled to the entire share.731 However, if the decedent’s
brothers and sisters, nephews and nieces, survive with the widow
or widower, the surviving spouse is entitled to one-half (!6) of the
estate; and the group of brothers, sisters, nephews, and nieces,
shall be entitled to the other half.732 The brothers and sisters, •
nephews and nieces, must be by illegitimate filiation; otherwise,
the barrier rule, also known as the iron curtain rule, shall apply.
15.5 Rule No. 5: If there are no children or descendants, whether
legitimate or illegitimate, illegitimate parents, and surviving
spouse, the illegitimate brothers and sisters, nephews and nieces,
shall inherit the entire estate.733 The rules regarding succession of
legitimate brothers and sisters should be applicable to them. Full
blood illegitimate brothers and sisters should receive double the
portion of half-blood brothers and sisters; and if ail are either of
the full blood or of the half blood, they shall share equally.734 The
right of representation granted to nephews and nieces, when they
survive with their uncles and aunts, in Articles 972, par. 2, 975,
and 1005, should also apply in the case of illegitimate brothers
and sisters, nephews and nieces.
15.6 Rule No. 6: If there are no children or descendants, whether
legitimate or illegitimate, illegitimate parents, surviving spouse,
Âpplying by analogy Art. 997, NCC.

,3°Art. 990. NCC.
73'Art. 994, par. 1, NCC.
732Art. 994, par. 2, NCC.
733Art, 994, par. 2, NCC; 111 Tolentino, Civil Code ofthe Philippines, p. 478 (1992 ed.).
734M.
J9JC9B0M
R52M9UH7
brothers and sisters, nephews and nieces, the entire estate shall be
inherited by the State.’35 Note that if the decedent is illegitimate,
successional rights in favor of the collateral blood relatives are
granted only to the brothers, sisters, nephews, and nieces.’“ The
other collateral blood relatives are no longer granted successional
rights.
— oOo —
735Art. 994, par. 2, NCC; III Tolentino, Civil Code ofthe Philippines, p. 478 (1992 ed.).
’“Art. 994, par. 2, NCC.
J9JC9B0M
R52M9UH7
BOOK IV. — OBLIGATIONS AND CONTRACTS
PART 1: OBLIGATIONS
1) Concept
1.1 Basic Concents:
1.1.1 Definition: An obligation is a juridical necessity to
give, to do, or not to do.1 It is also defined as a juridical
relation whereby a person (creditor) may demand
from another (debtor) the observance of a determinate
conduct, and in case of breach, may obtain satisfaction
from the assets of the latter.2
1.1.2 Essential Elements: (1) juridical tie or vinculum juris
- the efficient cause established by the various sources
of obligations (law, contracts, quasi-contracts, delicts,
and quasi-delicts); (2) object - the prestation or the
particular conduct required to be observed by the debtor
(to give, to do, or not to do); (3) active subject (called
the obligee or creditor) - the person who can demand
the fulfillment of the obligation; and (4) passive subject
(called the obligor or debtor) - the person from whom
the obligation is juridically demandable.’
2) Sources of Obligations
2.1 Five Sources:
2.1.1 Five Sources: (1) Law; (2) Contracts; (3) Quasi-
contracts; (4) Acts or omissions punished by law
(Delicts); and (5) Quasi-delicts.4 This enumeration is
exclusive.’
'Art. 1156, NCC.

’Makati Stock Exchange, Inc. v. Campos, 585 SCRA 120 (2009).
’Ang Yu Asuncion v. CA, G.R. No. 109125, Dec. 2, 1994.
’Art. 1157, NCC.
’Makati Stock Exchange, Inc. v. Campos, supra.
332
J9JC9B0M
R52M9UH7
BOOK IV. — OBLIGATIONS AND CONTRACTS 333

PART I: OBLIGATIONS
2.2 Law:
2.2.1 Must Be Expressly Provided: Obligations derived from
law are not presumed? Hence, only those expressly
determined in the Civil Code or in special laws are
demandable.7 These obligations are regulated: (1) by the
precepts of the law which establishes them; and (2) as to
what has not been foreseen, by the provisions of Bock
IV of the Civil Code?
2.2.2 When Source of Obligation: Law is the source of
obligation when it does not merely limit itself to
enforcing compliance with an obligation originating
from the acts of the parties, but by itself establishes the
obligation, making the act of the party or parties only a
moment, or determining the occasion in order that the
obligation contained in the legal precept may begin to
be demandable.’
2.3 Contracts:
2.3.1 Definition: A contract is defined as "a meeting ofminds
between two persons whereby one binds himself, with
respect to the other, to give something or to render some
service. The definition lays stress on the meeting of
the minds of the contracting parties," for consent is
the essence of a contract.12 It is the element of consent
which distinguishes contracts from the other sources of
obligations.
2.3.2 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.12 In
contract law, this principle is known as the obligatory
force ofcontracts, which presupposes the existence of a
valid and enforceable contract.
“Art. 1158, 1“ sentence, NCC.

’/</., 2nd sentence.
•id
’8 Munresa, 18-19.
'"Art. 1305, NCC.
"Lustan v. CA, 266 SCR A 663, 670 (1997).
l2Jalandre v. Custodio, 92 Phil. 1063, Unreported.
"Art. 1159, NCC.
J9JC9B0M
R52M9UH7
2.4 Ouasi-contracts:
2.4.1 Definition: It is a juridical relation arising from certain
lawful, voluntary, and unilateral acts with the objective
ofpreventing unjust enrichment or benefit at the expense
of another.'4
2.4.2 Forms of Ouasi-contracts: There are several forms of
quasi-contracts enumerated in the Civil Code," but
the enumeration is not exclusive.'6 The obligation is
not contractual in nature in the absence of the element
of consent, whether express or implied. Neither is the
obligation based on delict or quasi-delict, if the act
which gives rise to it is not unlawful. In those instances
where there is no pre-existing contractual relation, and
there being neither a delict nor a quasi-delict, a juridical
relation known as quasi-contract may arise between the
parties to avoid a case of unjust enrichment."
2.4.3 Nepotiorum Gestio: (a) Definition: 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." (b) Requisites: (1) a person
(called the officious manager or gestor) voluntarily
assumes the management or agency of the business
or property of another;1’ (2) the property must be
neglected or abandoned; otherwise, what results is a
case of unauthorized/unenforceable contract and not
negotiorum gestio;20 (3) there is no authorization from
the owner, whether express or implied; otherwise,
what results is a contract of agency and not negotiation
gestio;21 and (4) the assumption of agency or
management must be done in good faith. If the owner
ratifies the management of the business, the effects of an
"Art. 2142, NCC.

"Arts. 2144-2175, NCC.
"Art. 2143, NCC.
"Report of the Code Commission, p. 60.
"Art. 2144, NCC.
"M.
“Art. 2144(1), NCC.
2lArt. 2144(2), NCC.
J9JC9B0M
R52M9UH7

PARTI: OBLIGATIONS
express agency shall be produced, even if the business

may not have been successful.22 (c) Obligations of
officious manager: (1) he is obliged to continue with the
agency or management until the termination of the affair
and its incidents and he can only require the owner to
substitute him if the latter is in a position to do so;22 (2)
in the performance of his duties, he is obliged to observe
the diligence of a good father of a family—if the owner
suffers damage by reason of the fault or negligence of
the officious manager, the latter is liable to pay damages
to the former,24 but the courts may, however, increase or
moderate the indemnity according to the circumstances
of each case;25 (3) he is personally liable for contracts
which he has entered into with third persons, insofar as
the latter shall be concerned, even though he acted in
the name of the owner,26 hence, there shall be no right of
action between the owner and such third persons, except
(i) if the owner has ratified the management, either
expressly or tacitly; or (ii) when the contract refers to
things pertaining to the owner of the business;27 (4) if he
delegates to another person all or some of his duties, he
is liable for the acts of the delegate, without prejudice
to the direct obligation of the delegate to the owner;21
(5) 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;2’ and (6) he
is not, as a rule, liable for any loss or damage to the
property or business by reason of fortuitous event. But
in the following situations, he is liable for any fortuitous
event if he: (i) undertakes risky operations which the
owner was not accustomed to embark upon; (ii) prefers
his own interest to that of the owner; (iii) fails to return
the property or business after demand by the owner; (iv)
-’■’Art. 2149, NCC.

21 Art. 2144, NCC.
“Art. 2145, NCC.
’’/</.
“Art. 2152, NCC.
27M.
“Art. 2146. 1“ par., NCC.
2’M.
J9JC9B0M
R52M9UH7
assumes the management in bad faith;30 (v) is manifestly

unfit to carry on the management, except when the same
was assumed to save the property or business from
imminent danger; and (vi) prevents, by his intervention, a
more competent person from taking up the management,
except when the same was assumed to save the property
or business from imminent danger.31 (d) Obligations of
owner: The owner is liable to the officious manager for
the following: (1) obligations incurred in his interest;
(2) necessary and useful expenses; and (3) damages
suffered by the officious manager in the performance
of his duties, in the following situations: (i) if the owner
enjoys the advantages of the officious management;32
(ii) if the management had for its purpose the prevention
of an imminent and manifest loss, although no benefit
may have been derived;33 or (iii) 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.32
2.4.4 Solutio Indehiti: (a) Definition: 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." (b) Requisites: (1) payment is made when
there exists no binding relation between the payor, who
has no duty to pay, and the person who received the
payment; and (2) payment is made thru mistake, and
not thru liberality or some other cause." (c) Similarities
with action in rem verso: (1) the plaintiff suffers a loss;
(2) the defendant is correspondingly enriched; (3) the
enrichment of the defendant is unjustified because the
delivery or payment to him is without legal or just cause;
(4) the defendant has the obligation to return what was
"Art. 2147, NCC.

"Art. 2148, NCC.
32Art. 2150, l“par„ NCC.
"Art. 2150,2nd par., NCC.
"Art. 2151, NCC.
"Art. 2154, NCC.
"Power Commercial & Industrial Corp. v. CA, 274 SCRA 597.
/
J9JC9B0M
R52M9UH7

PART I: OBLIGATIONS
unduly delivered to him; and (5) the objective is to

prevent unjust enrichment, (d) Distinctions between
solutio indebiti and in rem verso: (1) the source of
obligation in solutio indebiti is quasi-contract; while in
in rem verso, it is law; (2) in solutio indebiti, the undue
payment is by reason of mistake of fact or mistake in a
doubtful or difficult provision of law; while in in rem
verso, the undue payment need not be by reason of
mistake, or if there was mistake, it was a mistake of
law that is not doubtful nor difficult, (e) Obligations in
solutio indebiti: (1) the recipient has the obligation to
return what has been unduly delivered;37 (2) if he acted
in bad faith, he is also liable: (i) to pay legal interest, if
a sum of money is involved; (ii) to return the fruits he
received or those which should have been received, if
the thing produces fruits;3’ (iii) to answer for any loss
or impairment of the thing from any cause, until it is
recovered; and (iv) to pay damages to the person who
delivered the thing, until it is recovered;3’ (3) if there are
two or more payees, their responsibility is solidary."
2.4.5 Other Forms ofOuasi-Contracts: (a) Support and funeral
expenses: (1) if support was given by a stranger, without
the knowledge of the person obliged to give support,
the former has the right to claim reimbursement from
the latter unless he gave it out of piety and without
intention of being repaid;’1 (2) when support is unjustly
refused by the person obliged to give it and a third
person furnished the same when urgently needed, the
latter has the right to demand reimbursement from the
former unless the same was given without the intention
of being reimbursed—also applicable when the father
or mother of a minor unjustly refuses to support or fails
to give support to the child when urgently needed;43
(3) when funeral expenses are borne by a third person,
without the knowledge of the relatives who were
’’Art. 2154, NCC.

’•Art. 2159, 1“ par., NCC.
’’Art. 2159,2"“ par., NCC.
“Art. 2157, NCC.
“Art. 2164, NCC; Art. 206, FC.
“Art. 207, FC; Art. 2166, NCC.
J9JC9B0M
R52M9UH7
obliged to give support to the deceased, the former may

claim reimbursement from the latter;43 (b) Accident and
calamities: (1) when during a fire, flood, storm, or other
calamity, property is saved from destruction by another
person without the knowledge of the owner, the latter is
bound to pay the former just compensation;44 (2) when
through an accident or other cause a person is injured or
becomes seriously ill, and he is treated or helped while
he is not in a condition to give consent to a contract, he
shall be liable for the services of the physician or other
person aiding him, unless the service has been rendered
out of pure generosity;45 (3) when in a small community
a majority of the inhabitants of age decide upon a
measure for protection against lawlessness, fire, flood,
storm, or other calamity, anyone who objects to the plan
and refuses to contribute to the expenses but is benefited
by the project as executed shall be liable to pay his
share of said expenses;46 (c) Other situations: (1) a third
person who pays the debtor’s indebtedness without the
latter’s knowledge is entitled to demand reimbursement
but only up to the extent that the payment has benefited
the debtor;47 (2) any person who is constrained to pay
the taxes of another shall be entitled to reimbursement
from the latter;48 and (3) when the government, upon the
failure of any person to comply with health or safety
regulations concerning property, undertakes to do the
necessary work, even over his objection, he shall be
liable to pay the expenses.4’
2.5 Delicts:
2.5.1 Basis of Civil Liability Ex Delicto'. 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
“Art. 2165, NCC.

“Art. 2168, NCC.
45Art. 2167, NCC.
“Art. 2174, NCC.
“Art. 2136, NCC; Art. 2173, NCC.
“Art. 2175, NCC.
"Art. 2169, NCC.
J9JC9B0M
R52M9UH7

PARTI: OBLIGATIONS
or injury to another is evidently the foundation of the

civil action.50
2.5.2 Effect of Acquittal: (a) If accused is declared not
author of act or omission complained of: There is
no civil liability ex delicto.*' This is the situation
contemplated in Rule 111 of the Rules of Court, which
says that the civil action based on delict shall be deemed
extinguished if there is a finding in a final judgment in
the criminal action that the act or omission from which
the civil liability may arise did not exist.” (b) If based on
reasonable doubt: He is not exempt from civil liability
based on delict which may be proved by preponderance
of evidence only. This is the situation contemplated in
Article 29 of the Civil Code, where the civil action for
damages is "for the same act or omission. ””
2.5.3 Effect of Death Pending Appeal of Judgment of
Conviction: Both the criminal liability and the civil
liability (arising from the crime) are extinguished.
However, the civil liability based on other sources of
obligations (other than the delict) is not extinguished but
may be recovered only by filing a separate civil action.
The statute of limitations on the civil liability (based on
other sources than delict) is deemed interrupted during
the pendency of the criminal case.54
2.6 Ouasi-delicts:
2.6.1 Requisites for Recovery: To sustain a claim based on
quasi-delict, the following requisites must concur: (1)
damage suffered by the plaintiff; (2) fault or negligence
of the defendant; and (3) connection of cause and effect
between the fault or negligence of defendant and the
damage incurred by the plaintiff.55
’“Banal v. Tadeo, Jr.. 156 SCR A 325.

’'Mananlan V. CA, 350 SCRA 387.
”Sec. 2(b), Rule 111, 2000 Rules of Criminal Procedure.
’’Manantan v. CA, 350 SCRA 387.
^People v. Bayoias, 236 SCRA 239; Villegas v. CA, G.R. No. 82562, April 11, 1997;
People v. Abungan, G.R. No. 136843, Sep. 28, 2000; Go v. Looyuko, 537 SCRA 445; People v.
Ayocbok, 629 SCRA 324 (2010).
55Dy Teban Trading, Inc. v. Ching, 543 SCRA 560; BPI v. Lifetime Marketing Corp., 555
SCRA 373; Corinthian Gardens Association, Inc. v.Tanjangco, 556 SCRA 154; NgoSin Singv. Li
Seng Giap & Sons, Inc., 572 SCRA 625.
J9JC9B0M
R52M9UH7
2.6.2 Distinguished from Delict: (1) crimes affect the public

interest, while quasi-delicts are only of private concern;
(2) the Penal Code punishes or corrects the criminal
act, while the Civil Code, by means of indemnification,
merely repairs the damage; and (3) delicts are not as
broad as quasi-delicts, because the former are punished
only if there is a penal law clearly covering them, while
the latter, quasi-delicts, include all acts in which any
kind of fault or negligence intervenes.5'1
2.6.3 Scope of Quasi-delicts: (a) Covers acts or omissions
criminal in character: Article 2176 of the Civil Code,
where it refers to “fault or negligence, ” covers not only
acts “not punishable by law" but also acts criminal
in character, whether intentional and voluntary or
negligent.57 Hence, the same intentional, voluntary,
or negligent act causing damages and punished by
law may produce two kinds of civil liability: (1) civil
liability arising from the crime under Article 100 of the
Revised Penal Code (RPC); or (2) civil liability arising
from quasi-delict under Article 2176 of the Civil Code.51
(b) But double recovery not allowed: The Civil Code
expressly prohibits the plaintiff from recovering damages
twice under delict and quasi-delict “for the same act or
omission” of the defendant.5’ (c) Effect of nre-exisline
contractual relations: As a rule, the pre-existing contract
between the parties may bar the applicability of the law
on quasi-delict.60 However, by way of exception, the
existence of a contract between the parties does not bar
the commission of a tort (quasi-delict) by one against
the other and the consequent recovery of damages
therefor, when the act that breaks the contract is also a
tort.61 (d) Culpa contractual distinguished from culpa
’‘Garcia v. Barredo, 73 Phil. 60; Diana v. Balangas Transportation Co., 93 Phil. 392.
’’Safeguard Security Agency, Inc. V. Tangco, 511 SCRA 67; I-.lcano v. Hill, 77 SCRA 89;
Garcia v. Barredo, supra.
5*ld.
59Art. 2177, NCC.
“Coca-Cola Bottlers Philippines, Inc. v. CA, G.R. No. 110295, October 18, 1993.
61 Air France v. Carrascoso, 18 SCRA 155 (1966); Singson v. BPI, 23 SCRA 1117 (1968);
also in Light Rail Transit Authority v. Navidad, 397 SCRA 75 (2003); YHT Realty Corp. v. CA,
451 SCRA 638 (2005); and Schmitz Transport & Brokerage Corp. v. Transport Venture. Inc., 456
SCRA 557 (2005).
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
extra contractual (culna aauiliana); (1) in the first, the

source of obligation is contract; while in the second, the
source of obligation is quasi-delict; (2) in the first, the
negligence is merely incidental to the performance of
an already existing obligation (arising from contracts)
and that the vinculum juris exists independently of
the negligence; while in the second, the negligence is
substantive and independent in that it is the negligence
itself which creates the vinculum; and (3) in the first,
proof of the contract and of its non-performance is
sufficient prima facie to warrant recovery, hence, it
is not necessary to prove the negligence; while in the
second, the burden of proof rests upon the plaintiff to
prove the negligence and failure to do so shall result in
the dismissal of the action.
3) Kinds of Obligations: Civil and Natural

3.1 Classification of Obligations Based on Juridical Quality/
Efficaciousness:
3.1.1 Civil Obligation: One which gives a right of action
to compel its performance.62 In other words, a civil
obligation is one which provides for a legal sanction in
case of its breach.
3.1.2 Natural Obligation: One which does not grant a right
of action to enforce its performance, but after voluntary
fulfillment by the debtor, it authorizes the retention of
what has been delivered or rendered by reason thereof.63
In other words, this kind of obligation does not provide
for a legal sanction in case of non-performance.
3.2 Legal Consequences of Natural Obligations:
3.2.1 Effect of Voluntary Fulfillment: While it does not grant
a right of action to enforce its performance, a natural
obligation grants the creditor the right to retain what has
been delivered by reason thereof after the same has been
voluntarily fulfilled by the debtor.63
“Art. 1423, NCC.

“M.
“Art. 1423, NCC.
J9JC9B0M
R52M9UH7
3.2.2 May Be Converted Into Civil Obligation: A natural

obligation may again be converted into a civil obligation,
either by reason of novation or when it has been made
the subject matter of a contract of guaranty, pledge, or
mortgage.65 In novation, its first requisite is that there
must be a valid previous obligation. The first requisite
does not require that the obligation be a civil one
because even a natural obligation can be novated. The
Court held that a prescribed debt is a natural obligation
which can be the subject matter of novation.66
3.2.3 Cannot Be Subject Matter of Legal Compensation:
Since legal compensation requires that both obligations
be demandable,67 a natural obligation cannot be the
subject matter of legal compensation because it is not
legally demandable.
3.3 Important Examples of Natural Obligations:
3.3.1 When Right to Sue Has Prescribed: When the right to
sue upon a civil obligation has lapsed by extinctive
prescription (or barred by statute of limitations), the
obligation is converted into a natural obligation.66 In
relation thereto, when without the knowledge or against
the will of the debtor, a third person pays a debt which
the obligor is not legally bound to pay because the
action thereon has prescribed, the latter may not demand
reimbursement from the former because such payment
has not been beneficial to the debtor.69 The obligation
of the debtor to the third-party payor is not civil, but
a natural one. Hence, if the debtor later voluntarily
reimburses the third person, he cannot recover what he
has paid.™
3.3.2 No Agreement in Writing for Payment of Monetary
Interest: The debtor may not be compelled to pay
monetary interest on a loan unless the same has been
“Ans. 2052, par. 2 and 2086, NCC.

“Villaroel v. Estrada, 71 Phil. 140 (1940).
67Art. 1279(4), NCC.
“Art. 1424, NCC.
"Art. 1236,2“ par., NCC.
’“Art. 1425, NCC.
J9JC9B0M
R52M9UH7

PARTI: OBLIGATIONS
expressly stipulated in writing.71 However, if the

borrower voluntarily pays the monetary interest in
the absence of stipulation therefor, he cannot recover
the same because such voluntary payment is a case of
natural obligation.72 But if the payment of the interest
was by reason of mistake, the debtor may still recover it
pursuant to solutio indebiti.n
3.3.3 When Action Has Failed: When, after an action to
enforce a civil obligation has failed, the defendant
voluntarily performs the obligation, he cannot demand
the return of what he has delivered or the payment of the
value of the service he has rendered.74
3.3.4 When There is No Legal Obligation To Pay in
Succession Bv Will: The rule is that an heir is not liable
beyond the value of the property he received from the
decedent.75 But when he voluntarily pays a debt of the
decedent exceeding the value of the property which
he received by will or by the law of intestacy from the
estate of the deceased, the payment is valid and cannot
be rescinded by the payor.7'1 In the same way, when a
will is declared void because it has not been executed
in accordance with the formalities required by law, the
estate shall pass to the legal or intestate heirs by the law
of intestacy. But if one of the intestate heirs, after the
settlement of the debts of the deceased, pays a legacy
in compliance with a clause in the defective will, the
payment is effective and irrevocable.77
4) Kinds of Obligations: Real and Personal

4.1 Classifications of Obligations Based on Prestation:
4.1.1 Kinds of Obligations: (a) Real Obligation - One which
involves an obligation to give or to deliver; (b) Personal
Obligation - One which involves an obligation to do or
not to do.
71 Art. 1956, NCC.

77Art. 1960, NCC.
”W.
74Art. 1428, NCC.
7!Art. 1311, 1" par., NCC.
"Art. 1429, NCC.
77Art. 1430, NCC.
J9JC9B0M
R52M9UH7
4.1.2 Two Kinds of Real Obligations: (1) Determinate

or Specific Obligation - One which involves an
obligation to deliver a determinate or specific thing;
(2) Indeterminate or Generic Obligation - One which
involves the obligation to deliver an indeterminate or
generic thing. A thing is considered determinate or
specific when it has been particularly designated or
physically segregated from all others of the same class
or species.’8 A thing is generic if it has been designated
merely by its class or genus.
4.1.3 Two Kinds of Personal Obligations: (1) Positive
Personal Obligation - One which involves an obligation
to do; (2) Negative Personal Obligation - One which
involves an obligation not to do.
4.2 Legal Consequences of Determinate Obligations:
4.2.1 As to Performance: The debtor of a thing cannot compel
the creditor to receive a different one, although the latter
may be of the same value as, or more valuable than that
which is due.”
4.2.2 Three Accessory Obligations: In every determinate
obligation, there are three accessory obligations, in
addition to the obligation to deliver the specific thing
due: (1) to preserve the thing to be delivered with the
proper diligence of a good father of a family, unless
the law or the stipulation of the parties requires another
standard of care;8" (2) to deliver also all the accessions
and accessories, even though they may not have been
mentioned;81 and (3) to deliver also the fruits if the
creditor is already entitled to the same. The creditor
acquires a right to demand for the delivery of the fruits
of the determinate thing due from the time the obligation
to deliver the determinate thing arises."2 In obligations
to deliver a determinate thing by reason of contract, the
obligation to deliver the principal thing arises at the
time of perfection of the contract, unless the obligation
’’Art. 1460, l“par.,NCC.

’’Art. 1244, par. l.NCC.
“Art. 1I63.NCC.
"Art. 1166.NCC.
ald.
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
is subject to a suspensive condition, in which case, the

obligation arises only upon the happening of the said
condition.81
4.2.3 Remedies in Case of Breach: The creditor can compel
the debtor to deliver the determinate thing due in an
action for specific performance, with a right to recover
damages.84
4.2.4 Susceptibility to Extinguishment by Wav of Loss: A
determinate obligation can be extinguished by reason of
loss if: (1) the loss is without the debtor’s fault; and (2)
it was lost before he has incurred in delay.”
4.3 Legal Consequences of Generic Obligations:
4.3.1 As to Performance: When the obligation consists in the
delivery of an indeterminate or generic thing, whose
quality and circumstances have not been stated, the
creditor cannot demand a thing of superior quality.
Neither can the debtor deliver a thing of inferior
quality.86
4.3.2 Remedies in Case of Breach: The creditor can either: (I)
ask another person to comply with the obligation at the
expense of the debtor;87 or (2) compel the debtor himself
to make the delivery, plus damages in either case.88
4.3.3 Not Susceptible to Extinguishment by Wav of Loss: A
generic obligation is not susceptible to extinguishment
by reason of loss84 because the genus of a thing never
perishes (genus- nunquam peril).
4.4 Legal Consequences of Positive and Negative Personal
Obligations:
4.4.1 Remedies in Case of Breach of Obligation to Do: (a)
When considered breach: Not only in case of non
performance but also when the performance is either
"'Art. 1181, NCC.

“Art. 1165, par. I, NCC.
"’Art. 1262, par. I. NCC.
“Art. 1246, NCC.
87Art. 1165, par. 2, NCC.
“Art. 1170, NCC.
“Art. 1263, NCC.
J9JC9B0M
R52M9UH7
poor or in contravention of the tenor of the obligation;”

(b) Remedies: In case of non-performance, the remedy
is to ask another person to execute the act at the cost of
the debtor, plus damages;’1 however, if the obligation is
personal only to the debtor, the only remedy is to recover
damages. The debtor may not be compelled to execute
the act against his will because the same is tantamount
to involuntary servitude, which is prohibited by the
Constitution.92 If the obligation to do was done poorly
or in contravention of the tenor of the obligation, there
is an additional remedy of demanding for the undoing of
what has been done at the expense of the debtor.”
4.4.2 Remedies in Case of Breach of Obligation Not To
Do: (a) When considered breach: If the obligor does
what he is forbidden to do. (b) Remedies: To demand
for the undoing of what has been done at the expense
of the obligor,94 in addition to the creditor’s right to
recover damages.” If it becomes physically or legally
impossible to exercise the right to demand the undoing
of what has been done, the remedy of the creditor is
simply to recover damages from the debtor.
5) Breach of Obligations
5.1 Causes of Non-Performance of Obligations:
5.1.1 Involuntary Cause: A cause which is without the debtor’s
fault, or independent of his will, such as fortuitous event
orforce majeure, or fault of someone else.
5.1.2 Voluntary Cause: Causes which are due to the debtor’s
fault, or by reason of his will, such as (I) mora or delay;
(2) Mo or fraud; (3) culpa or negligence; and (4)
contravention of the tenor of the obligation.
■"Art. 1167.NCC.
’'Art. 1167, par. l.NCC.
’’Sec. 18(2), Article III, 1987 Philippine Constitution.
’’Art. 1167, par. 2, NCC.
'"Art. 1168, NCC.
’’Art. 1170, NCC.
J9JC9B0M
R52M9UH7

PART I: OBLIGATIONS
5.2 Mora or Delay:

5.2.1 Kinds of Delay: (a) mora solvendi - delay on the part
of the debtor; (b) mora accipiendi - delay on the part of
the creditor; and (c) compensation morae - delay on the
part of both parties because neither has completed their
part in their reciprocal obligation.14
5.2.2 Mora Solvendi: (a) Requisites: (1) the obligation be
demandable and already liquidated; (2; the debtor
delays performance; and (3) the creditor requires the
performance judicially or extrajudicially?" Once the
creditor makes a demand, whether judicial or extra-
judicial, the debtor incurs mora or delay.1' Hence, absent
any demand from the obligee, the obligor does not incur
delay.” (b) Exceptions to requirement of demand: (I)
when the obligation expressly so declares; (2) when
the law expressly so declares; (3) when from the nature
and the circumstances of the obligation it appears that
time was the controlling motive for the establishment
of the contract; or (4) when demand would be useless,
as when the obligor has rendered it beyond his power
to perform.100 (c) Effects of mora solvendi: (1) the
debtor becomes liable for damages,101 referred to as
“compensatory interests"; (2) the debtor remains liable
if the thing was lost after he has incurred in delay even if
the loss was without his fault102 or by reason of fortuitous
event;101 and (3) the prescriptive period within which the
obligee may bring an action against the obligor does not
commence to run until a demand is made.10*
’“Cortes V. CA. G.R. No. 126083, July 12,2006.

’'Social Security System v. Moonwalk Development and Housing Corp., 221 SCRA 119;
Selegnu Management and Development Corp. v. UCPB, supra: I’antaleon v. American Express
International, Inc., G.R. No. 174269, May 8,2009.
’“Art. 1169, NCC; Titan-Ikeda Construction and Development Corp. v. Primetown Property
Group, Inc., G.R. No. 158768, Feb. 12, 2008.
'"Solid I lomes, Inc. v. CA, 465 SCRA 137.
""Art. 1169, 2nd par., NCC.
101 Art. 1170, NCC.
102Art. 1262, 1“ par., NCC.
103Art. 1165, last par., NCC.
'“Solid Homes, Inc. v. CA, 465 SCRA 137.
J9JC9B0M
R52M9UH7
5.2.3 Requisites of Mora Accioiendi-. (1) An offer of

performance by the debtor who has the required capacity;
(2) the offer must be to comply with the prestation as it
should be performed; and (3) the creditor refuses the
performance without just cause.105
5.2.4 Delay in Reciprocal Obligations: (a) Concept of
reciprocal obligations: 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.106 They are to be performed simultaneously,
so that the performance of one is conditioned upon the
simultaneous fulfillment of the other.107 (b) When delay
exists: The mutual inaction of the parties gives rise
to compensation morae.m In other words, if both did
not perform, the delay of one is cancelled out by the
delay of the other. Hence, there is no delay. But from
the moment one of the parties fulfills his obligation,
delay by the other begins,109 without the necessity of
a demand.110 But demand is necessary when different
dates for performance are fixed for the obligations.1"
5.3 Polo (Fraud) and Culpa (Negligence):
5.3.1 Polo (fraud): (a) Concent: It is the deliberate and
intentional evasion of the normal fulfillment of
obligations, (b) Prohibited Waiver: Any waiver of an
action for future fraud is void."2
5.3.2 Negligence (culna contractual).’ (a) Concent: It is the
fault or negligence incident in the performance of an
obligation which already existed, and which increases
the liability from such already existing obligation, (b)
Prohibited waiver: When negligence shows bad faith it
mId.
'“Cortes v. CA, G.R. No. 126083, July 12, 2006.
mId.
mld.
109 Art. 1169, last par., NCC.
""Solar Harvest, Inc. v. Davao Corrugated Carton Corp., G.R. No. 176868, July 26, 2010.
"'Id.
112Art. 1171, NCC.
J9JC9B0M
R52M9UH7

PART I: OBLIGATIONS
is tantamount to fraud. Hence, any waiver of an action

for future negligence showing bad faith is also void."’
5.4 Fortuitous Event (Caso FortuitoY.
5.4.1 Definition: Fortuitous events by definition are
extraordinary events not foreseeable or avoidable. It is,
therefore, not enough that the event should not have been
foreseen or anticipated, but it must be one impossible to
foresee or to avoid. The mere difficulty to foresee the
happening is not impossibility to foresee the same."4
It may either be an act of God, or natural occurrences
such as floods or typhoons (known as “fortuitous event
proper”), or an act of man (force majeure) such as riots,
strikes, or wars."5
5.4.2 Effect and Requisites: The rule is that no person shall be
responsible for a fortuitous event."6 Hence, the obligor,
as a rule, is not liable for any loss or deterioration caused
by a fortuitous event. However, to exempt the obligor
from liability for a breach of an obligation by reason
of a fortuitous event, the following requisites must
concur: (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;
and (4) the debtor must be free from any participation
in, or aggravation of, the injury to the creditor."’ If the
negligence or fault of the obligor coincided with the
occurrence of the fortuitous event, and caused the loss
or damage or the aggravation thereof, the fortuitous
event cannot shield the obligor from liability for his
negligence."6 In other words, the whole occurrence is
humanized and removed from the rules applicable to a
fortuitous event."’
"’Art. 1173, in relation to Art. 1171, NCC.

"’Sicain v. Jorge, 529 SCRA 443, citing Republic v. Luzon Stevedoring Corp., 21 SCRA
279.
"’Asset Privatization Trust v. TJ. Enterprises, G.R. No. 167195, May 8,2009.
"‘Art. 1174, NCC.
"’Mondragon Leisure and Resorts Corp. v. CA, 460 SCRA 279.
"‘College Assurance Plan v. Belfranlt Development, Inc., 538 SCRA 27.
"’Asset Privatization Trust v. TJ. Enterprises, supra; Sicam v. Jorge, supra.
J9JC9B0M
R52M9UH7
5.4.3 Exceptions to Fortuitous Event: The obligor remains

liable for a breach of an obligation by reason of a
fortuitous event in the following instances: (1) when
the law expressly so specifies; (2) when it is otherwise
declared by the parties; and (3) when the nature of the
obligation requires the assumption of risks.120
6) Kinds of Obligations: Pure, Conditional, and With a Term

6.1 Classification of Obligations Based on Absence/Presence of
Condition or Term:
6.1.1 Pure Obligation: Obligation is not subject to any
condition or term (period).
6.1.2 Conditional Obligation: One which is subject to a
condition.
6.1.3 Obligation With a Term: An obligation whose effects
are subjected in one way or another to the expiration of
a term.
6.2 Pure Obligation:
6.2.1 Effect: The obligation already exists and it is already
demandable. In other words, the obligation is
immediately demandable.121
6.2.2 Other Obligations which are Immediately Demandable:
(1) obligation subject to a resolutory condition; and (2)
obligation subject to a resolutory term.122
6.3 Conditional Obligation:
6.3.1 Definition: It is an uncertain event which wields an
influence on a legal relation.12' It is also defined as every
future and uncertain event upon which an obligation or
provision is made to depend.124
6.3.2 Kinds of Conditions: (J) Suspensive or Resolutory
- effect is on the existence of the obligation; (2)
Potestative, Casual, or Mixed - effect is on the validity
l2°Art. 1174, NCC.

l2lAn. 1179, par. I, NCC.
,22Arts. 1179, par. 2 and 1193, par. 2, NCC.
I2J8 Manresa 126.
l24Esrichc, Law Dictionary.
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
of the obligation; (3) Possible and Impossible - effect

is on the validity of the obligation; and (4) Positive
and Negative - effect is on the determination of the
effectivity of the obligation.
6.3.3 Suspensive and Resolutory: (a) Suspensive Condition:
Obligationarisesonlyuponthefulfillmentofthecondition.
If the condition is not fulfilled, the obligation does not
arise.125 During the pendency of the condition, however,
the creditor has the right to take necessary measures to
preserve and protect his inchoate interest.126 (b) Effect
of fulfillment of condition: The effects in an obligation
to give shall retroact to the day of the constitution of
the obligation. However, when the obligation imposes
reciprocal prestations, the fruits and interests are
deemed mutually compensated.127 In obligations to do
and not to do, courts shall determine, in each case, the
retroactive effects.128 (c) Effect of loss, deterioration, or
improvement of determinate thing prior to fulfillment
of condition: (1) If lost without the fault of the debtor,
the obligation is extinguished.12'1 (2) If lost through the
fault of the debtor, the debtor’s obligation is converted
into payment of damages.130 (3) If it deteriorates without
the fault of the debtor, the impairment is borne by the
creditor.131 (4) If it deteriorates through the fault of the
debtor, the creditor may choose between the rescission
of the obligation and its fulfillment, with damages in
either case.132 (5) If it is improved by its nature, or by
time, the improvement shall inure to the benefit of
the creditor.133 If it is improved at the expense of the
debtor, the debtor may remove the improvement if the
l2!Art. 1181. NCC.

'“Art. 1188, NCC.
'“Art. 1187, NCC.
'"Art. 1189(1), NCC.

'“Art. 1189(2), NCC.
“'Art. 1189(3), NCC.
132Art. 1189(4), NCC.
'“Art. 1189(5), NCC.
J9JC9B0M
R52M9UH7
removal can be done without injuring the thing due.'34

(d) Resolutory Condition: Obligation already exists
but the same is extinguished upon the fulfillment of the
condition.135 Hence, it is immediately demandable.'36
Upon performance of the obligation by the debtor, the
condition becomes a suspensive condition as to him.
(e) Effect of fulfillment of condition: Obligation is
extinguished.137 In obligations to give, the parties shall
return to each other what they have received.'38
6.3.4 Tacit Resolutory Condition in Reciprocal Obligations:
(a) Reciprocal Obligation: Reciprocal obligations are
those which arise from the same cause, and in 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. They are to be performed simultaneously
such that the performance of one is conditioned upon
the simultaneous fulfillment of the other.'3’ (b) Tacit
Resolutory Condition: The power to rescind obligations
is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him,140
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. ”14' But the power to rescind must be
invoked judicially.142 (c) Not absolute right: Rescission
will not be permitted for slight or casual breach of the
contract, but only for such breaches as are so substantial
and fundamental as to defeat the object of the parties
in making the agreement.'43 (d) Prescriptive period for
action to rescind based on Article 1191: 10 years from
'34Art. 1189(6), in relation to Art. 579, NCC.

135Art. 1181, NCC.
'“Art. 1179, par. 2, NCC.
,37Art. 1181, NCC.
'“Art. 1190, NCC.
'“Heirs of Antonio Bernabe v. CA, 559 SCRA 53.
'“Art. 1191, par. I,NCC.
l4'Casiflo, Jr. v. CA, 470 SCRA 57.
l420ng v. Bogflalbal, 501 SCRA 490.
l43Song Fo & Company v. Hawaiian-Philippine Co., 47 Phil. 821; Yancza v. CA, 572
SCRA 413.
J9JC9B0M
R52M9UH7

PART I: OBLIGATIONS
accrual of the right of action, for written contracts144 or

six years, for verbal contracts.145 (e) If both committed
breach: If it can be determined who the first infractor is,
the first infractor is liable for damages but the same shall
be equitably tempered by the courts,146 since the second
infractor also derived or thought he would derive some
advantage by his own act or neglect.147 If it cannot be
determined who the first infractor is, the obligations
are deemed extinguished and each shall bear his own
damages.148
6.3.5 Potestative, Casual, and Mixed Conditions: (a)
Potestative Condition: When the fulfillment of the
condition is exclusively dependent upon the will
of either the debtor or creditor. If the condition is
potestative on the part of the debtor and it is at the same
time suspensive, the obligation becomes void;14’ if it is
at the same time resolutory, the obligation is valid.150 If
the condition is potestative on the part of the creditor
the obligation is valid, (b) Casual Condition: When th<
fulfillment of the condition is entirely dependent upon
chance or upon the will of a third person, in which case
the obligation is valid and will take effect in conformity
with the Civil Code.151 (c) Mixed Condition: 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, (d) Doctrine of Constructive Fulfillment of
Suspensive Condition: When the condition is mixed,
suspensive, partly dependent upon the will of the debtor,
and the latter intentionally prevents the fulfillment of
the condition dependent on him, the entire condition is
l44Art. 1144(1), NCC.

145Art. 1145(1), NCC; Iringan v. CA, 366 SCRA 41; Cannu v. Galang. supra.; Unlad Re
sources Development Corp. v. Dragon, 560 SCRA 63; Heirs of Sofia Quirong v. Development
Bank of the Phil., G.R. No. 173441, Dec. 3, 2009.
146Art. 1192, NCC.
l47Ongv. Bogfialbal, 501 SCRA 409.
14!Art. 1192, NCC.
‘"’Art. 1182, NCC.
‘"Taylor v. Uy Tieng, 43 Phil. 873 (1922).
,s,Id.
J9JC9B0M
R52M9UH7
deemed constructively fulfilled.152 This is the doctrine

of constructive fulfillment of a suspensive condition,
provided for in Article 1186 of the Civil Code, (e)
Rule on Constructive Fulfillment of Mixed Conditional
Oblieation: When the condition is mixed, suspensive,
partly dependent upon the will of the debtor and partly
dependent upon the will of a third person, and the debtor
did all in his power to comply but the condition is not
fulfilled because of the third person over whom the
debtor has no control, the entire condition is deemed
constructively fulfilled. This is known as the rule
on constructive fulfillment of a mixed conditional
obligation, which is provided for by jurisprudence.'53
6.3.6 Possible and Impossible Conditions: (a) Possible
Condition: When the condition is not contrary to
the law of nature, or not contrary to good customs or
public policy, or not prohibited by law. (b) Impossible
Condition: When the condition is contrary to the law
of nature (physical impossibility), or contrary to good
customs or public policy, or prohibited by law (legal
impossibility), (c) Effect of Impossible Condition: (1)
On obligation: The obligation becomes void.'51 (2) On
simple and remuneratorv donations: The condition is
considered not imposed.'55 Hence, the donation remains
valid. (3) On testamentary dispositions: The condition
is considered not imposed.156 Hence, the testamentary
disposition remains valid.
6.3.7 Positive and Negative Conditions: (a) Positive
Condition: A condition that a certain event will happen
within a specific period has the effect of extinguishing
the obligation dependent upon such condition from the
moment: (1) said period lapses without the condition
having been fulfilled; or (2) when it becomes certain
that the event will not take place, even before said
period expires.'5’ (b) Negative Condition: A condition
'“Art. 1186, NCC.

'“International Hotel Corp. v. Joaquin, Jr., 695 SCRA 382 (2013).
'“Art. 1183,NCC.
'“Art. 727, NCC.
'“Art. 873, NCC.
'“Art. 1184, NCC.
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
that some event will not happen at a determinate time

has the effect of rendering the obligation effective from
the moment: (1) the period indicated has elapsed; or (2)
if it has become evident that the event cannot occur.'56
6.4 Obligation With a Term:
6.4.1 Definition: A term or period consists of a space of time
which, having an influence on obligations as a result of
a juridical act, and either suspends their demandability
or produces their extinguishment.1” It may also refer
to a future event, the happening of which is certain. If
the happening of the future event is uncertain, it is a
condition; if the happening of the future event is certain,
it is a term.
6.4.2 Kinds of Terms: (a) Suspensive and Resolutory: (1)
Suspensive Term: One that must lapse before the
performance of the obligation can be demanded.160
Before the arrival of the period, the obligation already
exists but is not yet demandable. A suspensive condition
affects the very existence of the obligation, such that
if the condition is not fulfilled, the obligation does
not arise. But a suspensive term does not affect the
existence of the obligation but only its demandability.
(2) Resolutory Term: The period after which the
obligation is terminated. The obligation is valid up
to a certain date. Upon the arrival of said date, the
obligation is terminated.'61 A resolutory condition,
upon its happening, results in the extinguishment of
the obligation,163 as though it had not existed. On the
other hand, a resolutory term, upon the arrival of the
day certain, simply results in the termination of the
obligation161 without annulling the fact of its existence,
(b) Definite and Indefinite: (1) Definite Term: Refers to
a known date or time. (2) Indefinite Term: Refers to an
"“Art. 1185, NCC.

'”8 Manresa 158; Lirag Textile Mills v. CA, 63 SCRA 374,375.
'“Art. 1193, par. 1, NCC.
161 Art. 1193, par. 2, NCC.
163 Art. 1181, NCC.
161 Art. 1193, par. 2, NCC.
J9JC9B0M
R52M9UH7
event which will necessarily happen but the date of its

happening is unknown, such as the death ofa person.164 If
the uncertainty consists in whether the day will come or
not, the obligation is conditional.165 (c) Legal, Voluntary,
and Judicial: (1) Legal Term: It is the period granted by
law. (2) Voluntary Term: It is the period stipulated by
the parties. (3) Judicial Term: It is the period allowed by
the courts.
6.4.3 Benefit of Term: (a) Rule: Whenever in an obligation
a period is designated, it is presumed to have been
established for the benefit of both the creditor and
the debtor.166 It means both can use the period. As a
consequence, the creditor cannot demand payment,
and the debtor cannot make an effective tender and
consignation of payment, before the period stipulated
has arrived, (b) Exceptions: (1) Contrary agreement.
If the period is for the benefit of the creditor alone, he
may demand performance at any time, even before the
arrival of the day certain, but the debtor in such a case
cannot compel him to accept payment before the period
lapses. On the other hand, if the period is for the benefit
of the debtor alone, he may make payment at any time,
even before the expiration of the period, but he may
oppose a premature demand for payment. (2) Debtor
loses the right to use period in the following instances:
(i) debtor becomes insolvent, unless he gives a security;
(ii) debtor does not furnish the promised security; (iii)
by his acts, debtor impaired the security or it disappears
by reason of fortuitous event, unless he gives a new
security; (iv) debtor violates any undertaking by reason
of which the creditor agreed to the period; (v) debtor
attempts to abscond.16’
6.4.4 Instances When Court Authoriz.ed to Fix Period: (1) when
obligation is intended to be with a period but the period
has not been fixed;16" (2) when duration of the period is
'“Art. 1193, par. 3, NCC.

'“Art. 1193, par. 4, NCC.
'“Art. 1196, NCC.
'"Art. 1198, NCC.
'“Art. 1197, NCC.
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
left to the exclusive will of the debtor,1® such as when

the debtor binds himself to pay when his means permit
him to do so;170 and (3) when the non-compliance by one
of the parties in reciprocal obligations is with respect to
time, the court may fix or grant a period if there exists
a just cause therefor.171 When the obligation is not one
with a period, such as when the obligation is payable on
demand (which is actually a pure obligation), the court
is not authorized to fix the period.'77 In numbers I and
2 hereof, the fulfillment of the obligation itself cannot
be demanded until after the court has fixed the period
for compliance therewith, and such period has arrived.
Any action to compel performance brought before that
would be premature.173
7) Kinds of Obligations: Alternative and Facultative Obligations

7.1 Classification Based on Number of Prestations (Object):
7.1.1 Simple Obligation: When there is only one prestation
agreed upon.
7.1.2 Conjunctive Obligation: When there are several
prestations which are due and the debtor is required to
perform ail prestations in order for the obligation to be
extinguished.
7.1.3 Alternative Obligation: When there are several
prestations which are due but the debtor is required to
perform only one prestation in order for the obligation
to be extinguished.
7.1.4 Facultative Obligation: When there is only one
prestation agreed upon, but the debtor may render
another in substitution.''4
"•"Supra.
'’"Art. 1180. NCC.
■’'Art. 1191. par. 3, NCC.
,72Peoples Bank & Trust Co. v. Odom, 64 Phil. 126.
'^Conception v. People of the Phil., 74 Phil. 63: Gonzales v. Jose. 66 Phil. 369; Pages v
Babiian Lumber Co.. J 04 Phil. 882.
174ArL 1206. NCC.
J9JC9B0M
R52M9UH7
7.2 Alternative Obligation:

7.2.1 Right of Choice: (a) Rule: It belongs to the debtor,
unless expressly granted to the creditor.175 (b) Limitation
upon debtor's right of choice: (1) The creditor cannot
be compelled to receive part of one and part of the
other undertaking;176 and (2) the debtor cannot choose
prestations which are impossible, unlawful, or which
could not have been the object of the obligation.177 (c)
When debtor's right of choice is lost: When only one
prestation is practicable.'7'
7.2.2 Effectivitv of Choice: (a) When choice becomes
effective: from the time it has been communicated
to the other or when the other gains knowledge of
such choice.'” (b) Effect: Once choice is effective, it
becomes irrevocable.'60 Hence, the obligation ceases to
be alternative and becomes a simple one of performing
that which has been chosen.'61
7.2.3 Effect of Loss of Prestation/s: (a) If all were lost: (1) by
reason of fortuitous event or by reason of the creditor’s
fault, the obligation is extinguished; (2) by reason of the
debtor’s fault but the right of choice is with him, he is
bound to pay the value of the last prestation which he
lost,"12 plus damages;"1’ and (3) by reason of the debtor’s
fault but the right of choice is with the creditor, the latter
can demand for the payment of the price of any of the
prestations, with indemnity for damages."" (b) If not all
were lost: (1) by reason of fortuitous event, the choice
may still be exercised from those remaining;1” (2) by
reason of the debtor’s fault but the right of choice is
,,5Art 1200, par. l.NCC.

"‘Art. 1199, par. 2, NCC.
l77Art 1200, par. 2, NCC.
""Art. 1202, NCC.
"’Art. 1201, NCC.
'“Reyes v. Martinez, 55 Phil. 492 (1930).
""Art. 1205, par. l.NCC.
"“Art. 1204, par. 2, NCC.
'"Art. 1204, par.3, NCC.
'“Art. 1205(3), NCC.
'“Art 1205(1), NCC.
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
with him, he can simply choose from the remaining

prestation/s; (3) by reason of the debtor’s fault but the
right of choice is with the creditor, the latter may claim
any of those subsisting (without right to damages), or
the price of that which has disappeared (with a right
to damages);186 (4) by reason of the creditor’s fault but
the right of choice is with him, he can simply choose
from the remaining prestation/s; and (5) by reason of
the creditor’s fault but the right of choice is with the
debtor, the latter may either rescind the contract with
damages because he cannot make a choice according to
the terms of the obligation,187 or he may choose from the
remaining without a right to damages.
7.3 Facultative Obligation:
7.3.1 Concept: Only one prestation has been agreed upon
to be due (called “original prestation”), but the debtor
may instead perform in substitution another prestation
which has already been agreed upon (called “substitute
prestation”). The choice to substitute is always with
the debtor. The loss of the substitute prestation does
not produce any legal effect. However, the loss of the
original prestation by fortuitous event will result in the
extinguishment of the obligation.
7.3.2 Requirement of Notice: If the debtor will be performing
the original prestation, there is no need to notify the
creditor because it is what is due. However, if the
debtor chooses to perform the other prestation, there
is a need to notify the creditor because it is not what
is due; otherwise, the loss of such prestation by reason
of a cause not attributable to him shall not result in
the extinguishment of the obligation. Once the debtor
notifies the creditor that he will be performing the
other prestation, the obligation becomes a simple one
of performing the chosen prestation. The loss of the
chosen prestation by fortuitous event will result in the
extinguishment of the obligation.
'“Art. 1205(2), NCC.

'•’Art. 1203, NCC.
J9JC9B0M
R52M9UH7

i
8) Kinds of Obligations: Joint and Solidary Obligations
8.1 Classification Based on Number of Subjects:
8.1.1 Simple Obligation: When there is only one debtor and
only one creditor.
8.1.2 Joint or Solidary Obligation: In case of plurality of
subjects, the obligation is either joint or solidary. Ajoint
obligation is one in which each debtor is liable only
for a proportionate part of the debt, and each creditor
is entitled to demand only a proportionate part of the !
credit from each debtor.188 On the other hand, a solidary
obligation is one in which each of the debtors is liable for
the entire obligation, and each of the creditors is entitled
to demand the satisfaction of the whole obligation from
any or all of the debtors."9
8.1.3 Presumption in Favor of Joint Obligation: In case of
plurality of subjects, the law presumes the obligation
to be merely joint.190 For example, where an instrument
containing the word "We promise to pay" is signed by
two or more persons, they are presumed to be merely
joint debtors.
8.1.4 When Obligation Becomes Solidary: (1) when the
obligation expressly so states; (2) when the law so
provides; or (3) when the nature of the obligation so
requires.191
8.1.5 Solidarity Bv Slipulalion/Aureement: The obligation
may expressly state, for example, that each one of
the debtors can be compelled to pay the totality of
the debt, or that each one of them is obligated to pay
for the entire value of the obligation;192 or the word
“solidary" may be used; or the parties may simply use
words indicating an agreement for solidarity, such as
ffi t-rcdii Corp. v. CA, G.R. No. 109648, Nov. 22, 2001; Dy-Dumalasa v. Fernandez,
el al, G.R. No. 178760, July 23, 2009.
'“id.
'"'An. 1207, NCC; Escafio v. Ortigas, Jr., G.R. No. 151953, June 29, 2007.
"‘An. 1207, NCC.
"‘Juan Ysmael & Co. v. Salinas, 73 Phil. 601.
!
J9JC9B0M
R52M9UH7

PART I: OBLIGATIONS
“jointly and severally,”1” "“junto o separadamente"m

“individually and collectively,' or “individually and
jointly liable.”'"
8.1.6 Solidarity Bv Provision of Law: Examples are the
following: (1) where an instrument containing the
word "I promise to pay" is signed by two or more
persons, they are deemed to be jointly and severally
liable thereon, where the language of the instrument is
ambiguous;197 (2) if two or more heirs take possession
of the estate, they shall be solidarily liable for the loss
or destruction of a thing devised or bequeathed, even
though only one of them should have been negligent;”*
(3) all partners are liable solidarily with the partnership
for everything chargeable to the partnership for loss
or injury caused to any person by any wrongful act
or omission of any partner in the ordinary course of
the business of the partnership,”9 and for money or
property of a third person misapplied by a partner in the
course of the partnership business;™ (4; the principal
is solidarily liable with the agent even when the latter
has exceeded his authority, if the former allowed the
latter to act as though be had full pow ers;21" (5) if tw o
or more persons have appointed an agent for a common
transaction or undertaking, they shah be solidarily liable
to the agent for all the consequences of the agency;2"2
(6) in commodantm. two or more bailees are solidarily
liable for a thing loaned in the same contract;2® (7) the
responsibility of tw o or more officious managers shall
be solidary, unless the management was assumed to
'"'International Finance Corp. v. Imperial Textile Mills, Inc., G.R. No. 160324. Nov. 15,
2005.
'"Parot v. Gemora, 7 Phil. 94.
’’’Oriental Commercial v. Lafucnte, (C.A.) 38 Off. Gaz. 947.
'"Ronquillo v. CA, 132 SCRA 274.
l9,Art. 17(g), Negotiable Instruments Law.
’’“Art. 927, NCC.
l99Art. 1824, in relation to Art. 1822, NCC.
’“"Art. 1824, in relation Io Art. 1823, NCC.
“'Art. 1911, NCC.
202Art. 1915, NCC.
203Art. 1945, NCC.
i
L
J9JC9B0M
R52M9UH7
save the thing or business from imminent danger;’” and

(8) the responsibility of two or more payees is solidary
in solutio indebiti.™ Note that those provisions of law
providing for solidarity only provide for solidarity with
respect to the liability of the debtors. Hence, solidarity
on the side of the creditors may only exist by agreement
of the parties.
8.1.7 Solidarity by Reason of Nature of Oblieation: It cannot
refer to the indivisibility of the obligation because
the law says that “the indivisibility of an obligation
does not necessarily give rise to solidarity.” Some of
the obligations, solidary by nature, are also provided
by law, such as civil liability arising from crime,206
the obligations of two bailees,’07 of two officious
managers,“* or of two tortfeasors.2" Likewise, when
several heirs of a deceased partner continued with the
business and management of the partnership against
the will of the other partner, the obligation of said heirs
to undertake an inventory, render an accounting of
partnership assets, and to wind up the partnership affairs
is solidary by its nature.210
8.2 Joint Obligation:
8.2.1 Division of Joint Debts or Credits: The division ofjoint
credits or debts may be established in the obligation
itself, as when the debtors specified their respective
liabilities or when the creditors specified the sums for
which each ofthem is entitled. However, ifthe obligation
itself is silent as to how the debt or credit shall be
divided among the joint debtors or joint creditors, then
such debt or credit shall be presumed to be divided into
as many equal parts as there are creditors or debtors.’"
’“Art. 2146, par. 2, NCC.

“’Art. 2157, NCC.
’“Art. 110, RPC.
“’Art. 1945, NCC.
’“Art. 2146, par. 2, NCC.
’"Art. 2194, NCC.
’l0Sunga-Chan v. CA, G.R. No. 164401, June 25, 2008.
’"Art. 1208, NCC.
J9JC9B0M
R52M9UH7
I

PART 1: OBLIGATIONS
8.2.2 Each Share Distinct From Olhers: The most essential

and characteristic effect of a joint obligation is that the
share of each of the joint creditors or debtors in the
credit or debt is considered distinct from one another.21-'
As a consequence: (a) Extinction: The extinction of the
debt of one of the various debtors does not necessarily
affect the debts of the others.215 (b) Delay: The delay-
on the part of only one of the joint debtors does not
produce effects with respect to the others, and if the
delay is produced through the acts of only one of the
joint creditors, the others cannot take advantage thereof,
(c) Interruption of prescription: The interruption of
prescription by the judicial demand of one creditor upon
a debtor does not benefit the other creditors nor interrupt
the prescription as to other debtors. In the same way,
a partial payment or acknowledgment made by one of
several joint debtors does not stop the running of the
statute of limitations as to the others.214 (d) Vices of each
obligation: The vices of each obligation arising from
a personal defect of a particular debtor or creditor, do
not affect the validity of the other credits or debts. <e)
Insolvency of a debtor: The insolvency of a debtor does
not increase the liability of his co-debtors, nor does it
authorize a creditor to demand anything from his co
creditors. (f) Defense of n-s judicata: In divisible joint
obligations, the defense of res judicata is not extended
from one debtor to another, the reason being that no
debtor has more of an obligation than his own. nor may-
each creditor claim more rights than what respectively
pertains to him.215
8.2.3 Correlation of Debts and Credits: Since each debt
and credit is considered distinct and separate from the
others, the problem of correlation of debts and credits
shall be governed by the following rules: (I) when the
number of creditors and debtors are the same, and the
division of the joint credit among the joint creditors and
the division among the joint debtors are unequal, and
2l2Art. 1208, NCC.

2l5Agoncillo and Marino v. Javier, 38 Phil. 424.
ll4/d, citing^ Manresa 182.
21!8 Manresa 200-201.
J9JC9B0M
R52M9UH7
the debts and credits, as thus divided, can be matched

with each other, they shall be the debtor and creditor
of each other; and (2) where the number of creditors
and debtors are unequal, or when although there is an
equal number of creditors and debtors, the credits to
which each joint creditor is entitled and the share of
the joint debt for which each joint debtor is answerable
are unequal and do not match, each creditor may ask or
each debtor may pay all in proportion to the respective
credits and debts, in order that such credits or debts may
be subject to equal contingencies.
8.3 Solidary Obligation:
8.3.1 Kinds of Solidarity: (a) Active Solidarity - It is the
solidarity existing among the creditors of the same
obligation, by virtue of which, each of them, as regards
his co-creditors, is a creditor only as to his share in the
obligation and, in regard to the common debtor, he
represents all of them.216 (b) Passive Solidarity - It is
the solidarity existing among the debtors of the same
obligation, by virtue of which they are bound to the
payment of the whole credit.217 (c) Mixed Solidarity - It
is the solidarity existing on the part of both creditors and
debtors.21*
8.3.2 Solidarity Among Creditors: (a) Mutual agency: In
regard to their common debtor or debtors, each one of
the creditors can represent all of them. Hence, insofar
as the common debtors are concerned, each one of the
creditors is a representative of the others, (b) Effect of
demand: Because of mutual agency, the debtor may pay
any one of the solidary creditors; but if any demand has
been made by one of the solidary creditors, payment
must be made only to such creditor.21’ Payment to
another is a case of payment made to a wrong person
which will not extinguish the debtor’s obligation,
(c) Extinguishment of obligation: Because of mutual
agency, any one of the solidary creditors may extinguish
2I61 Giorgi, Teoria de la Obligaciones, 89.

™Id.
2I,8 Manrcsa 205.
2l’Art. 1214, NCC.
J9JC9B0M
R52M9UH7
BOOK IX'. OBI IGA1IONS IX w

PARI I:OBI.IGAl IONS
the debtor's obligation even without the consent of

the others. Insofar as the debtor is concerned, the act
is valid and will result in the extinguishment of the
debtor’s obligation.™ But the creditor who executed
such act shall be liable to the others for the share in the
■ obligation corresponding to them."1 (d) Assignment of
creditor’s rights: A solidary creditor cannot assign his
rights to a stranger without the consent of the others.™
Such unauthorized assignment is invalid. Hence, if the
debtor pays the assignee the payment is not valid.
8.3.3 Solidarity Among Debtors: (a) Mutual guaranty: The
creditor may proceed against any one of the solidary
debtors or some or all of them simultaneously.™ In
short, each one of the solidary debtors is liable for the
entire obligation, (b) Who may nay: Any one of the
solidary debtors may extinguish the entire obligation.
However, if two or more solidary debtors offer to pay,
the creditor may choose which offer to accept.™ (c)
Right of solidary debtor who paid entire obligation: He
may demand reimbursement from his co-debtors only
the share which corresponds to each, with interest for
the payment already made.™ When one of the solidary
debtors cannot, because of his insolvency, reimburse his
share to the debtor paying the obligation, such shall be
bome by all his co-debtors, in proportion to the debt of
each."” (d) Solidarity not affected bv varied terms and
conditions: Solidarity may exist although the creditors
and debtors may not be bound in the same manner and
by the same periods and conditions."’ (e) Defenses
available to solidary debtor: (1) Those derived from the
nature of the obligation,"* such as when the obligation
is void or unenforceable, in which case, the debtor
““Art. 1215, NCC.
“'Art. 1213, NCC.

“'Art. 1216, NCC.
“'Art. 1217, par. l.NCC.
“’Art. 1217, par. 2, NCC.
“‘Art. 1217, par. 3, NCC.
“’Art. 1211, NCC.
““Art. 1222, NCC.
J9JC9B0M
R52M9UH7 1
invoking it is not liable for the entire obligation; (2)

Those defenses which are personal to the debtor sued,229
such as minority or insanity, in which case, the debtor
invoking it is not liable for the entire obligation; or those
defenses which pertain only to his share,230 such as when
his share is subject to a suspensive condition which is
not yet fulfilled, in which case, the debtor invoking it
may not be compelled to pay his share but only the
shares pertaining to the others; and (3) Those defenses
which personally belong to the others,231 in which case,
the debtor invoking it may not be compelled to pay the
share pertaining to such other debtor or debtors.
8.3.4 Effect of Remission in Mixed Solidarity: Ifthe remission
is effected by one of the solidary creditors in favor of
one of the solidary debtors and without the consent of
the other creditors: (a) Remission of entire obligation:
It shall extinguish the obligation; but the creditor who
effected the remission shall be liable to the others for the
share in the obligation corresponding to them.232 But the
remission of the whole obligation obtained by one of the
solidary debtors does not entitle him to reimbursement
from his co-debtors.233 (b) Remission of entire share
of solidary debtor: It releases such debtor from the
obligation, with respect to the payment of the balance.
But in case of insolvency of another solidary debtor, his
share shall be borne by all his co-debtors, including the
debtor whose entire share had already been condoned.234
(c) Partial remission of share of solidary debtor: If the
remission in favor of a solidary debtor is partial, his
character as solidary debtor continues with respect to
the creditors and his co-debtors. Hence, he can be made
to pay the balance of the obligation.233
mld.
™ld.
mld.
232Art. 12I5.NCC.
’’’Art. 1220, NCC.
“Art. 1217, par. 3, NCC.
2358 Manresa 225-227.
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
8.4 Joint and Indivisible Obligation:

8.4.1 Concent: As to the object of the obligation (prestation),
the same is indivisible. As to the subjects, in case of
plurality, the same is a joint obligation. Hence, the
obligation is a joint obligation and, at the same time,
indivisible. This is because the indivisibility of the
obligation does not necessarily give rise to solidarity.334
Hence, even ifthe obligation is indivisible, it is presumed
to be merely joint in case of plurality of subjects.
8.4.2 Consequences of Joint and Indivisible Obligation: In
case of plurality of debtors, each one of the debtors is
liable only for his part (not the entire obligation), but he
cannot separately perform his part because of the indi
visibility of the prestation. Here, the obligation can be
enforced only by proceeding against all the debtors,337
although each is liable only for his respective share.
Since they are merely joint debtors, the others shall
not be liable in case of insolvency of one of them.33*
In case of breach of the obligation because any one of
the joint debtors does not comply with his undertaking,
the obligation may be converted into payment of dam
ages. But only the erring debtor is liable for the payment
of punitive damages, while the others cannot be liable
beyond their corresponding portion of the price of the
thing or of the value of the service in which the obliga
tion consists.33’ In case of plurality of creditors, each of
the creditors is entitled to collect only his part (not the
entire obligation), but since the obligation is indivisible,
he cannot demand performance of such part. The collec
tion of the entire credit will require the collective action
of all creditors, although each is entitled only to his own
part.
9) Kinds of Obligations: Divisible and Indivisible Obligations

9.1 Classification Based on Susceptibility to Partial Performance:
9.1.1 Divisible Obligation: The obligation is susceptible of
division and partial performance.
"‘Art. 1210, NCC.

3)7Art. 1209, NCC.
™ld.
21,Art. 1224, NCC.
J9JC9B0M
R52M9UH7
9.1.2 Indivisible Obligation: The obligation is not susceptible

of partial performance.
9.1.3 Test: The test of divisibility of an obligation is whether
or not it is susceptible of partial performance. This
susceptibility does not mean that it is possible or not to
fulfill the obligations by parts, but rather, whether or not
it is opposed to the ends or purpose of the obligation.240
9.2 Rules in Determining Indivisibility:

9.2.1 Obligation To Give: Obligations to deliver a definite
thing, such as an animal or vehicle, are indivisible.241
However, even though the object may be physically
divisible, an obligation is indivisible if so provided by
law or intended by the parties.242
9.2.2 Obligation To Do: Generally indivisible. Even though
the service may be physically divisible, an obligation
is indivisible if so provided by law or intended by the
parties.243 These obligations are divisible, however,
when: (1) the obligation has for its object the execution
of a certain number of days of work; (2) the obligation
has for its object the accomplishment of work by
metrical units; or (3) the obligation has for its object
analogous things which by their nature are susceptible
of partial performance.244
10) Kinds of Obligations: Obligations with a Penal Clause

10.1 Concent of Penal Clause:
lO.l.l Definition: A penal clause is an accessory obligation
which the parties attach to a principal obligation 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
inadequately fulfilled.245
24O1V Francisco, Civil Code ofthe Philippines, 366.

24lArt. 1225, par. l.NCC.
242Art. 1225, par. 3, NCC.
mld.
244Art. 1225, par. 2, NCC.
243Pryce Corporation v. Philippine Amusement and Gaming Corp., 458 SCRA 164, 180-
181.
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
10.1.2 As Substitute For Damages and Interest: (a) Rule: The

penalty takes the place of the indemnity for damages
and the payment of interest.246 (b) Exceptions: Indemnity
for damages, in addition to and apart from the penalty
stipulated, may be recovered in three cases: (1) when
there is an express stipulation to that effect; (2) when
the obligor, having failed to comply with the principal
obligation, also refuses to pay the penalty, in which case
the creditor is entitled to interest in the amount of the
penalty, in accordance with Article 2209 of the NCC; or
(3) when the obligor is guilty of fraud in the fulfillment
of the obligation.247
10.1.3 Not Replacement for Principal Obligation: (a) Rule:
Penalty is not a substitute for the performance of the
obligation. Hence, as a rule, the debtor cannot exempt
himself from the performance of the obligation by
paying the penalty.248 (b) Exception: when the foregoing
right is expressly reserved for the debtor.24’
10.1.4 When Creditor Entitled to Both Principal and Penalty:
(a) Rule: Creditor cannot demand the fulfillment of the
obligation and the satisfaction of the penalty at the same
time.250 (b) Exception: Creditor may only be entitled
to both rights if the same has been clearly granted to
him.251
10.1.5 Proof of Actual Damages Not Needed: Creditor need
not present proof of actual damages suffered by him in
order that the penalty may be demanded.252 There is no
difference between a penalty and liquidated damages.
A stipulation on liquidated damages is a penalty clause
where the obligor assumes a greater liability in case of
breach of an obligation.251
246Art. 1226, NCC.

24,M.
248Art. 1227, NCC.
wld.
™Id.
u'ld.
“Art. 1228, NCC.
“’Titan Construction Corp- V. Uni-Field Enterprises, G.R. No. 153874, 517 SCRA 180,
189.
J9JC9B0M
R52M9UH7
10.1.6 When Penalty May Be Reduced bv Court: (1) when

the principal obligation has been partly or irregularly
complied with by the debtor; or (2) even if there has
been no performance, if the penalty is iniquitous or
unconscionable.25*
11) Extinguishment of Obligations: Payment

11.1 Importance of Compliance with Rules for Valid Payment:
11.1.1 If Strictly Complied: Debtor may compel the creditor
to accept payment. If the creditor refuses to accept, the
refusal is without just cause. Hence, the debtor may
resort to valid consignation.
11.1.2 If Not Strictly Complied: Creditor has just cause for
refusing to accept payment. If the debtor resorts to
consignation, the same is not valid.
11.2 Rule No. 1: Payment must be complete. This element is known as
“integrity of payment.”
11.2.1 Rule on Partial Payment: (a) Rule: Creditor cannot be
compelled to accept partial payment.255 (b) Exceptions:
(1) when there is express stipulation allowing partial
payment; and (2) when debt is partly liquidated
and partly unliquidated, the debtor can pay the part
liquidated without waiting for the liquidation of the part
that is unliquidated.256
11.2.2 When Obligation Extinguished: (a) Rule: Only when
obligation is completely delivered or rendered.25’
(b) Exceptions: (1) when obligation is substantially
performed in good faith;25* and (2) when creditor waives
the balance of the obligation.25’
11.2.3 First Exception - Doctrine of Substantial Performance:
Two requisites: (1) performance must be substantial,
meaning the omission or deviation is slight, technical,
“’Art. 1229, NCC.

“‘Art. 1248, pars. 1 and 2, NCC.
“’Art. 1233, NCC.
“‘Art. 1234, NCC.
“‘Art. 1235, NCC.
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
or unimportant;260 and (2) the performance was in good

faith, meaning the incomplete performance is the result
merely of an oversight, misunderstanding, or excusable
neglect
11.2.4 Second Exception - Waiver of the Balance: While
the creditor may not be compelled to accept partial
payment, he may opt to accept the same. However, the
acceptance of incomplete payment does not result in
the extinguishment of the obligation unless the creditor
waives his right to recover the balance.261 Such intention
to waive may not be inferred from the creditor’s mere
silence in accepting an incomplete payment.
11.3 Rule No. 2: Payment is made by the proper person; otherwise,
the creditor cannot be compelled to accept the same.
11.3.1 Who are Considered Proper Persons: (1) the debtor
or his authorized representative; (2) a third person
allowed to make payment by agreement of the parties;
or (3) a third person interested in the fulfillment of the
obligation, such as guarantors, sureties, or third-party
mortgagors.
11.3.2 Rule If Payment is from a Stranger: He cannot compel
the creditor to accept payment from him. But if the
creditor accepts the payment, the same is valid and the
debtor’s obligation is extinguished.
11.3.3 Distinction Between Payment from a Third Person
(Interested in the Obligation) and from a Stranger:
(1) if payment is from the former, the creditor can be
compelled to accept; while if payment is from the latter,
the creditor cannot be compelled;262 ( 2) if payment is
from the former, he is entitled to full reimbursement
even if such payment was made without the debtor’s
consent; on the other hand, if the payment is from the
latter and the debtor consented to the payment, he is also
entitled to full reimbursement; but if he pays without
the debtor’s consent, he is entitled to reimbursement
““International Hotel Corp- v. Joaquin, Jr., 695 SCRA 382 (2013).

26lArt. 1235, NCC.
262Art. 1236, par. 1, NCC.
J9JC9B0M
R52M9UH7
only up to the extent that the debtor was benefitted;263

and (3) if payment is from the former, he is entitled
to be subrogated to the creditor’s rights even if such
payment was made without the debtor’s consent;2" on
the other hand, if the payment is from the latter and the
debtor consented to the payment, he is also entitled to
be subrogated to the creditor’s rights;265 but if he pays
without the debtor’s consent, he is not entitled to be
subrogated to the creditor’s rights.
11.4 Rule No. 3: The payor must have the capacity to make payment.
11.4.1 Effect If Payor is Incapacitated: Where the person
paying has no capacity to make the payment, the creditor
cannot be compelled to accept it; consignation will not
be proper; in case he accepts it, the payment will not be
valid.266
11.4.2 Capacity to Make Payment in Obligations To Give: In
obligations to give, payment to be valid must be made
by a person having the free disposal of the thing due and
capacity to alienate it.267
11.5 Rule No. 4: Payment must be made to the proper person.
11.5.1 Who are Considered Proner Persons to Whom Payment
Must be Made: (1) a person in whose favor the
obligation has been constituted (or the original creditor);
(2) his successor-in-interest; or (3) persons authorized
to receive the payment,266 whether authorized by the
creditor or any person authorized by law to do so, such
as a guardian, executor, or administrator of the estate of
a deceased and assignee or liquidator of a partnership or
corporation.26’
11.5.2 Effect of Payment to Wrong Person: (a) Rule: Payment
is invalid, (b) Exceptions: payment to a wrong person
is exceptionally valid if: (1) payment has redounded to
261 Art. 1236, par. 2, NCC.

267 Art. 1302(3), NCC.
261 Art. 1302(2), NCC.
2“8 Manresa 267.
267Art. 1239, NCC.
2“Art. 1240, NCC.
MSee Haw Pia v. China Banking Corp., 80 Phil. 604, citing 4 Manresa 254.
J9JC9B0M
R52M9UH7

PART I: OBLIGATIONS
the benefit of the creditor2’" —it is the debtor, generally,

who has the obligation to prove that the wrong payment
redounded to the creditor’s benefit; but in the following
cases, the law already presumes that the wrong payment
has already redounded to the creditor’s benefit: (i) if,
after payment, the third person acquires the creditor’s
rights; (ii) if the creditor ratifies the payment to the
third person; or (iii) if, by the creditor’s conduct, the
debtor has been led to believe that the third person had
authority to receive the payment;2’1 (2) if the payment
is made in good faith to any person in possession of the
credit272 —in the absence of assignment of the creditor or
a valid negotiation (in case of negotiable instruments),
the payee does not become a possessor of the credit,
except when he is a holder of a negotiable instrument
payable to bearer, in which case, any payment to the
latter in good faith by the debtor is a valid payment;
and (3) if the debtor pays the creditor prior to acquiring
knowledge of the assignment of credit made by the
latter.27’
11.6 Rule No. 5: The person to whom payment is made must have the
capacity to receive it.
11.6.1 Effect of Payment Made to Incapacitated Person: (a)
Rule: Payment is invalid, (b) Exceplions: Payment
is valid: (1) if the incapacitated has kept the thing
delivered; or (2) insofar as the payment has been
beneficial to him.27’
11.7 Rule No. 6: The very thing or service due must be delivered—an
element of payment known as “identity of payment.”
11.7.1 Nature of Obligation: (a) Determinate Obligation: The
debtor cannot compel the creditor to receive a different
one, although the latter may be of the same value as,
or more valuable, than that which is due.2” (b) Generic
2,“Art. 1241, par. 2, NCC.

271 Art. 1241, par. 2, NCC.
2,2Art. 1242, NCC.
’’’Art. 1626, NCC.
’’’Art. 1241, par. I, NCC.
’’’Art. 1244, par. l.NCC.
J9JC9B0M _ J
R52M9UH7
Obligation: If the quality and circumstances have not

been stated, the creditor cannot demand a thing of
superior quality and the debtor may not deliver a thing
of inferior quality.276 (c) Obligation To Do or Not To Do:
An act or forbearance cannot be substituted by another
act or forbearance against the creditor’s will.277
11-7.2 Obligation To Pay in Money: (a) Rule: The creditor
cannot be compelled to accept payment not in the
currency stipulated; or in the absence of agreement, in
the currency which is legal tender in the Philippines.27*
(b) Legal tender currency in the Philippines: All notes
and coins issued by the Bangko Senlral ng Pilipinas
and guaranteed by the Republic of the Philippines are
considered legal tender for all debts, both public and
private.279 With respect to coins, they shall be considered
legal tender: (1) up to the maximum amount of Pl,000
only—for denominations of I-Piso, 5-Piso, and 10-
Piso coins; and (2) up to the maximum amount of Pl 00
only—for denominations of 1-sentimo, 5-sentimo,
10-sentimo, and 25-sentimo coins.280 (c) Checks are not
legal tender: (1) Rule: A check is not legal tender, and an
offer of a check in payment of a debt is not a valid tender
of payment and may be refused receipt by the creditor,2*1
whether it be a manager’s, cashier’s, or personal check.2*2
(2) When creditor accents: The foregoing rule does not
prevent a creditor from accepting a check as payment.
However, the delivery of checks (or promissory note
payable to order or other mercantile documents) shall
produce the effect of payment only when: (i) they have
been encashed; or (ii) they have been impaired through
the fault of the creditor.281 (3) When tender of payment
!7‘Art. 1246, NCC.

277Art. 1244, par. 2, NCC.
27*Art. 1249, NCC.
2”Sec. 52, R.A. No. 7653, otherwise known as the New Central Bank Act.
:*°BSP Circular No. 537, Series of 2006.
“'Philippine Airlines, Inc. v. Court of Appeals, 181 SCRA557; Roman Catholic Bishop of
Malolos, Inc. v. Intermediate Appellate Court, 191 SCRA411.
M2Tibajia, Jr. v. Court of Appeals, 223 SCRA 163, G.R. No. 100290, June 4, 1993.
283Art. 1249, par. 2, NCC.
J9JC9B0M
R52M9UH7

PARTI: OBLIGATIONS
in check is for exercise of right: The requirement of

legal tender is applicable only in the payment of an
obligation to pay in money. When the case involves not
the payment of an obligation but the exercise of a right,
i.e., the right of redemption, the Civil Code provisions
on payment of obligations do not apply. Instead, what
applies is the settled rule that a mere tender of a check
is sufficient to compel redemption.284 A check may be
used for the exercise of the right of redemption, the
same being a right and not an obligation. The tender
of a check is sufficient to compel redemption but is not
in itself a payment that relieves the redemptioner from
his liability to pay the redemption price.288 (d) Effect of
extraordinary inflation or deflation: (1) Rule: In case
an extraordinary inflation or deflation of the currency
stipulated should supervene, 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.286 (2) Requisites: For extraordinary inflation
(or deflation) to affect an obligation, the following
requisites must be proven: (i) that there was an official
declaration of extraordinary inflation or deflation from
the Bangko Sentral ng Pilipinas;2'1 absent an official
pronouncement or declaration by competent authorities
of the existence of extraordinary inflation during a given
period, the effects of extraordinary inflation are not to
be applied;288 (ii) that the obligation was contractual
in nature;28’ and (iii) that the parties expressly agreed
to consider the effects of the extraordinary inflation or
deflation.2*1
’“Biuna v. Gimenez, 469 SCRA 486.

’"’Fortunado v. Court of Appeals, 196 SCRA 269.
“‘Art. 1250, NCC.
“’Equitable PCI Bank v. Ng Slieung Ngor, 541 SCRA 223, G.R. No. 171545, Dec. 19,
2007.
““Telengtan Brothers & Sons, Inc. v. United States Lincs, Inc., supra', Almeda v. Bathala
Marketing Industries, Inc., supra.
“’Equitable PCI Bank v. Ng Sheung Ngor, supra.
™ld.
J9JC9B0M
R52M9UH7
11.8 Rule No. 7: Payment must be in the proper place; otherwise, the
creditor cannot be compelled to accept the payment.
11.8.1 Rule: Payment must be made at the domicile of the
debtor.291 This rule applies even if the debtor changes
his domicile in bad faith, except that the additional
expenses in collecting the credit shall be borne by the
debtor.292
11.8.2 Exceptions: (1) if there is another place of payment
designated in the obligation;29’ or (2) in the absence
of agreement and when the obligation is to deliver a
determinate thing, the payment shall be made wherever
the thing might be at the moment the obligation was
constituted.294
11.9 Special Forms of Payment:
11.9.1 Dation in Payment: (a) Concept: It is the alienation
of property to the creditor in satisfaction of a debt
in money.295 (b) Requisites: (1) there must be the
performance of a prestation in lieu of payment (animo
solvendi) which may consist in the delivery of a
corporeal thing or a real right or a credit against the third
person; (2) there must be some difference between the
prestation due and that which is given in substitution
(aliud pro alio)-, and (3) 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.296 (c) Effect:
The dation in payment extinguishes the obligation to
the extent of the value of the thing delivered, either
as agreed upon by the parties or as may be proved,
unless the parties by agreement, express or implied,
or by their silence, consider the thing as equivalent to
the obligation, in which case the obligation is totally
extinguished.297 In other words, a dation in payment
2,1 Art. 1251, par. 3, NCC.

292Art. 1251, par. 4, NCC.
293Art. 1251, par. 1,NCC.
2wArt. 1251, par. 2, NCC.
29sFort Bonifacio Development Corp. v. Yllas Lending Corp., 567 SCRA 454.
296Lo v. KJS Eco-Formwork System Phil., Inc., G.R. No. 149420, Oct. 8,2003.
2”Lopez v. Court of Appeals, 114 SCRA 671.
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
does not necessarily mean total extinguishment of the

obligation. The obligation is totally extinguished only
when the parties, by agreement, express or implied, or
by their silence, consider the thing as equivalent to the
obligation.2”
11.9.2 Cession: (a) Concept: Cession or assignment consists
in the abandonment of the totality of the property of the
debtor in favor of the creditors in order that the same
may be applied for the satisfaction of their credits.2”
(b) Distinguished from Dation in Payment: (1) dation
in payment transfers the ownership over the thing
alienated to the creditor; whereas in cession, only
the possession and administration are transferred to
the creditors; (2) dation in payment does not require
plurality of creditors; whereas cession requires plurality
of creditors; (3) in dation in payment, the debtor must
not be insolvent; whereas cession presupposes the
existence of insolvency on the part of the debtor; (4)
dation in payment involves specific thing or property;
whereas cession involves the totality of the property •
of the debtor; and (5) dation in payment may totally
extinguish the obligation and result in the release of the
debtor; whereas in cession, the assignment only releases
the debtor from responsibility for the net proceeds of
the thing assigned, unless there is stipulation to the
contrary?”
11.9.3 Tender of Payment and Consignation: (a) Rule: Tender
of payment, even i f valid, does not by itself produce legal
payment, unless it is completed by consignation?01 The
effect of a valid tender of payment is merely to exempt
the debtor from payment of interest (compensatory)
and/or damages?02 (b) Distinctions Between Tender
of Payment and Consignation: Consignation is the act
of depositing the thing due with the court or judicial
authorities whenever the creditor cannot accept or
2”Caltex Philippines, Inc. v. Intermediate Appellate Court, G.R. No. 72703, Nov. 13,1992.
2w8 Manresa 321; Art. 1255, NCC.
’“Art. 1255, NCC.
301 Philippine National Bank v. Relativo, 92 Phil. 203, G.R. No. L-5298, Oct. 29,1952.
mId.
J9JC9B0M
R52M9UH7
refuses to accept payment, and it generally requires

a prior tender of payment. Tender is the antecedent
of consignation, that is, an act preparatory to the
consignation, which is the principal, and from which are
derived the immediate consequences which the debtor
desires or seeks to obtain. Tender of payment may be
extrajudicial, while consignation is necessarily judicial,
and the priority of the first is the attempt to make a
private settlement before proceeding to the solemnities
of consignation.305 (c) When Consignation Without
Tender of Payment Sufficient: Consignation generally
requires a prior tender ofpayment.304 But in the following
instances, consignation alone shall result in the release
of the debtor from his responsibility: (1) when creditor
is absent; (2) when creditor is unknown; (3) when
creditor does not appear at the place of payment; (4)
when creditor is incapacitated to receive the payment at
the time it is due; (5) when, without just cause, creditor
refuses to give a receipt; (6) when two or more persons
claim the same right to collect; and (7) when the title
of the obligation has been lost.305 (d) Requisites for
Valid Consignation: (1) there was a debt due; hence, in
instances where no debt is due and owing, consignation
is not proper,306 such as in cases of right of redemption
since the right to redeem is a right, not an obligation;30’
(2) the creditor to whom tender of payment was made
refused to accept it, or because he or she was absent
or incapacitated, or because several persons claimed
to be entitled to receive the amount due or because
the title to the obligation had been lost; (3) previous
notice of the consignation had been given to the person
interested in the performance of the obligation (not only
the creditor must be notified but all persons interested
in the fulfillment of the obligation, such as guarantors,
sureties and third-party mortgagors); (4) the amount due
””Meat Packing Corporation of the Philippines v. Sandiganbayan, 259 SCRA 409; B.E.
San Diego, Inc. v. Alzul, G.R. No. 169501, June 8,2007.
304Art. 1256, par. 1,NCC.
305Art. 1256, par. 2, NCC.
’’'’’Legaspi v. Court of Appeals, 142 SCRA 82.
’’’’immaculate v. Navarro, 160 SCRA 211.
I
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
was placed at the disposal of the court; and (5) after

the consignation had been made, the person interested
was notified of the action (not only the creditor must
be notified but all persons interested in the fulfillment
of the obligation, such as guarantors, sureties and third-
party mortgagors). This requisite is fulfilled by the
service of summons upon the defendants together with
a copy of the complaint therein. The foregoing essential
requisites must be complied with fully and strictly in
accordance with the provisions of Articles 1256 to 1261
of the NCC. Substantial compliance is not enough.™1
(e) When Debt Considered Extinguished: Consignation
is completed at the time the creditor accepts the same
without objections, or, if he objects, at the time the court
declares that it has been validly made in accordance
with law.30’ The consignation has retroactive effect.
The payment is deemed to have been made at the time
of the deposit of the money in court, or when it was
placed at the disposal of the judicial authority.310 (f)
Withdrawal By Debtor of Deposit: Before the creditor
has accepted the consignation or before a judicial
declaration that the consignation has been properly
made, the debtor may withdraw the thing or the sum
deposited as a matter of right, allowing the obligation
to remain in force.311 But after the creditor has accepted
the consignation or after a judicial declaration that the
consignation has been properly made, the debtor may
no longer withdraw the same without the consent of the
creditor. In such a situation, if the creditor authorizes
the debtor to withdraw the thing or sum deposited, he
loses every preference which he may have over the
thing and the co-debtors, guarantors, and sureties shall
be released.312 (g) Effects If Consignation is Valid: (1)
it produces the effect of payment, thereby releasing
the debtor from all responsibility;313 (2) the accrual of
“Soco v. Militants, 123 SCRA 160.

“’Reisenbeck v. Court of Appeals, G.R. No. 90359, June 9, 1992.
3luRamos v. Sanio, 451 SCRA 103 (2005); Jespajo Realty and Development Corp. v. CA,
390 SCRA 27 (2002); Riesenbeck v. Court of Appeals, 209 SCRA 656 (1992).
3"Art. 1260, par. 2, NCC.
3l2Art. 1261, NCC.
313Art. 1256, par. 1, NCC; Ponce de Leon v. Santiago Syjuco, Inc., 90 Phil. 311.
J9JC9B0M
R52M9UH7
interest on the obligation is suspended from the moment

of consignation; (3) the loss of the thing or amount
consigned occurring without the fault of the debtor
before the acceptance of the consignation by the creditor
or its approval by the court should be for the account of
the creditor;514 (4) since the consignation has retroactive
effect, the fruits, products, and interest of the thing
consigned shall belong to the creditor from the moment
the consignation was made; and (5) the expenses of
consignation shall be charged against the creditor.515
(h) Effects If Consignation is Invalid: (1) the obligation
remains and there is no suspension of the accrual of the
interest; and (2) it is the consignor who shall bear the
loss;516 and (3) the expenses of consignation shall be for
the account of the debtor.517
11.9.4 Application of Payment: (a) Requisites: (1) there exist
only one debtor and one creditor; (2) between them,
there be several obligations; (3) the various debts be of
the same kind; (4) the debts are all due, except when:
(i) the parties so stipulate; or (ii) the application is
made by the party for whose benefit the term has been
constituted;5"' and (5) the payment made is not sufficient
to cover all obligations, (b) Right to Make Application
Initially Belongs to Debtor: To the debtor corresponds
in the first instance the right to determine to which debt
his payment should be applied.51’ But such right must be
exercised by the debtor at the time of payment,520 and
not afterwards.521 And once the right is exercised, such
application is irrevocable and the debtor has no more
right to change his application of payment.522 However,
the debtor cannot make an application of payment in the
5l4Sia v. Court of Appeals, 92 Phil. 355.

515Art. 1259, NCC.
’“Chua Kay v. Lint Chang, 54 O.G. 26.
5l7Art. 1259, NCC.
’'“Art. 1252,par. l.NCC.
’’’Art. 1252, par. 1, NCC; Texas Company, Inc. v. Marfil, (C.A.), 39 O.G. 1238.
5mM.
52lPowell v. National Bank, 54 Phil. 54.
522Bachrach Garage and Taxicab Co. v. Golingco, 39 Phil. 912.
J9JC9B0M
R52M9UH7

PART I: OBLIGATIONS
following manner: (1) that will violate the agreement;’23

(2) he cannot make a partial payment of any of the debts,
in violation of the rule in Article 1248; or (3) if the debt
produces interest, he cannot apply his payment to the
principal without paying first the interest, in violation of
the rule in Article 1253. (c) If Debtor Did Not Exercise
Right: Where the debtor has not expressly elected any
particular obligation to which the payment should be
applied at the time of making the payment, the creditor
may make such application.’24 However, in order for the
application made by the creditor to be valid and lawful,
the following requisites must be present: (1) the creditor
expresses such application in the corresponding receipt
that he issued; and (2) the debtor must have assented
to such application, as shown by his acceptance of the
receipt without protest.’23 Ultimately, therefore, the
application by a creditor depends upon the debtor’s
acquiescence.’26 (d) Application By Operation of Law:
When neither the debtor nor the creditor has specified
to which of the several debts the payment should be
applied or if application cannot be inferred from other
circumstances, the following rules should be applied:
(1) the payment should be applied first to the debt which
is most onerous to the debtor; or (2) if the debts due
are of the same nature and burden, the payment should
be applied to all of them proportionately.’2’ (e) Debts
More Onerous to Debtor: (1) Guaranteed debts are
deemed to be more onerous to the debtor than those not
guaranteed, and are entitled to priority in the application
of the debtor’s payments;”8 (2) where one debt bears
interest and the other does not, even if the latter should
be the older obligation, the former is considered as
“’Premiere Development Bank v. Central Surety & Insurance Co., Inc., 579 SCRA 359
(21)09).
’"Art. 1252, par., NCC.
Traders Insurance & Surety Company v. Dy Eng Giok, 55 O.G. 5546.
“Traders Insurance & Surety Company v. Dy Eng Giok, supra.
“’Art. 1254, NCC.
“Traders Insurance & Surety Company v. Dy Eng Giok, 55 O.G. 5546; see also Com
monwealth v. Far Eastern Surety & Insurance Company, 83 Phil. 305 and Hongkong & Shanghai
Banking Corp. v. Aldanese, 48 Phil. 990.
J9JC9B0M
R52M9UH7
more onerous;329 (3) where there are various debts, the

oldest ones are more burdensome, and payments should
■ be applied to them before the more recent ones;330 and
(4) when a person has two debts, one as sole debtor
and another as solidary co-debtor, his more onerous
obligation to which first payments are to be applied is
the debt as sole debtor.331
12) Extinguishment of Obligations: Loss

12.1 As Applied to Obligations To Give: Only an obligation to deliver
a determinate thing (determinate obligation) can be extinguished
by reason of loss. An obligation to deliver a generic thing
(generic obligation), on the other hand, cannot be extinguished
by reason of loss332 because the genus of a thing can never perish
(genus nunquamperil). For example, an obligation to pay money
is generic; therefore, it is not excused by fortuitous loss of any
specific property of the debtor.333
12.1.1 Concent of Loss in Determinate Obligations: It is
understood that the thing is lost when: (1) it perishes, (2)
goes out of commerce, or (3) disappears in such a way
that its existence is unknown or it cannot be recovered.334
12.1.2 Requisites for Loss of Specific Thine Due: (1) the loss
occurs without the fault of the debtor; (2) the loss occurs
prior to the debtor incurring delay; and (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.335 Hence, the
debtor must not have obligated himself to deliver the
same thing to two or more persons who do not have the
same interest; otherwise, he shall be responsible for the
loss of the thing by reason of fortuitous event until he
has effected the delivery.336
329Menzi & Co. v. Quing Chuan, G.R. No. L-46278, Oct. 26, 1939.
”°Philippine National Bank v. Venigulh, 50 Phil. 253.
’’’Commonwealth v. Far Eastern Surety & Insurance Company, 83 Phil. 305; citing 8
Manresa, 4,h ed., p. 290.
”2Art. 1263, NCC.
’’’Ramirez v. Court of Appeals, 98 Phil. 225, 228 (1956).
334Art. 1189(2), NCC.
335Art. 1262, NCC.
”6Art. 1165, par. 3, NCC.
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
12.1.3 Presumption that Loss is Due to Debtor’s Fault: It is

presumed that the loss was due to the fault of the debtor
whenever the thing is lost in his possession?” However,
the presumption does not apply in case of earthquake,
flood, storm, or other natural calamity?”
12.1.4 When Law Provides for Liability Even for Fortuitous
Event: (1) The obligor delays or 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;”0 (3) if the common carrier negligently
incurs in delay in transporting the goods, a natural
disaster shall not free such carrier from responsibility;341
(4) the borrower who uses the thing for a purpose
different from that intended, delays its return, receives
the thing under appraisal, lends it to a third person,
or saves his property instead of the thing borrowed;342
(5) the depositary who uses the thing without the
depositor’s permission, delays its return, or allows
others to use it;343 (6) the negotiorum gestor or officious
manager 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;344 and (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 justification.343
12.2 As Applied to Obligations To Do: An obligation to do is lost:
(1) when the prestation becomes legally or physically impossible
without the fault of the debtor;346 or (2) when, by reason of an
unforeseen event, the service has become so difficult as to be
manifestly beyond the contemplation of the parties?4’
’’’Art. 1265, NCC.

33"M.
33’Art. 1165, lust par., NCC.
“Art. 552, par. 2, NCC.
341 Art. 1740, NCC.
342Art. 1942, NCC.
343Art. 1979, NCC.
“Art. 2147, NCC.
“Art. 1268, NCC.
“Art. 1266, NCC.
"’Art. 1267, NCC.
J9JC9B0M
R52M9UH7
12.2.1 Article 1266 Applicable Only to Obligation To Do:

Article 1266 of the Civil Code is applicable only to
obligations “to do,” which include all kinds of work
or service. The obligation to pay rentals or deliver the
thing in a contract of lease falls within the prestation
“to give”; hence, it is not covered within the scope of
Article 1266.148 In Article 1266, the performance of
the obligation to do must be possible at the time of the
perfection of the contract; otherwise, the contract is void
because it contemplates of rendition of an impossible
service."’ The performance becomes impossible only
during the consummation stage.
12.2.2 Doctrine of Unforeseen Events: (a) Requisites for
Application of Article 1267: (1) the event or change
in circumstances could not have been foreseen at the
time of the execution of the contract; (2) it makes the
performance of the contract extremely difficult but not
impossible; (3) it must not be due to the act of any of the
parties; and (4) the contract is for a future prestation.lw
The difficulty of performance under Article 1267 of
the Civil Code should be such that one party would be
placed at a disadvantage by the unforeseen event. Mere
inconvenience, unexpected impediments, or increased
expenses do not suffice to relieve the debtor from a bad
bargain.”1 fbl Applicability: The doctrine of unforeseen
events should apply only to risks that are manifestly
beyond the contemplation of the parties, or to those
absolutely exceptional changes of circumstances, where
equity demands assistance for the debtor.”2 It does not
apply to risks that are already known, or should have
been known, to the parties when they entered into their
contractual relations.
""f’NCC v. CA, G.R. No. 116896, May 5, 1997.

"’Art. 1409(5), NCC.
”Tagaytay Realty, Inc. v. Gacutan, 761 SCRA 87 (2015).
”2PNCC v. CA, 272 SCRA 183 (1997).
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
13) Extinguishment of Obligations: Condonation or Remission
13.1 Concept: It is gratuitous on the part of the creditor, but it requires

acceptance by the debtor to be valid.’” It is either in the form
of donation inter vivos or legacy, depending on its effectivity.
Whether donation or legacy, it must not be inofficious.
13.1.1 Donation Inter Vivos: When the creditor intended the

condonation to become effective during his lifetime.
13.1.2 Legacy of Condonation of Debt: When the creditor
intended the condonation to become effective upon his
death.
13.2 When Condonation is Donation:
13.2.1 How Made: Either expressly or impliedly.’” Acceptance
by the debtor must be made during the lifetime of the
creditor; otherwise, the donation is not perfected.
13.2.2 If Made Expressly: It must conform with the formalities
of ordinary donation in Articles 748 and 749;’”
otherwise, it is void.
13.2.3 Presumption of Condonation: When a private document
evidencing a credit is found in the possession 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.”6 The presumption
can be rebutted by proving that there was no voluntary
delivery.
13.3 When Condonation is Legacy:
13.3.1 As to Form: It must comply with the formalities of a last
will and testament.
13.3.2 Tinting of Acceptance: The acceptance by the debtor
can only be made after the death of the creditor.
’’’Art. 1270, NCC.

’"Art. 1270, par. 1,NCC.
’’’Art. 1270, par. 2, NCC.
’"Art. 1271, par. l.NCC.
J9JC9B0M
R52M9UH7
14) Extinguishment of Obligations: Merger or Confusion

14.1 Concent:
14.1.1 Definition: Confusion or merger is the meeting in one
person ofthe qualities of creditor and debtor with respect
to the same obligation.357 It exists when the characters of
creditor and debtor are merged in the same person.358
14.1.2 Requisites: (1) it must take place in the person of the
principal creditor and principal debtor;359 hence, if the
merger involves the creditor and the guarantor, the
obligation is not extinguished;360 and (2) it must be
complete and definite, because if it is not complete, the
obligation still subsists.361
15) Extinguishment of Obligations: Compensation

15.1 Concept:
15.1.1 Definition: It is a mode ofextinguishing to the concurrent
amounts the obligations of persons who, in their own
right and as principals, are reciprocally creditors and
debtors of each other.362
15.1.2 Kinds: (1) Legal - that which takes place ipsojure when
all the requisites of law are present;363 (2) Voluntary -
that which occurs when the parties agree to the mutual
extinguishment of their credits or to compensate their
mutual obligations even in the absence of some of the
legal requisites;364 (3) Judicial - that which takes place
when the court allows the set off or counterclaim of the
defendant as against the claim of the plaintiff; and (4)
Facultative - when it can be claimed by the party who
can oppose it and who is the only party prejudiced by the
compensation, as happens when one of the obligations
has a period for the benefit of one party alone and the
35’4 Sanchez Roman, 421.

3s‘Art. 1275, NCC.
3!9Art. 1276, NCC.
“M
3612 Castan, 60.
J“PNB Madecor v. Uy, 363 SCRA 1128 (2001); Art. 1278, NCC.
363Mavesl (USA), Inc. v. Sampaguila Garment Corp., G.R. No. 127454, Sep. 21,2005.
364M.
J9JC9B0M
R52M9UH7
BOOK IV. — OBLIGATIONS AND CONTRACTS •Sil

PARTI: OBLIGATIONS
latter renounces the period with the effect of making the

obligation due and therefore compensable.363 In legal,
voluntary, and judicial compensation, there must be the
confluence of the characters of the mutual debtors and
creditors. Without this, the contracting parties cannot
stipulate, in case of voluntary compensation, as to the
compensation of their obligations, for then the legal tie
that binds contracting parties to their obligations would
be absent. At least one party would be binding himself
under an authority he does not possess.366
15.2 I.egal Compensation:
15.2.1 Requisites: (1) The parties must be creditors and debtors
of each other in their own right and as principals363 —
hence, taxes cannot be subject to compensation for the
simple reason that the government and the taxpayer
are not creditors and debtors of each other,368 for debts
are due to the Government in its corporate capacity,
while taxes are due to the Government in its sovereign
capacity;36’ that there can be no valid compensation
between the debt of corporation X to the stockholders
of corporation Y under a contract of loan and the
obligation of corporation Y to corporation X for the
payment of the purchase price in a contract of sale, for
the reason that both corporations are not mutually bound
as creditors and debtors in their own name because a
corporation has a personality distinct and separate from
its stockholders;3™ but a bank has the right to set off
a deposit in its hands to extinguish the indebtedness
owed to it by the same depositor,331 because, as to fixed,
savings, and current deposits of money in banks and
similar institutions, the relationship between banks
3683 Casual, 8"' ed„ pp. 298-299.

366CKH Industrial and Development Corp. v. Court ofAppeals, 272 SCRA 333,348 (1997).
’"’Art. 1278, NCC.
,MPhilex Mining Corp. v. Commissioner of Internal Revenue, 294 SCRA 687 (1998),
tiling Cordero v. Gouda, 18 SCRA 331 (1966). See also South African Airways v. Commissioner
of Internal Revenue, 612 SCRA 665 (2010) and Caltex Philippines, Inc. v. Commission on Audit,
208 SCRA 726 (1992).
wld., tiling Commissioner of Internal Revenue v. Palanca, 18 SCRA 496 (1966).
3TOCHK Industrial and Development Corp. v. CA, supra.
37,Gullas v. Philippine National Bank, 62 Phil. 519(1935).
J9JC9B0M
R52M9UH7
and depositors has been held to be that of creditor and

debtor;’72 (2) that both debts consist in a sum of money,
or if the things due are consumable, they be of the same
kind, and also of the same quality if the latter has been
stated;3’3 (3) that both debts be due374 —if one of the
debts is payable on demand and there is no demand yet,
there can be no legal compensation because such debt
is not yet due;375 (4) that both debts be demandable and
liquidated”8 —hence, if one of the debts is a natural
obligation, there can be no legal compensation because
a natural obligation is not legally demandable; and a
debt is liquidated when its existence and amount are
determined,377 or when the amount is determinable
by inspection of the terms and conditions of relevant
documents;37' and (5) that neither of the debts be subject
to any lien, retention, or suit instituted by third persons of
which notice has been communicated in due time to the
debtor.37’ By “in due time” should be meant the period
before legal compensation was supposed to take place,
considering that legal compensation operates so long
as the requisites concur, even without any conscious
intent on the part of the parties.38" A controversy that
is communicated to the parties after that time may no
longer undo the compensation that had taken place by
force of law, lest the law concerning legal compensation
be for naught.381
’’’Associated Bank v. Tan, 446 SCRA 2X2 (2004), citing Consolidated Bank & Trust Corp,
v. CA, 410 SCRA 562 (2003); Guingona Jr. v. City Fiscal of Manila, 128 SCRA 577 (1984);
Serrano v. Central Bank of lite Phils., 96 SCRA 96 (19X0). See also Nisce v. Equitable PCI Bank,
Inc., 516 SCRA 231 (2007).
3,3Art. 1279(2), NCC.
’"Art. 1279(3), NCC.
”’PNB Madecor v. Uy, 363 SCRA 1128 (2001).
"‘Art. 1279(4), NCC.
’’’Philippine Trust Co. v. Roxas. 772 SCRA 339 (2015). citing First United Constructors
Corporation, v. Bayanihan Automotive Corporation, 713 SCRA 354, 367 (2014).
’’’Soriano v. People, 703 SCRA 536 (2013), citing Raquel-Santos v. CA, 592 SCRA 169,
196 (2009). See also Selegna Management and Development Corporation v. United Coconut
Planters Bank, 489 SCRA 125. 138 (2006).
’’’Art. 1279(5), NCC.
”"PNB Madecor v. Uy, supra.
Mld.
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
15.2.2 Effects of Legal Compensation: When all the requisites

above 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.”2 Legal compensation
operates even against the will of the interested parties
and even without their consent. Since this compensation
takes place ipsojure, its effects arise on the very day on
which all its requisites concur. When used as a defense,
it retroacts to the date when its requisites are fulfilled.”’
15.2.3 Debts Not Subject to Legal Compensation: (1) when
one of the debts arises from a depositum; (2) when one
of the debts arises from the obligations of a depositary
or of a bailee in commodatum; (3) when one of the debts
arises from a claim for support due by gratuitous title;’"
(4) when one of the debts consists in civil liability
arising from a penal offense;”’ and (5) when one of the
debts consists in the claim of Government for payment
of taxes.
16) Extinguishment of Obligations: Novation
16.1 Concept:
16.1.1 Definition: 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 third person in the rights of
the creditor.”''
16.1.2 Extinctive or Modificatory; In its broadest concept,
novation is either extinctive or modificatory. It is
extinctive, also called total novation, when an old
“’All. 1290, NCC.

’"Hunk of the Philippine Islands v. Court of Appeals, 255 SCRA 571; see also Trinidad v.
Acapulco, G.R. No. 147477, June 27, 2006.
’"Art. 1287, NCC.
’"’Art. 1288, NCC.
’"Ajax Marketing & Development Corp. v. Court of Appeals, G.R. No. 118585, Sep. 14,
1995.
J9JC9B0M
R52M9UH7
I
obligation is terminated by the creation of a new

one that takes the place of the former. It is merely
modificatory, also called partial novation, when the
old obligation subsists to the extent that it remains
compatible with the amendatory agreement.387 Stated
otherwise, there is partial novation when there is only
a modification or change in some principal conditions
of the obligation. It is total, when the obligation is
completely extinguished.388
16.2 Extinctive Novation:
16.2.1 Requisites: (1) There must be a previous valid
obligation - it is only when the original obligation is
void that the novation also becomes void. There will
be a valid novation even if the original obligation
is voidable in two instances: (i) when there has been
a ratification of the obligation prior to the novation
inasmuch as ratification cleanses the obligation of its
defects from the very beginning; or (ii) if the defect
can be claimed only by the debtor because when he
consents to the novation, he renounces his right to annul
the old obligation."’ The previous obligation need not
be civil, it may be a case of a natural obligation. Hence,
a prescribed debt is a natural obligation which is a
sufficient consideration for the new contract.3” (2) There
must be an agreement of the parties concerned to a new
contract - when there is neither a valid new contract nor
a clear agreement between the parties to a new contract,
there is no novation. Without the new contract, the old
contract is not extinguished.3” (3) There must be the
extinguishment of the old contract - the extinguishment
of the old obligation by the new one is a necessary
"7Sime Darby Pilipinas, Inc. v. Goodyear Philippines, 651 SCRA 551 (2011); Adriatico
Consortium, Inc. v. Land Bank of the Phil., 609 SCRA 403 (2009); Sim v. MB. Finance Corp.,
508 SCRA 556 (2006); Fabrigas v. San Francisco del Monte, Inc., 476 SCRA 247 (2005); Garcia
v. Llamas, 417 SCRA 292 (2003); Babst v. CA, 350 SCRA 341 (2001); Quinto v. People, 305
SCRA 708, 714 (1999).
"*Ong V. Bogdalbal, 501 SCRA 490 (2006), citing IV Tolentino, Commentaries andJuris
prudence on the Civil Code ofthe Philippines, 1991 cd„ p. 382.
"’Art. 1298, NCC.
""Villaruel v. Estrada, 71 Phil. 140 (1940).
’’’Country Bankers Insurance Corp. v. Lagman, 653 SCRA 765 (2011).
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
element of extinctive novation which may be effected

either expressly or impliedly?” (4) There must be the
validity of the new contract3” - if the new obligation is
void, the extinguishment of the original obligation is not
realized,394 because that which is null and void cannot
produce any effect.395 However, even when there is no
novation because of the nullity of the new obligation,
Article 1297 also provides that the original obligation
is deemed extinguished if “the parties intended that the
former relation should be extinguished in any event."
16.2.2 Kinds of Novation: (a) As to Essence: (1) Objective
Novation - also called real novation, occurs when there
is a change of the object, cause, or principal conditions
of an existing obligation; (2) Subjective Novation - also
called personal novation, occurs when there is a change
of either the person of the debtor, or of the creditor in
an existing obligation; (3) Mixed Novation - when the
change of the object, cause, or principal conditions of
an obligation occurs at the same time with the change
of either in the person of the debtor or creditor.3W (b) As
to Form or Constitution: (1) Express - when the new
obligation declares in unequivocal terms that the old
obligation is extinguished; (2) Implied - when the new
obligation is incompatible with the old one on every
point.39’
16.2.3 Objective Novation: A novation is objective if the
change involves the cause, object, or any principal
conditions.39’ Hence, the novation is merely modificatory
39-’PNB v. Soriano, 682 SCRA 243 (2012); Reyes v. BP1 Family Savings Bank, Inc., 486
SCRA 276 (2006).
’’’Wellex Group, Inc. v. U-Land Airlines Co., Lid., 745 SCRA 563 (2015); PNB v. Soriano,
682 SCRA 243 (2012); Heirs of Servando Franco v. Gonzales, 675 SCRA 96 (2012); Transpacific
Battery Corp. v. Security Hank & Trost Co., 587 SCRA 230 (2009); Valenzuela v. Kalayaan
Development & Industrial Corp., 590 SCRA 380 (2009).
)94Art. 1297, NCC.
’”8 Manresa, 439-440.
’"Ajax Marketing & Development Corp. v. CA, 248 SCRA 222(1995), citing Cochingyan,
Jr. v. R & B Surely and Insurance Co., Inc., 151 SCRA 339, 349 (1987).
’’’Wellex Group, Inc. v. U-Land Airlines Co., Ltd., 745 SCRA 563 (2015), citing Arco Pulp
and Paper Co. v. Lim, G.R. No. 206806, June 25, 2014; Spouses Bautista v. Pilar Development
Corporation, 312 SCRA 611 (1999).
’’“Art. 1291(1), NCC.
J9JC9B0M
R52M9UH7
where the change brought about by any subsequent

agreement is merely incidental to the main obligation,
such as a change in the interest rate, an extension of
time to pay”9 or a change in the period to comply with
the obligation. Such a change in the period would only
be a modificatory (or partial) novation, since the period
merely affects the performance, not the creation of the
obligation.4™ An obligation to pay a sum of money is
not novated by an instrument that expressly recognizes
the old, or changes only the terms of payment, or adds
other obligations not incompatible with the old ones, or
the new contract merely supplements the old one.401 The
novation is not extinctive, but merely modificatory.
16.2.4 Substitution of Debtor: (a) Release of debtor: In order
to change the person of the debtor, the old one must
be expressly released from the obligation, and the third
person or new debtor must assume the former’s place in
the relation.402 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. If there is no agreement as to
solidarity, the first and the new debtor are considered
obligated jointly.40’ (b) Exnromision or Deleeacion-.
(1) Expromision - 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 third person assuming his obligation. As
’"Foundation Specialist, Inc. v. Betonval Ready Concrete, Inc., 596 SCRA 697 (2009);
Aquinlcy v. Tibong, 511 SCRA 414 (2006). See also Heirs ol'Servando Franco v. Gonzales, 675
SCRA 96 (2012), citing California Bus Lines, Inc. v. State Investment House, Inc., 418 SCRA 297
(2003); Garcia, Jr. v. CA, 191 SCRA 493 (1990).
■""Ong V. Bogfialbal, 501 SCRA 490 (2006), citing Inchausti & Co. v. Yulo, 34 Phil. 978,
986 (1914); Zapanta v. de Rotaeche, 21 Phil. 154, 159(1912).
■“'PNB v. Soriano, 682 SCRA 243 (2012); Transpacific Battery Corp. v. Security Bank &
Trust Co., 587 SCRA 230 (2009); Aguilar v. Manila Banking Corporation 502 SCRA 354 (2006);
Spouses Reyes v. BPI Family Savings Bank, Inc., 486 SCRA 276 (2006).
“Philippine Savings Bank v. Maitalac, 457 SCRA 203 (2005), citing Garcia v. Llamas,
417 SCRA 292 (2003). See also Aquinlcy v. Tibong, 511 SCRA 414 (2006); Ajax Marketing &
Development Corp. v. CA, 248 SCRA 222 (1995), citing Lopez v. CA, 114 SCRA 671 (1982) and
Mercantile Insurance Co., Inc. V. CA, 196 SCRA 197 (1991).
4“’Aquinlcy v. Tibong, 511 SCRA 414 (2006) and Ajax Marketing & Development Corp,
v. CA, 248 SCRA 222(1995).
J9JC9B0M
R52M9UH7

PART 1: OBLIGATIONS
such, expromision absolutely requires the consent of

the third person (or new debtor) and the creditor. The
consent of the old debtor, however, is not indispensable
because it can be made even without his knowledge
or consent. (2) Delegation - When the debtor offers
and the creditor accepts a third person who consents
to the substitution so that the intervention and the
consent of these three persons are necessary and they
are respectively known as delegante (original debtor),
delegatario (creditor), and delegado (new debtor).4"
Whether the substitution of debtor is by expromision or
delegation, the effect is the same, that is, the release
of the original debtor from the obligation. Exception:
In delegation, if the new debtor fails to perform the
obligation by reason of his insolvency, the action can
be revived against the original debtor in two instances:
(1) when the insolvency of the new debtor was already
existing and of public knowledge at the time the old
debtor delegated his debt; or (2) when such insolvency
was already existing and known to the old debtor at the
time he delegated his debt.40’
16.2.5 Subrogation: (a) Definition and Kinds: It is defined as the
transfer of all the rights of the creditor to a third person,
who substitutes him in all his rights.406 It may either be:
(1) Legal Subrogation - that which takes place without
agreement but by operation of law because of certain
acts; and (2) Conventional Subrogation - that which
takes place by agreement of parties.40’ (b) Instances of
Legal Subrogation: (1) when a creditor pays another
creditor who is preferred, even without the debtor’s
knowledge; (2) when a third person, not interested in
the obligation, pays with the express or tacit approval
of the debtor; or (3) when, even without the knowledge
of the debtor, a person interested in the fulfillment of
the obligation pays, without prejudice to the effects of
■‘"Testate Estate of Mota v. Serra, 47 Phil. 464 (1925).

"’Art. 1295, NCC.
"“Licaros v. Gatmaitan, 362 SCRA548 (2001) and Chemphil Import and Export Corp.
Court of Appeals, 251 SCRA 257(1995).
"7<Z
J9JC9B0M
R52M9UH7
confusion as to the latter’s share.408 (c) Conventional

Subrogation: Conventional subrogation of a third person
requires the consent of the original parties (the original
creditor and debtor) and of the third person (the new
creditor).409 It is a new contractual relation based on the
mutual agreement among all the necessary parties.410 (d)
Distinctions Between Conventional Subrogation and
Assignment of Credit: (1) in conventional subrogation,
the debtor’s consent is necessary; in an assignment of
credit, the consent of the debtor is not necessary in order
that the assignment may fully produce the legal effect;411
(2) subrogation extinguishes an obligation and gives
rise to a new one; assignment refers to the same right
which passes from one person to another;412 and (3) the
nullity of an old obligation may be cured by subrogation,
such that the new obligation will be perfectly valid;
but the nullity of an obligation is not remedied by the
assignment of the creditor’s right to another. If the
intention of the parties is that the agreement would
not become valid and effective in the absence of the
debtor’s consent, the transaction is one of conventional
subrogation and not an assignment of credit. Hence, if
not consented to by the debtor, there is no conventional
subrogation and it may not be treated as an assignment
of credit.41’ If the creditor’s right is transferred to a third
person without requiring the debtor’s consent for its
validity, the transaction is merely an assignment of the
credit.414
“Art. 1302, NCC.

“Art. 1301, NCC.
4l0Licaros v. Gatmaitan, supra.
4UIV Tolentino, Civil Code ofthe Philippines, 1996 ed., p. 402, cited in Ledonio v. Capitol
Development Corp., 526 SCRA 379 (2007).
mld.
4l’Licaros v. Gatmaitan, 362 SCRA 548 (2001).
4l4Rodriguez v. CA, 207 SCRA 553 (1992) and Ledonio v. Capitol Development Corp.,
526 SCRA 379 (2007).
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
PART 2: CONTRACTS
17) Basic Concepts
17.1 Concept:
17.1.1 Definition: 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.4”
It may also be defined as "a juridical convention
manifested in legalform, by virtue ofwhich one or more
persons bind themselves in favor of another or others,
or reciprocally, to thefidfillment ofa prestation to give,
to do, or not to do.",'t
17.1.2 Important Classifications: (a) As to Perfection: (1)
Consensual - that which is perfected by mere consent;
and (2) Real - that which is perfected not by mere
consent but by the delivery of the object of the contract,
(b) As to Its Name: (1) Nominate - that which is
distinguished by a particular or special name in the Civil
Code, like sale, lease, and deposit; and (2) Innominate
- that which is recognized in the Civil Code, but not
specially named or classified therein. These contracts
shall be regulated by the stipulation of the parties, by
the provisions of Obligations and Contracts, by the rules
governing the most analogous nominate contracts, and
by the customs of the place.417 There are four kinds of
innominate contracts: (i) do ut des—I give that you give;
(ii) do utfacias—1 give that you do; (iiij/acio ut des—I
do that you give; and (iv) facio ut facias—1 do that you
do. (c) As to Degree of Dependence: (1) Principal - that
which can exist independently of other contracts, like
a contract of loan; (2) Accessory - that which cannot
exist without a valid principal contract, like guaranty,
pledge, mortgage, and antichresis; and (3) Preparatory
- that which is not an end by itself but only a means
for the execution of another contract, like agency and
4liArt. 1305, NCC.

4l6Jardine Davies, Inc. v. Court of Appeals, 333 SCRA 684, 692-694, citing 4 Sanchez
Roman 148-149.
4l7Art. 1307, NCC.
J9JC9B0M
R52M9UH7
the contract of option, (d) As to Cause: (1) Onerous

— that where the cause is understood to be, for each
contracting party, the prestation or promise of a thing or
service by the other,418 like sale; (2) Remuneratory - that
where the cause is the service or benefit for which the
remuneration is given;41’ and (3) Gratuitous - that where
the cause is the mere liberality of the benefactor,420 like
commodatum, (e) According to Risk Involved: (1)
Commutative - that in which each of the contracting
parties gives and receives an equivalent or there is a
mutual exchange of relative values, like sale; and (2)
Aleatory - that in which each of the parties or both
reciprocally bind themselves to give or to do something
in consideration of what the other shall give or do upon
the happening of an event which is uncertain, or which
is to occur at an indeterminate time,421 like the contract
of insurance.
17.2 Fundamental Characteristics:
17.2.1 Obligatory Force of Contracts: It simply means that
“obligations arising from contracts have the force
of law between the contracting parties and should be
complied with in good faith.”422 To be obligatory, the
contract must be perfected, valid, and enforceable.
17.2.2 Autonomy of Contracts: Also known as freedom of
contracts. It simply means that the contracting parties
are accorded the liberality and freedom to establish such
stipulations, clauses, terms, and conditions as they may
deem convenient, provided the same are not contrary
to law, morals, good customs, public order, or public
policy."’ Such freedom is protected by the Constitution
which commands: (1) no person shall be deprived of
life, liberty, or property without due process of law;424
4l!Art. 1350, NCC.
"“Art. 1350, NCC.

"'Art. 2010, NCC.
422Art. 1159, NCC.
"’Art. 1306, NCC.
"4Sec. I, Art. Ill, 1987 Phil. Constitution.
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
and (2) no law shall be passed impairing obligation of

contracts?25
17.2.3 Mutuality of Contracts: It simply means that the
“contract must bind both the contracting parties; its
I validity or compliance cannot be left to the will of
one of them.”226 The ultimate purpose is to render
void a contract containing a condition which makes
its fulfillment dependent solely upon the uncontrolled
will of one of the contracting parties?27 For example,
even if the loan agreement gave the creditor a license
to increase the interest rate at will during the term of
the loan, that license would have been null and void for
being violative of the principle of mutuality essential
in contracts425 because the rate of interest is a vital
component of the agreement?2’ However, contracts of
adhesion—one in which one of the parties imposes a
ready-made form of contract, which the other party may
accept or reject, but which the latter cannot modify410 —
have been declared as binding as ordinary contracts, the
reason being that the party who adheres to the contract
is free to reject it entirely?11
17.2.4 Relativity of Contracts: (a) Concent: The principle of
relativity of contracts provides that contracts can only
bind the parties who entered into it, and it cannot favor
or prejudice a third person, even if he is aware of such
contract and has acted with knowledge thereof.412 (b) But
including heirs and assiens: A contract also binds the
heirs and assigns of the contracting parties. The general
rule is that heirs are bound by contracts entered into by
their predecessors-in-interest, except when the rights
and obligations arising therefrom are not transmissible
by (1) their nature, (2) stipulation, or (3) provision of
"5See. 10, Art. Ill, 1087 Phil. Constitution.

"‘Art. 1308, NCC.
"’Allied Banking Corporation v. CA, 284 SCRA 357, 363-364 (1998).
"’Philippine National Bank v. CA, 196 SCRA 536, 544-546(1991).
"’Philippine National Bank v. CA, 238 SCRA 20 (1994).
4J0Geraldez v. CA, 230 SCRA 320 (1994)
"'Philippine Commercial and International Bank v. CA, 255 SCRA 299,307.
"’Integrated Packaging Corp. v. Court of Appeals, 333 SCRA 170(2000); Art. 1311, par.
I, NCC.
J9JC9B0M
R52M9UH7
law.433 As a rule, therefore, he who contracts does so for

himself and his heirs.434 For example, a contract of lease
is generally transmissible to the heirs of the lessor or
lessee. Consequently, the successors-in-interest of the
lessee are entitled to the benefits, while that of the lessor
are burdened with the duties and obligations, which
said covenants conferred and imposed on the original
parties.433 (c) Exceptions to relativity of contracts: (1)
Stipulation pour autrui™ - it is a stipulation in favor
of a third person conferring a clear and deliberate
favor upon him, and which stipulation is merely a
part of a contract entered into by the parties, neither
of whom acted as agent of the third person, and such
third person may demand its fulfillment provided that
he communicates his acceptance to the obligor before
it is revoked.43’ Its requisites are the following: (i) there
must be a stipulation in favor of a third person; (ii) the
stipulation must be a part, not the whole of the contract;
(iii) the contracting parties must have clearly and
deliberately conferred a favor upon a third person, not a
mere incidental benefit or interest; (iv) the third person
must have communicated his acceptance to the obligor
before its revocation; and (v) neither of the contracting
parties bears the legal representation or authorization
of the third party.438 Once the third person accepts the
benefit, he will acquire the right to proceed against
the contracting parties even if he is not a party to the
contract. (2) Third persons may be affected by contracts
creating real rights when they come into possession of
the object of the contract,439 as for example, a recorded
lease is binding upon the purchaser who did not take any
part in the execution of the lease contract440 or a contract
433An. 1311, par. 1, NCC; DKC Holdings Corporation v. Court of Appeals, 329 SCRA
666, 672 (2000).
434Eleizegui v. Lawn Tennis Club, 2 Phil. 309, 313 (1903).
"’Estate of Llenado v. Llenado, G.R. No. 145736, March 4,2009.
416Art. 1311, par. 2, NCC.
"’Florentino v. Encarnacion, Sr., 79 SCRA 193, 201 (1977); Associated Bank v. CA, 291
SCRA 511 (1998).
43!Young v. CA, 169 SCRA 213,219 (1989); citing Florentino v. Encarnacion, Sr., supra.
"’Art. 1312, NCC.
440Art. 1676, NCC.
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
of mortgage duly registered is binding upon third

persons.441 (3) Creditors acquire the right to rescind the
contract entered into by the debtor with a third person
if that contract is intended to defraud him.442 (4) Tort
interference - any third person who induces another to
violate his contract shall be liable for damages to the
other contracting party,443 if the following requisites
are present: (i) the existence of a valid contract; (ii)
knowledge on the part of the third person ofthe existence
of contract; and (iii) interference of the third person is
without legal justification or excuse.444 A third person
can be held liable for tort interference even if he does
not know the identity of one of the contracting parties.
The law does not require that the responsible person
shall have known the identity of the injured person.443
18) Perfection and Essential Requisites of Contracts

18.1 Perfection of Contracts:
18.1.1 Stages of Contracts: (1) Negotiation - or preparation
begins when the prospective contracting parties
manifest their interest in the contract and ends at the
moment of their agreement; (2) Perfection - or birth of
the contract occurs when they agree upon the essential
elements thereof; and (3) Consummation - which is the
last stage, occurs when the parties fulfill or perform the
terms agreed upon in the contract, culminating in the
extinguishment thereof.446
♦"Arts. 2125, par. 1 and2126,NCC.

**2Arts. 1313 and 1381(3), NCC.
443Art. 1314, NCC.
44,'So Ping Bun v. Court of Appeals, 314 SCRA751, 758 (1999).
♦"Gilchrist v. Cuddy, 29 Phil. 542.
“Sagun v. ANZ Global Services and Operations (Manila), Inc., 801 SCRA 243 (2016);
SM Investments Corp. v. Posadas, 776 SCRA219 (2015); Robem Development Corp. v. People’s
Landless Association, 693 SCRA 24 (2013); C.F. Sharp & Co.. Inc. v. Pioneer Insurance & Surety
Corp., 666 SCRA 210 (2012); International Freeport Traders, Inc. v. Danzas Intercontinental, Inc.,
640 SCRA 621 (2011); XYST Corp. v. DMC Urban Properties Development, Inc., 594 SCRA 598
(2009); Rockland Construction Company, Inc. v. Mid-Pasig Land Development Corp., 543 SCRA
596 (2008); Central Cement Corp. v. Mines Adjudication Board, 542 SCRA 277 (2008); Navarra
v. Planters Development Bank, 527 SCRA 562 (2007); Moreno, Jr. v. Private Management Office,
507 SCRA 63 (2006).
J9JC9B0M
R52M9UH7
18.1.2 How Perfection ofContracts Takes Place: The perfection

of a contract takes place upon the concurrence of
the essential elements thereof.447 A contract which is
consensual as to perfection is so established upon a
mere meeting of minds, i.e., the concurrence of offer and
acceptance, on the object, and on the cause thereof.44*
Stated otherwise, a consensual contract is perfected by
mere consent.44’ A contract which requires, in addition
to the above, the delivery of the object of the agreement
is commonly referred to as a real contract.450 There are
only four contracts classified as real contracts under the
Civil Code, which requires delivery of the object of the
contract for its perfection, as follows: (1) pledge, (2)
commodatum, (3) mutuum, and (4) deposit. All other
contracts are consensual, or perfected by mere consent.
18.1.3 Kinds of Elements of Contracts: (1) Essential - those
necessary for the very existence of the contract itself
and the absence of any one of said elements will prevent
the creation or existence of a contract, such as the
object, cause, consent, and delivery of the object; (2)
Natural - those which are not essential for the existence
of a contract but they are presumed to exist in certain
contracts, unless there is an express stipulation to the
contrary, such as the warranties against eviction and
hidden defects in a contract of sale; and (3) Accidental
- those which exist only when the parties expressly
provide for them, such as the clauses, terms, and
conditions that the parties may agree upon, provided
they are not contrary to law, morals, good customs,
public order, or public policy.451
18.1.4 Essential Requisites of Contracts: For consensual
contracts, there are three essential elements or requisites:
(1) consent; (2) object; and (3) cause. For real contracts,
there are four essential requisites: (1) consent; (2)
object; (3) cause; and (4) delivery of the object.
44,Ang Yu Asuncion v. CA, 238 SCR A 602 (1994).

“ZrZ
44’XYST Corp. v. DMC Urban Properties Development, Inc., 594 SCRA 598 (2009).
450Ang Yu Asuncion V. CA, supra.
45lArt. 1306, NCC.
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
18.2 Consent:
18.2.1 How Manifested: Consent is manifested by the meeting
of the offer and acceptance upon the thing and the cause
which are to constitute the contract.452 Thus, an offer
that is not accepted does not give rise to consent, and
the contract does not come into existence.45’
18.2.2 Offer: (a) Concent: It is defined as “an expression of
willingness to contract on certain terms, made with
the intention that it shall become binding as soon as it
is accepted by the person to whom it is addressed.”454
Thus, an offer refers to a unilateral proposition which
one party makes to the other for the celebration of
the contract.455 (b) Requisites for effective offer: (1)
the offeror must have a serious intention to become
bound by his offer; (2) the terms of the offer must be
reasonably certain,455 definite, and complete, so that the
parties and the court can ascertain the terms of the offer;
and (3) the offer must be communicated by the offeror
to the offeree, resulting in the offeree’s knowledge of
the offer, (c) Instances not considered as offers: (1) as
a rule, business advertisements of things for sale are
not offers but mere invitations to make an offer457 —the
positive response to such advertisement is what may be
considered as the offer; (2) advertisements for bidders
are not considered as offers but simply invitations to
make proposals458 —the bid proposals or quotations
submitted by the prospective suppliers are the offers and
the reply of the proposer, the acceptance or rejection of
the offers;45’ and (3) display of goods with a price ticket
attached in a shop window or on a supermarket shelf is
not an offer to sell but an invitation for customers to make
an offer to buy. (d) When Offer is Terminated: (1) by
revocation or withdrawal - the offer may be withdrawn
452 Art. 1319, NCC.

’’’Gamboa v. Gonzales, 17 Phil. 381.
’’’G.H. Treitel, The Law ofContract, IO’1 cd., p. 8.
’’’Paredes v. CA, 463 SCRA 504 (2005).
’’’Art. 1325, NCC.
458Art. 1325, NCC.
’’’Jardine Davies, Inc. v. CA, 333 SCRA 684 (2000).
J9JC9B0M
R52M9UH7
or revoked by the offeror, as a rule, at any time prior

to the perfection of the contract;460 however, where a
period is given to the offeree within which to accept
the offer and the same has a separate consideration, a
contract of “option” is deemed perfected, and it would
be a breach of that contract to withdraw the offer during
the agreed period;461 (2) by rejection of the offer by the
offeree or when he makes a counter-offer—because
a counter-offer is a rejection of the original offer and
the simultaneous making of a new offer; (3) by the
death, insanity, insolvency, or civil interdiction of
either the offeror or the offeree prior to perfection of
the contract;462 (4) by expiration of the period fixed for
the acceptance of the offer;463 (5) by the supervening
illegality of the proposed contract prior to perfection;
and (6) by the destruction of the subject matter prior to
perfection, (e) Option Contract: (1) Concept: An option
is a 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 binds the party who has given the
option, not to enter into the principal contract with any
other person 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 decide
to use the option. It is a separate agreement distinct from
the contract which the parties may enter into upon the
consummation of the option.464 (2) If not supported by
consideration: If the period is not itself founded upon
or supported by a consideration, the option does not
become a contract. Thus, the offeror is still free and has
the right to withdraw the offer before its acceptance,
or, if an acceptance has been made, before the offeror’s
coming to know of such fact, by communicating that
460Ang Yu Asuncion v. CA, 238 SCRA 602, 613 (1994); citing Luudico v. Arias, 43 Phil.
27.
461 Ang Yu Asuncion v. CA, supra.
462Art. 1323, NCC.
463Art. 1321, NCC.
464Carcellcr v. Court of Appeals, 302 SCRA 718, 724 (1999).
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
withdrawal to the offeree.4" (3) When option becomes

contract: Where a period is given to the offeree within
which to accept the offer and the same is founded
I upon or supported by a separate consideration, a
contract of “option” is deemed perfected.466 Since the
option becomes a contract, the offeror is bound by the
agreement and may not withdraw the offer during the
period agreed upon. Thus, it will be a breach of that
contract (of option) to withdraw the offer during the
agreed period.467 (4) Consideration in option contract:
By the very nature of an option contract, the same is an
onerous contract for which the consideration must be
something of value, although its kind may vary.468 The
consideration need not be monetary but could consist
of other things or undertakings. (5) Option money
distinguished from earnest money: (i) earnest money is
part of the purchase price, while option money is the
money given as a distinct consideration for an option
contract; (ii) earnest money is given only where there
is already a sale, while option money applies to a sale
not yet perfected; and (iii) when earnest money is given,
the buyer is bound to pay the balance, while when
the would-be buyer gives the option money, he is not
required to buy.46’
18.2.3 Acceptance of Offer: (a) Must be absolute: To be
effective, an acceptance must be absolute.470 An
acceptance is considered absolute and unqualified when
it is identical in all respects with that of the offer so
as to produce consent or a meeting of the minds.47'
A qualified acceptance, or one that involves a new
4"Ang Yu Asuncion, supra, citing Art. 1324, Civil Code and Atkins, Kroll & Co. v. Cua,
102 Phil. 94; see also Rural Bunk of Paniflaque, Inc. v. Remolado, 135 SCRA 409; Sanchez v.
Rigos, 45 SC RA 368.
466Ang Yu Asuncion v. CA, supra.
“’/</.
46HVilIamor v. Court of Appeals, G.R. No. 97332, 10 October 1991, 202 SCRA 607, 615;
Bible Baptist Church v. Court of Appeals, 444 SCRA 399 (2004); Eulogio v. Sps. Apeles, G.R.
No. 167884, Jun. 20, 2009.
46’Adelfa Properties, Inc. v. CA, 240 SCRA 565, 584 (1995).
470Art. 1319, l“par., NCC.
47lTalampas, Jr. v. Moldcx Realty, Inc., 758 SCRA 666 (2015) and Traders Royal Bank v.
Cuison Lumber Co., Inc., 588 SCRA 690 (2009).
J9JC9B0M
R52M9UH7
proposal, constitutes a counter-offer172 and is a rejection

of the original offer. Any modification or variation from
the terms of the offer annuls the offer.473 (b) Manner of
Acceptance: The offeror may fix the time, place, and
manner of acceptance, all of which must be complied
with.474 An acceptance which is not made in the manner
prescribed by the offeror is not effective but constitutes
a counter-offer which the offeror may accept or reject.473
In the absence of any manner of acceptance fixed by
the offeror in his offer, an acceptance may be express
or implied476 and, if an offer has been made through
an agent, it is deemed accepted from the time the
acceptance is communicated to said agent.477 (c) When
acceptance binds offeror: The contract is perfected only
from the time an acceptance of an offer is made known
to the offeror.478 This is known as the cognition theory
being followed by the Civil Code, (d) Withdrawal of
acceptance: For a contract to arise, the acceptance
must be made known to the offeror. Accordingly, the
acceptance can be withdrawn or revoked before it is
made known to the offeror.47’
18.2.4 Capacity to Give Consent: (a) Persons incanable of
giving consent: (1) Minors480 - where the minors who
entered into the contract have already passed the age
of puberty and adolescence in such a way that they
could misrepresent and actually did misrepresent
themselves as having reached the age of majority
(active misrepresentation), they cannot, upon reaching
the age of majority, annul the contract on the ground
of minority inasmuch as they are already in estoppel;-""
but if the minor was guilty merely of constructive or

473ABS-CBN Broadcasting Corp. v. CA, 301 SCRA 572.
4,4An. 1321, NCC.
473Malbarosa v. CA, G.R. No. 125761, April 30,2003.
"‘Art. 1320, NCC.
4,7&eArt. 1322, NCC.
4,8Art. 1319, par. 2. NCC.
479Jardinc Davies, Inc. v. CA, supra; Oesmer v. Paraiso Development Corp., G.R. No.
157493, Feb. 5, 2007.
4“Art. 1327(1), NCC.
481Mercado v. Espiritu, 37 Phil. 215.
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
passive misrepresentation, or when the document

signed by him did not contain such statement that he is
already of legal age, he may still annul the contract upon
reaching the age of majority;4"2 (2) insane or demented
persons4"3 - but contracts entered into during a lucid
interval are valid;484 (3) deaf mutes who do not know
how to write;483 (4) those in a state of drunkenness or
during a hypnotic spell;488 (5) persons suffering from
the accessory penalty of civil interdiction;48’ and (6)
incompetents under guardianship, (b) Effects of old aire
and physical infirmity: A person is not incapacitated
to contract merely because of advanced years or by
reason of physical infirmities. Only when such age or
infirmities impair his mental faculties to such extent as
to prevent him from properly, intelligently, and fairly
protecting his property rights that he is considered
incapacitated.4"8 (c) Effect of illiteracy: An illiterate is
not incapable of giving consent to a contract. However,
when an illiterate alleges mistake or fraud in giving his
consent, the burden is on the party interested in enforcing
the contract to prove that the terms thereof have been
fully explained to the former in a language understood
by him;4"’ otherwise, the contract is voidable. It is the
party invoking the benefits of Article 1332 who has the
burden of proving that he really is unable to read or that
the contract is written in a language not understood by
him. Only after sufficient proof of such facts may the
burden of proving that the terms of the contract had
been explained to the disadvantaged person be shifted
to the party enforcing the contract.4™
18.2.5 Vices of Consent: (a) Mistake: In order that mistake
may invalidate consent, it is necessary that: (1) it should
refer to the substance of the thing which is the object
“‘Brugunzu v. Villa-Abrille, 105 Phil. 456.

“‘Art. 1327(2), NCC.
“‘Art. 1328, NCC.
“’Art. 1327(2), NCC.
“‘Art. 1328, NCC.
“’Art. 34, RPC.
“"Loyola v. Court of Appeals, 326 SCRA 285.
“’Art. 1332, NCC.
‘■"Sales v. Court of Appeals, 211 SCRA 858, 864 (1992).
J9JC9B0M
R52M9UH7
of the contract4’1 - which includes mistake over the

essence or the substantial qualities of a thing (error in
substantia) which affects not the identity of the thing
but the materials which compose it, as for example, the
purchase of an object which is gold plated in the belief
that it is really gold; mistake over determinate attributes
or characteristics of a thing foreign to its matter,
but which has been understood as essential by the
contracting parties (error in substantia), as for example,
a painting by Goya is bought and the painting is not of
Goya; and mistake as to amount (error in quantitate)
which refers to mistake as to the extension or dimension
of the object and differs from the mistake of account
which is simply a mistake in the computation or in a
mathematical operation;4’2 or to those conditions which
have principally moved one or both parties to enter into
the contract,453 or to the identity or qualifications ofone of
the parties when the same have been the principal cause
of the contract454 —for mistake as to the qualification of
one of the parties to vitiate consent, the mistake must be
either with regard to the identity or with regard to the
qualification of one of the contracting parties and the
identity or qualification must have been the principal
consideration for the celebration of the contract;"3 (2)
it must be excusable and not one that could have been
avoided by the party alleging it456 —an error so patent
and obvious that nobody could have made it, or one
which could have been avoided by ordinary prudence, or
a mistake that is caused by manifest negligence, cannot
be invoked by the one who made it in order to annul
his contract;4” and (3) it must generally be a mistake of
fact and not mistake of law. Ordinarily, a mistake of law
does not vitiate consent. By way of exception, mistake
of law may invalidate consent if the following requisites
are present: (i) the mistake must be with respect to the
4,1 Art. 1331, par. l.NCC.

451IV Caguioa, Comments and Cases on Civil Law, 1983 cd., p. 523.
4,1Art. 1331, par. l.NCC.
4MArt. 1331,par. 2, NCC.
"’Roman Catholic Church v. Panic, 669 SCRA 234 (2012).
"‘Art. 1333, NCC; Domingo Realty, Inc. v. CA, 513 SCRA 40 (2007).
"’Domingo Really, Inc. v. CA, supra.
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
legal effect of an agreement; (ii) it must be mutual;

and (iii) the real purpose of the parties must have been
frustrated.4’8 (b) Violence: In order that violence may
vitiate consent and be a ground for annulment of a
contract, the following requisites must be present: (1)
the force employed is either serious or irresistible; and
(2) it must have been the determining cause of consent.
It is not necessary that the force be always irresistible.4”
Such violence will annul the obligation, although it may
have been employed by a third person who did not take
part in the contract.™ (c) Intimidation: In order that
intimidation may vitiate consent and render the contract
invalid, the following requisites must concur: (1) that
the intimidation must be the determining cause of the
contract, or must have caused the consent to be given;
(2) that the threatened act be unjust or unlawful; (3) that
the threat be real and serious, there being an evident
disproportion between the evil and the resistance which
all men can offer, leading to the choice of the contract
as the lesser evil; and (4) that it produces a reasonable
and well-grounded fear from the fact that the person
from whom it comes has the necessary means or ability
to inflict the threatened injury.401 The intimidation
will annul the obligation, although it may have been
employed by a third person who did not take part in
the contract.'02 However, a threat to enforce one’s claim
through competent authority, if the claim is just or legal,
does not vitiate consent.’02 (d) Undue Influence: In order
for undue influence to vitiate consent, the following
requisites must be present: (1) a person who can be
influenced; (2) the fact that improper influence was
exerted; and (3) submission to the overwhelming effect
of such unlawful conduct.’04 (e) Fraud: In order that
fraud may vitiate consent and be a cause for annulment
4”Art. 1334, NCC.

4”Art. 1335, NCC.
’““Art. 1336, NCC.
’“'De Leon v. CA, 186 SCRA 345 (1999); Binua v. Ong, 727 SCRA 59 (2014); and BP1 v.
Fernandez, 768 SCRA 563 (2015).
’“’Art. 1336, NCC.
’“’Art. 1335, par. 4, NCC.
’“Loyola v. CA, 326 SCRA 285 (2000).
J9JC9B0M
R52M9UH7
of contract, the following must concur: (1) it must

have been employed by one contracting party upon the
other’® - as a rule, therefore, misrepresentation by a
third person does not vitiate consent;506 exceptions: (i)
when the third person causes the fraud in connivance
with, or at least with the knowledge, without protest,
of the favored contracting party, the contract may be
annulled,507 and (ii) a contract may also be annulled on
the ground of vitiated consent if deceit by a third person,
even without connivance or complicity with one of the
contracting parties, resulted in mutual error on the part
of the parties to the contract;508 (2) it must have induced
the other party to enter into the contract509 — it must be
causal fraud (dolo causante), meaning the fraud must
be the determining cause of the contract, or must have
caused the consent to be given,510 because if the fraud is
merely incidental (dolo incidente), or those which are
not serious in character and without which the other
party would still have entered into the contract, the
person employing fraud is only liable to pay damages;5"
(3) it must have been serious512 - the fraud is serious
when it is sufficient to impress, or to lead an ordinarily
prudent person into error; that which cannot deceive a
prudent person cannot be a ground for nullity;513 and (4)
it must have resulted in damage and injury to the party
seeking annulment.514 Silence or concealment, by itself,
does not constitute fraud, unless there is a special duty
to disclose certain facts, or unless according to good
“Arts. 1342 and 1344, NCC.

“Hill v. Veloso, 31 Phil. 160(1915).
™Id.
“Rural Bank of Caloocan, Inc. v. CA, 104 SCR A 151 (1981); Co v. CA, 193 SCR A 198
(1991).
“Art. 1338, NCC.
5I0Fontana Resort and Country Club, Inc. v. Tan, 664 SCRA 382 (2012); Archipelago
Management and Marketing Corp. v. CA, 299 SCRA 43 (1998); Samson V. CA, 238 SCRA 397
(1994).
511 Art. 1344, par. 2, NCC; Geraldcz v. CA, 230 SCRA 320 (1994).
5l2Art. 1344, par. 1,NCC.
5bECE Realty and Development, Inc. v. Mandap, 734 SCRA 76 (2014) and Carganillo v.
People, 735 SCRA 677 (2014).
5l4Alcasid v. CA, 237 SCRA 419 (1994); Constantino v. Court of Appeals, 264 SCRA 59;
Rural Bank of Sta. Maria, Pangasinan v. Court of Appeals, 314 SCRA 255,270 (1999).
I
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
faith and the usages of commerce the communication

should be made.5'5 Thus, when the seller has knowledge
of a material fact which, if communicated to the
buyer, would render the sale unacceptable, or at least,
substantially less desirable, the non-disclosure of such
fact would amount to fraud.516
18.3 Object of Contract:
18.3.1 Possible Object of Contracts: (1) all things which are
not outside the commerce of men, including future
things; (2) all rights which are not intransmissible; or
(3) all services which are not contrary to law, morals,
good customs, public order, or public policy.517
18.3.2 Requisites: (1) it must be within the commerce of
men;518 (2) it must be real or possible, either physically
or legally;51’ (3) it should be licit, or not contrary to law,
morals, good customs, public order, or public policy;520
and (4) it should be determinate or determinable, as to
its kind.521
18.3.3 Rule as to Future Inheritance: As a rule, no contract may
be entered into upon future inheritance.521 Contracts
entered into upon future inheritance are void.522 For
inheritance to be considered “future,” succession must
not have been opened at the time of the contract.524 A
contract may be classified as a contract upon future
inheritance prohibited under the second paragraph of
Article 1347 of the Civil Code where the following
requisites concur: (1) the succession has not yet been
opened; (2) the object of the contract forms part of the
inheritance; and (3) the promisor has, with respect to
"'"Art. 1339. NCC; Riviera Filipina, Inc. v. CA, 380 SCRA 245 (2002) and Rural Bank of
Stu. Maria, Pangasinan v. CA, 314 SCRA 255, 270 (1999).
’"Guinhawa v. People, 468 SCRA 278 (2005).
’"Art. 1347, NCC.
""Art. 1347, NCC.
’"Art. 1348, NCC.
520Art. 1347, NCC.
521 Art. 1349, NCC.
522Art. 1347, par. 2, NCC.
’“Arroganle v. Deliarte, G.R. No. 152132, July 24, 2007.
524J.L.T. Agro, Inc. v. Balansag, G.R. No. 141882, March 11,2005.
J9JC9B0M
R52M9UH7
the object, an expectancy of a right which is purely

hereditary in nature.525 Exception: The law allows,
however, a person to make a partition of his estate by an
act inter vivos, provided that the legitime of compulsory
heirs is not prejudiced.526 This is the exception to the
rule prohibiting contracts upon a future inheritance.527
18.4 Cause of Contract:

18.4.1 Cause and Motive: (a) Cause: The cause or
consideration is the why of the contracts, the essential
reason which moves the contracting parties to enter
into the contract.52* (b) Distinguished from Motive:
The particular motives of the parties in entering into a
contract are different from the cause thereof.529 Cause
is the essential reason for the contract, while the
latter are the particular reasons of a contracting party
which do not affect the other party and which do not
preclude the existence of a different consideration. To
clarify by an example: A thing purchased constitutes
the consideration (cause) for the purchaser and not
the motives which have influenced his mind, like its
usefulness, its perfection, its relation to another, the
use thereof which he may have in mind, etc., a very
important distinction, which precludes the annulment of
the contract by the sole influence of the motives, unless
the efficacy of the former had been subordinated to
compliance with the latter as conditions.550 Ordinarily,
therefore, a party’s motives for entering into a contract
do not affect the contract.5’1 Exception: The motive may
be regarded as causa when it predetermines the purpose
of the contract.5’2 Stated otherwise, the motive may
be regarded as the causa when the realization of such
iuld.,‘ see also Arrogante V. Deliarte, supra.

526Art. 1080, NCC.
“’J.L.T. Agro, Inc. v. Balansag, supra.
“’Gonzales v. Trinidad, 67 Phil. 682; Villamor v. CA, 202 SCRA 607; Domingo v. CA. 367
SCRA 368, 379 (2001); Bible Baplisl Church v. CA, 444 SCRA 399 (2004); Eulogio v. Apeles,
576 SCRA 561 (2009).
“’Art. 1351, NCC.
“°8 Manresa 618-619, cited in Gonzales v. Trinidad, 67 Phil. 682.
5JIUy v. CA, 314 SCRA 69 (1999).
“2E. Razon, Inc. v. Philippine Ports Authority, 151 SCRA 223 (1987).
I
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
motive or particular purpose has been made a condition

upon which the contract is made to depend.’" In this
situation, the illegality of the motive shall render the
contract void’34 because the motive is also the cause.
18.4.2 Requisites for Cause: (1) It must exist - But cause is
presumed to exist in a contract although not stated,
unless the contrary is proved.’3’ However, if it is proven
that the cause did not exist at the time of the transaction,
the contract is void.”6 (2) It must be true - The statement
of a false cause in contracts shall render them void,”7
unless it can be proven that they were founded upon
another cause which is true and lawful.”1 If the price
is simulated, the sale is void, but the act may be shown
to have been in reality a donation, or some other act or
contract.”’ Hence, a deed of sale, in which the stated
consideration had not in fact been paid, is null and
void.’40 On the other hand, if the consideration or price
stated in the contract is true except that it is not paid,
the contract is valid and results in a right to demand the
fulfillment or cancellation of the obligation.541 Thus, it
is not the act of payment of price that determines the
validity of a contract of sale.542 (3) It must be licit - a
contract where the cause is contrary to law, morals,
good customs, public order, or public policy is void541
and produces no effect whatever.544
18.4.3 Effect of Lesion or Inadequacy of Cause: Lesion or
inadequacy of cause does not invalidate a contract,
unless there has been fraud, mistake, or undue
’’’Philippine National Construction Corp. V. CA, 272 SCRA 183 (1997).

”4Art. 1409(1), NCC.
’’’Art. 1.354, NCC.
”‘Art. 1409(3), NCC.
’’’Art. 1353, NCC; Javier v. Court of Appeals, 183 SCRA 171.
”’M.
’’’Art. 1471, NCC.
’"Rongiivilln v. CA, 294 SCRA 289 (1998); Yu Bun Guan v. Ong, G.R. No. 144735, Oct.
18,2001; Ocejo, Perez & Co. v. Plores, 40 Phil. 921.
54 'Buenaventura v. Court of Appeals, 416 SCRA 263 (2003); see also Balatbat v. Court of
Appeals, 261 SCRA 128 (1996).
’42/rZ
’4’Art. 1409(1), NCC.
544Art. 1352, NCC.
J9JC9B0M
R52M9UH7
influence.545 But in the following cases, lesion is a

ground for rescission of the contract: (1) when the ward
suffers lesion by more than one-fourth (%) of the value
of the property in contracts entered into by guardians on
behalf of wards;546 (2) when the absentee suffers lesion
by more than one-fourth (!4) of the value of the property
in contracts entered into by legal representatives on
behalf of absentees;547 or (3) in partition among co-heirs,
when any one of them received things whose value is
less than one-fourth (!4) than the share to which he is
entitled.548
19) Forms of Contracts, Reformation, and Interpretation of

Contracts
19.1 Forms of Contracts:
19.1.1 Effect of Formalities: (a) Rule: Contracts are obligatory,
meaning both valid and enforceable, in whatever form
they may have been entered into, provided all the
essential requisites for their perfection are present."’
(b) Exceptions: Form becomes an indispensable
requirement: (1) when the law requires a certain form
to make the contract valid; or (2) 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.55"
19.1.2 Contracts which Require Form for Validity: (1) in
donation of personal property where the value exceeds
P5.000, both the donation and the acceptance must
be writing; otherwise, the donation is void;551 (2) in
donation of real property, both the donation and the
acceptance must be in a public instrument; otherwise,
the donation is void;552 ( 3) in donation propter nuptias,
same formalities applicable to ordinary donations
"’Art. 1355, NCC.

54‘Art. 1381(1), NCC.
"’Art. 1381(2), NCC.
"‘Art. 1098, NCC.
"’Art. 1356, NCC.
"'Art. 748, NCC.

552Art. 749, NCC.
1
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
are required; otherwise, the donation propter nuptias

is void;”3 (4) in express condonation intended to be
effective during the lifetime of the creditor, both the
condonation and the acceptance must comply with
the formalities applicable to ordinary donations;
otherwise, the condonation is invalid;”4 (5) in contracts
of partnership where real properties are contributed as
capital, there must be an inventory of the real properties
contributed, signed by the parties, and attached to a
public instrument; otherwise, the contract of partnership
is void;”3 (6) in agency to sell a parcel of land or any
interest therein, the authority of the agent is required to
be in writing; otherwise, the sale by the agent is void;”6
(7) any stipulation between the common carrier and the
shipper or owner limiting the liability of the former for
the loss, destruction, or deterioration of the goods to
a degree less than extraordinary diligence must be in
writing and signed by the shipper or owner; otherwise,
the stipulation is not valid;”’ (8) in antichresis, it is
necessary that the amount of the principal and of the
interest of the principal obligation should be specified in
writing; otherwise, the contract of antichresis is void;”'
(9) in sale or transfer of large cattle, the same must
be registered with the city/municipal treasurer and a
certificate of transfer must be issued; otherwise, the sale
or transfer is not valid;”’ and (10) in chattel mortgage,
the personal property must be recorded in the chattel
mortgage registry; otherwise, the chattel mortgage is
not valid.'60
19.1.3 Contracts Which Require Form for Enforceability
(Statute of Frauds): (a) Contracts itovemed by Statute
of Frauds: (I) an agreement that by its terms is not to
be performed within a year from the making thereof is
’’’Art. S3. FC, in relation to Arts. 748 and 749, NCC.

534Art. 1270, par. 2, NCC.
333 Art. 1773, in relation to Art. 1771, NCC.
”6Art. 1874, NCC.
’’’Art. 1744(1), NCC.
’’“Art. 2134, NCC.
’’’Act No. 1147, otherwise known as the Cattle Registration Act.
’“Art. 2140, NCC.
J9JC9B0M
R52M9UH7
required to be in writing to be enforceable under the

Statute of Frauds’6' - applies only to agreements not
to be performed on either side within a year from the
making thereof62 and the test to determine whether an
oral contract is enforceable under the one-year rule of
the Statute of Frauds is whether, under its own terms,
performance is possible within a year from the making
thereof;’61 (2) any special promise to answer for the
debt, default, or miscarriage of another’" - referring
to the contracts of guaranty proper and suretyship; (3)
an agreement in consideration of marriage,’6’ such as
marriage settlement;’66 (4) sale of goods, chattels, or
things in action at a price not less than P500 - the Statute
covers both tangible and intangible personal property’"
and also covers the assignment of choses in action;
hence, an assignment of a credit over P500 is governed
by the Statute of Frauds;’68 (5) sale of real property or
any interest therein or lease of real property for more
than a year,569 including an agreement for its renewal;’"
(6) representation as to the credit of a third person;”'
and (7) an express trust concerning an immovable or
any interest therein’" - the latter is also in the nature
of a statute of frauds.”1 (b) Requirement of formality
tinder Statute of Frauds: Those contracts must be
in writing or, if not in writing, there be some note or
memorandum thereof in writing subscribed by the party
charged’74 (or the party against whom enforcement is
“'Art. I403(2)(a), NCC.

’“National Bank v. Philippine Vegetable Oil Co., 49 Phil. 857, 867 (1927).
’"U.S.-Blue Valley Creamery Co. v. Consolidated Produels Co, C.C. A. Mo., 81 F.2d 182.
’"Art. 1403(2)(b), NCC.
’“Art. 1403, par. 2(c), NCC.
’“Art. 77, FC;
’“IVTolentino, CivilCode ofthe Phil., 1991 ed., 623.
citing Ysmael v. Hoskins, 50 Phil. 132.
’“Art. 1403, par. 2(e), NCC.
’"Fernandez v. Court of Appeals, 166 SCRA 577 (1998); Inter-Asia Services Corp. (Inter
national) v. Court of Appeals, 263 SCRA 408 (1996).
“'Art. 1403, par. 2(f), NCC.
’"Art. 1443, NCC.
“’Pefialbcr v. Ramos, 577 SCRA 509 (2009).
’"Art. 1403(2), NCC.
/'
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
sought)—the note or memorandum must contain the

name of the parties, the terms and conditions of the
contract, and a description of the property sufficient to
render it capable of identification’-’ and must contain
the essential elements of the contract expressed with
certainty7 that may be ascertained from the note or
memorandum itself, or some other writing to which it
refers or within which it is connected, without resorting
to parol evidence.’-6 (c) Principles zo'.emrz Sta’-te
of Frauds: (1) the form required under the Statute of
Frauds is for evidentiary purposes only; ~ 'nentx, if
the parties permit a contract to be proved, whhout any
objection, it is then just as binding as if the Statute has
been complied with;’*’ (2) the Statute of Frauds applies
only to executory contracts'*’ and it does not apply
to contracts which have been completely or partially
performed;”0 (3) the Statute of Frauds does not apply to
actions which are neither for violation of a contract nor
for the performance thereof;”1 (4) the Statute of Frauds
may be invoked only by a party to the oral contract not
by a stranger thereto;”2 (5) the defense of the Statute of
Frauds can be waived either by; (i) failing to object to
the presentation of oral evidence to prove the contract
or (ii) accepting benefits under the contract;”’ and (6) the
Statute of Frauds refers to specific kinds of transactions
and cannot apply to any other transaction that is not
enumerated in Articles 1403(2) and 1443.’"
’’’Swedish Match, AB v.CA,441 SCRA 1 (2004).riling Litonjuav. Fernandez,427SCRA

478 (2004).
’’’Swedish Match, AB v. CA, supra, 16, citing Gallemil V. Tabilaran, 20 Phil. 241 (1911).
citing Dumalagan v. Bolifer, 33 Phil. 471 (1916).
”9Mactan-Cebu International Airport Authority v. Tudtud, 571 SCRA 165 (2008), riling
Asia Production Co., Inc. v. Pao, 205 SCRA 458,467 (1992).
’“/</. Also in Asia Production Co., Inc. v. Pao, 205 SCRA 458,467 (1992), riling Almirol
v. Monserml, 48 Phil. 67, 70; Robles v. Lizarraga Hermanos, 50 Phil. 387; Diana v. Macalibo, 74
Phil. 70; Yuneza v. CA. 572 SCRA413 (2008); Swedish Match, AB v.CA,441 SCRA 1 (2004).
’“'Asia Productions Co., Inc. v. Patio, 205 SCRA 458, 467 (1992), riling Facturan v.
Sabanal, 81 Phil. 512 (1948) and Eusebio v. Sociedad Agricola del Balarin, 16 SCRA 569 (1966).
’“Art. 1408, NCC; Ayson v. CA, 97 Phil. 965.
’’’Art. 1405, NCC.
’"Cruz v. J.M. Tuason & Co., Inc., 76 Phil. 543, 555 (1977); Western Mindanao Lumber
Co, Inc. v. Medalle, 79 SCRA 703,706 (1977); Rosencor Development Corp. v. Inquing, G.R. No.
140479, March 8,2001.
J9JC9B0M
R52M9UH7
416 PRE-BAR REVIEWER IN CIVIL LAW'
19.1.4 Contracts Which Require Form for Convenience Onlv:

(a) Contracts required to be in public document under
Article 1358: (1) acts and contracts which have for
their object the creation, transmission, modification,
or extinguishment of real rights over immovable
property,5*’ such as a contract of real estate mortgage;
(2) cession, repudiation, or renunciation of hereditary
rights or of those of the conjugal partnership of gains;’**
(3) power to administer property, or any other power
which has for its object an act appearing or which should
appear in a public document, or should prejudice a third
person;5*7 and (4) cession of actions or rights proceeding
from an act appearing in a public document.-'7* AU other
contracts where the amount involved exceeds P50O
must appear in writing, (b) Purpose of requirement in
Article 1358: The provision of Article 1358 of the Civil
Code on the necessity of a public document is only for
convenience, not for validity or enforceability.’*’ Non-
compliance with formal requisites does not adversely
affect the validity of the contract or the contractual
rights and obligations of the parties.”0 (c) Remedy for
non-comnliance with formality under Article 1358:
For contracts which are required to be in a public
document under Article 1358, the contracting parties
may compel each other to observe that form and this
right may be exercised simultaneously with the action
upon the contract.”1 But in order for this remedy to be
exercised, it is necessary that the following requisites
must concur: (1) the contract must have already been
perfected;”2 (2) the contract must have been valid as to
form;’” and (3) the contract must have been enforceable
’"Art. 1358(1), NCC.

’“Art. 1358(2), NCC.
’“’Art. 1358(3), NCC.
’“Art. 1358(4), NCC.
“'DaiIon V. CA, 182 SCRA 892; Caoili v. CA, 314 SCRA 345 (1999); Cenido v.
Apacionado, 318 SCRA 688 (1999); Aguscn v. CA, 325 SCRA 504 (2000); Peflalosa v. Santos,
363 SCRA 545, 558-559 (2001).
”°Agasen v. CA, 325 SCRA 504 (2000); Londres v. CA, 394 SCRA 133.
”'Art. 1357, NCC.
”!M.
’’’Art. 1356, NCC.
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
under the Statute of Frauds.”* Thus, when a contract is

enforceable under the Statute of Frauds, and a public
document is necessary for its registration in the Registry
of Deeds, the parties may avail themselves of the right
under Article 1357.”’
19.2 Reformation and Interpretation of Contracts:
19.2.1 Concept and Requisites: (a) Definition: Reformation
is defined as a 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.”4 (b) Requisites
of Reformation: (1) there must have been a meeting
of the minds of the parties to the contract; (2) the
instrument does not express the true intention of the
parties; and (3) the failure of the instrument to express
the true intention of the parties is due to mistake, fraud,
inequitable conduct, or accident.”7 If the mistake is
mutual, the instrument may be reformed if the following
requisites are present: (1) the mistake should be of fact;
(2) the same should be proved by clear and convincing
evidence; and (3) the mistake should be common to
both parties to the instrument.”8
19.2.2 Instances Where Instalment May Not Be Reformed:
(1) if mistake, fraud, inequitable conduct, or accident
has prevented a meeting of the minds of the parties—
instead, the remedy is annulment of the contract and
not reformation;”* (2) in simple donations inter vivos
wherein no condition is imposed;4™ (3) in wills;401 (4)
”*W.
’’’Art. 1406, NCC.
’“B.F. Corporation v. Form-Eze Systems, Inc., 813 SCRA 155 (2016); Multi-Ventures
Capital and Management Corp. v. Stalwart Management Services Corp., 526 SCRA 420 (2007);
Quiros v. Arjona, 425 SCRA 57 (2004); Huibonhoa v. CA, 320 SCRA 625 (1999).
”’B.F. Corporation v. Form-Eze Systems, Inc., supra, citing Multi-Ventures Capital and
Management Corp. v. Stalwart Management Services Corp., supra. See also Quiros v. Arjona,
supra, and National Irrigation Administration v. Gamit, supra.
’’“Bank of the Philippine Islands v. Fidelity & Surely Co., 51 Phil. 57.
’"Art. 1359, par. 2, NCC.
““Art. 1366, NCC.
mld.
J9JC9B0M
R52M9UH7
1
when the real agreement is void;602 (5) when one of the

parties has brought an action to enforce the instrument,
he cannot subsequently ask for its reformation;60’ and (6)
when the contract is unenforceable because of failure to
comply with the Statute of Frauds.
19.2.3 Some Important Rules of Interpretation: (a) Contra Pro
ferentem (construe against drafting party) - the inter
pretation of obscure words or stipulations in a contract
shall not favor the party who caused the obscurity,60*
applicable in contracts of adhesion;605 (b) Principle of
Effectiveness - where two interpretations of the same
contract language are possible, one interpretation hav
ing the effect of rendering the contract meaningless,
while the other interpretation would give effect to the
contract as a whole, the latter interpretation must be
adopted;606 (c) Complementary-contracts-construed-to-
gether doctrine - an accessory contract must be read in
its entirety and together with the principal agreement,
based on Article 1374 of the Civil Code;60’ (d) Ejusdem
generis — however general the terms of a contract may
be, they shall not be understood to comprehend things
that are distinct and cases that are different from those
upon which the parties intended to agree.609
20) Defective Contracts

20.1 Classification of Contracts as to Defects:
20.1.1 Perfectly Valid: If the contract does not suffer from any
defect.
mId.
“’Art. 1367, NCC.
“’Art. 1377, NCC.
“’Wood Technology Corp. v. Equitable Banking Corp., 451 SCRA 754 (2005).
“‘Art. 1373, NCC; Philippine National Bank v. Utility Assurance & Surety Co., Inc., 177
SCRA 393 (1989).
“’Philippine Bank of Communications v. Lim, 455 SCRA 714 (2005), citing Rigor v.
Consolidated Orix Leasing and Finance Corp., 387 SCRA 270 (2002); Southeast Asia Shipping
Corp. V. Seagull Maritime Corp., 414 SCRA 419, 428 (2003); and Velasquez v. CA, 309 SCRA
539(1999).
mld.
“’Art. 1372, NCC.
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
20.1.2 Defective Contracts: In the order of their defects, from

least to most defective: (1) Rescissible Contract - it
is considered valid, binding, and effective until it
is rescinded and contains all the requisites of a valid
contract and are considered legally binding, but by reason
of injury or damage (lesion) to either of the contracting
parties or to third persons, such as creditors, it is
susceptible to rescission at the instance of the party who
may be prejudiced thereby;"0 (2) Voidable Contract -
one in which the essential requisites for validity under
Article 1318 are present,6" but may be annulled because
of want of capacity or the vitiated consent of one of the
parties; however, before such annulment, the contract is
existent, valid, and binding, hence, considered effective
and obligatory between parties,612 but it may be rendered
perfectly valid by ratification, which can be express or
implied;613 (3) Unenforceable Contract - that which
cannot be enforced by a proper action in court, unless
it is ratified, because either it is entered into without
or in excess of authority or it does not comply with
the Statute of Frauds or where both of the contracting
parties do not possess the required legal capacity;614
prior to ratification, the contract is valid but it cannot be
enforced by a proper action in court, but once ratified,
either expressly or impliedly, it is rendered perfectly
valid and becomes obligatory between the parties; and
(4) Void or Inexistcnt Contract - one which has no
force and effect from the very beginning; hence, it is as
if it has never been entered into and cannot be validated
either by the passage of time or by ratification.616
"‘Justice Vitug, Dissenting Opinion in Equatorial Really Development, Inc. v. Mayfair

Theater, Inc., G.R. No. 133879, November 21,2001.
‘"Francisco v. Herrera, G.R. No. 139982, November 21,2002.
‘"First Philippine Holdings Corp. v. Trans Middle East (Phils.), Equities, Inc., 607 SCRA
605 (2009), citing M WSS v. CA, 297 SCRA 287 (1988).
‘"Francisco v. Herrera, G.R. No. 139982, November 21,2002.
‘"Mercado v. Allied Banking Corporation, 528 SCRA 444 (2007), cited in Iglesia Filipina
Independiente v. Heirs of Bernardino Taeza, 715 SCRA 138(2014).
‘"Francisco v. Herrera, G.R. No. 139982, November21, 2002.
J9JC9B0M
R52M9UH7
20.2 Rescissible Contracts:

20.2.1 Distinctions Between Rescission in Articles 1191
and 1381: (1) the rescission under Article 1191 is on
account of breach of contract (more properly called
“resolution”); while the rescission under Article 1381
is by reason of lesion or economic prejudice;616 in
other words, the rescission under Article 1191 is not
predicated on injury to economic interests of the party
plaintiff but on the breach of faith by the defendant that
violates the reciprocity between the parties; while in
the rescission under Article 1381, the cause of action
is subordinated to the existence of lesion or economic
prejudice because it is the raison d ‘etre as well as the
measure of the right to rescind;617 (2) in Article 1191,
the contract is perfectly valid; in Article 1381, the
contract is defective; (3) the rescission in Article 1191
applies exclusively to reciprocal obligations; while
in Article 1381, the rescission applies to all kinds of
obligations arising from contracts, whether the same
be reciprocal in character or not; (4) the rescission
in Article 1191 is a principal action which seeks the
resolution or cancellation of the contract; while in
Article 1381, the rescission is only a subsidiary remedy,
meaning, it cannot be instituted except when the party
suffering damage has no other legal means to obtain
reparation for the same6'8 —consequently, the four-year
prescriptive period provided for in Article 1389 of the
Civil Code applies only to rescission as a subsidiary
remedy and not to rescission as a principal action under
Article 1191,619 which prescribes within 10 years from
the time the right of action accrues;620 (5) in Article
1191, only a contracting party can be injured and can
maintain an action for rescission; while in Article 1381,
6I6ASB Realty Corp. v. Ortigas & Company Limited Partnership, 777 SCRA 447 (2015).
6l7Concurring Opinion of J.B.L. Reyes, Universal Food Corp. v. CA, 33 SCRA I (1970),
cited in Pryce Corp. v. Philippine Amusement and Gaming Corp., supra, and Cannu v. Galang,
supra.
6l8UnIad Resources Development Corp. v. Dragon, 560 SCRA 63 (2008); Cannu v. Galang,
459 SCRA 80; Iringan v. CA, 366 SCRA 41 (2001); Ong v. CA, 310 SCRA I (1999).
6l9lringan v. CA, supra, and Unlad Resources Development Corp. v. Dragon, supra.
mId.
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
even a third person can become an injured party in the

rescission contemplated under Article 1381, as in the
case of contracts in fraud of the creditor; and (6) in
Article 1191, the court has discretionary power not to
grant the rescission if there be just cause for the fixing of
a period for the performance of the obligation;"' while
in Article 1381, the court must order the rescission once
the ground is proven.
20.2.2 Nature of Rescissible Contracts under Article 1381:
(1) these contracts are valid and enforceable, therefore
obligatory, until they are rescinded by a competent
court;622 (2) while these contracts are valid and
obligatory, they cause pecuniary lesion or prejudice to
one of the contracting parties or to a third person, for
which reason the law grants the remedy of rescission to
protect the injured party from all injury and damage that
the contract may cause, or to protect some incompatible
and preferential right created by the contract;"’ (3)
the defect of a rescissible contract under Article 1381
may not, however, be cleansed by ratification although
the right of action for rescission may be lost by way
of extinctive prescription;"’ and (4) the defect of a
rescissible contract cannot be attacked collaterally but
must be set up in an independent civil action and only
after a full blown trial.62’
20.2.3 Requisites for Rescission to Prosper: (1) the action
for rescission must originate from any of the causes
specified in Articles 1381 and 1382;“ (2) the party
suffering damage and who is asking for rescission has
no other legal means to obtain reparation for the damage
suffered by him;62’ (3) the person demanding rescission
must be able to return what he may be obliged to
restore if rescission is granted by the court628 —but this
"'Art. 1191, par. 3, NCC.

"’Art. 1380, NCC.
"’Aquino v. Tarledo, 31 Phil. 517.
"’Art. 1389, NCC.
"’Air France v. CA, 245 SCRA 485 (1995).
616Art. 1380, NCC; see also Aquino v. Tafledo, supra and Kongo v. Abastillas, 74 Phil. 176.
"’Art. 1383, NCC.
"“Art. 1385, 1" par., NCC.
J9JC9B0M
R52M9UH7
requisite does not apply to a creditor suing for rescission

under Article 1381, paragraph 3, because he received
nothing from the contract which he seeks to rescind; (4)
the things which are the object of the contract must not
be legally in the possession of third persons who did not
act in bad faith;62’ and (5) the action for rescission must
be filed within four years from the accrual of the right of
action610 —the four-year prescriptive period commences
to run: (i) from the termination of the ward’s incapacity, I
for contracts entered into by guardians on behalf of 1
the ward;611 (ii) from the time that the domicile of the
absentee is known, for contracts entered into by the
legal representative on behalf of the absentee;612 and
(iii) for contracts in fraud of creditors, only when the
creditor discovers that he has no other legal remedy for
the satisfaction of his claim against the debtor other
than an action pauliana—in other words, an action
pauliana presupposes the following: (i) a judgment
against the debtor; (ii) the issuance by the trial court of
a writ of execution for the satisfaction of the judgment,
and (iii) the failure of the sheriff to enforce and satisfy
the judgment of the court.613
20.2.4 Specific Contracts which are Rescissible: (a) Contracts
entered into bv guardians or legal representative where
ward or absentee suffers lesion: (1) contract is entered
into by a guardian on behalf of the ward or by the legal
representative; (2) the ward or the absentee suffers
lesion by more than one-fourth (!4) of the value of the
things which are the object thereof;634 (3) the contract
must not have been approved by the court; otherwise,
the contract is perfectly valid;61’ and (4) the contract
must not involve disposition or encumbrance of the
real property of the ward or of the absentee; otherwise,
the contract is not merely rescissible but unenforceable
“’Art. 1385,2"1 par., NCC.

““Ari. 1389, NCC.
611 Art. 1389, par. 2, NCC.
mId.
611Khe Hong Cheng v. Chua, 355 SCRA 701 (2001).
“Arts. 1381(1), (2), NCC.
“’Art. 1386, NCC.
J
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
under Article 1403(1) if entered into without judicial

approval, even if there is no lesion.™ (b) Contracts in
fraud of creditor: (1) Presupposes existence of valid
contracts: Contracts which are rescissible under Article
1381(3) are valid contracts, albeit undertaken in fraud
of creditors, and not absolutely simulated, because the
latter is not merely rescissible but inexistent, albeit
undertaken as well in fraud of creditors.6” They differ, as
follows: (i) absolute simulation implies that there is no
existing contract, no real act executed; while fraudulent
alienation means that there is a true and existing
transfer or contract; (ii) the former can be attacked by
any creditor, including one subsequent to the contract;
while the latter can be assailed only by the creditors
before the alienation; (iii) in absolute simulation, the
insolvency of the debtor making the simulated transfer
is not a prerequisite to the nullity of the contract; while
in fraudulent alienation, the action to rescind, or action
pauliana, requires that the creditor cannot recover in
any other manner what is due him; and (iv) an action
to declare a contract absolutely simulated does not
prescribe (Articles 1409 and 1410); while an action
pauliana to rescind a fraudulent alienation prescribes
in four years (Article 1389)."’8 (2) Requisites of Action
Pauliana-. The rescissory action to set aside contracts
in fraud of creditors is known as action pauliana.0* In
order to prosper, it must satisfy the following requisites:
(i) the plaintiff asking for rescission has a credit prior
to the alienation, although demandable later; (ii) the
debtor has made a subsequent contract conveying a
patrimonial benefit to a third person; (iii) the creditor
has no other legal remedy to satisfy his claim; (iv) the
act being impugned is fraudulent; (v) the third person
who received the property conveyed, if it is by onerous
"’"Rules 95, 96, and 107, Rules of Court; Neri v. Heirs of Hadji Yusop Uy and Julpha Ibra
him Uy, 683 SCRA 553 (2012).
"’’Manila Banking Corporation v. Silverio, 466 SCRA 438.
"’’Siguan v. Lim, 318 SCRA 725, 735 and MBTC v. International Exchange Bank, 655
SCRA 263 (2011).
J9JC9B0M
R52M9UH7
title, has been an accomplice in the fraud;"0 and (vi)

the conveyance must not be absolutely simulated."' (3)
Contract in violation of right of first refusal (RFR’l is in
fraud of creditor: A contract entered into in violation of
a right of first refusal of another person is rescissible"2
and considered in fraud of the creditor because the term
creditors in Article 1381(3) of the New Civil Code is
broad enough to include the obligee under an option
contract as well as under a right offirst refusal, sometimes
known as a right of first priority."3 (4) Presumption of
fraud: Fraud is presumed in the following: (i) there is
alienation of property by gratuitous title by the debtor
who has not reserved sufficient property to pay his
debts contracted before such alienation; or (ii) there is
alienation of property by onerous title made by a debtor
against whom some judgment has been rendered in any
instance or some writ of attachment has been issued.
The decision or attachment need not refer to the property
alienated and need not have been obtained by the party
seeking rescission."4 (5) Badges of fraud: (i) the fact
that the consideration of the conveyance is fictitious or
is inadequate; (ii) a transfer made by a debtor after suit
has begun and while it is pending against him; (iii) a
sale upon credit by an insolvent debtor; (iv) evidence
of large indebtedness or complete insolvency; (v) the
transfer of all or nearly all of his property by a debtor,
especially when he is insolvent or greatly embarrassed
financially; (vi) the fact that the transfer is made between
father and son, when there are present other of the above
circumstances; and (vii) the failure of the vendee to take
exclusive possession of all the property."5 (c) Contracts
over things under litigation: (1) the defendant, during the
pendency of the case, enters into a contract which refers
to the thing subject of litigation; and (2) the said contract
^Supra.
“'Manila Banking Corporation v. Silverio, supra.
“'Rosencor Development Corp. v. Inquing. 354 SCRA 119, 136; Conculada v. CA, 367
SCRA 164, 172; Riviera Filipina, Inc. v. CA, 380 SCRA 245,260.
“'Equatorial Realty Development, Inc. v. Mayfair Theater, Inc,, 264 SCRA 483 (1996).
“'Art. 1387, NCC; China Banking Corporation v. Court of Appeals, 327 SCRA 378, 386.
“5Oria v. Mcmicking, 21 Phil. 243, 250-51 (1912).
J
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
was entered into without the knowledge and approval

of the litigants or of a competent judicial authority."6
(d) Payment made under state of insolvency: any
payment made by an insolvent debtor of an obligation
the fulfillment of which could not be compelled at the
time of the payment is considered fraudulent and is,
therefore, rescissible."’
20.2.5 Right of First Refusal: (a) Concept: Aright offirst refusal
is a contractual grant, not of the sale of a property, but
of the first priority to buy the property in the event the
owner sells the same."8 Such grant may be embodied in
a separate contract, in which case it must be supported
by its own consideration distinct and separate from the
consideration supporting the contemplated contract,
or it may only be a part of a certain contract, such as
when it is one of the provisions in a lease contract. In
the latter case, the right of first refusal is an integral
and indivisible part of the contract of lease making
the consideration for the lease the same as that for the
right of first refusal."’ (b) Distinguished from Option:
while both create an exclusive privilege to enter into
a contract with someone else, they differ as follows:
(1) an option or an offer would require, among other
things, a clear certainty on both the object and the cause
or consideration of the envisioned contract,in other
words, there is a definite offer; while in a right of first
refusal, while the object might be made determinate,
the exercise of the right, however, would be dependent
not only on the grantor’s eventual intention to enter
into a binding juridical relation with another but also
on terms, including the price, that obviously are yet
to be later firmed up;‘!1 (2) in an option, the exercise
"“Art. 1381(4), NCC; Ada v. Bnylon, 678 SCRA293 (2012).

"'Art. 1382, NCC.
"“Polytechnic University of the Philippines v. Golden Horizon Realty Corp., 615 SCRA
478 (2010), citing Roscncor Development Corporation v. Inquing, supra. Also in Villegas v. CA,
499 SCRA 276 (2006).
"'Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., 264 SCRA 483 (1996).
“wAng Yu Asuncion v. CA, 238 SCRA 602 (1994).
a'Id., cited in Polytechnic University of the Philippines v. Golden Horizon Realty Corp.,
615 SCRA 478 (2010).
J9JC9B0M
R52M9UH7
of the privilege is always for a fixed period; while in

a right of first refusal, the period for the exercise of
the privilege may either be definite or indefinite; 652
and (3) in an option, being an onerous contract, the
consideration must be something of value, although its
kind may vary;653 while in right of first refusal, the grant
may either be gratuitous or onerous, except that a party
to a contract cannot unilaterally withdraw a right of
first refusal that stands upon valuable consideration.654
(c) Effect of violation of RFR: (1) If grantor entered
into contract with third person: The contract can be
rescinded if the third person acted in bad faith (or with
knowledge of the existence of the RFR);“5 however, if
the third person acted in good faith, the contract may
not be rescinded656 and the remedy of the grantee is
simply to recover damages from the grantor. (2) Upon
rescission of contract: the grantor may now be directed
to comply with his obligation to sell the property to the
grantee under the same terms and conditions that it had
been sold to a third person. In other words, there should
be identity of terms and conditions to be offered to the
buyer holding the right of first refusal.657
20.2.6 Effects of Rescission: (I) It has the effect of unmaking
a contract, or its undoing from the beginning, and not
merely its termination.658 (2) Hence, the necessary
consequence of rescission is mutual restitution, that is,
the parties to a rescinded contract must be brought back
to their original situation prior to the inception of the
contract; hence, they must return what they received
pursuant to the contract.65’ (3) Mutual restitution is also
“’Tuazon v. Del Rosario, 637 SCR A 728 (2010).

6,3Villamor v. CA, 202 SCRA 607,615 (1991); Bible Baptist Church v. CA, 444 SCRA 399
(2004); Eulogio v. Apeles, 576 SCRA 561 (2009).
654PUP v. Golden Horizon Really Corp., supra.
“’Guzman, Bocaling and Co, Inc. v. Bonnevie, 206 SCRA 668 (1992); Equatorial Realty
and Development, Inc. v. Mayfair Theater, Inc., 264 SCRA 483 (1996); and Litonjua v. L&R
Corporation, 320 SCRA 405 (1999).
“‘Rosencor Development Corporation v. Inquing, 354 SCRA 119 (2001).
“’Parahaque Kings Enterprises, Inc. v. CA, 268 SCRA 727 (1997).
““Unlad Resources Development Corp. v. Dragon, 560 SCRA 63 (2008).
“’Art. 1385, NCC; Forest Hills Golf & Country Club v. Vertex Sales and Trading, Inc.,
692 SCRA 706 (2013).
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
required in cases involving rescission under Article

1191.660
20.2.7 Who May Bring Action and Against Whom: The action
for rescission may be brought by: (1) the person who is
injured by the rescissible contract, that is, the ward or
absentee, the creditors damaged or the plaintiff in case
a thing in litigation is alienated by defendant; (2) the
heirs of the above persons; and (3) the creditors of the
aforesaid persons by virtue of Article 1177 of the Civil
Code.661 On the other hand, the action may be brought
against the following: (a) the author of the injury and his
successors in interest; and (b) third persons who have
acquired in bad faith the property alienated in fraud of
creditors.662
20.3 Voidable Contracts:
20.3.1 Concent. Characteristics, and Remedy: (a) Concept:
Voidable or annullable contracts are existent, valid, and
binding, although they can be annulled because of want
of capacity or the vitiated consent of one of the parties.
However, before such annulment, they are considered
effective and obligatory between parties.663 Hence, it is
valid until it is set aside and its validity may be assailed
only in an action for that purpose. They can be confirmed
or ratified.664 (b) Characteristics: (1) it is existent, valid,
and binding and produces all its civil effects, until it is
set aside by a final judgment of a competent court in an
action for annulment;665 (2) however, it suffers from a
defect in the form of vitiation of consent by lack of legal
capacity of one of the contracting parties, or by mistake,
“"Gotesco Properties, Inc. v. Fajardo, 692 SCRA 319 (2013); Unlad Resources
Development Corp. v. Dragon, 560 SCRA 63 (2008); Laperal v. Solid Homes, Inc., 460 SCRA
375 (2005); Velarde v. CA, 361 SCRA 56 (2001); Co v. CA, 312 SCRA 528 (1999).
“'IV Caguioa, Comments and Cases on Civil Law, 1983 ed., p. 604.
mId.
“’First Philippine Holdings Corp. v. Trans Middle East (Phils.) Equities, Inc., 607 SCRA
605 (2009); The Estate of Pedro C. Gonzales v. The Heirs of Marcos Perez, 605 SCRA 47 (2009);
Famanila v. CA, 500 SCRA 76 (2006).
“M WSS v. CA, 297 SCRA 287,300 (1998), citing IV Tolentino, Civil Code ofthe Philip
pines, 1991 ed., p. 596.
665Art. 1390, par. 2, NCC; Suntay v. Conjuangco-Suntay, 300 SCRA 760,771 (1998); First
Philippine Holdings Corp. v. Trans Middle East (Phils.) Equities, Inc., supra.
J9JC9B0M
R52M9UH7
violence, intimidation, undue influence, or fraud;666

(3) it may be rendered perfectly valid by ratification,
which can be express or implied, such as by accepting
and retaining the benefits of a contract;667 (4) it is also
susceptible of validation by prescription since the action
for the annulment of contract prescribes in four years;661
and (5) it cannot be attacked collaterally; its validity
can only be assailed directly either by an action for that
purpose or by way of a counterclaim.669 (c) Remedy
of Annulment: To annul means to reduce to nothing;
annihilate; obliterate; to make void or of no effect; to
nullify; to abolish; to do away with.670 Hence, a contract
that is annulled presupposes that it subsists but later
ceases to have legal effect when it is terminated through
a court action.671 In annulment, it is the judgment of the
court that produces the invalidity of the contract. It is to
be distinguished from declaration of nullity of contracts.
Null and void means that something does notêxist from
the beginning.672 Thus, a void contract is invalid from the
beginning and in declaring its nullity the court simply
declares a status or condition which already exists from
the very beginning.673
20.3.2 Two Kinds of Voidable Contracts: (1) where one of the
parties is incapable of giving consent to a contract676
—if both parties are incapable of giving consent to
a contract, the contract is not merely voidable but
unenforceable;675 and (2) where both parties are capable
of giving consent to a contract, but the consent of one
is vitiated by mistake, violence, intimidation, undue
influence, or fraud.676
“‘Art. 1390, NCC.

“’Francisco v. Herrera, 392 SCRA 317 (2002); Art. 1390, par. 2, NCC.
“‘Art. 1391, NCC.
“’Llacerv. Muilozde Bustillo, 12 Phil. 328 (1908); Rone v. Claro, 91 Phil. 250(1952); IV
Tolentino, Civil Code ofthe Philippines, 1991 ed., p. 598.
670Suntay v. Conjuangco-Suntay, supra, citing Nuguid v. Nuguid, 123 Phil. 1305 (1966).
"'Id.
mld.
mId.
676Art. 1390(1), NCC.
"’Art. 1403, par. 3, NCC.
"‘Art. 1390(2), NCC.
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
20.3.3 Personality to File Annulment and Prescriptive Period-

(a) Who can file for annulment: Before a party can
have the necessary standing to institute an action for
annulment, he must either be: (1) the party obliged
principally or subsidiarily in the contract which he
seeks to annul677 —by way of exception, a person who
is not a party obliged principally or subsidiarily under
a contract may exercise an action for annulment of the
said contract if: (i) he is prejudiced in his rights with
respect to one of the contracting parties; and (ii) he can
show detriment which would positively result to him
from the contract in which he has no intervention;676
(2) he must be the party suffering from incapacity to
give consent or the victim of intimidation, violence,
undue influence, fraud, or mistake—persons who are
capable cannot allege the incapacity of those with
whom they contracted; nor can those who exerted
intimidation, violence, or undue influence, or employed
fraud, or caused mistake based their action upon these
flaws of the contract.67’ (b) Prescriptive period: The
period of prescription is four years and it commences
to run, as follows: (1) from the time the defect ceases
if the ground for annulment is vitiation of consent by
intimidation, violence, or undue influence616 and it
cannot be interrupted by an extrajudicial demand made
by the party whose consent was vitiated;611 (2) from
the time of the discovery if the ground for annulment
is vitiation of consent by mistake or fraud617 —if the
fraudulent conveyance is registered in the Register of
Deeds, the discovery of fraud is reckoned from the time
the document was registered in the Register of Deeds in
view of the rule that registration is notice to the whole
world;6*3 (3) from the time the minor reaches the age of
majority or 18 years of age if the ground for annulment
" ' Art. 1397, NCC.

6 "Teves v. People’s Homesite &. Housing Corp-, 23 SCRA 1141.
‘’’Art 1397, NCC.
““'Art. 1391, par. 2, NCC.
“'Miailhe v. CA, G.R. No. 108991, March 20. 2001.
*^ld.
"“’Metropolitan Fabrics, Ine. v. Prosperity Credit Resources. Ice.. 719 SCRA 29-> <201-H.
J9JC9B0M
R52M9UH7
is want of capacity by reason of minority;"4 and (4)

from the time the guardianship ceases if the ground for
annulment is want of capacity other than minority."5
20.3.4 Ratification: (a) Concept: Ratification or confirmation
refers to the act of or means by virtue of which efficacy
is given to a contract which suffers from a vice of
curable nullity."6 (b) How Made: It may be effected
expressly or tacitly. A tacit ratification is the execution
of an act which necessarily implies an intention to
waive the right to annul,"’ such as by accepting and
retaining the benefits of a contract.688 (c) Requisites:
(1) the contract has all the essential requisites, but it is
tainted with a vice which is susceptible of being cured;
(2) it should be effected by the person who is entitled
to do so under the law—the right to ratify the defect
of the contract belongs only to the party who has the
right to bring the action for annulment,although
such ratification may also be effected by the guardian
of the incapacitated person,650 and it does not require
the conformity of the contracting party who has no
right to bring the action for annulment;651 (3) it should
be effected with the knowledge of the vice or defect65’
—before a contract can be ratified, knowledge of its
existence must be brought to the parties who have
authority to ratify it or circumstances must be shown
from which such knowledge may be presumed;655 and
(4) the cause of the nullity or defect should have already
disappeared.654 (d) Effects of Ratification: The effect of
ratification is retroactive. It cleanses the contract from
684Art. 1391, par. 3, NCC, in relation to Art. 236, FC.

tK/d.
6868 Manresa, S'6 ed., Bk. 2, p. 665, cited in Jurado, Obligations and Contracts, 1987 ed.,
p. 533.
“’Art. 1393, NCC.
“‘Francisco v. Herrera, 392 SCRA 317 (2002).
“’Arts. 1394 and 1395, NCC.
650Art. 1394, NCC.
651 Art. 1395, NCC.
"’Art. 1393, NCC.
653Yu Chuck v. Kong Li Po, 46 Phil. 608 (1924).
“’Art. 1393, NCC.
J9JC9B0M
R52M9UH7

j PART 2: CONTRACTS
all its defects from the moment it was constituted,6”

thereby extinguishing the action to annul a voidable
contract.696 It results, therefore, that after a contract
is validly ratified, no action to annul the same can be
maintained based upon defects relating to its original
validity.6”
20.3.5 Effects of Annulment: (a) General Rule: If a
voidable contract is annulled by a final judgment of
a competent court, the contract is invalidated from
the very beginning. Since the contract is declared
void at inception, the parties shall be restored to their
original status prior to the inception of the contract as
if no contract has been made, thus, upon annulment,
the parties should be restored to their original position
by mutual restitution.6’6 As a consequence, as long as
one of the contracting parties does not restore what in
virtue of the decree of annulment he is bound to return,
the other cannot be compelled to comply with what is
incumbent upon him.699 (b) Exception: When the defect
of the contract consists in the incapacity of one of the
parties, the incapacitated person is not obliged to make
any restitution except insofar as he has been benefited
by the thing or price received by him.™
20.4 Unenforceable Contracts:
20.4.1 Concept. Nature, and Characteristics: (a) Concent:
Those contracts which cannot be enforced by a proper
action in court, unless they are ratified, because either
they are entered into without or in excess of authority or
they do not comply with the Statute of Frauds or both
of the contracting parties do not possess the required
legal capacity.™1 (b) Nature and Characteristics: (1) It
is a valid contract although it cannot be sued upon or
695Art. 1396, NCC.

696Art. 1392, NCC.
"’Tang Ah Chun v. Gonzales, 52 Phil. 180(1928).
"“Art. 1398, NCC; Cadwallader & Company v. Smith, Bell & Company, 7 Phil. 461
(1907).
‘"’Art. 1402, NCC.
’"Art. 1399, NCC.
™’Iglesia Filipina Indepcndiente v. Heirs of Bernardino Taeza, 715 SCRA 138 (2014),
citing Mercado v. Allied Banking Corp., 528 SCRA 444 (2007).
J9JC9B0M
R52M9UH7
be enforced by a proper action in court because of its

defect. (2) The defect of the contract consists of either:
(i) it is entered into without or in excess of authority;
(ii) it does not comply with the Statute of Frauds; or
(iii) both of the contracting parties are incapable of
giving consent to a contract. (3) Since an unenforceable
contract, though valid, is not enforceable by a proper
action in court, it is not binding or obligatory between
the parties, unless the contract is ratified. But unlike a
void contract which is not susceptible to ratification, an
unenforceable contract can be ratified. (4) The defect
is purely a matter of defense. There is no action that
may be filed to set aside the contract and the contract
is not susceptible of validation by prescription. (5) The
defense that the contract is unenforceable is available
only to the contracting parties. The contract cannot be
assailed by third persons.702
20.4.2 Three Kinds of Unenforceable Contracts: (a)
Unauthorized Contracts: (1) Rule: Contracts entered
into in the name of another person by one who has been
given no authority or legal representation or who has
acted beyond his powers are unenforceable,705 not void.
If the principal does not ratify the contract, it may not
be enforced against him. If he ratifies the contract, the
ratification retroacts to the day when the agent entered
into such contract. Contracts entered into by guardians on
behalf of the ward or by legal representatives on behalf
of the absentee involving disposition or encumbrance
of real property of the ward or of the absentee without
judicial approval are unenforceable.’" (2) Exception:
An unauthorized contract involving the sale of a parcel
of land is not merely unenforceable but void ab initio
because the law requires the authority of the agent to
be in writing, in case of agency to sell a parcel of land
or any interest therein; otherwise, the sale is void.705
Thus, the sale of a parcel of land made by the son on
’“Art. 1408, NCC.

’“Art. 1403, par. 1, NCC.
’“Rules 95, 96, and 107, Rules of Court; Neri v. Heirs of Hadji Yusop Uy and Julplia
Ibrahim Uy, 683 SCRA 553 (2012).
’“Art. 1874, NCC; Delos Reyes v. CA, 313 SCRA 632 (1999).
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
behalf of his father but without the latter’s consent or

authority is void because of failure to comply with the
requirement of Article 1874.’“ (b) Contracts Which
Violate the Requirement of Statute of Frauds: "7 See the
I discussions in supra 19.1.3. (c) Contract Where Both
Parties are Incapacitated: Where only one of the parties
is incapable of giving consent to a contract, the contract
is merely voidable;™5 but if both parties are incapable
of giving consent to a contract, the contract is not
voidable but unenforceable.™’ In either case, however,
the contract may be ratified. In a contract which is
unenforceable because both parties are incapacitated,
the ratification on the part of one of the contracting
parties "shall give the same effect as ifonly one of them
were incapacitated,thereby making the contract
merely voidable. If ratification is made on the part of
both parties, "the contract shall be validated from the
inception.
20.5 Void or Inexistent Contracts:
20.5.1 Concept and Characteristics: (a) Concept: A void or
inexistent contract is one which has no force and effect
from the beginning, as if it has never been entered
into, and which cannot be validated either by time
or ratification.717 A void contract produces no effect
whatsoever either against or in favor of anyone; it
does not create, modify, or extinguish the juridical
relation to which it refers.71’ (b) Characteristics: (1)
As a rule, they produce no legal effects whatsoever
in accordance with the principle "quod nullum est
nullum producit effectum";w hence, it does not create,
’“Delos Reyes v. CA, supra.

707Art. 1403, par. 2, NCC.
’“Art. 1390(1), NCC.
’“Art. 1403, par. 3, NCC.
’'“Art. 1407, par. I, NCC.
’"Art. 1407, par. 2, NCC.
7,2Heirs of Policarpio M. Ureta, Sr. v. Heirs of Liberate M. Ureta, supra, citing Tongoy
v. CA, 123 SCRA 99 (1983). See also Yun Kwan Byung v. Philippine Amusement and Gaming
Corp., 608 SCRA 107 (2009) and Manila Banking Corp. v. Silverio, 466 SCRA 438 (2005).
7l4/d.
J9JC9B0M
R52M9UH7
modify, or extinguish the juridical relation to which it

refers.”5 The exception to this rule is when the void
contract has already been performed and the principle
of in pari delicto is applied. Under this principle, the
guilty parties to an illegal contract cannot recover from
one another and are not entitled to affirmative relief.”6
Thus, the contract, though void, has produced an effect.
(2) They are not susceptible of ratification7” and, as
between the parties to the contract, the validity cannot
be given to it by estoppel; thus, it is immaterial that
the parties initially acted to implement the contract,
believing in good faith that the same was valid.”” (3)
The right to set up the defense of inexistence or absolute
nullity cannot be waived or renounced.7” (4) The action
or defense for the declaration of their inexistence or
absolute nullity is imprescriptible720 —however, the
right to have a contract declared void ab initio may be
barred by laches although not barred by prescription.”'
(5) The inexistence or absolute nullity of a contract
cannot be invoked by a person whose interests are not
directly affected.722 Stated otherwise, the right to set
up the nullity of a void or non-existent contract is not
limited to the parties, as in the case of annullable or
voidable contracts; it is extended to third persons who
are directly affected by the contract.
20.5.2 Contracts Which are Void or Inexistent: (a) Illegal
Contracts: Those whose cause, object, or purpose is
contrary to law, morals, good customs, public order,
or public policy”1 —cause is ordinarily different from
motive and, as a rule, the motive or particular purpose
”5W.
”6Art. 1412(1), NCC; Gonzalo v. Tamale, Jr., 713 SCRA 224 (2014).
’’’Heirs of Policarpio M. Ureta, Sr. v. Heirs of Liberalo M. Ureta, 657 SCRA 555 (2011),
ci‘ing Tongoy v. CA, 123 SCRA 99 (1983).
”“Nool v. CA, 276 SCRA 149(1997).
’’’Heirs of Policarpio M. Ureta, Sr. v. Heirs of Liberalo M. Ureta, supra, citing Tongoy v.
CA, supra.
’’"Art. 1410, NCC.
”'MWSS v. CA, 297 SCRA 287 (1998).
’’’Heirs of Policarpio M. Ureta, Sr. v. Heirs of Liberate M. Ureta, 657 SCRA 555 (2011),
C“‘"S Tongoy v. CA, 123 SCRA 99 (1983).
’’’Art. 1409(1), NCC.
J9JC9B0M
R52M9UH7
■

PART 2: CONTRACTS
of a party in entering into a contract does not affect

the validity nor existence of the contract.724 ( 1 ) Cause
Distinguished from Motive: Cause is the essential
reason which moves the contracting parties to enter into
it. In other words, the cause is the immediate, direct,
and proximate reason which justifies the creation of an
obligation through the will of the contracting parties.723
On the other hand, motive is the particular reason of a
contracting party which does not affect the other party.726
(2) When motive becomes cause: The motive may be
regarded as causa when "it predetermines the purpose
of the contract.,rnl In other words, when the realization
of such motive or particular purpose has been made a
condition upon which the contract is made to depend,
then the motive becomes the cause.72* When they blend
to that degree, and the motive is unlawful, then the
contract entered into is null and void.72’ (b) Absolutely
Simulated Contract: Those which are absolutely
simulated or fictitious.710 (1) Concept: In absolute
simulation there appears to be a valid contract but there is
actually none because the element of consent is lacking
because the parties do not actually intend to be bound
by the terms of the contract.711 As a result, an absolutely
simulated or fictitious contract is void, and the parties
may recover from each other what they may have given
under the contract.712 As a consequence, a contract of
purchase and sale is null and void and produces no
“Philippine National Construction Corp. v. CA, 272 SCRA 183, 193 (1997); Uy v. CA,
314 SCRA 69 (1999).
723Uy V. CA, 314 SCRA 69 (1999), citing Basic Books (Phil.), Inc. v. Lopez, 16 SCRA
291 (1966).
“M.
’’’Liguez v. CA, 102 Phil. 577 (1957); E. Razon Inc. V. Philippine Ports Authority, 151
SCRA 233 (1987) and Uy v. CA, supra.
“Philippine National Construction Corp. v. CA. 272 SCRA 183,193 (1997).
“Olegario v. Court of Appeals, 238 SCRA 96 (1994), citing E. Razon, Inc. v. Philippine
Ports Authority, 151 SCRA 233 (1987).
7)0Art. 1409(2), NCC.
’’'Clemente v. CA, G.R. No. 175483, October 14, 2015.
“Valerio v. Refresca, 485 SCRA 494, 500-501 (2006); Heirs of Policronio M. Urela, Sr.
v. Heirs of Liberato M. Urcta, 657 SCRA 555 (2011); Villaceran v. De Guzman, 666 SCRA 454
(2012); Tanchuling v. Cantela, 774 SCRA 406 (2015).
J9JC9B0M
R52M9UH7
effect whatsoever where it appears that the same is

without cause or consideration which should have been
the motive thereof, or the purchase price which appears
thereon as paid but which in fact has never been paid
by the purchaser to the vendor.’" The most protuberant
index of absolute simulation of contract is the complete
absence of an attempt in any manner on the part of the
ostensible buyer to assert rights of ownership over the
subject properties.™ (2) Distinguished from Relative
Simulation: In relative simulation, however, the parties
conceal their true agreement.’35 In this kind ofsimulation,
the essential requisites of a contract are present and
the simulation refers only to the content or terms of
the contract.736 There are two juridical acts involved in
relative simulation: the ostensible act and the hidden
act. The ostensible act is the contract that the parties
pretend to have executed while the hidden act is the true
agreement between the parties.’37 A relative simulation
binds the parties to their real agreement “when it does
not prejudice a third person and is not intended for any
purpose contrary to law, morals, good customs, public
order, or public policy.”738 (c) Contracts Whose Cause
or Object Did Not Exist: Those whose cause or object
did not exist at the time of the transaction.73’ Thus, a
contract entered into upon future inheritance is void.740
The Court defined future inheritance as any property
or right not in existence or capable of determination at
the time of the contract, that a person may in the future
acquire by succession.741 Likewise, in a contract of lease,
although the lessor need not be the owner of the property
being leased, he should have a right (e.g., either as a
’"Tanchuling v. Cantata, 774 SCRA 406 (2015), citing Cruz v. Bancom Finance
Corporation, 429 Phil. 224,233 (2002).
’"Heirs of Policronio M. Ureta, Sr. v. Heirs of Liberalo M. Ureta, supra.
m/M. 1345, NCC.
’"Valerio v. Refresca, supra.
’"Villegas v. Rural Bank of Tanjay, Inc. (2009), citing IV Tolentino, Civil Code of the
Philippines, 1991 ed., p. 516.
’“Art. 1346, NCC.
’"An. 1409(3), NCC.
’“Arrogante v. Deliarte, 528 SCRA 63 (2007).
’•"Blasv. Santos, 111 Phil. 503(1961).
J
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
usufructuary or a lessee) or at least an authority (e.g., as

an agent of the owner, usufructuary, or lessee) to lease it
out; otherwise, the contract is void because the cause or
object did not exist at the time of the transaction.742 (d)
Objects outside commerce of men: Those whose object
is outside the commerce of men.74’ Thus, the following
things may not be the object of a contract because
they are not susceptible of appropriation, therefore,
outside the commerce of men: (1) Properties of public
dominion are outside the commerce of men.744 They
cannot be subject to sale, disposition, or encumbrance;
any sale, disposition, or encumbrance of such property
of the public dominion is void for being contrary to law
and public policy.745 They cannot likewise be leased or
otherwise be the subject matter of contracts.74'1 Hence,
the right of the public to use public property may not
be bargained away through contract.747 For example,
public streets cannot be converted into flea markets and
leased to private individuals;748 the submerged lands
in the Manila Bay area, which are declared to be part
of the State’s inalienable natural resources, cannot be
alienated to a private entity;74’ and properties officially
declared military reservations become inalienable
and outside the commerce of men and may not be the
subject of a contract or of a compromise agreement.750
(2) Sacred things, common things like the air and the
sea, and res niillius, as long as they have not been
appropriated.751 (3) Rights which are intransmissible
’•’Ballesteros v. Abion, 482 SCRA 23 (2006) and Berccro v. Capitol Development Corp.,
519 SCRA 484 (2007).
74,Art. 1409(4), NCC.
’••Manila International Airport Authority v. CA, 495 SCRA 591 (2006), citing Municipality
ofCavitev. Rojas, 30 Phil. 602(1915); walso Dacanay v. Asistio, Jr„ 208 SCRA404.411 (1992).
’•’Navy Officers’ Village Association, Inc. v. Republic, 764 SCRA 524 (2015).
’•“Dacanay v. Asistio, supra, ciling Villanueva v. Castaileda and Macalino, 15 SCRA 142;
Municipality of Cavite v. Rojas, 30 Phil. 602; Espiritu v. Municipal Council of Pozomtbio, 102
Phil. 869; and Muyot v. De la Puente, 48 O.G. 4860.
’•’Dacanay v. Asistio, supra.
™ld.
’•’Chavez v. Public Estates Authority, 384 SCRA 152 (2002).
’’"Republic v. Bacas, 710 SCRA 411 (2013).
”*3 Manresa, 690-692.
J9JC9B0M
R52M9UH7
may not also be the object of a contract because they

are also considered outside the commerce of men, such
as: (i) purely personal rights, i.e., patria potestas or
marital authority, the status and capacity of persons, and
honorary titles and distinctions; and (ii) public offices,
inherent attributes of the public authority, and political
rights of individuals, such as the right of suffrage.”2 (e)
Contracts Involving Impossible Service: Impossible
things or services cannot be the object of contracts.”’
The rule is based on the maxim impossibilium nulla
obligatio est (There is no obligation to do impossible
things). An impossible service is that which is beyond
the ordinary power of man or that which is against
the law, morals, good customs, public order, or public
policy. As to impossible services, the impossibility
may either be absolute, when nobody can perform it;
or relative, when it cannot be performed because of
the special conditions or qualifications of the obligor.
The absolute impossibility nullifies the contract. As to
relative impossibility, the effects thereof shall depend
on whether the same is temporary or permanent. If
temporary, it does not nullify the contract, such as
when a partner agrees to contribute to the partnership
a sum more than what his means allow; if permanent,
it nullifies the contract, such as blindness in a contract
which requires the use of eyesight.”4 (f) Intention
Cannot Be Ascertained: Those where the intention of
the parties relative to the principal object of the contract
cannot be ascertained.”’ The rule is echoed in Article
1378, paragraph 2, which states: “if the doubts upon
the principal object of the contract in such a way that it
cannot be known what may have been the intention or
will of the parties, the contract shall be null and void."
(g) Expressly Prohibited or Declared Void By Law:
An example of a contract expressly prohibited by law
is any stipulation which contravenes the prohibition
”2IV Tolentino, Civil Code ofthe Philippines, 1991 ed„ p. 521.

™Art. 1348, NCC.
7548 Manresa 685.
’’’Art. 1409(6), NCC.
I
J9JC9B0M
R52M9UH7

PART 2: CONTRACTS
against pactum commissorium.On the other hand,

examples of contracts expressly declared void by law
are those contracts which failed to comply with the
formalities required by law for their validity, such as
those mentioned in Articles 748, 749, 1773, 1744(1),
1874, 2134, and 2140 of the Civil Code and Act No.
1147.
20.5.3 Principle of In Pari Delicto: (a) Applicability; The
principle of in pari delicto applies only to contracts
with an illegal cause, subject matter,”7 or purpose,”’
whether the attendant facts constitute an offense or
misdemeanor or whether the consideration involved is
merely rendered illegal.”’ It does not apply to inexistent
contracts,760 or to fictitious or simulated contracts.761 (b)
Statement of the Rule: The principle of in pari delicto
provides that when two parties are equally at fault, the
law leaves them as they are and denies recovery by
either one of them.762 No suit can be maintained for its
specific performance, or to recover the property agreed
to be sold or delivered, or the money agreed to be paid,
or damages for its violation, and no affirmative relief of
any kind will be given to one against the other. Each must
bear the consequences of his own acts. They will be left
where they have placed themselves since they did not
come into court with clean hands.761 (c) Exceptions: The
rule is subject to the following exceptions that permit
the return of that which may have been given under a
void contract to: (a) the innocent party (Arts. 1411-1412,
Civil Code); (b) the debtor who pays usurious interest
(Art. 1413, Civil Code); (c) the party repudiating the
void contract before the illegal purpose is accomplished
’’"Arts. 2088 and 2137, NCC.

’’’Heirs of Poliearpio M. Ureta, Sr. v. Heirs of Liberate M. Ureta, 657 SCRA 555 (2011),
citing Sta. Romana v. Imperio, 122 Phil. 1001, 1007 (1965) and IV Tolentino, Civil Code ofthe
Philippines, Vol. IV, p. 634, (2002).
”“Modina v. CA, 317 SCRA 696, 702-703 (1999) and Yu Bun Guan v. Ong, 367 SCRA
559(2001).
”’/</.
7“M.
76lHeirs of Poliearpio M. Ureta, Sr. v. Heirs of Liberate M. Ureta, supra.
762Yu Bun Guan v. Ong, supra.
’“Bercero v. Capitol Development Corp., 519 SCRA 484 (2007).
J9JC9B0M
R52M9UH7
or before damage is caused to a third person and ifpublic

interest is subserved by allowing recovery (Art. 1414,
Civil Code); (d) the incapacitated party if the interest
of justice so demands (Art. 1415, Civil Code); (e) the
party for whose protection the prohibition by law is
intended if the agreement is not illegal perse but merely
prohibited and if public policy would be enhanced by
permitting recovery (Art. 1416, Civil Code); and (f)
the party for whose benefit the law has been intended
such as in price ceiling laws (Art. 1417, Civil Code) and
labor laws (Arts. 1418-1419, Civil Code).7" Another
exception to the rule is where the application of the in
pari delicto rule would violate well-established public
policy.7" In Gonzalo v. Tarnate, Jr.,'UA the Court held
that the principle of pari delicto cannot be applied if
it would contravene the public policy on prevention of
unjust enrichment. However, the recovery on the basis
of unjust enrichment cannot apply to a foreigner who
acquired private lands in the Philippines in violation of
the Constitutional prohibition.767
’"Hulst v. PR Builders, Inc., 532 SCRA 74 (2007).

’“Pajuyo v. CA, 430 SCRA 492 (2004) and Gonzalo v. Tamale, Jr., 713 SCRA 224 (2014).
luSupra.
767prenzel v. Catio, 406 SCRA 55 (2003), cited in Beumer v. Amores, 686 SCRA 770
(2012).
I
J9JC9B0M
R52M9UH7
BOOK V. — SPECIAL CONTRACTS
1) Concept
1.1 Basic Concepts:
1.1.1 Essence of Contract: It is a contract involving the
exchange of a thing or right in consideration of the
payment of a price certain in money or its equivalent.
The consideration for the delivery of a thing or right
must be payment of a price in money or the equivalent
of money.1
1.1.2 Distinguished from Barter: The contract of barter
involves the exchange of a thing for another thing.2 If
the consideration for the delivery of a thing is partly
in money and partly in another thing: (a) the contract
shall be characterized by the manifest intention of the
parties; (b) if such intention does not clearly appear,
the contract shall be considered a barter if the value of
the thing given exceeds the amount of the money or its
equivalent; otherwise, it is sale.1 If the contract is sale,
it is covered by the Statute of Frauds; if barter, it is not
covered by the Statute of Frauds.
1.1.3 Nature and Characteristics: (a) It is a consensual
contract: From the point of view of perfection, the
contract of sale is a consensual contract—which means
that the sale is perfected by mere consent.4 The delivery
'An. 1458, NCC.

’Art. 1638, NCC.
’Art. 1468, NCC.
4Dulion v. CA, 182 SCRA 872, 877 (1990); Balatbat v. CA. 261 SCRA 128 (1996); Acap
v. CA, 251 SCRA 30; Fule v. CA, 286 SCRA 698; Quijada v. CA, 299 SCRA 695; Buenaventura
v.CA, 416 SCRA 263.
441
J9JC9B0M
R52M9UH7
of the thing bought or payment of the price is not

necessary for the perfection of the contract.5 Instead,
upon perfection of the contract it creates an obligation
to make the delivery of the thing bought.6 (b) It is not a
mode, but only creates title: The contract of sale is not
a mode of transmitting ownership. Upon perfection, it
does not transfer or affect ownership. Instead, it only
creates an obligation to transfer ownership or it only
creates title. It is tradition or delivery, as a consequence
of sale, that actually transfers ownership.7 (c) It creates
reciprocal obligations: A contract of sale creates
reciprocal obligations, where the seller obligates himself
to transfer the ownership of and deliver a determinate
thing, and the buyer obligates himself to pay therefor
a price certain in money or its equivalent.8 (d) It is
ordinarily commutative and onerous: Ordinarily, the
contract of sale is commutative and onerous, in that each
one of the parties assume a correlative obligation—the
seller to deliver and transfer ownership of the thing sold
and the buyer to pay the price.’ However, the contract
may also become aleatory when the sale is subordinated
to an uncertain event, as in the case of a sale of hope or
expectation, or emptio spei.'° (e) It is also a nominate
and a principal contract.
1.1.4 Two Kinds of Contracts of Sale: (a) Absolute Sale:
When the sale is devoid of any condition imposed on
the passing of title of the thing to be conveyed or on
the obligation of a party thereto" and, hence, title to the
property passes to the vendee upon delivery of the thing
sold;12 (b) Conditional Sale: When the sale is subject
’Balatbat v. CA, 261 SCRA 128, 138-139(1996).

‘Art. 1458, NCC.
7San Lorenzo Development Corp. v. CA, G.R. No. 124242, Jan. 21, 2005; Equatorial
Realty Development, Inc. v. Mayfair Theater, Ine., 370 SCRA 56; Norkis Distributors, Inc. v. CA,
193 SCRA 694; Aznar v. Yapdiangco, 13 SCRA 486.
“Carrascoso, Jr. v. CA, 477 SCRA 666 (2005); Agro Conglomerates, Inc. v. CA, 348 SCRA
450 (2000).
’Gailc v. Fonacicr, 2 SCRA 830, 837 (1961).
'“Id.
"Romero v. CA, 250 SCRA 223 (1995).
"Nabus v. Pacson, G.R. No. 161318, Nov. 25, 2009; Ramos v. Heruela, 473 SCRA 79
(2005); Universal Kobina Sugar Milling Corp. v. Heirs ofTeves, 438 Phil. 26 (2002).
J9JC9B0M
R52M9UH7
BOOK V. — SPECIAL CONTRACTS 443

to any condition imposed on the passing of title of the

thing to be conveyed or on the obligation of a party
thereto.13 (c) Contract to Sell (CTS) Is Different from
Conditional Contract of Sale (CCS): (1) Definition of
CTS: It is a bilateral contract whereby the prospective
seller, while expressly reserving the ownership of
the subject property despite delivery thereof to the
prospective buyer, binds himself to sell the subject
property exclusively to the prospective buyer upon
fulfillment of the condition agreed upon, such as the
full payment of the purchase price.'4 Elsewise stated, in
a contract to sell, ownership is retained by the vendor
and is not to pass to the vendee until full payment of
the purchase price.15 (2) Distinction Between CTS and
CCS: A contract to sell may not even be considered as
a conditional contract of sale.16 While in both contracts,
title to the property remains with the seller until the
buyer fully pays the purchase price and both contracts
are subject to such positive suspensive condition of the
buyer’s full payment of the purchase price, they differ as
follows: (1) In a contract of conditional sale, the buyer
automatically acquires title to the property upon full
payment of the purchase price and this transfer of title
is “by operation of law without any further act having
to be performed by the seller.”17 On the other hand, in a
contract to sell, transfer of title to the prospective buyer
is not automatic because the prospective seller must
convey title to the property through a deed of absolute
sale.18 (2) The distinction is important to determine
the applicable laws and remedies in case a party does
not fulfill his or her obligations under the contract. In
a contract of conditional sale, our laws on sales under
the Civil Code of the Philippines apply. On the other
"Romero v. CA, supra.

"Roque v. Aguado, G.R. No. 193787, April 7,2014, riling Ver Reyes v. Salvador, Sr., 564
SCRA 456 (2008).
"/</.
'“Coronel v. CA, 263 SCRA 15 (1996).
"Olivarez Really Corp. v. Castillo, G.R. No. 196251, July 9,2014, ciring Nabusv. Pecson,
605 SCRA 334 (2009).
"Id.
J9JC9B0M
R52M9UH7
hand, contracts to sell are not governed by our laws on

sales but by the Civil Code provisions on conditional
obligations.19 (3) Distinguishing Characteristic of CTS:
The stipulation to execute a deed of absolute sale upon
full payment of the purchase price, is a unique and
distinguishing characteristic of a contract to sell.20
Hence, where the seller promises to execute a deed
of absolute sale upon completion by the buyer of the
payment of the price, the contract is only a contract to
sell,21 even if their agreement is denominated as a Deed
of Conditional Sale.22 The agreement to execute a deed
of sale upon full payment of the purchase price shows
that the vendors reserved title to the subject property
until full payment of the purchase price.23 Prior to the
execution of the deed of absolute sale, the seller is not
obligated yet to transfer the ownership to the buyer,
even if there is a contract to sell between them.24
2) Essential Elements and Formalities

2.1 Essential Elements:
2.1.1 Three Essential Elements: Being a consensual contract,
it only requires three essential elements: (1) consent,
(2) object, and (3) cause. With respect to cause: as to
the buyer, the cause is the delivery of the thing sold;
whereas, as to the seller, it is the payment of the price
in money or its equivalent. In relation to price, the
parties must not only agree on the amount of the price
but also on the manner of payment of the price to give
rise to a perfected contract of sale. An agreement as to
the manner of payment goes into the price, such that a
disagreement on the manner of payment is tantamount
to a failure to agree on the price.2’
"''Supra.
“Diego V. Diego, G.R. No. 179965, February 20, 2013.
2,/<Z
’’Roque v. Aguado, G.R. No. 193787, April 7, 2014, citing Tan v. Benolirao, 604 SCRA
36 (2009).
"Ursal v. CA, 473 SCRA 52 (2005).

’’Boston Bank of the Philippines v. Manalo, 482 SCRA 108 (2006).
J9JC9B0M
R52M9UH7

PART I: CONTRACT OF SALE
2.1.2 Subiect Matter 1 Object): (a) General rule: Any thing that
has a value that can be assessed in money, whether im
movable or movable, consumable or non-consumable,
corporeal or incorporeal, present or future, and even a
mere hope or expectancy, may be the object of sale.16
(b) Requisites: (1) the thing must be licit;27 (2) the thing
may or may not be existing at the time of the perfection
of the contract, so long as it has the potential or possibil
ity of existence at some future time28 —the goods which
form the subject of a contract of sale may be either exist
ing goods, owned or possessed by the seller, or goods to
be manufactured, raised, or acquired by the seller after
the perfection of the contract of sale:2’ (i) emptio rei spe-
ratae - it is a sale of future things in which the amount
and the quality of the thing is uncertain and the sale is
subject to the condition that the thing should come into
existence, such that if the condition is not fulfilled or if
the thing does not come into existence, the contract be
comes ineffective;30 or (ii) emptio spei - it is the sale of
hope or expectancy which the law allows, but the sale of
a vain hope or expectancy is void;31 (3) the thing must be
determinate,32 that is, it is already particularly designat
ed or physically segregated from all others of the same
class;33 or. at least determinable, that is, the thing is ca
pable of being made determinate without the necessity
of a new or further agreement between the parties.34 (c)
Contract of Sale Distinguished from Contract for Piece
of Work: Since the contract of sale does not require the
thing to be already in existence at the time its perfection,
the contract may either be sale or contract for piece of
work if the subject matter is a thing still to be made:
(1) Contract For Piece of Work: By the contract for a
piece of work, the contractor binds himself to execute
’"Francisco on Sales, 1955 cd., p. 16.

’’Art. 1459, NCC.
’“Art. 1461, par. 1,NCC.
’’Art. 1462, par. l.NCC,
’“Francisco on Sales, 1957 cd., p. 24.
’’Art. 1461, par. 3, NCC.
’’Art. 1458, NCC.
’’Art. 1460, par. I, NCC.
’’Art. 1460, par. 2, NCC.
J9JC9B0M
R52M9UH7
a piece of work for the employer, in consideration of a

certain price or compensation. The contractor may ei
ther employ only his labor or skill, or also furnish the
material.31 (2) Test in determining character of contract:
(i) if the parties intended that at some future date an
object has to be delivered, without considering the work
or labor of the party bound to deliver, the contract is one
of sale; but if one of the parties accepts the undertaking
on the basis of some plan, taking into account the work
he will employ personally or through another, there is
a contract for a piece of work;36 (ii) if such intention is
not clear but the one who committed to deliver the thing
is habitually engaged in the business of manufacturing
or making such thing, the contract is one of sale; how
ever, if the one who committed to deliver the thing is
not habitually engaged in the business of making such
thing and the same would never have existed except for
the order of the person desiring it, the contract is one
for a piece of work, not a sale.3’ (3) Importance of Dis
tinctions: (i) In a contract of sale, the obligation created
is an obligation to give; while the obligation created in
contract for piece of work is an obligation to do; (ii)
the contract of sale is covered by the Statute of Frauds,
while the contract for piece of work is not. (d) Require
ment of Ownership: (1) Ownership by the seller of the
thing sold at the time of the perfection of the contract of
sale is not an element for its perfection and a perfected
contract of sale cannot be challenged on the ground of
non-ownership on the part of the seller at the time of
its perfection; hence, the sale is still valid.3" (2) Instead,
upon perfection of the contract, it will create an obliga
tion on the part of the seller to transfer ownership to the
buyer” —if the seller will not be able to do so, the same
is merely a breach of the contract of sale. (3) If the seller
is not the owner but he was able to deliver the thing
33Art. 1713, NCC.

’6V Tolentino, Civil Code ofthe Phil., 1992 cd., 286.
’’Engineering & Machinery Corp. v. CA, 252 SCRA 156 (1996), cited in Dino v. CA, 359
SCRA 91, G.R. No. 113564, June 20, 2001; see also Inchausti & Co. v. Cromwell, 20 Phil. 345
(1911) and Art. 1467, NCC.
’“Quijada v. CA, 299 SCRA 695 (1998); see Art. 1459, NCC.
’’Art. 1458, NCC.
J9JC9B0M
R52M9UH7

sold to the buyer, the latter does not acquire ownership

because no one can give what one does not have—nemo
dat quod non habet.” Exception: when the sale of a per
son with a void title is to a third person who purchased
it for value and in good faith."
2.1.3 Consideration - Price: (a) Requisites: (1) The price
must be real or true—if the price is simulated, the
contract is void, but the act may be shown to have been
in reality a donation, or some other act or contract.42
Thus, a deed of sale, in which the stated consideration
had not in fact been paid, is null and void.42 On the other
hand, if the price agreed upon is true, the failure to pay
the price does not affect the validity of the contract but
merely results in a right to demand the fulfillment or
cancellation of the obligation under an existing valid
contract;44 (2) The consideration must be in money or
its equivalent;42 (3) The price must be certain: (i) in
order that the price may be considered certain, it shall
be sufficient that it be so with reference to another
thing certain, or that the determination thereof be left
to the judgment of a specified person or persons;46 (ii)
if such person or persons be unable or unwilling to fix
the price, the contract shall be inefficacious, unless the
parties subsequently agree upon the price;47 (iii) if the
third person or persons acted in bad faith or by mistake,
the courts may fix the price;4' (iv) where such third
person or persons are prevented from fixing the price or
terms by fault of the seller or buyer, the party not in fault
may have such remedies against the party in fault as are
4lTangaliu v. CA, 371 SCRA 49 (2001), citing Gonzales v. Heirs of Thomas and Paula
Cruz, 314 SCRA 585, 597 (1999) and Segura v. Segura, 165 SCRA 368 (1988).
■"Modina v. CA, 317 SCRA 696 (1999).
42 Art. 1471, NCC.
"Rongavilla v. CA, 294 SCRA 289; Yu Bun Guan v. Ong, G.R. No. 144735, Oct. 18,2001.
"Buenaventura v. CA, 416 SCRA 263; Montecillo v. Reynes, G.R. No. 138018, July 26,
2002; Balatbat v. CA, 261 SCRA 128.
"Art. 1458, NCC.
"Art. 1469, par. l.NCC.
"Art. 1469, par. 2, NCC.
"Art. 1469, par. 3, NCC.
J9JC9B0M
R52M9UH7
allowed the seller or the buyer, as the case may be;4’ (v)
the fixing of the price can never be left to the discretion
of one of the contracting parties; however, if the price
fixed by one of the parties is accepted by the other,
the sale is perfected;50 and (vi) where the price cannot
be determined in any other manner, the contract is
inefficacious.51 (b) Effect of Gross Inadequacy of Price:
It does not affect a contract of sale. However, it may
indicate a defect in the consent, or that the parties really
intended a donation or some other act or contract.52
2.1.4 Consent - Perfection: (a) Consensual contract: A
contract of sale is a consensual contract, which means
that the sale is perfected by mere consent53 or is perfected
at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price.54
(b) Sale by Auction: A sale by auction is perfected
when the auctioneer announces its perfection by the
fall of the hammer, or in other customary manner. Until
such announcement is made, any bidder may retract
his bid; and the auctioneer may withdraw the goods
from the sale unless the auction has been announced
to be without reserve.55 (c) Effect of Earnest Money:
Whenever earnest money is given in a contract of sale
it shall be considered as part of the price and as proof
of the perfection of the contract.56 However, Article
1482 speaks of earnest money given in a contract of
sale. The earnest money forms part of the consideration
only if the sale is consummated upon full payment of
the purchase price. If the earnest money is given in a
contract to sell, Article 1482, which speaks of a contract
49Art. 1469, par. 4, NCC.

"Art. 1473, NCC.
51 Art. 1474, NCC.
52 Art. 1470, NCC.
“Dalion v. CA, 182 SCRA 872, 877 (1990); Balatbat v. CA, 261 SCR A 128 (1996); Aeap
v. CA, 251 SCRA 30; Fule v. CA, 286 SCRA 698; Quijada v. CA, 299 SCRA 695; Buenaventura
v.CA, 416 SCRA 263.
"Art. 1475,par. l.NCC; Province of Cebu v. Heirs of Rufina Morales, G.R. No. 170115,
Feb. 19, 2008.
55 Art. 1476(2), NCC.
56Art. 1482, NCC.
J9JC9B0M
R52M9UH7

of sale, does not apply.” (d) Effect of Loss of Thing

Prior to Perfection: (1) For things other than “goods,”
the contract is without any effect” —it is a case of an
inexistent contract;” and (2) In case of “specific goods,”
if they perished in part or have wholly or in a material
part so deteriorated in quality as to be substantially
changed in character without the knowledge of the
seller, the buyer may at his option treat the sale either
as: (i) avoided; or (ii) valid as to all of the existing
goods or in so much thereof as have not deteriorated,
and as binding the buyer to pay the agreed price for the
goods in which the ownership will pass, if the sale was
divisible.60
2.1.5 Capacities of Parties: (a) General Requirement:
Same as ordinary contracts.61 (b) Prohibited Sales:
(1) between husband and wife, unless their property
regime is complete separation62 —but only the heirs
and the creditors can question its nullity and not the
spouses themselves who executed the contract with full
knowledge of the prohibition;6’ (2) the same prohibition
also applies to common-law relationships because of
policy considerations and the dictates of morality;61
otherwise, the condition of those who incurred guilt
would turn out to be better than those in legal union;63
(3) the guardian cannot acquire by purchase, even at
a public auction or judicial auction, either in person
or through the mediation of another, the property
of the ward under his guardianship,66 so long as the
guardianship still exists;67 (4) the agent cannot acquire
by purchase, even at a public auction or judicial auction,
either in person or through the mediation of another,
’’Serrano v. Caguiat, 517 SCRA 57 (2007).

’"Art. 149.3, pur. I, NCC.
”10 Manresa 125-126.
“Art. 1494, NCC.
61Art. 1489, NCC.
“Art. 1490, NCC.
“Modina v. CA, 317 SCRA 696 (1999).
wCruz v. CA, 281 SCRA 491 (1997).
‘’Calimlim-Canullas v. Fortun, 129 SCRA 675 (1984).
“Art. 1491(1), NCC.
“Rubins v. Batiller, 51 SCRA 120 (1973).
J9JC9B0M
R52M9UH7
the property of the principal whose administration

or sale may have been entrusted to him,68 unless the
principal consents to such sale;6’ (5) the executor or
administrator cannot acquire by purchase, even at a
public auction or judicial auction, either in person or
through the mediation of another, the property of the
estate under his administration,70 so long as there is no
final settlement yet of the estate;71 (6) public officers and
employees cannot acquire by purchase, even at a public
auction or judicial auction, either in person or through
the mediation of another, the property of the State or of
any subdivision thereof or of any government-owned or
controlled corporation or institution, the administration
of which has been entrusted to them;72 and (7) justices,
judges, prosecuting attorneys, and clerks of superior
and inferior courts, and other officers and employees
connected with the administration of justice, including
attorneys or lawyers, cannot acquire by purchase, even
at a public auction or judicial auction, either in person or
through the mediation of another, the property and rights
in litigation or levied upon an execution before the court
within whose jurisdiction or territory they exercise their
respective jurisdiction.” In all the foregoing contracts,
the sale is void.74
2.1.6 Formalities in Contracts of Sale: (a) Requirement as
to Validity: Whatever may be its subject matter, no
particular form is required in a contract of sale for its
validity.” The only exception is the sale of large cattle76
which requires that the same be recorded with the city/
municipal treasurer and that a certificate of transfer
be issued; otherwise, the sale is not valid." Thus, an
oral sale of a parcel of land is a valid contract, (b)
“Art. 1491(2), NCC.

“Distajo v. CA, 339 SCRA 52 (2000); Art. 1491(2), NCC.
"Art. 1491(3), NCC.
"Rubias v. Batiller,supra.
"Art. 1491(4), NCC.
’’Art. 1491(5), NCC.
"Rubias v. Batiller, supra.
’’Dalionv.CA, 182 SCRA 872 (1990).
"Art. 1581, NCC.
"Act No. 1147, otherwise known as the Cattle Registration Act.
J9JC9B0M
T
R52M9UH7

Requirement As To Enforceability: The sale of personal

property at a price not less than” P500 and the sale of
real property” must be in writing under the Statute of
Frauds; otherwise, the contract is unenforceable.86 (c)
Sale of Land Need Not Be in Public Document and Be
Recorded: It is not a requirement for the validity of a
contract of sale of a parcel of land that this be embodied
in a public instrument.81 Thus, the non-appearance of
the parties before the notary public who notarized the
deed does not necessarily nullify nor render the parties’
transaction void ab initio.12 Likewise, the non-recording
of the instrument in the registry of property does not
affect the validity of the contract.83 (d) Remedy under
Article 1357: If the sale of a parcel of land is already
enforceable under the Statute of Frauds, either because
the sale is in a private instrument” or there has already
been partial performance of the contract,83 and a public
document is necessary for the registration in the registry
of deeds, the parties may avail themselves of the right
granted under Article 1357 of the Civil Code.86 (e)
Requirement of Form in Agency to Sell Land: When the
sale of a piece of land or any interest thereon is through
an agent, the authority of the latter shall be in writing;
otherwise, the sale shall be void.83
3) Obligations of the Parties
3.1 Obligations of Seller:
3.1.1 In General: (1) to deliver the thing sold; (2) to transfer
ownership over the thing sold;88 and (3) to warrant the
following: (i) that he has the right to sell the thing at
the time when the ownership is to pass (warranty of
’"Art. 1403. par. 2(d), NCC.

’’Art. 1403, par. 2(e), NCC.
“Art. 1403, par. 2, NCC.
81 Agasen v. CA, 325 SCRA 504 (2000), citing Balatbat v. CA, 261 SCRA 128 (1996).
"Pcrtalosa v. Sanios, 363 SCRA 545 (2001).
"Fule v. CA, 286 SCRA 698 (1998) and Agascn v. CA, supra.
“Dalion v. CA, supra.
"Vda. de Jomoc v. Court of Appeals, G.R. No. 92871, Aug. 2, 1991.
“Art. 1406, NCC.
’’Art. 1874, NCC.
“Arts. 1458 and 1495, NCC.
J9JC9B0M
R52M9UH7
ownership); (ii) that the buyer shall enjoy the legal

and peaceful possession of the thing (warranty against
eviction); and (iii) that the thing sold is free from
any hidden faults or defects (warranty against hidden
defects)/’
3.1.2 Obligation to Deliver and Transfer Ownership: (a)
Sale Not a Mode But Merely Title: The obligations
of the seller to deliver and to transfer ownership are
intertwined. In sales, the purpose of delivery is not
only to transfer possession but precisely to transfer
ownership to the buyer. As previously discussed, sale
is not a mode, but merely a title.90 Therefore, sale by
itself does not transfer or affect ownership; the most
that sale does is to create the obligation to transfer
ownership. It is tradition or delivery, as a consequence
of sale, that actually transfers ownership,’1 unless the
sale is conditional, (b) When to Deliver: In reciprocal
obligations, as in a contract of sale, the general rule is
that the fulfillment of the parties’ respective obligations
should be simultaneous.’2 Thus, the vendor is not bound
to deliver the thing sold, if the vendee has not paid
him the price, or if no period for the payment has been
fixed in the contract.” Exception: Where a period for
the payment of the price has been fixed in the contract,
the vendor is already bound to deliver the thing sold,
although the period has not elapsed or, consequently,
although he has not collected the price.” (c) Forms
of Delivery: (1) Actual delivery: (i) in the case of a
movable thing, it consists in actually handing it over to
another; or (ii) in the case of immovables, it consists
of material and possessory acts done by the vendee in
the presence of and with the consent of the vendor.” (2)
“’Arts. 1445 and 1547, NCC.

wSan Lorenzo Development Corp. v. CA, G.R. No. 124242, Jan. 21, 2005; Equatorial
Really Development, Inc. v. Mayfair Theater, Inc., 370 SCRA 56; Norkis Distributors, Inc. v. CA,
193 SCRA 694; Aznar v. Yapdiangco, 13 SCRA 486.
"Id.
“Solar Harvest Incorporated Davao Corrugated Carton Corp., G.R. No. 176686, July
26, 2010,625 SCRA 448.
“Art. 1524, NCC.
”10 Manresa, 135; 2 Castan. 9'“ cd., 227-228.
J9JC9B0M
R52M9UH7

Constructive Delivery: (i) traditio simbolica (symbolic

delivery) - such as the delivery of movable property
may be made by the delivery of the keys of the place
or depository where it is stored or kept,56 or the delivery
of a negotiable document of title,” or the execution of
a public instrument;58 in the case of the latter, however,
there is no transfer of ownership notwithstanding the
execution of a public instrument when the instrument
itself expresses or implies that it was not the intention
of the parties to effect delivery55 or when there is an
impediment that may prevent the passing of the property
from the hands of the vendor to the vendee, as when a
third person was actually in possession of the thing and
objecting thereto;™ (ii) traditio longa manti - delivery
is effected by the vendor by simply pointing to the
vendee the thing to be transferred and which at that time
must be within sight;101 (iii) traditio brevi manti - the
vendee already had the thing in his possession for any
other reason or by reason of another distinct title and
the mere agreement of the parties that the vendee shall
now hold the thing as its owner amounts to delivery;™
and (iv) traditio constitution possessorium - the vendor
continues to be in possession of the thing but in some
other capacity and no longer as an owner, as when he,
for example, possesses the thing as a lessee or a mere
usufructuary, (d) Intention to Deliver Important: In all
forms of delivery, it is necessary that the act of delivery,
whether constructive or actual, should be coupled
with the intention of delivering the thing. Without that
intention, there is no tradition.108 (e) Delivery “On Sale
or Return”: When goods are delivered to the buyer "on
sale or return " to give the buyer an option to return the
goods instead of paying the price, the ownership passes
’"Art. 1498, par. 2, NCC.

’’Pacific Commercial Co. v. Yatco, 70 Phil. 285.
’"Art. 1498, par. I, NCC.
‘‘■‘Id
'““Equatorial Realty Dev., Inc. v. Mayfair Theater, Inc., 370 SCRA 56; Addison v. Felix,
38 Phil. 404.
'“'Art. 1499, NCC.
mId.
'“Union Motor Corp. v. CA, G.R. No. 117187, July 20,2001.
J9JC9B0M
R52M9UH7
to the buyer on delivery but he may re-vest the ownership

in the seller by returning or tendering the goods within
the time fixed in the contract, or, if no time has been
fixed, within a reasonable time.104 (f) Sales on approved
or on trial or on satisfaction: When goods are delivered
to the buyer on approval or on trial or on satisfaction,
or other similar terms, the ownership does not pass to
the buyer upon delivery. Instead, the ownership shall
only pass: (1) when the buyer signifies his approval or
acceptance to the seller or does any other act adopting
the transaction; or (2) if he does not signify his approval
or acceptance to the seller, but retains the goods without
giving notice of rejection, then if a time has been fixed
for the return of the goods, on the expiration of such
time, and, if no time has been fixed, on the expiration of
a reasonable time.10’
3.1.3 Double Sale: (a) Requisites: (1) the two (or more) sales
transactions must pertain to exactly the same subject
matter; (2) the two (or more) sales transactions must
constitute valid sales; (3) the two (or more) buyers at
odds over the rightful ownership of the subject matter
must each represent conflicting interests; (4) the two
(or more) buyers at odds over the rightful ownership
of the subject matter must each have bought from the
very same seller"* —it is necessary that the conveyance
must have been made by a party who has an existing
right in the thing and the power to dispose of it;10’ it
cannot be invoked where the two different contracts of
sale are made by two different persons, one of them not
being the owner of the property sold or, even if the sale
was made by the same person, if the second sale was
made when such person was no longer the owner of
the property, because it had been acquired by the first
purchaser in full dominion, the second purchaser cannot
""Art. 1502, pur, l.NCC.

"“Art. 1502, par. 2, NCC.
'“Cheng v. Genato, 360 Phil. 891,909 (1998), died bi Maclan-Cebu International Airport
Authority v. Tirol, 588 SCRA 635 (2009).
"“Consolidated Rural Bank (Cagayan Valley), Inc. v. CA, 448 SCRA 347 (2005), citing
C. Villanueva, Philippine Law on Sales. 100 (1995).
J9JC9B0M
R52M9UH7

acquire any right,10* in which case the non-owner cannot

validly sell;109 and (5) both sales must be contracts ofsale
—if one of the two contracts is a contract to sell, there is
I no double sale because in a contract to sell, there being
no previous sale of the property, a third person buying
such property despite the fulfillment of the suspensive
condition such as the full payment of the purchase
price, for instance, cannot be deemed a buyer in bad
faith and the prospective buyer cannot seek the relief
of reconveyance of the property. Title to the property
will transfer to the buyer (third person) after registration
because there is no defect in the owner-seller’s title per
se, but the latter, of course, may be sued for damages by
the prospective buyer in the contract to sell.110 (b) Rules
on Double Sale: (1) in case of movable property, the
ownership shall be transferred to the person who may
have first taken possession thereof in good faith, if it
should be movable property;1" (2) in case of immovable
property, the ownership shall belong to the person
acquiring it who in good faith first recorded it in the
Registry of Property. Should there be no inscription, the
ownership shall pertain to the person who in good faith
was first in possession; and, in the absence thereof, to
the person who presents the oldest title, provided there
is good faith.11- The law on double sale presumes title or
ownership to pass to the first buyer, unless the second
buyer is able to successfully displace the first buyer by
doing the foregoing acts enumerated in Article 1544."’
In other words. Article 1544 requires the second buyer
to acquire the immovable in good faith and to register it
in good faith.11'1 Knowledge gained by the second buyer
of the first sale defeats his rights even if he is first to
register the second sale, since such knowledge taints his
""Salem v. Roduje, 530 SCRA 432 (2007).

"“Coronel v. CA, 263 SCRA 15 (1996).
"'Art. 1544, par. l.NCC.
"’Art. 1544, pars. 2 and 3, NCC.
"’Coronel v. CA, supra.
"’Abrigo v. De Vera, G.R. No. 154409, June 21, 2004. citing Gabriel v. Mabanta, 399
SCRA 573 (2003); Martinez v. Court of Appeals, 358 SCRA 38 (2001); Bautista v. Court of
Appeals, 230 SCRA 446 (1994).
J9JC9B0M
R52M9UH7
prior registration with bad faith."5 On the other hand,

knowledge gained by the first buyer of the second sale
cannot defeat the first buyer’s rights except only as
provided by the Civil Code and that is where the second
buyer first registers in good faith the second sale ahead
of the first. Such knowledge of the first buyer does
not bar her from availing of her rights under the law,
among them, to register first her purchase as against
the second buyer."6 (c) Effect of Registration of Land
Subiect Matter of Double Sale: (1) If land is registered
under the Torrens System, the law on double sale under
Article 1544 applies;"7 (2) If the land is unregistered
and the first sale was made by the original owners but
unrecorded while the second was an execution sale that
resulted from a complaint for a sum of money filed
against the said original owners and registered under
Act No. 3344, the law on double sale under Article
1544 of the Civil Code cannot be invoked to benefit the
purchaser at the execution sale. Instead, the purchaser
of unregistered land at a sheriff’s execution sale only
steps into the shoes of the judgment debtor, and merely
acquires the latter’s interest in the property sold as of the
time the property was levied upon.""
3.1.4 Warranties: (a) Requisites of Express Warranty: (1)
it consists of an affirmation of fact or any promise by
the seller relating to the thing; (2) the natural tendency
of such affirmation or promise is to induce the buyer
to purchase the thing; and (3) the buyer purchases the
thing relying upon such affirmation or promise."’ (b)
Three Implied Warranties: (1) warranty of ownership;
(2) warranty against eviction; and (3) warranty against
hidden defects.120 (c) Requisites for Recovery for
Breach of Warranty Against Eviction: (1) the purchaser
has been deprived of the whole or part of the thing sold;
(2) the eviction is by a final judgment; (3) the basis
"’Cruz v. Cabana, 129 SCRA 656 (1984); Uraca v. CA, 278 SCRA 702 (1997).
""Id.
"’Abrigo v. De Vera, G.R. No. 154409, June 21,2004.
"“Carumba v. CA, 31 SCRA 558 (1970).
"’Art. 1546, NCC.
'•’“Art. 1547, NCC.
J9JC9B0M
R52M9UH7

thereof is by virtue of a right prior to the sale made by

the vendor; and (4) the vendor has been summoned
and made co-defendant in the suit for eviction at the
instance of the vendee.12' (d) Warranty Against Hidden
Defects: (1) Nature of Defects: (i) it must be hidden,
hence, the vendor shall not be answerable for patent
defects or those which may be visible, or for those
which are not visible if the vendee is an expert who,
by reason of his trade or profession, should have
known them;122 and (ii) such defects have rendered the
thing unfit for the use for which it is intended, or have
diminished its fitness for such use to such an extent
that, had the vendee been aware thereof, he would not
have acquired it or would have given a lower price for
it.123 (2) Alternative Remedies for Breach of Warranty
Against Hidden Defects: (i) action redhibitoria - this
is an action for the recovery of the purchase price, with
interest, accompanied with a return of the thing sold;
or (ii) action estimatoria or quanti minoris - this is an
action for the recovery of a part ofthe price in proportion
to the defects in quality of the thing sold, or an action
for the proportionate reduction of the purchase price,
(e) Prescriptive Period: Actions based on breach of
implied warranty against hidden defects12’ or warranty
against eviction125 prescribe within six months from
the date of delivery of the thing sold.126 (f) Principle of
Recoupment: Recoupment (reconvention) is the act of
rebating or recouping a part of a claim upon which one
is sued by means of a legal or equitable right resulting
from a counterclaim arising out of the same transaction.
It is the setting up of a demand arising from the same
transaction as the plaintiff’s claim to abate or reduce that
claim.122 The legal basis for recoupment by the buyer is
'■’'Arts. 1548, 1557,and 1558, NCC;Angv.CA, 567 SCRA 53 (2008); Power Commercial
and Industrial Corp. v. CA, 247 SCRA 597 (1997).
122Art. 1561, NCC.
mld.
124Art. 1571, NCC.
l25Art. 1548, NCC.
l26Ang v. CA, supra.
l27First United Construction Corporation v. Bayanihan Automotive Corporation, 713
SCRA 354 (2014).
J9JC9B0M
R52M9UH7
the first paragraph ofArticle 1599 of the Civil Code, viz:

‘‘Article 1599. Where there is a breach of warranty by
the seller, the buyer may, at his election: (1) Accept or
keep the goods and set up against the seller, the breach
of warranty by way of recoupment in diminution or
extinction ofthe price; xxx ” Hence, when the seller files
an action for collection of the purchase price, the buyer
may set up the seller’s breach of warranty by way of
recoupment or counter-claim. It is necessary, however,
that the recoupment must arise out of the contract or
transaction upon which the plaintiff’s claim is founded.
In other words, the subject matter of the breach of
warranty must be the same subject matter in the seller’s
action for recovery of the price.128
3.2 Obligations of Buyer:
3.2.1 Distinguished from Agency to Sell: The obligation
of the buyer is to pay a price certain in money or its
equivalent.12’ Hence, the contract of sale must be
distinguished from a mere agency to sell. In the former,
there is an obligation to pay the purchase price; while in
the latter,,M the agent receives the thing to sell it, and does
not pay its price, but delivers to the principal the price
he obtains from the sale of the thing to a third person,
and if he does not succeed in selling it, he returns it.
The test in determining one from another is the degree
of control exercised over the thing delivered by the one
who delivered it. If the delivery puts the transferee in
the attitude or position of an owner, and not merely as
an agent who must account for the proceeds of a resale,
the transaction is a sale; while the essence of an agency
to sell is the delivery to an agent, not as his property,
but as the property of the principal, who remains the
owner and has the right to control sales, fix the price and
terms, demand, and receive the proceeds less the agent’s
commission upon sales made.131
"‘Supra.
1,9Art. 1458, NCC.
'“Quiroga v. Parsons, 38 Phil. 501 (1918).
l3lKerr& Co., Lid. v. Lingad, 38 SCRA 524 (1971).
J9JC9B0M
R52M9UH7

3.2.2 Rights Granted to Buyer in Relation to Payment

of Price: (a) Right to Suspend Payment: (I) Rules
Applicable to All Kinds of Contracts of Sale: Should
the vendee be disturbed in the possession or ownership
of the thing acquired, or should he have reasonable
grounds to fear such disturbance, by a vindicatory
action or a foreclosure of mortgage, he may suspend the
payment of the price until the vendor has caused the
disturbance or danger to cease.132 Exceptions: There is
no right to suspend payment (i) when the vendor gives
security for the return of the price in a proper case; (ii)
when it has been stipulated that, notwithstanding any
such contingency, the vendee shall be bound to make
the payment; and (iii) a mere act of trespass shall not
authorize the suspension of the payment of the price,113
because in the latter case the vendee can easily resort
to an action for ejectment. (2) Rules Applicable in Sale
of Subdivision Lots or Condominium Units: In case
of failure of the owner or developer to develop the
subdivision or condominium project according to the
approved plans and within the time limit for complying
the same, the buyer may exercise the following
alternative remedies: (1) he may suspend payment and
wait for further development; or (2) he may demand
reimbursement of the total amount paid.1" In case of
the first option, the owner/developer may not forfeit the
installment payments made by the buyer135 and the buyer
may not be ousted from the subdivision.111 In case of the
second option, the notice informing the developer of the
intention not to remit further payments on account of
non-development of the subdivision, and the-demand
for refund, can be made at the same time.13’ (b) Right to
Grace Period: (1) If Granted bv Contract: When a grace
period is provided for in the contract of sale, the same
is a right, not an obligation of the debtor, and when
unconditionally conferred, the grace period is effective
1,1 Art. 1590, NCC.

133 Art. 1590, NCC.
'"Sec. 23, P.D. No. 957.
m!d.
'“Relucio v. Brillante-Garfin, 187 SCRA 405.
'"Casa Filipina Realty Corp. v. Office of the Pres., 241 SCRA 165.
J9JC9B0M
R52M9UH7
without further need of demand either calling for the

payment of the obligation or for honoring the right.1”
(2) In Sale of Realty by Installments (Maceda Law);
Applicability: Applicable to sale of real property by
installments, except: (i) sale of industrial lots; (ii) sale of
commercial buildings; and (iii) sale to tenants. Right of
Buyer Who Paid Less Than Two Years of Installments:
He is entitled to a grace period of 60 days from the
date the installments became due.1” Within said period,
the buyer may still update the payment without the
obligation to pay interest and penalties. The seller may
cancel the contract only after the expiration of the grace
period but the notice of cancellation must be by way
of a notarial act. The cancellation becomes effective 30
days from receipt of such notice of cancellation. Right
of Buyer Who Paid At Least Two Years Installments: He
is entitled to a grace period of one month for every one
year of installment payments paid. This right shall be
exercised by the buyer only once in every five years of
the life of the contract and its extensions, if any.'" The
seller may cancel the contract only after the grace period
but must comply with two mandatory requirements: (1)
to send a notarized notice of cancellation to the buyer
and (2) to refund the cash surrender value.141 Until and
unless the seller complies with these twin mandatory
requirements, the contract to sell between the parties
remains valid and subsisting.142 Thus, the buyer has the
right to continue occupying the property subject of the
contract to sell,141 and may “still reinstate the contract by
updating the account during the grace period and before
the actual cancellation” of the contract.144 The “cash
surrender value” is at least 50% of the total payments,
but after five years of installments, an additional 5%
every year but not to exceed 90% of the total payments
l38Bricktown Development Corp. v. Amor Tierra Development Corp., 239 SCRA 126.
l39Sec. 4, par. 1, R.A. No. 6552, otherwise known as the Maceda Law.
'"Sec. 3(a), R.A. No. 6552, otherwise known as the Maccda Law.
'’’Communities Cagayan, Inc. v. Nanol, G.R. No. 176791, Nov. 14, 2012, citing Active
Realty & Development Corp. v. Daroya, 431 Phil. 753 (2002).
I42M.
'43/<Z, citing Pagtalunan v. Dela Cruz I'tla. de Manzano, 533 SCRA 242 (2007).
l44/rf., citing Leaflo v. Court of Appeals, 420 Phil. 836 (2001).
J9JC9B0M
R52M9UH7

PART 1: CONTRACT OP SALL
made, (c) Right to Pay Price Even After E.zpirafinn r.f

Period: In the sale of immovable property. Article 1592
of the Civil Code allows the buyer to still pay, even
after the expiration of the period allowed for payment,
as long as no demand for rescission has been made,1*’
whether judicially or by notarial act.1*4 Even an offer
to pay prior to the demand for rescission is sufficient
to defeat the seller’s right to rescind under article 1592
of the Civil Code.1*’ But Article 1592 applies only to
a contract of sale, and not to a sale on installment or a
contract to sell.'*’
3.2.3 Two Types of Pricing Agreements in Sale Involving
Real Estate: (a) Unit Price Contract: Wherein the
purchase price is determined by way of reference to a
stated rate per unit area (e.g., Pl ,000 per square meter),
in which case: (1) If the vendor delivers less than the
area agreed upon, the vendee may: (i) oblige the vendor
to deliver all that may be stated in the contract, if that
is possible; or (ii) if the foregoing is not possible,
the vendee may either demand for the proportionate
reduction of the purchase or ask for rescission of the
contract, if the lack in the area is not less than one-tenth
(1/10) of the stated area.'*4 Nevertheless, if the vendee
would not have bought the immovable had he known
of its smaller area, he may rescind the sale.1’0 (2) If
the area is the same but any part is not of the quality
specified in the contract, the same rule as the foregoing
shall apply and rescission shall take place only when
the inferior value of the thing sold exceeds one-tenth
(1/10) of the price agreed upon.'51 Nevertheless, if the
vendee would not have bought the immovable had he
,4’Art. 1592, NCC; City of Cebu v. Heirs of Candido Rubi, 366 Phil. 70(1999); Province
ofCebuv. Heirs of Rufina Morales, G.R. No. 170115, February 19, 2008.
’’’Laforteza v. Machuca, 333 SCR A 643 (2000), citing Ocampo v. Court of Appeals, 233
SCRA 551,562 (1994).
’’’Valarao v. CA, G.R. No. 130347, March 3, 1999; Panpilinan v. CA, 279 SCRA 590
(1997); Alfonso v. CA, 186 SCRA 400 (1990); People's Industrial and Commercial Corp. v. CA,
281 SCRA 206 (1997); Sps. Garcia v. CA, G.R. No. 172036, April 23,2010.
150Art. 1539, par. 4, NCC.
151 Art. 1539, pars. 2 and 3, NCC.
J9JC9B0M
R52M9UH7
known of its inferior quality, he may rescind the sale.'"

(3) If the vendor delivers more than the area stated in
the contract, the vendee has the option to accept only
the amount agreed upon or to accept the whole area,
provided he pays for the additional area at the contract
rate.'53 (b) Lump Sum Contract: Which states a full
purchase price for an immovable the area of which may
be declared based on the estimate or where both the area
and boundaries are stated. (1) In case the area of the
immovable is stated in the contract based on an estimate:
(i) the actual area delivered may not measure up exactly
with the area stated in the contract; (ii) there shall be
no increase or decrease of the price although there be
a greater or lesser area or number than that stated in
the contract;154 (iii) however, the discrepancy must not
be substantial—the use of “more or less” or similar
words in designating quantity covers only a reasonable
excess or deficiency.155 (2) Where both the area and the
boundaries of the immovable are declared, the area
covered within the boundaries ofthe immovable prevails
over the stated area. In cases of conflict between areas
and boundaries, it is the latter which should prevail.154
Hence, the vendor shall be bound to deliver all that is
included within said boundaries, even when it exceeds
the area or number specified in the contract; and, should
he not be able to do so, he shall suffer a reduction in
the price, in proportion to what is lacking in the area
or number, unless the contract is rescinded because the
vendee does not accede to the failure to deliver what has
been stipulated.'5’
3.2.4 Remedies of Seller If Price Not Paid in Sale of Personal
Property on Installments: (a) Three Alternative
Remedies: (1) Exact fulfillment of the obligation
(action for collection of the price), available even if
'"Art. 1539, par. 4, NCC.

151 Art. 1539, par. 5, NCC.
'“Art. 1542, par. l.NCC.
'“Rudolf Lielz, Inc. v. CA, 478 SCRA 451 (2005); cited in Cebu Winland Development
Corp. v. Ong Siao Hua, 588 SCRA 120 (2009).
Art. 1542, par. 2, NCC.
'"Art. 1542, par. 2, NCC.
J9JC9B0M
R52M9UH7
I
failure to pay covers only a single installment;158 (2)

Rescission or cancellation of the sale, if the failure to
pay covers two or more installments;15’ or (3) Foreclose
the chattel mortgage, if the failure to pay covers two or
more installments.160 If the vendor has elected to avail
himself of any of the remedies, he is deemed to have
renounced the others.161 The filing of a collection suit
bars the foreclosure of the mortgage. The mere act of
filing of an ordinary action for collection operates as a
I waiver of the mortgagee-creditor’s remedy to foreclose
the mortgage.162 (b) If Seller Chooses to Foreclose
Chattel Mortgage: (1) Prohibition Against Recovery
of “Unpaid Balance of Price": The seller is prohibited
from recovering any “unpaid balance of price”165 —the
idea is to limit the mortgagee (vendor) to the property
mortgaged;16* hence, the seller is barred from recovering
not only the balance of the price, but also the interest
on the principal, attorney’s fees, expenses of collection,
and the costs.165 However, the law requires the actual
foreclosure of the mortgaged chattel. It is the actual
sale of the mortgaged chattel that would bar the creditor
(who chooses to foreclose) from recovering any unpaid
balance.166 (2) Applicability: In order for Article 1484(3)
to apply, there must be vendor-vendee relationship
between the parties and the contract between them must
be a contract of sale of personal property in installments.
If the subject matter of the chattel mortgage was bought
from a third party and the contract between the parties
15,1Art. 1484(1), NCC.

156Art. 1484(2), NCC.
'“Art. 1484(3), NCC.
'’’Universal Motors Corp. v. Dy Hian Tat, G.R. No. L-23788, May 16, 1969; see also
Eliseo Tool Manufacturing Corp- v. CA, 307 SCRA 731, citing Della Motor Sales Corporation v.
Niu Kum Duan. 213 SCRA 259, 264 (1992); Nonalo v. IAC, 140 SCRA 255.
'“Bank of America, NT and SA v. American Realty Corp., 321 SCRA 659 (1999).
“'Art. 1484(3), NCC.
”*Mttcondray & Co., Inc.:. v. Eustaqio, 64 Phil. 454(1937); Filipinas Investment & Finance
Corp, v. Ridad, 30 SCRA 564 (1969).
'6iMacondray & Co., Inc. v. Eustaqio, supra; Filipinas Investment & Finance Corp. v.
Ridad, supra; Luneta Motor Co. v. Salvador, supra.
'“Manila Motor Co. v. Fernandez, 99 Phil. 782 (1956); Pacific Commercial Co. v. De la
Rama, 72 Phil. 380 (1941); De la Cruz v. Asian Consumer and Industrial Finance Corporation,
214 SCRA 103(1992).
J9JC9B0M
R52M9UH7
is a contract of loan with accessory chattel mortgage

contract, Article 1484(3) is not applicable.167 The
prohibition against recovery of the unpaid balance of
the price also applies to contracts purporting to be leases
of personal property with option to buy, when the lessor
has deprived the lessee of the possession or enjoyment
of the thing.168
4) Pacto De Retro Sale and Equitable Mortgage

4.1 Pacto De Retro Sale:
4.1.1 Concept: (a) Definition: A sale with a right of repurchase
(pacto de retro sale), also known as conventional
redemption, takes place when the vendor reserves the
right to repurchase the thing sold, with the obligation of
returning to the vendee the price of the sale, the expenses
of the contract and any other legitimate payments made
by reason of the sale, the necessary and useful expenses
made on the thing sold, and the obligation of complying
with such other stipulations which may have been
agreed upon.'" (b) Grant of Right of Repurchase Must
be Simultaneous: To be a pacto de retro sale, the grant
of the right of repurchase must be made simultaneously
with the sale although not necessarily in the same
instrument;'70 in fact, if the sale is in writing and already
complies with the requirement of the Statute of Frauds,
the verbal grant of the right of repurchase simultaneously
made with the sale may be proven by parol evidence and
is not required to separately meet the requirements of the
Statute.'7' However, if the grant of right of repurchase
was made long after the sale was already perfected, the
transaction is not apacto de retro sale but merely a grant
of an option to buy back.177 (c) Transfer of ownership:
In a true pacto de retro sale, title to and ownership of
property are immediately vested in the vendee a retro.
'"’Equitable Savings Bank v. Palces, G.R. No. 214752, March 9, 2016.

'‘“Art. 1485, NCC.
'"Arts. 1601 and 1616, NCC.
'’"Capulong V. CA, G.R. No. L-61337, June 29,1984.
l7'Mactan International Airport Authority v. CA, 263 SCRA736 (1996).
l72Villarica v. CA, 26SCRA 189 (1968); Torres v. CA, 216 SCRA 287 (1992).
J9JC9B0M
R52M9UH7

subject only to the resolutory condition that the vendor

repurchases it within the stipulated period.1” The failure
of the vendor a retro to repurchase the property vests
upon the vendee a retro by operation of law the absolute
title and ownership over the property sold.174
4.1.2 Period of Redemption (Repurchase): (a) Period: (1) the
period expressly agreed upon,1” but such period cannot
exceed 10 years;176 (2) in the absence of an express
agreement, it shall be four years from the date of the
contract;177 or (3) if the vendor questions the transaction
as an equitable mortgage but the court eventually rules
that it was indeed a pacto de retro sale, the vendor may
still exercise the right to repurchase within 30 days
from finality of the judgment.'7’ But the application
of the latter rule is predicated upon the good faith of
the vendor a retro, believing in good faith that the
agreement was in reality a mortgage.1” (b) What must
be paid to vendee upon repurchase: (1) the price of the
sale; (2) the expenses of the contract, and any other
legitimate payments made by reason of the sale; and (3)
the necessary and useful expenses made on the thing
sold.160 Thus, if prior to repurchase the vendee a retro
introduced an improvement on the subject property, he
is neither a builder in good faith nor a builder in bad
faith because the applicable laws are Articles 1606 and
1616 which require the vendor a retro to also pay the
necessary and useful expenses made on the thing sold.1’1
Since the payment of the redemption or repurchase
price is merely incidental to the exercise of a right and
not payment of an existing obligation, tender of a check
'"Luntayag v. Heirs of Jacinto Nenteo, Ci.R. No. 162112, July 3, 2007, citing Ufa. de
Rigonan el al. v. Zoroaster Derecho representing the Heirs of Ruben Derecho, el al.. G.R. No.
159571, July 15, 2005,463 SCRA627,636.
,74/</.
'"Art. 1606, par. l.NCC.
176Art. 1606, par. 2, NCC.
177 Art. 1606, par. l.NCC.
'"Art. 1606, par. 3, NCC.
'"Felicen, Sr., el al. v. Orias, 156 SCRA 586 (1987); i'da. de Macoy v. C A, 206 SCRA 244
(1992); Abilla v. Gobonseng, G.R. No. 146651, Jun. 17, 2002.
'““Art. 1616, NCC.
'“'Narvaez v. Alciso, 594 SCRA 60 (2009).
J9JC9B0M
R52M9UH7
is sufficient to compel redemption but is not of itself a

payment that relieves the redemptioner from his liability
to pay the redemption price.182
4.2 Equitable Mortgage:
4.2.1 Concept: (a) Definition: An equitable mortgage has
been defined as one which, although lacking in some
formality, or form or words, or other requisites demanded
by a statute, nevertheless reveals the intention of the
parties to charge real property as security for a debt, and
contains nothing impossible or contrary to law.183 The
essential requisites of an equitable mortgage are: (1) the
parties enter into what appears to be a contract of sale,
(2) but their intention is to secure an existing debt by
way of mortgage.184 (b) Nomenclature Not Controlling:
Even if a contract is denominated as a pacto de retro,
the owner of the property may still disprove it by
means of parol evidence, provided that the nature of the
agreement is placed in issue by the pleadings filed with
the trial court.18’
4.2.2 Presumption of Equitable Mortgage: (a) Instance Where
Presumption Apply: (1) when the price of a sale with
right to repurchase is unusually inadequate; (2) when
the vendor remains in possession as lessee or otherwise;
(3) when upon or after the expiration of the right to
repurchase another instrument extending the period of
redemption or granting a new period is executed; (4)
when the purchaser retains for himself a part of the
purchase price; (5) when the vendor binds himself to
pay the taxes on the thing sold; and (6) in any other case
where it may be fairly inferred that the real intention of
the parties is that the transaction shall secure the payment
of a debt or the performance of any other obligation.1"
Any of the circumstances laid out in Article 1602,
neither the concurrence nor an overwhelming number
'“Fortunado v. CA, 196 SCRA 269 (1991).

Lumayag v. Heirs of Jacinto Nemeo, supra, citing Benny Go v. Eliodoro Bacaron, G.R.
No. 159048, October 11,2005, 472 SCRA 339, 347.
“4Vda. de Delfin v. Dellola, G.R. No. 143697, Jan. 28, 2008, citing Ramos v. Sarao, 451
SCRA 103, 113(2005).
'"’Ramos v. Sarao, 451 SCRA 103 (2005).
'“Art. 1602, NCC.
J9JC9B0M
R52M9UH7

of the enumerated circumstances, is sufficient to support

the conclusion that a contract of sale is in fact an
equitable mortgage.187 (b) Effect If Pacto De Retro Sale
is Actually Equitable Mortgage: (1) any money, fruits,
or other benefit to be received by the vendee as rent or
otherwise shall be considered as interest which shall be
subject to the usury law;188 (2) the apparent vendor who,
in reality is a mortgagor, may ask for the reformation of
the instrument,18’ since the true intention of the parties
is not expressed in the instrument;'” (3) if there is a
stipulation in the sale with pacto de retro providing
that complete and absolute title shall be vested on the
vendee should the vendors fail to redeem the property
on the specified date, the same is void for being a pactum
commissorium■,',' and (4) the proper remedy in case the
borrower refuses to pay the “price” is to foreclose on
the mortgage, and there can be no loss of the purported
seller’s right to redeem since this would constitute the
process known as a pactum commissorium.m

5) Lease of Things
5.1 Basic Concents:
5.1.1 Two Kinds of Contract of Lease: (1) Contact of Lease
(proper) - it is a lease of things, or when the subject
matter is a thing; and (2) Contract for Piece of Work —
it is a lease of service, or when the subject matter is a
service.'”
5.1.2 Contract of Lease of Things: (a) Essence: It is a contract
involving the grant of temporary use or enjoyment of
'"Ramos v. Sanio, supra; Lorbes v. CA, 351 SCRA 716 (2001),- I'da. de Delfin v. Dellota,
G.R. No. 143697, January 28, 2008.
'“Art. 1602, last par., NCC.
'“’Art. 1605, NCC.
'“Art. 1359, NCC.
'’'Olea v. Court of Appeals, 247 SCRA 274 (1995).
IWC. Villanueva on Sales, 2004 ed., pp. 591-592; Montevirgin v. CA, 112 SCRA 641
(1982).
'“Art. 1642, NCC.
J9JC9B0M
R52M9UH7
a property to another in consideration of the payment

of a price certain in money or its equivalent (called
“rent”).”4 If the grant of temporary use or enjoyment of
a property in favor of another is gratuitous, the contract
is commodatum.m If the consideration is not payment of
a price but the delivery of another thing or rendition of
service, an innominate contract will result.196 (b) Lessor
Need Not be the Owner: Since lease does not involve
any transfer of ownership, the lessor need not be the
owner of the property leased.1’7 However, the lessor
must have a right (e.g., usufructuary or lessee) or at least
an authority (e.g., as an agent of the owner); otherwise,
the contract is void because the cause or object of
which did not exist at the time of the transaction.”8 (c)
Consensual Contract: Being a consensual contract, it is
perfected at the moment there is a meeting of the minds
on the thing and the cause and consideration which are
to constitute the contract.”9
5.1.3 Subject-matter: (a) What Can be Subiect-matter: Either
real or personal property. As to personal property,
consumable goods cannot be the subject matter of a
contract of lease, except when they are merely to be
exhibited or when they are accessory to an industrial
establishment.21" (b) Lease of Rural and Urban Lands: (1)
Those persons disqualified to buy under Articles 1490
and 1491, are also disqualified to become lessees of the
things mentioned therein.291 (2) Foreigners are allowed
to lease lands in the Philippines: (i) if the foreigner is
investing in the Philippines, the lease shall be for a
period not exceeding 50 years, renewable once for a
period of not more than 25 years and the lease are shall
be used solely for the purpose of the investment upon the
”4Art. 1643, NCC.

”sArt. 1935, NCC.
19611 Manresa596.
'’’Ballesteros v. Abion, 482 SCRA 23 (2006).
”8/rZ See also Bercero v. Capitol Development Corp., 519 SCRA 484 (2007).
'"Bugatti v. Court of Appeals, 397 Phil. 376, 395 (2000).
2“Art. 1645, NCC.
201 Art. 1646, NCC.
J9JC9B0M
R52M9UH7

mutual agreement of the parties;202 (ii) if the foreigner is

not investing in the Philippines, he is allowed to lease
private lands in the Philippines but for a maximum
period only of 25 years, renewable for another period
of 25 years upon mutual agreement of both parties.20'
(3) When Governed bv Statute of Frauds: If the lease
of real property, including lands, is for a period of more
than one year, it must be in writing; otherwise, the
contract is unenforceable.2" (4) When Special Power
Necessary: If the lease is to be recorded in the Registry
of Property, the following cannot constitute the same
without special power: (i) the husband with respect
to the wife’s paraphernal real estate; (ii) the father or
guardian as to the property of the minor or ward; and
(iii) the manager.20’ However, even if the lease is not
to be recorded, a special power is also necessary when
the lease is for a period of more than one year.20” In
the foregoing, if the lease is without a special power,
the same is void.207 (5) Effect of Recording in Registry
of Pronertv: Unless a lease is recorded, it shall not be
binding upon third persons.205 The purchaser of a piece
of land which is under a lease that is not recorded in
the Registry' of Property may terminate the lease except:
(a) when there is a stipulation to the contrary in the
contract of sale, or (b) when the purchaser knows of the
existence of the lease.200 But if the sale is fictitious and
was only resorted to for the purpose ofextinguishing the
lease, the supposed vendee cannot terminate the lease.
The sale is presumed to be fictitious if at the time the
supposed vendee demands the termination of the lease,
the sale is not recorded in the Registry of Property.210 (6)
Term of Lease: (i) the period agreed upon; however, no
“’Sec. 4, R.A. No. 7652, otherwise known as the "Investor’s Lease Act."
“’Sec. I, P.O. No. 471, dated May 24,1974, in relation Io Sec. 5(1), R.A. No. 7652.
“‘Art. 1403(2Xe), NCC.
“’Art. 1647, NCC.
““Art. IK7«(B), NCC.
“’FWo. de Chua v. IAC, G.R. No. 70909, January 5,1994.
“"Art. 1648, NCC.
“'Art. 1676, 1“ par., NCC.
2l0Art. 1676, 3,d par., NCC.
J9JC9B0M
R52M9UH7
lease for more than 99 years shall be valid;211 (ii) when

the duration of the lease has not been fixed and it is a
lease of rural lands, it is understood to have been made
for all the time necessary for the gathering of the fruits
which the whole estate leased may yield in one year, or
which it may yield once, although two or more years
may have to elapse for the purpose;212 (iii) when the
period for the lease has not been fixed and it is a lease
of urban land, it is understood to be from year to year, if
the rent agreed upon is annual; from month to month, if
it is monthly; from week to week, if the rent is weekly;
and from day to day, if the rent is to be paid daily.213
However, the court may fix a longer period when: the
rent is paid daily and the lessee has stayed in the place
for over one month; the rent is paid weekly and the
lessee has been in possession for over six months; or
the rent is paid monthly and the lessee has occupied the
premises for over one year.214 However, when the lease
contract provides that it "shall continuefor an indefinite
period provided the lessee is up-to-date in the payment
of his monthly rentals," Article 1687 does not apply
because the lease is not one with a period but instead
subject to a resolutory condition.215
5.1.4 Rights and Obligations of the Parties: (a) Right to
Assign Contract: (11 Rule: The lessee cannot assign the
lease;216 (2) Exceptions: (i) if the assignment is with the
consent of the lessor; or (ii) even without the lessor’s
consent, if there is a stipulation in the contract allowing
the assignment of the lease.217 (b) Right to Sublease:
(1) Rule: The lessee may sublet the thing leased; (2)
Exception: He cannot do so if expressly prohibited in the
contract.218 (3) Duty of Sublessee: (i) he is bound to the
lessor for all acts which refer to the use and preservation
2"Art. 1643, NCC.

212Art. 1682, NCC.
213Art. 1687, NCC.
214W.
215Jespajo Realty Corp. v. CA, G.R. No. 113626, Sep. 27, 2002.
216Art. 1649, NCC.
2"Jd.
2,1Art. 1650, NCC.
J9JC9B0M
R52M9UH7

of the thing leased in the manner stipulated between the

lessor and the lessee;21’ (ii) he is subsidiarily liable to
the lessor for any rent due from the lessee but he cannot
be responsible beyond the amount of rent due from him,
in accordance with the terms of the sublease. Insofar
as the lessor’s claim is concerned, payment of rent in
advance by the sublessee shall be deemed not to have
been made.220 (c) Principal Obligations of Lessor: (1) to
deliver the thing which is the object of the contract in
such a condition as to render it fit for the use intended221 - ■
since the delivery of the object of the contract is merely
an obligation created by the contract upon perfection,
the lessor can be compelled to make the delivery;222 (2)
to make on the leased premises during the lease all the
necessary repairs in order to keep it suitable for the use
to which it has been devoted, unless there is a stipulation
to the contrary223 - the term “repairs” does not extend to:
(i) the reconstruction of a leased house that has been
completely destroyed by fire because “repairs” can refer
only to partial destruction or impairment;224 and (ii) the
“filling up” of a lot, since this would not be a “repair”
but an “improvement,” repair being limited to putting
back something into its original stipulation;223 and (3)
to maintain the lessee in the peaceful and adequate
enjoyment of the lease for the entire duration of the
contract226 - the lessor is liable to the lessee only for cases
of legal trespass (perturbation de mero derecho) but not
in cases of mere trespass in fact (perturbation de mero
hecho) made by a third person.222 In other words, the
duty of the lessor to maintain the lessee in the peaceful
and adequate enjoyment of the leased property for the
entire duration of the contract is merely a warranty that
the lessee shall not be disturbed in having legal and not
!l’Art. 1651, NCC.

220Art. 1652, NCC.
22lArt. 1654(1), NCC.
222Dela Cruz v. El Seminario dela Archidiocesis de Manila, 18 Phil. 330(1911).
“Art. 1654(2), NCC.
“Lizares v. Hemaez, 40 Phil. 981 (1920).
“Alburo v. Villanueva, 7 Phil. 277 (1907)
226Art. 1654(3), NCC.
22,G.Q. Garments, Inc. v. Miranda, 495 SCRA 741 (2006).
J9JC9B0M
R52M9UH7
physical possession of the property.228 In case of trespass

in fact, the lessor is not liable because the lessee shall
have a direct action against the intruder.22’ (d) Principal
Obligations of Lessee: (1) to pay the price of the lease
according to the terms stipulated; (2) to use the thing
leased as a diligent father of a family, devoting it to
the use stipulated, and in the absence of stipulation, to
that which may be inferred from the nature of the thing
leased, according to the customs of the place; and (3)
to pay the expenses for the deed of lease.210 (e) Right
of Lessee to Suspend Payment of Rent: The lessee may
suspend the payment of the rent in case the lessor fails
to make the necessary repairs or to maintain the lessee
in peaceful and adequate enjoyment of the property
leased.211
5.1.5 Imnlicd New Lease (Tacita ReconduccioriY. (a) Concept:
Tacita reconduccion (or implied new lease) refers to the
right of the lessee to continue enjoying the material or
de facto possession of the thing leased within a period
of time fixed by law. During its existence, the lessee can
prevent the lessor from evicting him from the disputed
premises.2’2 (b) Requisites: (1) the term of the original
contract of lease has expired; (2) the lessor has not
given the lessee a notice to vacate; and (3) the lessee
continued enjoying the thing leased for 15 days with the
acquiescence of the lessor. This acquiescence may be
inferred from the failure of the lessor to serve notice
to vacate upon the lessee.2” (c) Effect of Implied New
Lease: Except for the period, the other terms of the
original contract are deemed revived.214 The “other terms
of the original contract” mentioned in Article 1670, are
only those terms which are germane to the lessee’s right
of continued enjoyment of the property leased,211 such as
22‘hl., citing Chua Tee Dee v. CA, 429 SCRA 418,435 (2004).
“’Art. 1664, NCC.
““Art. 1657, NCC.
211 Art. 1658, NCC.
“’Yuki, Jr. v. Co, G.R. No. 178527, Nov. 27, 2009.
211Art. 1670, NCC; Yuki, Jr. v. Co, supra.
2uhl.
asVda. lie Chua v. 1AC, G.R. No. 70909, Jan. 5, 1994.
J9JC9B0M
R52M9UH7

the amount of the rental, the date when it must be paid,

the care of the property, the responsibility of repairs,
etc.236 But no such presumption may be indulged in
with respect to special agreements which by nature are
foreign to the right of occupancy or enjoyment inherent
in a contract of lease, like the option to buy the leased
premises or a right of first refusal granted in the original
contract.237 (d) Term of Implied New Lease: (1) In case
of urban lands, it is understood to be from year to year,
if the rent agreed upon is annual; from month to month,
if it is monthly; from week to week, if the rent is weekly;
and from day to day, if the rent is to be paid daily;238 (2)
In case of rural lands, it is understood to have been made
for all the time necessary for the gathering of the fruits
which the whole estate leased may yield in one year, or
which it may yield once, although two or more years
may have to elapse for the purpose.23’ (e) Effect When
No Imnlied New Lease: If the lessee continues enjoying
the thing after the expiration of the contract when there
is no implied new lease because the lessor objected to
the continued enjoyment by the lessee, the latter shall
be subject to the responsibilities of a possessor in bad
faith.240
6) Contract for Piece of Work

6.1 Basic Concepts:
6.1.1 Concept: (a) Definition: By the contract for a piece of
work the contractor binds himself to execute a piece
of work for the employer, in consideration of a certain
price or compensation?'" The obligation created on the
part of the contractor is an obligation to do. (b) Two
Kinds: (1) where contractor employs only his labor or
skill; or (2) where contractor employs labor and also
furnishes the material?42
2 "'Dizon v. Magsaysay, 57 SCRA 250 (1974).

2iJid.. reiterated in Vda. t/cClma v. 1AC, supra.
“Art. 1687, in relation Io Art. 1670, NCC.
“Art. 1682, in relation to Art. 1670, NCC.
24,1 Art. 1671, NCC.
241 Art. 1713, NCC.
242M.
J9JC9B0M
R52M9UH7
6.1.2 When Contractor Also Furnishes Materials: (a)

Principal Obligations of Contractor: (1) to deliver the
thing produced; (2) to transfer dominion over the thing;
(3) to warrant that he has the right to transfer ownership
of the thing (warranty of title) and that the thing shall
be free from hidden defects or faults (warranty against
hidden defect).243 (b) Effect of Loss Prior to Delivery:
The contractor shall suffer the loss, unless there has
been delay in receiving the thing produced.244
6.1.3 When Contractor Employs Labor Only: (a) Rule: He
cannot claim any compensation if the work is destroyed
before delivery.243 (b) Exceptions: (1) When there has
been delay in receiving it; or (2) if the destruction was
caused by the poor quality of the material, provided
this fact was communicated in due time to the owner.246
(c) Effect of Defect in Materials: If the work cannot
be completed on account of a defect in the material
furnished by the employer, or because of orders from
the employer, without any fault on the part of the
contractor, the latter has a right to an equitable part
of the compensation proportionally to the work done,
and reimbursement for proper expenses made.247 (d)
Mechanic’s Lien: He who has executed a work upon a
movable has a right to retain it by way of pledge until
he is paid.24" The right of retention is conditioned upon
the execution of work upon the movable. Thus, if the
contractor fails to accomplish the repairs on the truck,
the right to retain the truck in accordance with Article
1731 does not arise.24’
6.1.4 Effect of Acceptance of Work: (a) Rule: Acceptance
of the work by the employer relieves the contractor of
liability for any defect in the work.230 (b) Exceptions:
(1) if the defect is hidden and the employer is not, by his
243Art. 1714, NCC.

244Art. 1717, NCC.
243Art. 1718, NCC.
Mld.
"’Art. 1722, NCC.
24"Art. 1731, NCC.
"’Optimum Motor Center Corp. v. Tan, G.R. No. 170202, July 14, 2008.
"“Art. 1719, NCC.
J9JC9B0M
R52M9UH7

special knowledge, expected to recognize the same; (2)

the employer expressly reserves his rights against the
contractor by reason of the defect;25' and (3) if a building
or edifice falls within 15 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.222 In the latter case, the engineer
or architect shall be solidarity liable with the contractor
if he supervises the construction.22’ If the collapse of
the building within 15 years from the completion of
the structure is by reason of a defect in the plans and
specifications drawn up by the engineer or architect,
or due to the defects in the ground, the engineer or
architect who drew up the plans and specifications shall
be liable.224 The action against the contractor, engineer,
or architect may be brought within 10 years following
the collapse of the building
6.1.5 Extent of Liability of Contractor: (a) Work Done by His
Employees: The contractor is responsible for the work
done by persons employed by him.222 (b) Death and
Physical Injuries Purine Construction: The contractor is
liable for all the claims of laborers and others employed
by him, and of third persons for death or physical
injuries during the construction.222 (c) Unpaid Wages of
Employees: (1) The contractor is liable for the unpaid
wages of his employees; (2) However, the owner is also
liable to pay such unpaid wages "up to the amount owing
from (him) to the contractor at the time the claim is
made. ”22’ To this extent, the owner’s liability is solidary
with the contractor, if both are sued together. But after
payment, the owner can seek reimbursement from the
contractor.25* However, if the owner has already fully
2s'Supra.
2,2 Art. 1723, NCC.
"’/</.
254/<Z
255Art. 1727, NCC.
252Art. 1728, NCC.
2!7JL Investment and Development, Inc. v. Tendon Philippines, Inc., G.R. No. 148596, Jan.
22, 2007; see Article 1729, NCC.
25"W.
J9JC9B0M
R52M9UH7
paid the contractor, the former’s liability ceases.2” But

payments made by the owner to the contractor before
they are due, or renunciation by the contractor of any
amount due him from the owner shall not prejudice the
laborers or employees.260

7) Concept
7.1 Carrier:
7.1.1 Concent and Kinds: A carrier is a person or corporation
who undertakes to transport or convey goods or persons
from one place to another, gratuitously or for hire. The
carrier is classified either as a private/special carrier
or as a common/public carrier.261 (a) Private Carrier: A
private carrier is one who, without making the activity
a vocation, or without holding himself or itself out to
the public as ready to act for all who may desire his
or its services, undertakes, by special agreement in a
particular instance only, to transport goods or persons
from one place to another either gratuitously or for
hire.262 (b) Common Carrier: A common carrier is a
person, corporation, firm, or association engaged in
the business of carrying or transporting passengers or
goods or both, by land, water, or air, for compensation,
offering such services to the public.26’ (c) Distinctions:
(1) the provisions on ordinary contracts of the Civil
Code govern the contract of private carriage; whereas,
contracts of common carriage are governed by the
provisions on common carriers of the Civil Code, the
Public Service Act, and other special laws relating to
transportation; (2) the diligence required of a private
carrier is only ordinary, that is, the diligence of a
good father of the family; whereas, a common carrier
2”Manalo v. Singson, (C.A.) G.R. No. 8944-R, June 13, 1953.

260Art. 1729, NCC.
“'Perefla v. Zarate, 679 SCRA 208 (2012).
262/<Z
™Id.
J9JC9B0M
R52M9UH7

is required to observe extraordinary diligence, and is

presumed to be at fault or to have acted negligently
in case of the loss of the effects of passengers, or the
death or injuries to passengers.214 (d) Test: The true
test for a common carrier is not the quantity or extent
of the business actually transacted, or the number and
character of the conveyances used in the activity, but
whether the undertaking is a part of the activity engaged
in by the carrier that he has held out to the general
public as his business or occupation. If the undertaking
is a single transaction, not a part of the general business
or occupation engaged in, as advertised and held out to
the general public, the individual or the entity rendering
such service is a private, not a common, carrier.2" (e)
Are operators of school bus services private or common
carriers? They are common carriers because they
are: (1) engaged in transporting passengers generally
as a business, not just as a casual occupation; (2)
undertaking to carry passengers over established roads
by the method by which the business was conducted;
and (3) transporting students for a fee. Despite catering
to a limited clientele, the operators operated as a
common carrier because they held themselves out as
a ready transportation indiscriminately to the students
of a particular school living within or near where they
operated the service and for a fee.266
7.2 Obligation of Common Carrier to Ensure Safety of Passengers:
7.2.1 Diligence Required: A common carrier is bound to carry
the passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances.267
Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course
of the trip but for so long as the passengers are within
its premises and where they ought to be in pursuance
264S»/»«.
265/<Z
MId.
267Art. 1755, NCC.
J9JC9B0M
R52M9UH7
to the contract of carriage.268 Also, the duty which the

carrier of passengers owes to its patrons extends to
persons boarding the cars as well as to those alighting
therefrom.269 It has been held that the victim, by stepping
on the platform of the bus, is already considered a
passenger and is entitled to all the rights and protection
pertaining to such a contractual relation.270
7.2.2 Presumption of Fault In Case of Death or Injuries:
(a) Rule: In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or
to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed above.271
(b) Common Carrier Liable for Acts of Employees:
Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the
former’s employees, although such employees may have
acted beyond the scope of their authority or in violation
of the orders of the common carriers.272 This liability of
the common carrier does not cease upon proof that they
exercised all the diligence of a good father of a family
in the selection and supervision of their employees.277
This defense is applicable to the employer only in quasi
delict, not in breach of contract, (c) Effect of Negligence
of Passenger: The passenger must observe the diligence
of a good father of a family to avoid injury to himself.274
If the negligence of the passenger is the proximate
cause of his death or injuries, the common carrier is
not liable. On the other hand, if the proximate cause
of the passenger’s death or injuries is the negligence
of the common carrier, the contributory negligence of
the passenger does not bar recovery of damages for his
’“Light Rail Transit Authority v. Navidad, 397 SCRA 75 (2003), citing Dangwa
Transportation Co., Inc. v. Court of Appeals, 202 SCRA 575.
“’Dangwa Transportation Co., Inc. v. CA, 202 SCRA 574, 581 (1991), citing Del Prado v.
Manila Electric Co., 52 Phil. 900 (1929).
mId.
2,1 Art. 1756, NCC.
272Art. 1759, l“par„ NCC.
277Art. 1759,2“'par., NCC.
274Art, 1761, NCC.
J9JC9B0M
R52M9UH7

death or injuries?” However, the amount of damages

shall be equitably reduced.2’6 (d) Effect of Acts of Other
Passengers or Strangers: If the injuries suffered by a
passenger is by reason of the willful acts or negligence
of other passengers or of strangers, the common carrier
is responsible thereto if its employees, through the
exercise of the diligence of a good father of a family,
could have prevented or stopped the act or omission?”
When intervening acts of strangers or other passengers
is the direct cause of the injury of a passenger, the
degree of care to be exercised by the common carrier
to prevent the incident is only that of a good father of
a family, (e) Effect of Stipulation Limiting Liability
of Common Carrier: The foregoing responsibility of a
common carrier for the safety of passengers cannot be
dispensed with or lessened by stipulation, by the posting
of notices, by statements on tickets, or otherwise?’8
Likewise, the reduction of fare does not justify any
limitation of the common carrier’s liability;2” however,
when a passenger is carried gratuitously, a stipulation
limiting the common carrier’s liability for negligence
is valid, but not for willful acts or gross negligence?80
7.2.3 Effect of Fortuitous Event Upon Carrier’s Liability:
A common carrier may not be absolved from liability
in case of force majeure or fortuitous event alone.
The common carrier must still prove that it was not
negligent in causing the death or injury resulting from
an accident?8' In other words, there must be an entire
exclusion of human agency from the cause of injury or
loss?82
2,5Art. 1762, NCC.

2,6/<Z
2”Art. 1763, NCC.
2,8Art. 1757, NCC.
’’’Art. 1758, 2- par., NCC.
28uArt. 1758, 1“ par., NCC.
281 Yobido v. CA, supra, citing Bachelor Express, Inc. v. CA, 188 SCRA216 (1990).
2,!M.
J9JC9B0M
R52M9UH7
8) Contract of Partnership
8.1 Nature of Contract:

8.1.1 Concept: (a) Definition: By the contract of partnership
two or more persons bind themselves to contribute
money, property, or industry to a common fund, with the
intention of dividing the profits among themselves.2”
(b) Requisites: In order to constitute a partnership, it
must be established that: (1) two or more persons bound
themselves to contribute money, property, or industry
to a common fund; and (2) they intend to divide the
profits among themselves.284 (c) Characteristics of
the Contract: It is consensual, preparatory, principal,
nominate, bilateral, onerous, and commutative, (d) Test
in determining existence of partnership: (1) Ordinarily,
the best evidence of the existence of a partnership is
the contract of partnership or the articles of partnership
itself.2” Thus, as a rule, persons who are not partners
as to each other are not partners as to third persons.
Exception: a partner by estoppel. (2) Co-ownership or
co-possession does not of itself establish a partnership,
whether such co-owners or co-possessors do or do not
share any profits made by the use of the property.287 ( 3)
The sharing of gross returns does not of itself establish
a partnership, whether or not the persons sharing them
have a joint or common right or interest in any property
from which the returns are derived.288 (4) The receipt by
a person of a share of the profits of a business is prima
facie evidence that he is a partner in the business,28’
unless such profits were received in payment: (i) as a
debt by installments or otherwise; (ii) as wages of an
employee or rent to a landlord; (iii) as an annuity to
“Art. 1767, par. 1, NCC.

“Heirs of Tan Eng Kee v. CA, 341 SCRA 740; Tocao v. CA. 342 SC'RA 20; Fue Leung v.
IAC, 169 SCRA 746, citing Yulo v. Yang Chiao Cheng, 106 Phil. 110.
“Heirs of Jose Lim v. Lim, G.R. No. 172690, March 3, 2010.
“Art. 1769(1), NCC.
“Art. 1769(2), NCC.
“Art. 1769(3), NCC.
“Art. 1769(4), NCC.
J9JC9B0M
R52M9UH7

a widow or representative of a deceased partner; (iv)

as interest on a loan, though the amount of payment
varies with the profits of the business; and (v) as the
consideration for the sale of a goodwill of a business or
other property by installments or otherwise.2”
8.1.2 Existence of Juridical Personality: (a) Rule: The
partnership has a juridical personality separate and
distinct from that of each of the partners.”1 To be
considered a juridical personality, it is sufficient that a
partnership must fulfill these requisites: (1) two or more
persons bind themselves to contribute money, property,
or industry to a common fund; and (2) intention on
the part of the partners to divide the profits among
themselves.292 (b) Personality Not Affected: (1) by the
fact that it does not appear in a public instalment, even if
the capital is P3,000 or more; (2) nor by the fact that it is
not recorded in the Securities and Exchange Commission
—failure to register the contract of partnership does
not affect the liability of the partnership and of the
partners to third persons. Neither does such failure to
register affect the partnership’s juridical personality.292
(c) Effect of Articles Kept Secret Arnone Members: If
the articles of the association are kept secret among the
members and wherein any one of the members may
contract in his own name with third persons: (1) as
among the members themselves, such associations and
societies shall have no juridical personality and their
members shall be governed by the provisions relating
to co-ownership;”* and (2) the absence of personality
cannot, however, be invoked against third persons for
the purpose of exempting themselves from complying
with their obligations contracted pursuant to the
stipulations kept secret among themselves, (d) Effect
If Object or Purpose is Unlawful: The contract is void
and the purported partners have no right to participate in
any profits that may have been earned by the unlawful
”°Art. 1769(4), NCC.

291 Art. 1768, NCC.
292Tocao v. CA, 342 SCRA 20.
292Angeles v. Sec. of Justice, 465 SCRA 106.
2MArt. 1775, NCC.
J9JC9B0M
R52M9UH7
partnership enterprise,2’5 but the partners are entitled to

the return of their respective contributions.296 When an
unlawful partnership is dissolved by a judicial decree,
the profits shall be confiscated in favor of the State.297 (e)
Partnership name: A partnership has the right to adopt
any name it may choose. It may or may not include
the name of one or more partners.2’8 However, the use
of the name of a deceased partner in the partnership
name is not allowed.259 In limited partnerships, the law
requires that the word “limited” be included in the name
of the partnership.™ The law prohibits a third person
from including his name in the firm name under pain of
assuming the liability of a partner. Thus, those who, not
being members of the partnership, include their names
in the firm name, shall be subject to the liability of a
partner.501
8.1.3 Requirement of Form: (a) Rule: A partnership may be
constituted in any form.202 (b) Exception: A contract of
partnership is void whenever immovable property is
contributed thereto but an inventory of said property
is not made, signed by the parties, and attached to the
public instrument.202 However, such requirement is
intended primarily to protect third persons.201 Hence,
when the case does not involve third parties who had
been prejudiced, as when the action is between the
partners themselves, they cannot deny the existence of a
partnership simply because of violation of Article 1773
of the NCC.205
’’’Arbes v. Polistico, 53 Phil. 489.

™ld.
1,1An. 1770, par. 2, NCC.
’’’Art. 1815, par. I.NCC.
2”/n re: Petition for Authority to Continue Use of the Firm Name “Sycip”, July 30, 1979.
’“Art. 1844( l)(a), NCC.
201 Art. 1815, par. 2, NCC.
202Art. 1771, NCC.
202Art. 1773, in relation io Art. 1771, NCC.
’"Torres v. CA, 320 SCRA 428 (1999).
205AZ
J9JC9B0M
R52M9UH7

8.2 Classifications of Partnerships:

8.2.1 As to Object or Purpose: (a) Classification: (1) Uni
versal Partnership - where the contract of partnership
encompasses expressly or impliedly either all the
present properties of the partners or just covering
all of the profits;”6 (2) Particular Partnership - one
which has for its object determinate things, their use
or fruits, or a specific undertaking, or the exercise of a
profession or vocation.”’ (b) Two Kinds of Universal
Partnership: (1) Universal Partnership of All Present
Property: (i) shall include all properties of each partner
at the time of constitution and profits that they may
acquire therewith;”" (ii) but shall not include properties
subsequently acquired by each partner thru inheritance,
legacy, or donation, except the fruits thereof.”’ (2)
Universal Partnership of Profits: (i) shall include
properties that the partners may acquire by their industry
or work during the existence of the partnership; (ii)
but shall not include movable or immovable property
which each of the partners may possess at the time of
the celebration of the contract; however, the usufruct
over such properties shall be included, (c) Presumption
In Favor of Universal Partnership of Profits: If not
specified in the articles, the partnership is deemed
only a universal partnership of profits.’10 (d) Persons
Prohibited From Entering Into Universal Partnerships:
Persons who are prohibited from giving each other any
donation or advantage cannot enter into a universal
partnership,’" like the spouses or those merely living
together as husband and wife without the benefit of
marriage.’1’
8.2.2 As to Extent of Partner’s Liability: (a) Classification:
(1) General Partnership - one where all the partners
are unlimitedly liable. All partners shall be liable pro
’“Art. 1777, NCC.

"’AH. 1783, NCC.
""Art. 1779, NCC.
"’Art. 1780, NCC.
’"Art. 1781, NCC.
’"Art. 1782, NCC.
’"Art. 87, FC.
J9JC9B0M
R52M9UH7
rata beyond the partnership assets for all the contracts

which may have been entered into in its name, under
its signature, and by a person authorized to act for the
partnership.313 In addition, the partners can be held
solidarity liable with the partnership specifically in the
following instances: (i) where, by any wrongful act or
omission of any partner acting in the ordinary course of
the business of the partnership or with the authority of
his co-partners, loss or injury is caused to any person,
not being a partner in the partnership, or any penalty
is incurred, the partnership is liable therefor to the
same extent as the partner so acting or omitting to act;
(ii) where one partner acting within the scope of his
apparent authority receives money or property of a third
person and misapplies it; and (iii) where the partnership
in the course of its business receives money or property
of a third person and the money or property so received
is misapplied by any partner while it is in the custody
of the partnership—consistently with the rules on the
nature of civil liability in delicts and quasi-delicts.31'1 (2)
Limited Partnership - where there is one or more general
partners who is/are unlimitedly liable and one or more
limited partners,315 the latter liable for partnership debts
only to the extent of their stipulated contributions under
the articles of partnership, (b) Effects of Being Limited
Partner: (1) as a rule, a limited partner does not become
liable as a general partner to third persons;31'' however,
he becomes liable as a general partner if, in addition
to the exercise of his rights and powers as a limited
partner, he takes part in the control of the business;3”
(2) he has no right to participate in the management of
the firm’s business; otherwise, he becomes liable as a
general partner;318 (3) when the surname of a limited
partner appears in a partnership name he becomes liable
as general partner to partnership creditors who extend
3l3Art. 1816, NCC.

3I4J. Vitug, Concurring Opinion in Lint Tong Lim v. Philippine Fishing Gear Industries,
Inc., 3I7SCRA728.
3l3Art. 1843, NCC.
’“Art. 1848, NCC.
3'7<Z
3IB/</.
J9JC9B0M
R52M9UH7

credit to the partnership without actual knowledge that

he is not a general partner,31’ unless it is also the surname
of a general partner, or prior to the time when the limited
partner became such, the business had been carried on
under the name in which his surname appeared;’20 (4)
the partnership creditors enjoy preference compared to
the limited and general partners in terms of payment
from the partnership property; (5) a limited partner
may also loan money to and transact other business
with the partnership, and, unless he is also a general
partner, receive on account of resulting claims against
the partnership, with general creditors, a pro rata share
of the assets;321 (c) Effects If He is Both General and
Limited Partner: He shall have all the rights and powers
and be subject to all the restrictions of a general partner;
except that, in respect to the return of his contribution,
he enjoys priority with respect to the return of his
contributions as a limited partner.322
8.3 Kinds of Partners:
8.3.1 As to Extent of Liability: (1) General Partner; or (2)
Limited Partner. Discussed above.
8.3.2 As to Nature of Contributions: (a) Classification: (1)
Capitalist Partner - one who contributes either money
or property to the common fund. Such contribution need
not be cash or fixed assets; it could be an intangible like
credit,32’ such as a promissory note or other evidence of
obligation, or even mere goodwill;324 or (2) Industrial
Partner - one who contributes only his industry, (b)
Effects of Being a Capitalist Partner: (1) A capitalist
partner cannot engage for his own account in any
operation or business which is of the same nature as
that of the partnership, unless there is a stipulation to
the contrary.32’ If he does, he shall bring to the common
’’’Art. 1846, Iasi par., NCC.

’“An. 1846, par. l.NCC.
521 Art. 1854, par. l.NCC.
’22Art. 1853, par. 2, NCC.
”’Lim Tong Linr v. Philippine Fishing Gear Industries, Inc., supra.
’“City of Manila v. Cumbe, 13 Phil. 677.
J9JC9B0M
R52M9UH7
funds any profits accruing to him from his transactions;

but he shall personally bear all the losses.’26 But this is
not a ground to exclude him from the partnership. (2)
In the absence of any agreement as to the distribution
of the profits and losses, the capitalist partner is liable
for the losses in the same proportion to what he may
have contributed32’ and any stipulation to the contrary
shall be void.’28 (3) In case of imminent loss of the
business of the partnership and there is a need for
additional capital contribution to save the venture,
the capitalist partner can be compelled to make such
additional contribution.’29 Any partner who refuses to
contribute shall be obliged to sell his interest to the
other partners, except if there is an agreement to the
contrary.330 (c) Effects of Being Industrial Partner: (1)
An industrial partner cannot engage in any kind of
business for himself, unless the partnership expressly
permits him to do so.331 If he does, the capitalist partners
may either: (a) exclude him from the partnership; or
(b) avail themselves of the benefits which he may have
obtained in violation of the prohibition, with a right to
damages in either case.332 (2) As to the distribution of
the profits and losses, an industrial partner shall not be
liable for the losses.333 ( 3) In case of imminent loss of
the business of the partnership and there is a need for
additional capital contribution to save the venture, an
industrial partner cannot be compelled to make such
additional contribution.3"
8.3.3. As to Time of Entry: (a) Classification: (1) Original
Partner - one who became as such at the time of the
constitution of the partnership; and (2) Incoming Partner
- one who became as such as a new member of an
existing partnership, (b) Liability of Incoming Partner:
“Art. 1808, par. 2, NCC.

"’Art. 1797, par. 2, NCC.
“Art. 1799, NCC.
"’Art. 1791, NCC.
330/rf.
"'Art. 1789, NCC.
mId.
"’Art. 1797, par. 2, NCC.
’"Art. 1791, NCC.
J9JC9B0M
R52M9UH7

As to old obligations of the partnership, or obligations

incurred prior to his admission to the partnership, he
is liable thereto as though he had been a partner when
such obligations were incurred. However, his liability
shall be satisfied only out of partnership property, unless
there is a stipulation to the contrary.”’
8.3.4 Other Classifications: (a) Managing Partner: (1)
Definition: One who has been entrusted with the
management of the partnership.”1 (2) Rule as to
management: (i) when the manner of management
has not been agreed upon, all the partners shall be
considered agents and whatever any one of them may
do alone shall bind the partnership;”7 but none may,
without the consent of the others, make any important
alteration in the immovable property of the partnership,
even if it may be useful to the partnership;”* (ii) when
a partner has been appointed manager, he may execute
all acts of administration despite the opposition of
his partners unless he should act in bad faith—if his
appointment is made in the articles of incorporation,
his power is irrevocable without just or lawful cause
and the vote of the partners representing the controlling
interest shall be necessary for such revocation of power,
but if his power was granted only after the partnership
has been constituted, it may be revoked at any time.’”
(iii) if two or more partners have been entrusted with the
management of the partnership and there is no agreement
to the contrary, each one may separately execute all acts
of administration, but if any of them should oppose
the acts of the others, the decision of the majority shall
prevail and, in case of a tie, the decision of the partners
owning the controlling interest shall be necessary;140
(iv) in case it should have been stipulated that none
of the managing partners shall act without the consent
of the others, the concurrence of all shall be necessary
’’’Art. 1826, NCC.

’“Arts. 1800 and 1801, NCC.
’’’Art. 1803(1), NCC.
’’“Art. 1803(2), NCC.
’’’Art. 1800, NCC.
“"Art. 1801, NCC.
J9JC9B0M
R52M9UH7
for the validity of the acts.341 (b) Dormant/Silent/Secret

Partner: (1) Definition: One whose connection to the
partnership is concealed and who does not take any
active part in it.342 (2) Effect of Being Dormant or Silent
Partner: (i) the dissolution of the partnership does not
of itself discharge the existing liability of any partner,343
including the unknown or dormant partner; (ii) but with
respect to obligations incurred by the partnership after
its dissolution, the liability of the unknown or dormant
partner shall be satisfied out of partnership assets
alone344 —his liability thereto is only up to the extent
of his share in the partnership assets, (c) Liquidating
Partner: (1) Definition: One who takes charge of the
liquidation and winding up of the partnership affairs.343
(2) Rule as to Who Has Right to Wind Up: (i) if there is
an agreement, it is the partner provided in the agreement
who has the right to wind up the partnership affairs;344
he is called “liquidating partner”; (ii) in the absence
of agreement, the partners who have not wrongfully
dissolved the partnership or the legal representative of
the last surviving partner, not insolvent, has the right to
wind up the partnership alTairs.347 (3) Effect of Acts of
Partner Who Has No Authority to Wind Up: (i) Rule:
the partnership is not bound by any of his acts;348 (ii)
Exceptions: the partnership is bound by his acts if he
transacted with one who had extended credit to the
partnership prior to dissolution and had no knowledge
or notice of his want of authority or with one who has
no knowledge or notice of his want of authority because
the fact of his want of authority has not been advertised
in a newspaper of general circulation in the place (or in
each place if more than one) at which the partnership
"'Art. 1802, NCC.

"’Art. 1834, par. 2, NCC.
"’Art. 1835, l“par., NCC.
344Art. 1834, par. 2, NCC.
"’Art. 1836, NCC.
Mld.
vlId.
"’Art. 1834, par. 3, No. 3, NCC.
J9JC9B0M
R52M9UH7

business was regularly carried on.”’ (4) Retiring and

Continuing Partners: (1) Definition: In case the business
of the partnership is continued after its dissolution,
those who remain in the partnership are referred to as
the “continuing partners,” whereas, those who cease
to be part of the partnership are referred to as “retiring
partners.”’’0 (2) Liability of Retiring Partner: (i) As
to existing obligations upon dissolution, he remains
liable;’’1 unless there is an agreement that he shall
no longer be liable between himself, the partnership
creditor and the person or partnership continuing the
business;’’’ if the agreement is only among the partners
themselves, such agreement is binding upon them but
this does not relieve the retiring partner from liability
to the partnership creditors; (ii) as to subsequent
obligations, he is no longer liable provided he has
given the necessary notice of withdrawal. (5) Partner by
Estoppel: (1) Definition: Although not an actual partner,
he has made himself liable as such by holding himself
out as a partner or allowing himself to be so held out.’’’
(2) Effect of Acts Executed bv Partner bv Estoppel: (i)
when all the members of existing partnership consent
to the representation, a partnership act or obligation
results’” —and all shall be liable, including the partner
by estoppel as though he were an actual member of the
partnership;’’’ (ii) when less than all the partners consent .
to such representation, no partnership obligation is
created; instead, it shall be considered the joint act
or obligation of the person acting and the persons
consenting to the representation’’1' —and each shall be
liable p/v rata.
^Supra.
“"Arts. 1837, 1839, 1840. and 1841, NCC.
“'Art. 1835,2"* par., NCC.
’”/</.
’’’Art. 1825, par. I, NCC.
’“Art. 1825, par. 2, NCC.
“‘Art. 1825, par. 2, NCC.
J9JC9B0M
R52M9UH7
8.4 Obligations of Partners:
8.4.1 Other Obligations Among Themselves Aside from

Those Already Discussed: (a) Personal Use of
Partnership Money: When a partner uses partnership
money for his personal use, he becomes a debtor for
the interest and damages,357 without need of demand.
His liability for interest and damages shall begin from
the time he converted the amount to his own use.35*
(b) Individual Transaction Using Firm’s Property or
Connected with Partnership Affairs: Every partner must
account to the partnership for any benefit derived by
him without the consent of the other partners from any
transaction connected with the formation, conduct, or
liquidation of the partnership or from any use by him
of its property.35’ He holds any such profit as trustee.360
(c) When Managing Partner Collects Personal Credit
and Firm’s Credit: When a managing partner collects
a credit from a debtor who owes him in his own name
and the partnership, and both debts being demandable,
the sum thus collected shall be applied to the two
credits in proportion to their amounts, even though
the managing partner may have given receipt for his
own credit only; but should he have given it for the
account of the partnership credit, the amount shall be
fully applied to the latter.56' (d) Damages Suffered by
Partnership Thru His Fault: Every partner is responsible
to the partnership for damages suffered by it through
his fault and he cannot compensate his liability with the
profits and benefits which he may have earned for the
partnership by his industry.362 However, the courts may
equitably lessen the foregoing responsibility if through
the partner’s extraordinary efforts in other activities of
the partnership, unusual profits have been realized.363
ls’Art. 1788,2nd par., NCC.

"‘Id.
3i’Art. 1807, NCC.
MId.
361 Art. 1792, I “par., NCC.
362Art. 1794, NCC.
3a/d.
J9JC9B0M
R52M9UH7

8.4.2 Obligations to Third Persons: (a) Binding the

Partnership: (1) General Rule: Acts of every partner
bind the partnership provided that: (i) the act is for
apparently carrying on in the usual way the business of
the partnership of which he is a member; and (ii) he acts
in the name of the partnership.36* (2) Exception: the act
does not bind the partnership when: (i) the partner so
acting has in fact no authority to act for the partnership
in the particular matter; and (ii) the person with whom
he is dealing has knowledge of the fact that he has no
such authority.365 (b) When Act is Not Apparently for
Carrying On Partnership Business: (1) General Rule:
The act does not bind the partnership.366 (2) Exception:
The act binds the partnership when such partner has
been authorized by the other partners with respect to
that particular matter.367 (c) Acts Requiring Concurrence
of All Partners: (1) assigning of partnership property
in trust for creditors or on the assignee’s promise to
pay the debts of the partnership; (2) disposition of the
goodwill of the business; (3) doing any other act which
would make it impossible to carry on the ordinary
business of a partnership; (4) confession of a judgment;
(5) entering into a compromise concerning a partnership
claim or liability; (6) submitting a partnership claim or
liability to arbitration; and (7) renouncing a partnership
claim.368 (d) Admission Made bv a Partner: (1) Made
Before Dissolution: It binds the partnership when: (i) it
concerns partnership affairs, and (ii) it is within the scope
of his authority.36’ (2) Made After Dissolution: It binds
the partnership only if it is necessary for the winding up
of partnership affairs.370 (e) Notice to Partner: (1) Rule:
It operates as notice to the partnership when: (i) it is
notice to any partner relating to partnership affairs; (ii)
upon knowledge of the partner acting in the particular
matter, acquired while a partner or then present to his
I6*Art. 1818, par. l.NCC. f

M>ld.
J66Art. 1818, par. 2, NCC.
“’/</.
““Art. 1818, par. 3, NCC.
“’Art. 1820, NCC.
370Art. 1834, NCC.
J9JC9B0M
R52M9UH7
mind; or (iii) upon knowledge of any other partner who

reasonably could and should have communicated it to
the acting partner.”1 (2) Exception: It does not operate
as notice to the partnership when the same is a case
of fraud on the partnership, committed by or with the
consent of that partner.’" (f) For Delicts or Ouasi-Delicts
Committed bv a Partner: The partnership becomes liable
to the same extent as the partner so acting or omitting to
act when: (1) it is committed by a partner acting in the
ordinary course of the business of the partnership; or
(2) with the authority of his co-partners.”3 (g) For Acts
of Conversion or Misappropriation: The partnership
is liable for an act of conversion or misappropriation
committed by a partner in the following cases: (1) where
the partner who received and misapplied the money or
property of a third person acted within the scope of his
apparent authority; or (2) where the money or property
of a third person was received by the partnership in
the course of its business and it was misapplied by any
partner while it was in the custody of the partnership.”4
8.4.3 Individual Liability for Partnership Obligations: (a)
For Obligations Arising From Contracts: All partners,
including industrial ones, shall be liable pro rata
(not solidarity) with all their property and after all
the partnership assets have been exhausted.”3 The
individual liability of the partners for partnership
debts is secondary, their individual assets becoming
answerable only where there are no firm assets or after
they have become exhausted, (b) For Consenting to
Acts of a Partner hv Eslonpel: (1) when all partners
consented, partnership liability results;”6 hence, all
partners shall be liable pro rata (not solidarity) with all
their property and after all the partnership assets have
been exhausted;3” (2) when not all consented, those
371 Art. 1821, NCC.

mId.
’"Art. 1822, NCC.
’"Art. 1823, NCC.
’’’Art. 1816, NCC.
’"Art. 1825, par. 2, NCC.
’’’Art. 1816, NCC.
J9JC9B0M
R52M9UH7

who consented shall be liable merely as joint debtors,

pro rata.™ As to the partner by estoppel: (1) when all
partners consented, he is also liable as though he were
an actual member of the partnership;’” (2) when not all
consented, he is liable pro rata with the other partners
so consenting.’80
8.5 Dissolution and Winding Up:
8.5.1 Causes for Dissolution Without Violation ofAgreement:
(a) Termination of the definite term or particular
undertaking specified in the agreement:’*' the dissolution
does not give rise to any liability for damages and none
of the partners shall be disqualified to participate in the
winding up of the affairs of the partnership; (b) Express
will of any partner in a partnership at will acting in
good faith:’82 (1) Definition of Partnership At Will:
If the partnership has no fixed term or no particular
undertaking is specified.in the agreement, it is therefore
a partnership at will predicated on their mutual desire
and consent, and it may be dissolved by the will of a
partner.’8’ (2) Effect of Good Faith: If the partnership
is a partnership at will, it can be dissolved whether
acting in good faith or in bad faith. If he acts in good
faith, he does not become liable for resulting damages
to the firm or his co-partners. But if he acts in bad faith,
he becomes answerable for the losses caused by the
dissolution, (c) Express Will of All Partners:’” (1) the
partnership can be dissolved at any time, even before
the expiration of the term agreed upon or the completion
of its particular undertaking;’8’ and (2) none of the
partners shall be liable for damages and none shall be
disqualified to participate in the winding up of the affairs
of the partnership, (d) Exnulsion of Any Partner Bona
’’’Art. 1825. par. 2, NCC.

’“/</.
’“'Art. 1830(I)(a), NCC.
’"’Art. 1830(l)(b), NCC.
’“’Tocao v. CA, G.R. No. 127405, Oct. 4, 2000.
’“Art. 1830(l)(c), NCC.
’“W.
J9JC9B0M
R52M9UH7
firfe:”6 (1) It is necessary that the power of expulsion is

conferred by the agreement between the partners and is
exercised in good faith; otherwise, the expulsion is not
valid;’” (2) if the expulsion is valid, the expelled partner
has no right to wind up the affairs of the partnership’8*
or to elect to continue the business of the partnership.’89
Note that in the absence of an express agreement, there
is no right to expel any member, except in the case of an
industrial partner who engages in business for himself
without express permission from the partnership.”0
8.5.2 Causes for Dissolution in Violation of Agreement:
Among partners, mutual agency arises and the doctrine
of delectus personae allows them to have the power,
although not necessarily the right, to dissolve the
partnership.”' However, an unjustified dissolution by
the partner can subject him to a possible action for
damages.”2
8.5.3 Causes for Dissolution By Operation of Law: (a)
Partnership Becomes Unlawful: It refers to any event
which makes it unlawful for the business of the
partnership to be carried on or for the members to carry
it on in partnership.’” (b) Loss of Specific Thing: In the
following cases: (1) the specific thing which a partner
had promised to contribute to the partnership perished
before the delivery; or (2) loss of the thing before or
after delivery, when the partner who contributed it
having reserved ownership thereof, has only transferred
to the partnership the use or enjoyment of the same.”*
But the partnership is not dissolved by the loss of the
thing when it occurs after the partnership has acquired
’“‘Art. 183O( 1 )(d), NCC.

mld.
u,An. 1836, NCC.
’’’Art. 1837, 2nd par.. No. 2, NCC.
3wSce Art. 1789, NCC.
’’'Ortega v. CA, 245 SCRA 529 (1995).
’”/</.
’’’Art. 1830(3), NCC.
’"Art. 1830(4), NCC.
J9JC9B0M
R52M9UH7

the ownership thereof.”5 (c) Death of Any Partner.”6

The individual property of a deceased partner shall be
liable for all obligations of the partnership incurred
while he was a partner, but subject to the prior payment
of his separate debts.’” (d) Insolvency of Any Partner:”*
and (e) Civil Interdiction of Any Partner?”
8.5.4 Dissolution Caused By Decree of Court: (a) On
Application Bv or For a Partner: In the following
instances: (1) a partner has been declared insane in
any judicial proceeding or is shown to be of unsound
mind; (2) a partner becomes in any other way incapable
of performing his part of the partnership contract; (3)
a partner has been guilty of such conduct as tends to
affect prejudicially the carrying on of the business; (4)
a partner willfully or persistently commits a breach of
the partnership agreement, or otherwise so conducts
himself in matters relating to the partnership business
that it is not reasonably practicable to carry on the
' business in partnership with him; (5) the business of the
partnership can only be carried on at a loss; or (6) other
circumstances that may render a dissolution equitable."0
(b) At Instance of Purchaser of Partner’s Interest: In the
following cases: (1) after the termination of the specified
term or particular undertaking; or (2) at any time if the
partnership was a partnership at will when the interest
was assigned or when the charging order was issued."1
8.5.5 Effects of Dissolution: (a) On Existence of Partnership:
On dissolution, the partnership is not terminated but
continues until the winding up of partnership affairs
is completed."’ Stated otherwise, upon its dissolution,
the partnership continues and its legal personality is
retained until the complete winding up of its business
mld.
’'"Art. 1830(5), NCC.
’’’Art. 1835, 3" par., NCC.
’’“Art. 1830(6), NCC.
’"Art. 1830(7), NCC.
’“Art. 1831, par. I, NCC.
"'Art. 1831, par. 2, NCC.
"’Art. 1825, NCC.
J9JC9B0M
R52M9UH7
culminating in its termination.40’ (b) Effect on Existing

Liability of Any Partner: (1) Rule: The dissolution of
the partnership does not of itself discharge the existing
liability of any partner.404 (b) Exception: A partner is
discharged from any existing liability upon dissolution
by an agreement to that effect between himself, the
partnership creditor, and the person or partnership
continuing the business."5 (c) Effect on Authority to
Act for Partnership as Between Partners: (1) General
Rule: The dissolution terminates all authority of any
partner to act for the partnership."6 Hence, the right
of a partner to bind the partnership to new contracts
or obligations (or new business) is terminated upon
dissolution. (2) Exceptions: (i) if the act is necessary to
wind up partnership affairs; (ii) if the act is to complete
transactions begun but not then finished;"7 or (iii) if the
dissolution is caused by the act, death, or insolvency of
a partner, each partner is liable to his co-partners for
his share of any liability created by any partner acting
for the partnership in relation to “new businesses” as
if the partnership had not been dissolved, unless the
dissolution being by act of any partner, the partner
acting for the partnership (who makes new contracts or
obligations) had knowledge of the dissolution; or the
dissolution being by the death or insolvency of a partner,
the partner acting for the partnership (who makes new
contracts or obligations) had knowledge or notice of the
death or insolvency."6 (d) Effect on Authority to Act
for Partnership as to Third Persons: A partner can bind
the partnership with respect to third persons: (1) by any
act appropriate for winding up partnership affairs or
completing transactions unfinished at dissolution;"9 (2)
by any transaction which would bind the partnership if
dissolution had not taken place provided that the other
party to the transaction (third person): (i) had extended
■“’Ortega v. CA, 245 SCRA 529.

■‘"‘Art. 1835, par. I.NCC.
■“’Art. 1835, par. 2, NCC.
""Ari. 1832, par. I.NCC.
"’/</.
"“An. 1833, NCC.
■'"’Art. 1834, par. 1, No. I.NCC.
J9JC9B0M
R52M9UH7

credit to the partnership prior to dissolution and had no

knowledge or notice of the dissolution; or (ii) though
he had not so extended credit, had nevertheless known
of the partnership prior to dissolution, and, having
no knowledge or notice of dissolution, the fact of
dissolution had not been advertised in a newspaper
of general circulation in the place (or in each place if
more than one) at which the partnership business was
regularly carried on.410 (e) When Partnership Not Liable
for Any Act of Partner After Dissolution: (1) where
partnership is dissolved because it is unlawful to carry
on the business, unless the act is appropriate for winding
up partnership affairs; (2) where the partner has become
insolvent; or (3) where the partner has no authority to
wind up partnership affairs; except by a transaction
with a third person who: (i) had extended credit to a
partnership prior to dissolution and had no knowledge or
notice of his want of authority; or (ii) had not extended
credit to the partnership prior to dissolution, and, having
no knowledge or notice of his want of authority, the
fact of his want of authority has not been advertised in
a newspaper of general circulation in the place (or in
each place if more than one) at which the partnership
business was regularly carried on.4"
9) Contract of Agency
9.1 Nature of Contract:
9.1.1 Concept: (a) Definition: By the contract of agency a
person (called the “agent”) binds himself to render
some service or to do something in representation or
on behalf of another (called the “principal”), with the
consent or authority of the latter.412 The essence of
agency is representation. For a contract of agency to
exist, it is essential that the principal consents that the
other party, the agent, shall act on its behalf, and the
410Art. 1834, par. 1, No. 2, NCC.

*"Id.
4,2Art. 1868, NCC.
J9JC9B0M
R52M9UH7
agent consents so as to act.413 The most characteristic

feature of an agency relationship is the agent’s power
to bring about business relations between his principal
and third persons.414 (b) Elements: (1) consent, express
or implied, of the parties to establish the relationship;
(2) object is the execution of a juridical act in relation
to a third person; (3) agent acts as a representative and
not for himself; and agent acts within the scope of his
authority.413 (c) Distinguished from Other Relations:
(1) From Assignment: In agency, the agent acts not on
his own behalf but on behalf of his principal. While
in assignment, there is total transfer or relinquishment
of right by the assignor to the assignee. The assignee
takes the place of the assignor and is no longer bound
to the latter.416 (2) From Lease of Service: (i) in agency,
the basis is representation; while in lease of service,
it is employment; (ii) in agency, the agent exercises
discretionary powers, while in lease of service, the lessee
ordinarily performs only ministerial functions;417 and
(iii) in agency, three persons are involved: the principal,
the agent, and the third persons with whom the agent has
contracted; while in lease of service, only two persons
are involved: the lessor (master or employer) and the
lessee (servant or employee), (d) Characteristics of
Contract: Agency is preparatory, consensual, nominate,
bilateral, and generally onerous.
9.1.2 Object or Subject Matter: (a) Rule: The object of every
contract of agency is the execution of a juridical act
in relation to a third person.41* The rule is that what a
man may do in person he may do through another.41’
(b) Exceptions: (1) peculiarly personal acts may not be
delegated; and (2) illegal or unlawful acts may not be
validly delegated.
4l3Apex Mining Co., Inc. v. Southeast Mindanao Gold Mining Corp., 492 SCRA 355.
4l4Nielson & Co., Inc. v. Lepanto Consolidated Mining Co., 26 SCRA 540.
415 Yu Eng Cho v. Pan American World Airways, Inc., 328 SCRA 717.
4,6Apcx Mining Co., Inc. v. Southeast Mindanao Gold Mining Corp., supra.
4l7Nielson & Co., Inc. v. Lepanto Consolidated Mining Co., supra.
JI8Rallos v. Felix Go Chan & Sons Realty Corp., 81 SCRA 251 (1978).
419Philpolts v. Philippine Manufacturing Co., 40 Phil. 471 (1919).
J9JC9B0M
R52M9UH7

9.2 Creation and Existence of Agency:

9.2.1 Classification of Agency: (a) As to Manner of Creation:
(1) Actual Agency - an agent-principal relationship
actually exists and consent was given; or (2) Apparent
or Ostensible Agency (Agency By Estoppel) - where
the agency is not the result of consent but by the actions
of a principal or an employer in somehow misleading
the public into believing that the relationship or the
authority exists.420 (b) As to Quantity of Transactions:
(1) General Agency - it comprises all the business of
the principal;421 or (2) Special Agency - it comprises
one or more specific transactions.422 (c) As to Nature of
Acts Authorized: (1) Agency Couched in General Terms
- it comprises only acts of administration, even if the
principal should state that he withholds no power or
that the agent may execute such acts as he may consider
appropriate, or even though the agency should authorize
a general and unlimited management;423 or (2) Agency
Couched in Specific or Explicit Terms - it indicates
the particular function or functions which the agent
is authorized to exercise, whether the same be acts of
administration or acts of dominion.
9.2.2 Conferment of Mandate in Actual Agency: (a) How
Made: It may be made expressly or impliedly. It may
also be given orally, unless the law requires a specific
form.424 (b) Express Mandate: (1) General Rule: No form
is required.425 (2) Exception: When the agency relates to
the sale of a piece of land or any interest therein, the
authority of the agent must be in writing; otherwise, the
sale shall be void.426 (c) Implied Conferment of Mandate:
(1) Implied from acts of the principal, from his silence
or lack of action, or his failure to repudiate the agency,
420Sargasso Construction & Development Corp./Pick & Shovel. Inc./Allantic Erectors, Inc.
(Joint Venture) v. Philippine Ports Authority, G.R. No. 170530, July 5, 2010, citing Professional
Services, Inc. v. Aguna, 513 SCRA 500 (2007).
421 Art. 1876, par. 2, NCC.
422/<Z
421 Art. 1877, NCC.
424Art. 1869, NCC.
425M.
426Art. 1874, NCC.
J9JC9B0M
R52M9UH7
knowing that another person is acting on his behalf

without authority."’ (d) Acceptance of Mandate: May
also be express, or implied from his acts which carry out
the agency, or from his silence or inaction according to
the circumstances."8 Between persons who are present,
the acceptance of agency may also be implied if the
principal delivers his power of attorney to the agent
and the latter receives it without any objection."’ For
persons who are absent, the acceptance of the agency
cannot be implied from the silence of the agent, except:
(1) when the principal transmits his power of attorney to
the agent, who receives it without any objection; or (2)
when the principal entrusts to him by letter or telegram
a power of attorney with respect to the business in
which he is habitually engaged as an agent, and he did
not reply to the letter or telegram.430
9.2.3 Agency By Estoppel: (a) Concept: One who clothes
another apparent authority as his agent, and holds
him out to the public as such, cannot be permitted to
deny the authority of such person to act as his agent,
to the prejudice of innocent third parties dealing with
such person in good faith."' (b) Requisites: (1) the
principal manifested a representation of the agent’s
authority or knowingly allowed the agent to assume
such authority; (2) the third person, in good faith,
relied upon such representation; and (3) relying upon
such representation, such third person has changed his
position to his detriment. An agency by estoppel, which
is similar to the doctrine of apparent authority, requires
proof of reliance upon the representations, and that, in
turn, needs proof that the representations predated the
action taken in reliance."2 (c) How It May Arise: (1)
By Snecial Information: If a person specially informs
another that he has given a power of attorney to a third
person, the latter thereby becomes a duly authorized
"’Art. 1869, NCC.

"‘Art. 1870, NCC.
"’Art. 1871, NCC.
""Art. 1872, NCC.
"'B.H. Macke, el al. v. Camps, G.R. No. 2962, Feb. 27, 1907.
"’Litonjua, Jr. v. Elcmit Corporation, 490 SCRA 204 (2006).
J9JC9B0M
R52M9UH7

agent with respect to the person who received the special

information.433 Such power shall continue to be in full
force until the notice is rescinded in the same manner
in which it was given.434 (2) By Public Advertisement:
If a person states by public advertisement that he has
given a power of attorney to a third person, the latter
thereby becomes a duly authorized agent with regard
to any person.433 Such power shall continue to be in full
force until the notice is rescinded in the same manner in
which it was given.436
9.3 Extent of Agency:
9.3.1 As to Quantity of Transactions Covered: (a) General
Agency - when it comprises all the business of the
principal;437 or (b) Special Agency - when it comprises
one or more specific transactions.438
9.3.2 As to Nature ofActs Authorized: fa) Agency Couched in
General Terms: it comprises only acts of administration,
even if the principal should state that he withholds no
power or that the agent may execute such acts as he may
consider appropriate, or even though the agency should
authorize a general and unlimited management;43’ (b)
Agency Couched in Explicit or Specific Terms: the
agency indicates the particular function or functions
which the agent is authorized to exercise, whether the
same be acts of administration or acts of dominion.
9.3.3 Power of Attorney: (a) Definition: A power of attorney
is only but an instrument in writing by which a person,
as principal, appoints another as his agent and confers
upon him the authority to perform certain specified acts
on behalf of the principal.4* It must be strictly construed
and pursued. The instrument will be held to grant only
those powers which are specified therein, and the agent •
433Art. 1K73, l“par„ NCC.

434Art. 1873, 2nd pur., NCC.
433Art. 1873, I-par., NCC.
436Art. 1873,2'“ par., NCC.
437Art. 1876, 2"“ pur., NCC.
43«/</.
43’Art. 1877, NCC.
““Angeles v. PNR, 500 SCRA 444.
J9JC9B0M
R52M9UH7
may neither go beyond nor deviate from the power

of attorney."' (b) Formalities Required: The law does
not even require that the special power of attorney be
in writing, but the same must be duly established by
evidence other than the self-serving assertion of the
party claiming that such authority was verbally given
him."2 The requirements ofa special power of attorney in
Article 1878 of the Civil Code and of a special authority
in Rule 138 of the Rules of Court refer to the nature of
the authorization and not its form."3 The exception to
this rule is the requirement in Article 1874 of the Civil
Code that the authority of the agent to sell a piece of land
or any interest therein be in writing; otherwise, the sale
is void, (c) General and Special Powers of Attorney: A
general power permits the agent to do all acts for which
the law does not require a special power.*" However, the
special power of attorney can be included in the general
power when it is specified therein the act or transaction
for which the special power is required."5 Thus, even
if a document is titled as a general power of attorney,
the requirement of a special power of attorney is met if
there is a clear mandate from the principal specifically
authorizing the performance of the act."6 (d) When
Special Powers Necessary: (1) to make payments as are
not usually considered acts of administration;(2) to
effect novations which put an end to obligations already
in existence at the time the agency was constituted; "•
(3) to compromise, to submit questions to arbitration,
to renounce the right to appeal from judgment, to waive
objections to the venue of an action or to abandon a
prescription already acquired"’ —but a special power
to compromise does not authorize submission to
‘"Supra.
"2Home Insurance Co. v. Unites Slates Lines Co., 21 SCR A 863 (1967).
"3Lim Pin v. Liao Tan, G.R. No. L-47740, July 20, 1982, 200 Phil. 685.
“Dominion Insurance Corp. v. CA, supra.
“Bravo-Guerrero v. Bravo, G.R. No. 152658, July 29, 2005, citing Veloso v. CA, 260
SCRA 593 (1996).
mId., citing Lim Pin v. Liao Tan, supra.
“Art. 1878(1), NCC.
“Art. 1878(2), NCC.
“Art. 1878(3), NCC.
J9JC9B0M
R52M9UH7

arbitration;4’0 (4) to waive any obligation gratuitously;4’1

(5) to enter into any contract by which the ownership
of an immovable is transmitted or acquired, either
gratuitously or for a valuable consideration,4” to create
or convey real rights over an immovable property,4” and
to lease any real property to another person for more
than one year;4” —a special power to sell excludes the
power to mortgage; and a special power to mortgage
does not include the power to sell;4” (6) to make gifts,
except customary ones for charity or those made to
employees in the business managed by the agent;456 (7) to
loan or borrow money, unless the latter act (borrowing)
be urgent and indispensable for the preservation of
the things which are under administration,4” and to
obligate the principal as a guarantor or surety4” —
there is a difference between authority to mortgage and
authority to contract an obligation4” and the authority to
mortgage does not carry with it the authority to contract
obligation;460 thus, where the power of attorney given
to the husband by the wife was limited to a grant o'
authority to mortgage a parcel of land titled in the wife’s
name, the wife may not be held liable for the payment
of the mortgage debt contracted by the husband;461 (8)
to bind the principal to render some service without
compensation460 and to bind the principal in a contract of
partnership;46’ (9) to accept or repudiate an inheritance;464
(10) to ratify or recognize obligations contracted
““Art. 18X0, NCC.

4)1 Art. 1878(4), NCC.
4>-’Art. 1878(5), NCC.
“’Art. 1878(12), NCC.
“4Art. 1878(8), NCC.
4,1 Art. 1879, NCC.
4!6Art. 1878(6), NCC.
“’Art. 1878(7), NCC.
“‘Art. 1878(11), NCC.
4”Dc Villa v. Fabricante, 105 Phil. 672 (1959).
“T'NH v. Sta. Maria, 29 SCRA 303 (1969).
“'De Villa v. Fabricante, supra.
“’Art. 1878(9), NCC.
“‘Art. 1878(10), NCC.
“‘Art. 1878(13), NCC.
J9JC9B0M
R52M9UH7
before the agency;465 and (11) Any other act of strict

dominion.4'4' Each of the powers enumerated above are
named “acts of strict dominion,” and cannot be implied
powers; and that one form of named special power
cannot give the presumption that it includes under any
form of construction or interpretation another special
power of attorney.46’ Thus, the power to mortgage does
not carry the implied power to represent the principal
in litigation.46’ However, every grant of power implies
and carries with it, as an incident, authority to do acts,
or use whatever means are reasonably necessary and
proper to the accomplishment of the purpose for which
the agency was created, unless the inference of such
power is expressly excluded by the instrument creating
the agency or by the circumstances of the business
to which the agency relates.469 For example, when an
attorney-in-fact has been empowered to pay the debts of
the principal and to employ legal counsel to defend the
principal’s interest, he has the implied power to pay on
behalf of the principal the attorney’s fees charged by the
lawyer.4™
9.4 Duties and Liabilities of the Parties:
9.4.1 Duties and Liabilities of Aeent to Principal: (a) When
Auencv is Declined: in case a person declines an agency,
he is bound to observe the diligence of a good father of
a family in the custody and preservation of the goods
forwarded to him by the owner until the latter should
appoint an agent or take charge of the goods.4’1 (b)
Duty to Advance Necessary Funds: Only if stipulated."2
However, even if there is such stipulation, the agent
cannot be compelled to advance the necessary funds if the
principal is insolvent."1 (c) Duly in Case of Principal’s
"Art. 1878(14), NCC.

"Art. 1878(15), NCC.
M1See Rodriguez v. Paminluan and De Jesus, 37 Phil. 876.
“"Valmonte v. CA, 252 SCRA 92 (1996).
46’2 CJ. 578-580.
■"“Municipal Council of Iloilo v. Evangelista, 55 Phil. 290 (1930).
"'Art. 1885, NCC.
"-’Art. 1886, NCC.
m!d.
J9JC9B0M
r
R52M9UH7

Death: The death of the principal extinguishes the

agency but the agent still has the obligation to finish the
business already begun before the death of the principal,
should delay entail any danger.474 (d) Appointment of
Substitute: (1) Rule: The agent may appoint a substitute,
except if the principal has prohibited him from doing
so.475 (2) If Authorized bv Principal: The acts of the
substitute will bind the principal. If the agent appointed
a substitute designated by the principal, the agent is not
liable for the acts of the substitute. If the agent appointed
a substitute of his own choice, he is also not liable for
the acts of the substitute unless he appointed a person
who was notoriously incompetent or insolvent.476 If he
appointed a substitute who is notoriously incompetent or
insolvent, the principal may furthermore bring an action
against the substitute with respect to the obligations
which the latter has contracted under the substitution.477
I (2) If Not Authorized But Not Prohibited: The acts of
II the substitute will bind the principal but the agent will
be liable for the acts of the substitute.478 The principal
may furthermore bring an action against the substitute
with respect to the obligations which the latter has
contracted under the substitution.47’ (3) If Prohibited:
I
The acts of the substitute shall not be enforceable
against the principal unless the same are ratified by
the latter.480 (e) Duty to Follow Instructions: (1) Rule:
The agent is required to act in accordance with the
instructions of the principal.481 (2) Exceptions: (i) if he
performs the agency in a manner more advantageous
to the principal than that specified by the latter;487 and
(ii) in case of sudden emergency not caused by the
agent’s fault, where there is time to communicate with
the principal, but something must be done and a strict
474Art. 1884, par. 2, NCC.

478Art. 1892, NCC.
476Art. 1892, par. I, No. 2, NCC.
477Art. 1893, NCC.
478Arl. 1892, par. I, No. I, NCC.
4,''Art. 1893, NCC.
480Escueta v. Lim, 512 SCRA 411 (2007), in relation to Art. 1892, last par., NCC.
481 Art. 1887, par. l.NCC.
482Art. 1882, NCC.
J9JC9B0M
R52M9UH7
compliance with the instructions becomes impossible or

would be detrimental to the interests of the principal.4’’
(f) Liability by Reason of Conflict of Interest: The agent
shall be liable for damages to the principal if, there
being a conflict between his interests and those of the
principal, he should prefer his own.484 (g) If Authorized
to Borrow Money: Agent can be the lender at the
current rate of interest.485 (h) If Authorized to Lend At
Interest: Agent cannot borrow it without the consent of
the principal.486 (i) If Authorized to Sell: Agent cannot
buy for himself without the consent of the principal;
otherwise, the contract is void.487 (j) Duty to Exercise
Due Diligence: (1) Rule: In the absence of instructions
from the principal, the agent, in the execution of the
agency, must do all that a good father of a family would
do, as required by the nature of the business.488 Hence,
the agent also has the obligation not to carry out an
agency if its execution would manifestly result in loss
or damage to the principal.48’ (2) Liability for Fraud and
Negligence: The agent is responsible not only for fraud,
but also for negligence.4’0 Pursuant to this rule, the law
imposes upon the agent the absolute obligation to make
a full disclosure or complete account to his principal of
all his transactions and other material facts relevant to
the agency and to deliver to the principal whatever he
may have received by virtue of the agency, even though
it may not be owing to the principal,49' so much so that
the law does not countenance any stipulation exempting
the agent from such an obligation and considers such
an exemption as void.4” (3) Effect of Compensation:
However, the negligence of the agent shall be judged
with more or less rigor by the courts, according to
48’2 C.J. 718.

484Art. I889.NCC.
485Art. 1890, NCC.
4“M.
48,Art. 1491(2), NCC.
4*8Art. 1887, par. 2, NCC.
4”Art. 1888, NCC.
"“Art. 1909, NCC.
4,1 Art. 1891, par. 1,NCC.
4”Art. 1891, par. 2, NCC; Domingo v. Domingo, 42 SCRA 131 (1971).
J9JC9B0M
R52M9UH7

whether the agency was or was not for a compensation.4”

(4) If He Uses Money of Principal for Own Use: The
agent owes interest on the sums he has applied to his
own use from the day on which he did so, and on those
which he still owes after the extinguishment of the
agency.4” (k) Rule on Sale bv Commission Agent: (1)
Duties on Care of Goods: (i) He shall be responsible for
the goods received by him in the terms and conditions
and as described in the consignment, unless upon
receiving them he should make a written statement of
the damage and deterioration suffered by the same;4”
(ii) a commission agent who handles goods of the same
kind and mark, which belongs to different owners, shall
distinguish them by countermarks, and designate the
merchandise respectively belonging to each principal.4”
(2) Rule on Sale on Credit: He cannot sell on credit
unless with the consent of the principal.4” If he does, the
principal may demand from him payment in cash, but
the commission agent shall be entitled to any interest or
benefit, which may result from such sale.4” If he sells
on credit with authority from the principal, he shall so
I inform the principal, with a statement of the names of
the buyers. If he fails to do so, the sale shall be deemed
I
to have been made for cash insofar as the principal is
concerned.4” (3) Del Credere Agent: A commission
agent who receives a guaranty commission (called a
del credere commission), in addition to the ordinary
commission, is known as a “del credere agent.” He bears
the risk of collection and he shall pay the principal the
proceeds of the sale on the same terms agreed upon with
the purchaser.500 However, the liability of the del credere
agent does not preclude the principal from resorting to
the purchaser to obtain payment, at any time before the
4”Art. 1909. NCC.

45HArt. 1896, NCC.
4,5 Art. 1903, NCC.
4”Art. 1904, NCC.
4”Art. 1905, NCC.
4”Art. 1906, NCC.

500Art. 1907, NCC.
J9JC9B0M
R52M9UH7
debt is paid.501 (1) Duty to Collect: A commission agent

who does not collect the credits of his principal at the
time when they become due and demandable shall be
liable for damages.’02 However, he is not liable if he can
prove that he exercised due diligence for that purpose.’05
(m) Liability of Two or More Agents: (1) Rule: Their
liability is merely joint, if solidarity has not been
expressly stipulated.’04 (2) If Solidarity is Stipulated:
Each of the agents is responsible for the non-fulfillment
of the agency, and for the fault or negligence of his
fellow agents, except in the latter case when the fellow
agents acted beyond the scope of their authority.50’
9.4.2 Duties and Liabilities of Principal to Agent: (a) Duty to
Pay Compensation: (1) Rule: Agency is presumed to be
for compensation, unless there is proof to the contrary.’06
(b) Doctrine of Procuring Cause: (I) Rule: In order for
an agent to be entitled to a commission, he must be
the procuring cause of the sale, which simply means
that the measures employed by him and the efforts
he exerted must result in a sale.507 In other words, an
agent receives his commission only upon the successful
conclusion of a sale.506 Conversely, it follows that where
his efforts are unsuccessful, or there was no effort on his
part, he is not entitled to a commission.’00 The doctrine
applies even if the sale took place after the authority
of the agent had lapsed so long there was proximate,
close, and causal connection between the agent’s efforts
and the principal’s sale of his property.’10 In fact, even if
the agent was not the efficient procuring cause and the
”'25 C.J. 341.

502Art. 1908, NCC.
w/d.
504Art. 1894, NCC.
’“’Art. 1895, NCC.
’“Art. 1875, NCC.
’“’Sanchez v. Medicard Philippines, Inc., G.R. No. 141525, Sep. 2, 2005; citing Damon v.
Antonio A. Brimo & Co., 42 Phil. 134,139 (1921). See also Ramos v. Court of Appeals, G.R. No.
25463, April 4, 1975, 63 SCRA 331.
>mId„ citing Hanh v. Court of Appeals, G.R. No. 113074, January 22, 1997, 266 SCRA
537, 549.
™Id.
’'“Manotok Brothers v. CA, 221 SCRA 224 (1993).
J9JC9B0M
R52M9UH7

sale took place after the expiration of his authority, he

is nonetheless entitled to his commission when he took
diligent steps to bring back together the parties, such that
a sale was finalized and consummated between them.511
(b) Obligation to Advance Necessary Funds: (1) Rule:
In the absence of stipulation that the agent shall advance
the funds necessary to carry out the agency, the same
must be advanced by the principal, should the agent
so request.512 (2) Instance Where Principal Not Liable
for Expenses Incurred bv Agent: (i) if the agent acted
in contravention of the principal’s instructions, unless
the latter should wish to avail himself of the benefits
derived from the contract; (ii) when the expenses were
due to the fault of the agent; (iii) when the agent incurred
them with knowledge that an unfavorable result would
ensue, if the principal was not aware thereof; or (iv)
when it was stipulated that the expenses would be
bome by the agent, or that the latter would be allowed
only a certain sum.515 (c) Duty to Indemnify Agent for
Damages: (1) Rule: Principal must indemnify the agent
for all the damages which the execution of the agency
may have caused the latter.5N (2) Exception: Principal
not liable if the damages were occasioned by the fault or
negligence on the part of the agent.515 (d) Agent’s Lien:
(1) The agent may retain in pledge the things which
are the object of the agency until the principal effects
the reimbursement and pays the indemnity mentioned
herein.510 The lien may be enforced in the same way as
a pledge, that is, by having the property sold at public
auction, in the manner prescribed by law. (e) Liability
of Two or More Principals: If two or more persons
have appointed an agent for a common transaction or
undertaking, they shall be solidarity liable to the agent
for the all the consequences of the agency.517
’"Pruts v. CA. 81 SCRA 360 (1978).

"’Art. 1912, 1“ par., NCC.
"’Art. 1918, NCC.
"‘Art. 1913, NCC.
"’/</.
"‘Art. 1914, NCC.
"’Art. 1915, NCC.
J9JC9B0M
R52M9UH7
9.5 Rights and Liabilities of Parties in Relation to Third Persons:

9.5.1 Liability for Contracts Entered by Agent: (a) When
Agent Acted Within Scope of His Authority: (1) Rule:
It is the principal who is liable to the third person while
the agent is completely absolved of any liability, as a
rule.’18 This rule applies whether or not the third person
dealing with the agent believes that the agent has actual
authority.’19 (2) Exceptions: Agent becomes liable to
the third person even if he acted within the scope of his
authority when: (i) he expressly binds himself;’20 or (ii)
he is guilty of fraud or negligence.’21 (3) As to Liability
of Third Person: The liability of the third person is
to the principal and not to the agent. The agent has
neither rights nor liabilities as against the third party,
(b) When Agent Acted Beyond Scope of His Authority
or Without Authority: (1) Rule: The contract does not
bind the principal;’22 it is unenforceable if not ratified
by the principal.’22 However, if the sale of a parcel of
land or any interest therein is made by agent without
authority from the principal, the sale is void.’24 It is the
agent himself who becomes liable to a third party with
whom he contracted with when he exceeds the limits
of his authority without giving notice of his powers to
the third person.’2’ But if he notified the third person of
the limits of his authority, he is not liable to such third
person, unless he undertook to secure the principal’s
ratification.’26 As to the third person, when he was
not given notice of the agent’s power, he can hold the
agent personally liable to him.’27 But when he is aware
of such limits of authority, he is to blame, and is not
’"Art. 1897, NCC; Eurotech Industrial Technologies, Inc. v. Cuizon, G.R. No. 167522,
April 23, 2007; Angeles v. PNR, 500 SCRA 444 (2006).
“’Sargasso Construction & Development Corp./Pick & Shovel, Inc./Atlantic Erectors, Inc.
(Joint Venture) v. Philippine Ports Authority, G.R. No. 170530, July 5, 2010.
““Art. 1897, second part, NCC.
“'Art. 1909, NCC.
’“Arts. 1898 and 1910,2nd par., NCC.
“'Arts. I317and 1403(1),NCC.
“4Art. 1874, NCC; Delos Reyes v. Court of Appeals, 313 SCRA 632 (1999).
“’Art. 1897, 2nd part, NCC.
“’Art. 1898, NCC.
J9JC9B0M
R52M9UH7

entitled to recover damages from the agent, unless the

latter undertook to secure the principal’s ratification.528
(2) Exception: The principal becomes liable even if
the agent has exceeded his powers in the following
instances: (i) when the principal ratifies the contract,
either expressly or impliedly,52’ in which case, only the
principal becomes liable to the third person; or (ii) when
the principal allowed the agent to act as though he had full
powers, in which case, the principal becomes solidari ly
liable with the agent.530 (c) When Agent Contracted in
His Name: (1) Rule: If an agent acts in his own name, the
principal has no right of action against the third person
with whom the agent has contracted; neither have such
persons against the principal.531 In such case the agent is
the one directly bound in favor of the person with whom
he has contracted, as if the transaction were his own.532
As between the principal and the agent, the former
can avail of the benefits derived by the latter from the
contract with the third person, or the former may sut
the latter for damages because of non-compliance with
the agency.533 (2) Exception: When the contract involves
things belonging to the principal,534 hence, the contract
must be considered as entered into between the principal
and the third person. Corollarily, if the principal can be
obliged to perform his duties under the contract, then it
can also demand the enforcement of its rights arising
from the contract.535 However, the exception does not
apply where the agent has exceeded his authority.536
(d) When Both Principal and Agent Transacted: (1)
Rule: When both the principal and agent entered into a
contract over the same thing, that of prior date shall be
preferred, without prejudice to the provisions of Article
528Art. 1898, NCC; Cervantes v. CA, G.R. No. 125138, March 2, 1999.
529Arts. 1317 and 1403(1), NCC.
““Art. 1911, NCC.
“‘Art. 1883, 1“ par., NCC.
532Art. 1883, 2nd par., NCC.
“3See Art. 1883, last par., NCC.
534M.
535National Food Authority v. 1AC, G.R. No. 75649, April 5, 1990.
“‘National Bank v. Agudelo, 58 Phil. 655.
J9JC9B0M
R52M9UH7
1544 of the Civil Code.’” (2) Who Rears Liability: If

the agent has acted in good faith, the principal shall be
liable in damages to the third person whose contract
must be rejected. If the agent acted in bad faith, he alone
shall be responsible.’38 (e) Liability for Delict or Quasi
delict Committed by Agent: So long as the agent acts
within the scope of his authority, the principal is liable
for the delict or quasi-delict of his agent.’39 But the agent
is liable to the principal not only for fraud, but also for
negligence.’40 (f) Liability in Agency bv Estoppel: (1)
Who is Liable to Third Person: It is the principal who
is liable. (2) Requisites: In order for the principal to be
liable, it is necessary that the following requisites must be
established: (i) the principal manifested a representation
of the agent’s authority or knowingly allowed the agent
to assume such authority; (ii) the third person, in good
faith, relied upon such representation; and (iii) relying
upon such representation, such third person has changed
his position to his detriment.”1 In agency by estoppel,
the apparent authority is determined only by the acts
of the principal and not by the acts of the agent. The
principal is, therefore, not responsible where the agent’s
own conduct and statements have created the apparent
authority.”2
9.6 Extent of Agency:
9.6.1 Modes of Extinguishment: (1) revocation; (2)
withdrawal of the agent; (3) death, civil interdiction,
insanity, or insolvency of the principal or of the
agent; (4) dissolution of the firm or corporation which
entrusted or accepted the agency; (5) accomplishment
of the object or purpose of the agency; (6) expiration
of the period for which the agency was constituted;”1
or (7) any other modes provided by the general law for
’’’Art. 1916, NCC.

’“Art. 1917, NCC.
”9VJ. Francisco, Agency, 293-294 (1952).
““Art. 1909, NCC.
“'Manila Remnant Co., Inc. v. CA, 191 SCRA 622 (1990), cited in Cuizon v. CA, supra.
“’Sargasso Construction & Development Corp./Pick & Shovel, lnc./Atlantic Erectors, Inc.
(Joint Venture) v. Philippine Ports Authority, supra.
543Art. 1919, NCC.
J9JC9B0M
R52M9UH7

the extinction of obligations, so far as applicable.5" (b)

Revocation: (1) Rule: Generally, the agency may be
revoked by the principal at will, and compel the agent
to return the document evidencing the agency.515 (2)
Exceptions: When the agency is coupled with interest,516
as in the following cases: (i) a bilateral contract depends
upon it; (ii) if it is the means of fulfilling an obligation
already contracted; or (iii) if a partner is appointed
manager of a partnership in the contract of partnership
and his removal from the management is unjustifiable.517
(3) When Agency Deemed Revoked: (i) When a new
agent is appointed for the same business or transaction,
the previous agency is revoked from the day on which
notice thereof was given to the former agent;511 (ii) when
the principal directly manages the business entrusted
to the agent, dealing directly with third persons;51’ or
(iii) a general power of attorney is revoked by a special
one granted to another agent, as regards the special
matter involved in the latter.550 (4) Necessity of Notice:
As between the agent and principal, in order for the
revocation to be effective against the agent, the latter
must be duly notified. As between the principal and
third person: (i) if the agency has been entrusted for
the purpose of contracting with specified persons, its
revocation shall not prejudice the latter if they were
not given notice thereof;551 and if the agent had general
powers, revocation of the agency does not prejudice
third persons who acted in good faith and without
knowledge of the revocation. Notice of the revocation
in a newspaper of general circulation is a sufficient
warning to third persons.55-’ (c) Withdrawal by Agent: (1)
Rule: Agent may withdraw from the agency by giving
’"•S’eeArt. 1231, NCC.

’"Art. 1920, NCC.
’"Republic of the Philippines v. Evangelista, G.R. No. 156015, Aug. 11,2005.
H,Art. 1927. NCC.
’"Art. 1923, NCC.
’’’Art. 1924, NCC.
’’“Art. 1926, NCC.
’’’Art. 1921, NCC.
552Art. 1922, NCC.
J9JC9B0M
R52M9UH7
due notice to the principal.553 (2) Liability for Damages:

If the principal should suffer any damage by reason of
the withdrawal by the agent, the latter must indemnify
the principal therefor, unless the agent should base his
withdrawal upon the impossibility of continuing the
performance of the agency without grave detriment to
himself.554 (3) Duty of Agent Upon Withdrawal: The
agent must continue to act until the principal has had
reasonable opportunity to take the necessary steps to
meet the situation, even if he should withdraw from
the agency.555 (d) Effect of Death: (1) Rule: Agency is
extinguished by the death of the principal or the agent.556
(2) Exceptions: (i) agency shall remain in full force and
effect even after the death of the principal, if it has been
constituted in the common interest of the latter and of
the agent, or in the interest of a third person who has
accepted the stipulation in his favor;55’ and (ii) anything
done by the agent, without knowledge of the death of
the principal or of any other cause which extinguishes
the agency, is valid and shall be fully effective with
respect to third persons who may have contracted with
him in good faith.556

10) Contract of Commodatum
10.1 Kinds of Contracts of Loan:
10.1.1 Classification: (a) Two Kinds of Loan: (1) Contract
of Commodatum - this is a contract of loan by one to
another of non-consumable property to be temporarily
used by the latter and returned in specie, as where a
horse or a house is lent to a friend to be used by him;55’
and (2) Contract of Mutuum - this is a contract of loan
"’Art. 1928, NCC.

™ld.
555Art. 1929, NCC.
“‘Art. 1919, NCC; Ratios v. Felix Go Chan & Sons Realty Corp., G.R. No. L-24332, Jan.
31, 1978.
!5’Art. 1930, NCC.
55BArt. 1931, NCC; see Ratios v. Felix Go Chan & Sons Realty Corp-, supra.
"’Art. 1933, 1“ par., NCC; Francisco, Credit Transactions, Vol. 1, 1953 ed., p. 2.
J9JC9B0M
R52M9UH7

by one of money or other consumable things to another

for consumption, this other becoming the owner of
the things subject to an obligation to repay the same
amount of the same quality as he had received, as where
A delivers a quantity of rice to B to the end that B shall
consume or otherwise dispose of it on condition that he
shall repay A with rice ofthe same quality and quantity.
(b) Distinctions: (1) As to purpose: in commodatum,
the purpose is to use the thing borrowed and with the
obligation to return the very same thing; in mutuum,
the purpose is to consume the thing borrowed and with
the obligation to repay its equivalent in kind, quality,
and quantity;561 (2) As to object: in commodatum, the
object may either be movable or immovable662 and, if
it is movable property, it is ordinarily non-consumable;
in mutuum, the object is always movable property and
it is always money or other consumable property;646
(3) As to right in subject matter: in commodatum, the
bailor retains the ownership of the thing loaned; while
in mutuum, ownership passes to the borrower;6" (4) As
to duty of borrower: in commodatum, the specific thing
loaned is to be returned; whereas by mutuum, the thing
loaned may be consumed, and the borrower discharges
himself, not by returning the identical thing loaned, but
by paying its equivalent in kind, quality, and quantity;666
and (5) As to consideration: commodatum is essentially
gratuitous; while mutuum may be gratuitous or with a
stipulation to pay interest.666
10.1.2 How Perfected: (a) Both are Real Contracts: Both
contracts shall not be perfected until the delivery
of the object of the contract.667 Thus, in a case where
a prospective lender issued checks to a prospective
borrower but there was no evidence that the checks
were actually encashed or deposited because the checks
,u,Supm.
661 Arts. 1933 and 1953, NCC.
)62Art. 1937, NCC.
566Art. 1933, par. 1,NCC.
’“Art, 1933, par. 4, NCC.
"’Arts. 1933 and 1953, NCC.
’“Art. 1933, pars. 2 and 3, NCC.
’“Art. 1934, NCC.
J9JC9B0M
R52M9UH7
were retained by another person, the Court ruled that the

contract of loan was not perfected because the checks
were not encashed.568 (b) Accepted Promise To Lend or
To Borrow: An accepted promise to deliver something
by way of commodatum or simple loan is binding upon
parties.569 This contract is consensual, which can only
give rise to an action for damages in case of breach,5,0
not an action for specific performance. The delivery of
the thing borrowed cannot be compelled. It is different
from the real contract of loan which requires the
delivery of the object of the contract for its perfection
and which gives rise to obligations only on the part of
the borrower.5’1
10.2 Nature and Characteristics of Commodatum:
10.2.1 Peculiar Characteristics of Contract: (a) Purpose:
enjoyment and use of the thing borrowed. But unlike
in usufruct, the bailee (borrower) has no right over the
fruits, unless there is a stipulation to that effect.”2 (b)
No Transfer of Ownership: The bailor (lender) retains
the ownership of the thing loaned5” and the obligation
of the borrower is to return the very same thing that he
borrowed.5" Hence, the bailor in commodatum need
not be the owner of the thing loaned,”5 but he must be
authorized by the owner or he must have a possessory
interest in the subject matter; otherwise, the contract is
void because the cause or object did not exist at the time
of the transaction.”6 (c) Subject Matter: Movable or
immovable property may be the object oicammodatum.in
If the subject matter is movable property, ordinarily it
must be non-consumable.”“ Exception: Consumable
’“"Naguiat V. CA, 412 SCRA 591 (2003).

569Art. 1934, NCC.
”°BPI Investment Corp. v. CA, 377 SCRA 117 (2002).
”'/</.
’’’Art. 1940, NCC.
’’’Art. 1933, par. 4, NCC.
’"Art. 1933, par. 1, NCC.
’’’Art. 1938, NCC.
’’"Art. 1409(3), NCC.
’’’Art. 1937, NCC.
’’“Art. 1933, par. l.NCC.
J9JC9B0M
R52M9UH7

goods may be the subject of commodatum if the purpose

of the contract is not the consumption of the object, as
when it is merely for exhibition,”’ called ‘‘commodatum
ad ostentationem."™ (d) Essentially Gratuitous: The
contract of commodatum is essentially gratuitous.’" If
any consideration is to be paid by him who acquires the
use, the contract ceases to be a commodatum™2 If the
consideration is in the form of payment of a price in
money or its equivalent, the contract becomes lease of
things;’83 if the consideration is in some other form, such
as the delivery of another thing or rendition of service,
the contract is innominate, (e) Purely Personal Contract:
Commodatum is purely personal in character.’" As
consequences: (1) the death of either the bailor or the
bailee extinguishes the contract;’8’ and (2) the bailee
cannot allow third persons to use the thing borrowed,
unless expressly authorized by the bailor.586 However,
the members of the bailee’s household are entitled to
make use of the thing loaned, except: (i) when there is a
stipulation to the contrary; or (ii) when the nature of the
thing forbids such use by the members of the bailee’s
household.’87 In case of unauthorized delegation of use:
(i) the bailee is liable for the loss of the thing, even if it
should be through a fortuitous event;’88 and (ii) the bailee
is liable for extraordinary expenses for the preservation
of the thing arising from the fault of the delegate.
10.3 Obligations of Parties:
10.3.1 Obligations of the Bailee (Borrower): (a) Ordinary
Expenses: The bailee is obliged to pay for the ordinary
expenses for the use and preservation of the thing
’’’Art. 1936, NCC.

’“"11 Mnnresa 602-603.
’“'Art. 1933, par. 2, NCC.
’"’Art. 1935, NCC.
’“’Art. 1643, NCC.
’"“Art. 1939, par. 1,NCC.
’“’Art. 1939, par. l.No. l.NCC.
’“‘Art. 1939, par. l.No. 2, NCC.
’““Art. 1942(3), NCC.
J9JC9B0M
R52M9UH7
loaned.’” (b) Loss of Thing Loaned: The bailee is liable

for the loss of the thing loaned if: (1) it was lost through
his fault; or (2) even if it should be lost through a
fortuitous event: (i) if he devotes the thing loaned to any
purpose different from that for which it has been loaned;
(ii) if he keeps it longer than the period stipulated, or
after the accomplishment of the use for which the
commodatum has been constituted; (iii) if the thing has
been delivered with appraisal of its value, unless there
is a stipulation exempting the bailee from responsibility
in case of a fortuitous event; (iv) if he lends or leases
the thing to a third person, who is not a member of his
household; or (v) if, being able to save either the thing
borrowed or his own thing, he chose to save the latter.”0
(c) Liability for Deterioration: The bailee does not
answer for the deterioration of the thing loaned due only
to the use thereof and without his fault.”1 (d) Liability
of Two or More Bailees: they are solidarity liable.’”
(e) Return of Thing Loaned: (1) When to Return:
Upon expiration of the period stipulated or after the
accomplishment of the use agreed upon.’” (2) Contract
of Precarium: the bailor may demand for the return
of the thing loaned at will in a contract of precarium,
which exists when: (i) the duration of the contract or the
use to which the thing loaned should be devoted has not
been stipulated; or (ii) when the use of the thing loaned
is merely tolerated by the owner.”4 (3) When Bailee
Commits Acts of Ingratitude: the bailor may demand
immediate return of the thing if the bailee commits any
act of ingratitude specified in Article 765.’” (4) Urgent
Need by Bailor: Should the bailor have urgent need of
the thing, he may demand its return or temporary use, in
which case the contract of commodatum is suspended.”6
’’’Art. 1941, NCC.

”°Art. 1942, NCC.
551 Art. 1943, NCC.
’’-’Art. 1945, NCC.
’’’Art. 1946, NCC.
’’’Art. 1947, NCC.
’’’Art. 1948, NCC.
”6Art. 1946, NCC.
J9JC9B0M
R52M9UH7

(5) Right of Retention: The bailee has the right to retain

the thing borrowed only when the bailor is liable for
damages because the bailee suffered damages by reason
of the flaws or defects of the thing which are known
to the bailor but the latter did not advise the former of
the existence of the same?” The bailor cannot exempt
himself from the payment of expenses or damages by
abandoning the thing to the bailee.”*
10.3.2 Obligations of the Bailor: (a) Extraordinary Expenses:
(1) Rule: Extraordinary expenses for the preservation
of the thing loaned shall be for the account of the
bailor.5” (2) If Bailee Advances Such Expenses: He
shall be entitled to a refund provided he notified the
bailor before incurring said expenses, except when they
are so urgent that the reply to the notification cannot
be awaited without danger.™ (3) Exception to Rule: If
the extraordinary expenses arise on the occasion of the
actual use of the thing by the bailee, even though he
acted without fault, the expenses shall be borne equally
by both the bailor and the bailee, unless there is a
stipulation to the contrary."1
11) Contract of Mutuum
11.1 Nature and Characteristics of Mutuum:
11.1.1 Characteristics of Contract: (a) Purpose: to consume
the thing borrowed, (b) Transfer of Ownership: In
mutuum, ownership passes to the borrower,•“ hence the
obligation of the borrower is to repay the loan with an
equal amount of the same kind and quality."’ (c) Subject
matter: Unlike in commodatum, the object of mutuum is
always personal property, which must be either money
or other consumable property."1 (d) Consideration:
Unlike in commodatum which is always gratuitous,
5,7Art. 1951, in relation Io Art. 1944, NCC.

598Art. 1952, NCC.
5”Art. 1949, par. l.NCC.
“°W.
601 Art. 1949, par. 2, NCC.
“2Art. 1933, par. 4, NCC.
“’Arts. 1933, par. 1 and 1953, NCC.
mld.
J9JC9B0M
R52M9UH7
mutuum may either be gratuitous or with a stipulation to

pay interest.™’
11.1.2 Transfer of Ownership: (a) Bank Deposits: Whether
fixed, savings, or current deposits are in the nature
of a contract of mutuum."* There is a debtor-creditor
relationship between the bank and its depositor. The
bank is the debtor and the depositor is the creditor. The
depositor lends the bank money and the bank agrees to
pay the depositor on demand.607 (b) Cash Advances: A
cash advance is in the nature of simple loan (mutuum),
where ownership over the money passes to the employee,
hence, no fiduciary relationship is created. Therefore, an
employee who availed of cash advances may not be held
liable for estafa for failure to liquidate the same because
he has no obligation to return the same money which
he had received.604 (c) Money Market Transactions: A
money market transaction is in the nature of a loan.609
In this transaction, the investor is a lender who loans his
money to a borrower through a middleman or dealer.610
11.2 Obligation of Borrower:
11.2.1 In General: (a) In Loan of Money: The obligation
of a person who borrows money shall be governed
by the provisions of Articles 1249 and 1250 of the
Civil Code.6" Hence, the rules on legal tender and
extraordinary infiation and deflation discussed in
Obligations and Contracts are applicable, (b) In Loan
of Other Consumable Not Money: The debtor owes
another thing of the same kind, quantity, and quality,
even if it should change in value. In case it is impossible
to deliver the same kind, its value at the time of the
perfection of the loan shall be paid.612
“’Art. 1933, par. 3, NCC.

“"'Art. 1980, NCC.
“’Consolidated Bank and Trust Corp. v. CA, 410 SCRA 562, 574 (2003).
“‘Yong Chan Kim v. People, 193 SCRA 344.
“’Cebu International Finance Corp. v. CA, 316 SCRA 488, 497 (1999); Citibank, N.A.
(Formerly First National City Bank) v. Sabeniano, 504 SCRA 378, 466 (2006); Allied Banking
Corp. V. Lim Sio Wan, G.R. No. 133179, Marell 27. 2008.
““Sesbreilo v. CA, 240 SCRA 606, 614 (1995).
""Art. 1955. par. l.NCC.
6l2Ari. 1955, par. 2, NCC.
J9JC9B0M
R52M9UH7
-

11.2.2 Obligation to Pay Interest: (a) Two Kinds of Interest:

(1) Monetary Interest - it refers to the compensation set
by the parties for the use or forbearance of money;61’
or (2) Compensatory Interest - it refers to the penalty
or indemnity for damages imposed by law or by the
courts.614 The former is the interest referred to in
Article 1956 of the Civil Code; while the latter is the
interest mentioned in Article 2209 of the Civil Code.61’
Accordingly, the right to recover interest arises only
either by virtue of a contract (monetary interest) or as
damages for delay or failure to pay the principal loan
on which the interest is demanded (compensatory
interest).616 (b) Rule on Monetary Interest: (1)
Requirement to Become Civil Obligation: In order for
the payment of monetary interest to become a case of
civil obligation, Article 1956 of the Civil Code requires
two requisites: (i) there must be an express stipulation
for the payment of interest; and (ii) the agreement for its
payment must be reduced in writing. Article 1956 refers
only to monetary interest.617 If there is an agreement
for the payment of monetary interest but not reduced
in writing, there is only a natural obligation to pay the
same.618 (2) Limitation on Rate of Interest Agreed Upon:
While the Usury Law remains to be suspended by virtue
of Central Bank Circular No. 905, s. 1982, effective on
January 1, 198361’ and the parties are free to stipulate
their preferred rate, courts are allowed to equitably
temper interest rates that are found to be excessive,
iniquitous, unconscionable, and/or exorbitant.610 In
such instances, only the unconscionable interest rate is
nullified and deemed not written in the contract; whereas
the parties’ agreement on the payment of interest on the
61’Sun Lite of Canada (Philippines), Inc. v. Tan Kil, G.R. No. 183272, October 15, 2014,
Republic of the Phil. v. Unimex Micro-Electronics GmBII, G.R. Nos. 166309-10, March 9,2007.
“4M.
6I’M.
“‘Islu V. Estorga, G.R. No. 233974, July 2, 2018.
“’Siga-an v. Villanueva, 576 SCRA 696 (2009).
‘"Art. I960, NCC.
“’Ruiz v. Court of Appeals, 401 SCRA 410 (2003).
“°lsla v. Estorga, supra.
J9JC9B0M
R52M9UH7
principal loan obligation subsists.621 It is as if the parties

failed to specify the interest rate to be imposed on the
principal amount, in which case the legal rate of interest
prevailing at the time the agreement was entered into is
applied by the Court.622 (3) If Rate Not Agreed Upon:
If there is an agreement for the payment of monetary
interest in writing but the parties failed to specify the
rate of interest, the legal rate of interest shall apply.622
(4) Legal Rate for Loan or Forbearance of Money: The
legal rate of interest for the loan or forbearance of any
money, goods, or credits accruing before July 1, 2013
(or from June 30, 2013 and downwards) is still 12%
p.a., while the legal rate beginning July 1, 2013 is 6%
p.a.““ (5) Payment of Interest on Accrued Interest: As a
rule, interest due and unpaid (called “accrued interest”)
shall not earn interest,622 unless: (i) the parties, by
stipulation, have agreed to capitalize the interest due
and unpaid, which, as added principal, shall earn new
interest;626 or (ii) the interest due is already judicially
demanded, in which case, it shall earn legal interest
although the obligation may be silent upon this point.62’
As to the application of Article 2212, it contemplates
the presence of stipulated or conventional interest which
has accrued when demand was judicially made.626 In
cases where no monetary interest had been stipulated by
the parties, no accrued monetary interest could further
earn compensatory interest upon judicial demand.62’
(6) Presumption of Payment of Interest: The receipt of
the principal by the creditor, without reservation with
respect to the interest, shall give rise to the presumption
a'Id„ citing Limso v. PNB, 782 SCRA 137 (2016).

622W, citing Limso v. PNB, supra.
“’Abella v. Abella, G.R. No. 195166, July 8,2015, cl/big Turing v. Olan, G.R. No. 168782,
October 10, 2008.
“’BSP Circular No. 799; Nakar v. Gallery Frames, 703 SCRA 439 (2013).
“’Art. 1959, NCC.
“‘Art. 1959, NCC.
“’Art. 2212, NCC.
““David v. CA, 375 Phil. 177 (1999), citing The Philippine American Accident Insurance
Company, Inc. v. Florcs, 186 Phil. 563 (1980).
“’Isla v. Estorga, supra.
J9JC9B0M
R52M9UH7

that said interest has been paid.6” This presumption,

however, may be rebutted by evidence to the contrary.
(7) Rule in Application of Payments: Ifthe debt produces
interest, payment of the principal shall not be deemed to
have been made until the interests have been covered.111
While this rule is obligatory upon the debtor;612 the
creditor may, however, agree on the application of
the payment to the principal prior to the payment of
the interest.611 (c) Rules on Compensatory Interest:
(1) Not Required to be Agreed in Writing: When an
obligation, regardless of its source, i.e., law, contracts,
quasi-contracts, delicts, or quasi-delicts, is breached,
the contravenor can be held liable for damages.6” This
is the concept of compensatory interest. The payment
of compensatory interest need not be reduced in
writing. As discussed earlier, Article 1956 refers only
to monetary interest. (2) Rate of Compensatory Interest:
(i) If the obligation consists in the payment of a sum of
money, and the debtor incurs in delay, the indemnity for
damages (compensatory interest) shall be the payment
of the interest agreed upon;615 however, courts may
also declare the rate agreed upon as iniquitous and
unconscionable penalty interest, in which case it shall be
reduced to the legal rate.616 (ii) If the obligation consists
in the payment of a sum of money, and the debtor incurs
in delay, in the absence of stipulation, the rate of interest
(legal rate) shall be 12% p.a. until June 30, 2013 and
6% p.a. beginning July 1, 2013“7 The new rate of 6%
p.a. can only be applied prospectively beginning July 1,
2013, not retroactively.61’ (iii) When an obligation, not
constituting a loan or forbearance of money, is breached,
““Art. 1176, 1“ pur., NCC.

“'Art. 1253, NCC.
6118 Manresa317.
“’Magdalena Estates, Inc. v. Rodriguez, G.R. No. L-18411, December 17, 1966, citing
Baltazar v. Lingayen Gulf Electric Co., Inc., G.R. Nos. L-16236-38, June 30,1965.
“’Eastern Shipping Lines, Inc. v. CA, 234 SCRA 78 (1994).
615Art. 2209, NCC; Eastern Shipping Lines, Inc. v. CA, supra.
“‘Segovia Development Corp. v. J.L. Dumatol Really and Development Corp., 364 SCRA
159.
“7BSP Circular No. 799; Nakar v. Gallery Frames, 703 SCRA439 (2013).
“’Nakar v. Gallery Frames, supra.
J9JC9B0M
R52M9UH7
an interest on the amount of damages awarded may be

imposed at the discretion ofthe court at the rate of 6% per
annum.63’ (iv) When the judgment of the court awarding
a sum of money becomes final and executory, the rate of
legal interest, whether the obligation constitutes a loan
or forbearance of money or not, shall be 6% per annum
from such finality until its satisfaction, this interim
period being deemed to be by then an equivalent to a
forbearance of credit.640 However, judgments that have
become final and executory prior to July 1, 2013, shall
not be disturbed and shall continue to be implemented
applying the rate of interest fixed therein.64'
12) Contract of Deposit

12.1 Nature and Characteristics:
12.1.1 Concent: (a) Definition: A deposit is constituted from
the moment a person receives a thing belonging to
another, with the obligation of safely keeping it and
of returning the same."2 The parties are the depositor
(depositante), he who delivers the thing to another under
circumstances coming within the definition of deposit,
and the depositary (depositario), he to whom the thing is
delivered, (b) Principal Purpose: The principal purpose
of the contract is safekeeping. If the safekeeping of
the thing delivered is not the principal purpose of the
contract, there is no deposit but some other contract."3
Thus, in the case of valet parking the contract entered
into is one of deposit; while in an ordinary car parking
the contract entered into is one of lease of things, (c)
Real Contract: (I) Rule: The contract of deposit itself
is a real contract—it is not perfected until the delivery
of the thing.644 (2) Consensual Contract: However,
an agreement to constitute a deposit is binding,"’ but
such is not the contract of deposit itself. The same is a
“’Eastern Shipping Lines, Inc. v. CA, supra.

““Nakar v. Gallery Frames, supra.
“'Id.
"’Art. 1962, 1 “ sentence, NCC.
643Art. 1962, 2nd sentence, NCC.
“’Arts. 1963 and 1316, NCC.
“’Art. 1963, NCC.
J9JC9B0M
R52M9UH7

consensual contract and such agreement shall give rise

to an obligation to do and to an action for damages in
case of breach.646 (d) Subject Matter: (1) Extrajudicial
Deposit: Only movable things may be the object of a
deposit.6*7 Necessarily, the movable must be corporeal
considering the purpose of the contract. (2) Judicial
,1 Deposit: Movable as well as immovable property may
be the object of sequestration or judicial deposit.64’ (e)
Compensation: (1) Rule: Generally, it is a gratuitous
contract.6*’ (2) Exceptions: It is for a compensation
when: (i) there is an agreement to that effect; or (ii) even
without an agreement, if the depositary is engaged in the
business of storing goods.650 If the deposit is gratuitous,
it is a unilateral contract because all the obligations
devolve upon the depositary and none on the depositor.
However, if the deposit is for compensation, it becomes
a bilateral contract.
12.1.2 Kinds of Deposit: (a) General Classification: (1)
Extrajudicial Deposit - where the deposit is constituted
by the will of the parties and only corporeal movable
property may be its object; (2) Judicial Deposit - it is the
court order that gives rise to this kind of deposit and it
takes place when an attachment or seizure of property in
litigation is ordered.651 As to judicial deposit, the object
may either be movable or immovable property.657 (b)
Classification of Extrajudicial Deposit: (1) Voluntary
Deposit - where the deposit is made by the will of the
depositor.655 (2) Necessary Deposit - where the deposit
is not by reason of the depositor’s will but it takes
place when: (i) it is made in compliance with a legal
obligation; or (ii) it takes place on the occasion of any
calamity, such as fire, storm, flood, pillage, shipwreck,
Applying by analogy the case o/BI’I Investment Corp. v. CA, supra.

"’Art. 1966, NCC.
"“Art. 2006, NCC.
“'Art. 1965, NCC.
““/</.
“'Art. 2005, NCC.
“’Art. 2006, NCC.
“’Art. 1968, 1“ sentence, NCC.
J9JC9B0M
R52M9UH7
or other similar events."4 The first is governed by the

law establishing it; while the second is governed by
the rules on voluntary deposit.6” (c) Form of deposit:
A contract of deposit may be entered into orally or in
writing."6 (d) Extinguishment of Voluntary Deposit: A
deposit is extinguished: (1) upon the loss or destruction
of the thing deposited; or (2) in case of a gratuitous
deposit, upon the death of either the depositor or the
depositary."’
12.2 Voluntary Deposit:
12.2.1 Parties: (a) Depositor: (1) Need Not Be Owner: It is not
essential that the depositor be the owner of the thing
deposited. In fact, the depositary cannot demand that the
depositor prove his ownership of the thing deposited.“'
A deposit constituted by a non-owner of the thing is
valid between the parties, but the owner is not precluded
from exercising reinvindicatory action against the
depositary. (2) Remedy of Depositary: If the depositary
has reasonable grounds to believe that the thing has not
been lawfully acquired by the depositor, he may return
the same.6” (3) When Depositary Discovered Thing Was
Stolen: Should the depositary discover that the thing
deposited has been stolen and who its true owner is, the
depositary is required to advise the latter of the deposit.
If the owner, in spite of such information, does not claim
it within one month, the depositary shall be relieved of
all responsibility by returning the thing deposited to
the depositor.6" (4) Deposit bv Two or More Persons:
A deposit may also be made by two or more persons,
each of whom believes himself entitled to the thing
deposited with a third person, who shall deliver it in a
proper case to the one to whom it belongs."' When there
are two or more depositors, if they are not solidary,
654 Art. 1996, NCC.

“’Art. 1997, NCC.
“‘Art. 1969, NCC.
"’Art. 1995, NCC.
"‘Art. 1984, par. l.NCC.
"’Art. 1984, par. 4, NCC.
“"Art. 1984, pars. 2 and 3, NCC.
“'Art. 1968, 2nd sentence, NCC.
J9JC9B0M
R52M9UH7

and the thing admits of division, each cannot demand

more than his share.662 When there is solidarity or the
thing does not admit of division, the depositary may
return the thing to any one of them; but if any demand,
judicial or extrajudicial, has been made by one of them,
the thing should be returned to him.66’ However, if
there is a stipulation that the thing should be returned
to one of the depositors, the depositary shall return it
only to the person designated.664 (5) When Depositor is
Incapacitated: If the depositor is incapacitated but the
depositary is capacitated, the latter is subject to all the
obligations of a depositary, and may be compelled to
return the thing by the guardian, or administrator, of the
depositor, or by the latter himself if he should acquire
capacity.66’ If the depositor should lose his capacity to
contract after having been made the deposit, the thing
cannot be returned except to the persons who may
have the administration of his property and rights.6*6
(b) Depositary: (1) When Depositary is Incapacitated:
If the depositary is incapacitated while the depositor is
capacitated, the depositor shall have an action against
the depositary only in the following situations: (i) when
the thing is still in the possession of the depositary, in
which case an action for recovery may be resorted to; or
(2) when the depositary himself is enriched or benefited
by the price of the thing, in which case an action for
recovery of the said sum may be resorted to. If the thing
is already in possession of a third person, an action for
recovery may be resorted against such third person if
the latter acquired the thing in bad faith.“’
12.2.2 Rights and Obligations of the Depositary: (a) Use of
Thing Deposited: (1) Rule: The depositary cannot
make use of the thing deposited without the express
permission of the depositor.666 Otherwise, he shall
“-’Art. 1985,par. l.NCC.

“'Art. 19X5, par. 2, in relation to Art. 1214, NCC.
“*Art. 1985, par. 2, NCC.
“’Art. 197(1, NCC.
““Art. 1986, NCC.
“’Art. 1971, NCC.
“‘Art. 1977, par. 1, NCC.
J9JC9B0M
R52M9UH7
be liable for damages.66’ (2) Exception: When the

preservation of the thing deposited requires its use, it
must be used but only for that purpose.670 (3) Effect of
Permission to Use: If safekeeping remains the principal
purpose of the contract, the contract is still deposit;
otherwise, the contract loses the concept of a deposit
and becomes a loan or commodatum, if gratuitous,671
or becomes a contract of lease of things, if a price is
paid as consideration.672 (b) Duty of safe-keeping:
(1) Standard: He is required to observe the diligence
which is expected of a good father of a family, unless
a different degree has been stipulated by the parties.673
However, if the deposit is gratuitous, this fact shall be
taken into account in determining the degree of care
that the depositary must observe.674 (2) Rule as to Safety
Deposit Boxes: It is not an ordinary contract of lease
but, at the same time, it is not an ordinary deposit but a
special kind of deposit.673 The primary function is still
found within the parameters of a contract of deposit,
i.e., the receiving in custody of funds, documents, and
other valuable objects for safekeeping.676 (c) Duty When
Thing is Delivered Closed and Sealed: (1) Rule: The
depositary must return it in the same condition, and
he shall be liable for damages should the seal or lock
be broken through his fault.677 Fault on the part of the
depositary is presumed, unless there is proof to the
contrary.67" As regards the value of the thing deposited,
the statement of the depositor shall be accepted, when
the forcible opening is imputable to the depositary,
should there be no proof to the contrary. However, the
courts may pass upon the credibility of the depositor
“’Art. 1977, par. 2, NCC.

“Art. 1977, par. 3, NCC.
671 Arts. 1978, par. 1 and 1933, NCC.
“Arts. 1643 and 1935, NCC.
“Art. 1163, in relalimi In An. 1972, NCC.
“Art. 1972, par. 2, NCC.
673CA Agro-Industrial Development Corp. v. CA, 219 SCRA 426 (1993); Sia v. CA, 222
SCR A 24 (1993).
mtd.
“Art. 1981, par. l.NCC.
“Art. 1981, par. 2, NCC.
J9JC9B0M
R52M9UH7

with respect to the value claimed by him.67'' (2) When

Authorized to Open: When it becomes necessary to open
a locked box or receptacle, the depositary is presumed
authorized to do so, if the key has been delivered to him;
or when the instructions of the depositor as regards the
deposit cannot be executed without opening the box
or receptacle.™ (3) Duty to Keep Secret of Deposit:
When the seal or lock is broken, with or without the
depositary’s fault, he shall keep the secret of the
deposit.681 (d) Authority to Deposit With Third Person:
(1) Rule: Unless there is a stipulation to the contrary, the
depositary cannot deposit the thing with a third person.™
(23 When Deposited With Someone Manifestly Unfit: If
deposit with a third person is allowed, the depositary is
liable for the loss if he deposited the thing with a person
who is manifestly careless or unfit.™ (e) Liability for
Loss of Thine: (1) Rule: Liable only if thing is lost thru
his fault. (2) Exception: he becomes liable for the loss of
the thing by reason of fortuitous event in the following
instances: (i) if it is so stipulated; (ii) if he uses the thing
without the depositor’s permission; (iii) if he delays its
return; or (iv) if he allows others to use it, even though
he himself may have been authorized to use the same.™
(f) Obligation to Return Thing Deposited: (1) What to
Return to Depositor: The thing deposited, including all
its products, accessories, and accessions.™ If the subject
matter of the deposit consists of money, the depositary is
not liable for interest. However, the depositary is liable
for interest on sums he has applied to his own use and
on those which he still owes after the extinguishment of
the deposit.™ (2) When to Return: The thing deposited
must be returned to the depositor upon demand, even
though a specified period or time for such return may
“Art. 1981, par. 3, NCC.

""Art. 1982, NCC.
“'Art. 1981, par. 4, NCC.
“’Art. 1973, 1“ sentence, NCC.
“'Art. 1973, 2"J sentence, NCC.
681 Art. 1979, NCC.
“’An. 1983, par. 1,NCC.
6W,Art. 1983, last par., in relation Io Art. 1896, NCC.
J9JC9B0M
R52M9UH7
have been fixed.6” On the part of the depositary, he

cannot return the thing deposited before the expiration
of the period agreed upon. However, even if the period
has not yet expired the depositary may return the thing:
(1) if the depositary has reasonable grounds to believe
that the thing has not been lawfully acquired by the
depositor;6*8 or (ii) if the depositary may have justifiable
reasons for not keeping the thing deposited, unless the
deposit is for a valuable consideration.6”
12.2.3 Obligations of Depositor: (a) Reimbursement of
Expenses for Preservation: The depositor is obliged
to reimburse the depositary for the expenses the latter
may have incurred for the preservation of the thing
deposited only when the deposit is gratuitous."0 (b)
Reimbursement for Losses Arising From Character of
Thing Deposited: The depositor shall reimburse the
depositary for any loss arising from the character of the
thing deposited, unless: (1) at the time of the constitution
of the deposit the depositor was not aware of, or was not
expected to know the dangerous character of the thing;
(2) the depositor notified the depositary of the same; or
(3) the depositary was aware of it without advice from
the depositor."' (c) Depositary Lien: The depositary
may retain the thing in pledge until the full payment of
what may be due him by reason of the deposit."2
12.3 Necessary Deposit in Hotels or Inns:
12.3.1 Deposit of Effects in Hotels or Inns: (a) Concept: The
deposit of effects made by travelers in hotels or inns
shall also be regarded as necessary and the keepers of
hotels or inns shall also be regarded as depositaries."’
As such depositaries, hotels and inns are liable for
the safety of the effects introduced in its premises, (b)
Extent of Liability: (1) The hotel-keeper is liable even
“’Art. 1988, par. I.NCC.

““Art. 1984, par. 4, NCC.
“’Art. 1989, NCC.
‘‘"Art. 1992, NCC.
"'Art. 1993, NCC.
“’’Art. 1994, NCC.
“’Art. 1998, NCC.
J9JC9B0M
R52M9UH7

for the vehicles, animals, and articles which have been

introduced or placed in the annexes of the hotel;®4 (2)
the responsibility of the hotels or inns shall include the
loss of, or injury to the personal property of the guests
caused by the servants or employees of the keepers
of hotels or inns as well as by strangers; but not that
which may proceed from any force majeure.m The act
of a thief or robber, who has entered the hotel, is not
deemed force majeure, unless it is done with the use of
arms or through an irresistible force.696 (c) Requisites
for liability; The keepers of hotels or inns shall be liable
for the safety of the personal effects introduced by hotel
guests provided that: (1) notice was given to the keepers,
or to their employees, of the effects brought by the
guests; and (2) the guests take the precautions which the
hotels or inns advised relative to the care and vigilance
of their effects.6” To hold hotelkeepers or innkeepers
liable for the effects of their guests, it is not necessary
that they be actually delivered to the innkeepers or their
employees. It is enough that such effects are within the
hotel or inn.6’8 But the hotel-keeper cannot free himself
from responsibility by posting notices to the effect that
he is not liable for the articles brought by the guest.
Any stipulation between the hotel-keeper and the guest
whereby the responsibility of the former is suppressed or
diminished shall be void.699 (d) When Keepers of Hotels
or Inns Not Liable: The keepers of hotels or inns shall
not be liable for the loss of, or injury to the personal
property of the guests, in the following situations: (1)
when it is caused by force majeure^ —but the act of a
thief or robber who has entered the hotel is not deemed
force majeure, unless it is done with the use of arms or
through irresistible force;701 (2) when such loss or injury
“’Art. 1999, NCC.

“’Art. 2000, NCC.
“6Art. 2001, NCC.
“’Art. 1998, NCC.
“‘De Los Santos v. Tan Khey, 58 O.G. No. 45-53, p. 7693, died in YHT Realty Corp. v.
CA, G.R. No. 126780, February 17, 2005.
“’Art. 2003, NCC.
’“Art. 2000, NCC.
701 Art. 2001, NCC.
J9JC9B0M
R52M9UH7
is due to the acts of the guest, his family, servants, or

visitors,’02 provided that the hotel-keeper is not guilty
of concurrent negligence or has not contributed in any
degree to the occurrence of the loss because a depositary
is not responsible for the loss of goods by theft, unless
his actionable negligence contributes to the loss;703 or
(3) when such loss or injury arises from the character
of the things brought into the hotel.7" (e) Innkeeper’s
Lien: The hotel-keeper has a right to retain the things
brought into the hotel by the guest as a security for
credits on account of lodging and supplies usually
furnished to hotel guests. This is called the “innkeeper’s
t
lien.” (f) Liability for Safety of Guests: The hotel
business is imbued with public interest; hotelkeepers
are bound to provide not only lodging for their guests
but also security to the persons and belongings of their
guests. While there is no law expressly obligating hotels
to ensure the safety of its guests, the Court has ruled
that if hotels are required to ensure the safety of the
personal effects of hotel guests, it is with greater reason
that hotels should be tasked with the responsibility of
ensuring the personal safety of their guests, applying
by analogy Articles 2000, 2001, and 2002 of the Civil
Code. But hotels shall not be liable if it can prove that it
exercised due diligence in order to prevent damage.703
13) Contracts of Guaranty and Suretyship

*3.1 Concept of Accessory Contracts:
13.1.1 Accessory Contracts: (a) Definition: An accessory
contract is one that cannot exist without a valid principal
contract. In our law, the term “accessory contract” is
synonymous with contracts of guaranty or security,
(b) Two Kinds of Accessory Contracts: (1) Contracts
of Personal Security - the faithful performance of
’“Art. 2002, NCC.

703 YHT Realty Corp. v. CA, G.R. No. 126780, February 17, 2005.
’"Art. 2002, NCC.
’“Makati Shangri-la Hotel and Resort, Inc. v. Harper, G.R. No. 189998, August 29, 2012.
J9JC9B0M
R52M9UH7

the obligation by the principal debtor is secured by

the personal commitment of another (the guarantor
or surety), such as the contracts of guaranty proper
and suretyship;706 (2) Contracts of Real Security - the
faithful performance of the obligation of the debtor is
secured by a specific property, such that if the principal
obligation becomes due and the debtor defaults, then the
property encumbered can be alienated for the payment
of the obligation.
13.2 Contract of Guaranty Proper:
13.2.1 Concept. Nature, and Characteristics: (a) Definition: By
guaranty a person, called the guarantor, binds himself
to the creditor to fulfill the obligation of the principal
debtor in case the latter should fail to do so.70’ (b)
Accessory Contract: A guaranty is an accessory contract
in the sense that it is entered into for the purpose of
securing the performance of another obligation which
is denominated as the principal obligation.™ (c)
Guarantor Cannot be Debtor Himself: Another peculiar
characteristic of guaranty is that the guarantor is a person
distinct from the person guaranteed. Thus, a person
cannot be both the primary debtor and the guarantor of
his own debt, for it is inconsistent with the very' purpose
of a guarantee which is for the creditor to proceed against
a third person if the debtor defaults in his obligation.™
(d) Obligation of Guarantor is Subsidiary: A contract
of guaranty gives rise to a subsidiary obligation on the
part of the guarantor. It is only after the creditor has
proceeded against the properties of the principal debtor
and the debt remains unsatisfied that a guarantor can
be held liable to answer for any unpaid amount. This
is the principle of excussion.710 (e) Unilateral Contract:
The contract of guaranty is unilateral,’11 because what
arises therefrom are solely obligations on the part of
’““Acme Shoe, Rubber and Plastic Corp. v. CA, G.R. No. 103576, August 22, 1996.
’“’Art. 2047, par. I, NCC.
’“’Atok Finance Corp. v. CA, 222 SCRA 232(1993).
’““Velasquez v. Solidbank Corp., G.R. No. 157309, March 28, 2008.
7l“Ong v. PCIB, 488 SCRA 705.
711The Texas Company (Phil.), Inc. v. Alonzo, 73 Phil. 90 (1941), citing Visayan Surety and
Insurance Corp. v. Laperal, G.R. No. 46515, June 14, 1940.
J9JC9B0M
R52M9UH7
the guarantor in relation to the creditor, (f) Governed

hv Statute of Frauds: The undertaking of the guarantor
(but not the contract of guaranty itself) is covered by
the Statute of Frauds.712 It is only the undertaking of the
guarantor that is required to be in writing; the consent of
the creditor (or the acceptance of the guaranty) may be
proven by parol evidence.
13.2.2 Kinds of Guaranty: (a) According to Source: (1)
Conventional - that which is created by agreement
of the parties; (2) Legal - that which is constituted in
compliance with a provision of law; or (3) Judicial
- that which the court requires in order to secure the
eventual right of a party to a legal action or proceeding.
(b) According to Consideration: (1) Gratuitous —
where the guarantor receives no compensation for
guaranteeing the principal obligation. A guaranty is
basically gratuitous;713 however, gratuitousness is not
its essence because the parties may stipulate to the
contrary.714 (2) Onerous - where the guarantor receives
consideration for guaranteeing the principal obligation.
(c) According to Person Guaranteed: (1) Simple - where
the obligation secured is that of the principal debtor; or
(2) Double - where the obligation secured is that of the
first or anterior guarantor, also called “sub-guaranty.”
13.3 Contract of Suretyship:
13.3.1 Nature and Characteristics: (a) Definition: A suretyship
is created when a guarantor binds itself solidarily
with the principal obligor.7” Article 2047 of the Civil
Code provides that suretyship arises upon the solidary
binding of a person deemed the surety with the principal
debtor for the purpose of fulfilling an obligation.7”
(b) Accessory Contract: The surety’s obligation is
not an original and direct one for the performance of
his own act, but merely accessory or collateral to the
7l2Art. 1403(2)(b), NCC.

7l3Art. 2048, NCC.
7l4/</.
’'’International Finance Corp. v. Textile Mills, Inc., 475 SCRA 149.
’’’Prudential Guarantee and Assurance Corp. v. Equinox Land Corp., G.R. Nos. 152505-
06, September 13,2007.
J9JC9B0M
R52M9UH7

obligation contracted by the principal.’17 (c) Liability

is Direct and Primary: Although a surety contract is in
essence secondary only to a valid principal obligation,
his liability to the creditor or promisee of the principal
1
1 is said to be direct, primary, and absolute;71’ in other
words, he is directly and equally bound with the
principal.719 Thus, a creditor can go directly against
the surety although the principal debtor is solvent
and is able to pay or no prior demand is made on the
principal debtor.770 (d) Governed by Statute of Frauds:
Suretyship is a contractual relation resulting from an
agreement whereby one person, the surety, engages to
be answerable for the debt, default, or miscarriage of
another, known as the principal. Hence, a contract of
suretyship is covered by the Statute of Frauds.771 (e)
Consideration in Suretyship: The surety becomes liable
for the debt or duty of another although he possesses no
direct or personal interest over the obligations nor does
he receive any benefit therefrom.777 The consideration
necessary to support a surety obligation need not pass
directly to the surety; a consideration moving to the
principal alone will suffice.777 (f) Distinguished from
Solidary Debtor: (1) in the case of surety, the entire
obligation belongs to someone else; while in the case of
a solidary debtor, there is a portion of the obligation that
properly pertains to him; (2) upon payment of the entire
obligation, the surety is entitled to seek reimbursement
from the principal debtor for the amount paid; while in
the case of a solidary debtor, he is not entitled to full
reimbursement of the amount he paid but may only
claim from his co-debtors the share which corresponds
to each, with interest for the payment already made.774
,l7Garcia. Jr. v. CA, 191 SCRA 493 (1990).

’"Garcia, Jr. v. CA, supra', see also International Finance Corp. V. Textile Mills, Inc., supra.
"'Id.
770Ong v. PCIB, 448 SCRA 705.
"'Art. 1403(2)(b), NCC.
777Garcia, Jr. v. CA, supra.
mId.
774Escaito v. Ortigas, G.R. No. 151953, June 29, 2007; see also Diamond Builders
Conglomeration v. Country Bankers Insurance Corp-, G.R. No. 171820, Dec. 13,2007.
J9JC9B0M
R52M9UH7
13.3.2 Surety and Mere Guarantor Distinguished: (1) a mere

guarantor does not bind himself solidarily with the
principal debtor, while a surety binds himself solidarily
with the principal debtor; (2) a guarantor is entitled to
the benefit of excussion, while a surety is not; (3) a
guarantor is only secondarily liable, while a surety is
principally liable; (4) a guaranty is an undertaking that
the debtor shall pay, while a suretyship is an undertaking
that the debt shall be paid; (5) a guarantor agrees that
the creditor, after proceeding against the principal, may
proceed against the guarantor if the principal is unable
to pay, while a surety promises to pay the principal’s
debt if the principal will not pay; and (6) a guarantor is
an insurer of the solvency of the debtor, while a surety
is an insurer of the debt.
13.4 Principles Common to Both:
13.4.1 As to Subject Matter (Principal Obligation Guaranteed):
(a) Nature of Principal Obligation Guaranteed: (I) It must
be a valid obligation (not void);725 (2) it may be voidable
or unenforceable;726 (3) it may be a civil obligation or
natural obligation;727 and (4) it may also be a conditional
obligation.728 (b) Obligations Covered: (1) A guaranty
or surety does not only cover present obligations of the
principal debtor, but it may also secure future debts, the
amount of which is not yet known72’ —and this is the
basis for contracts denominated as continuing guaranty
or suretyship, or one which covers all transactions,
including those arising in the future, which are within
the description or contemplation of the contract of
guaranty, until the expiration or termination thereof.™
(2) As a rule, a contract of guaranty or suretyship is only
prospective and not retroactive in operation,751 unless
725Art. 2052, par. 1, NCC.

,26Art. 2052, par. 2, NCC.
™Id.
72“Art. 2053, NCC.
,2’Art. 2053, NCC.
73oDifio v. CA, 216 SCR A 9(1992).
73lSocony Vacuum, Corp. v. Miraflores, 67 Phil. 304; El Venceder v. Canlas, 44 Phil. 699;
Asiastic Petroleum Co. v. De Pio, 46 Phil. 167.
J9JC9B0M
R52M9UH7

a contrary intent is clearly shown.™ Hence, when the

parties to the contract clearly provided that the guaranty
would cover “sums obtained and/or to be obtained,” the
same can be given retroactive application.™
13.4.2 Parties to Contract: (a) Who are Parties Thereto: The
contract of guaranty or suretyship is only between
the guarantor or surety and the creditor. The principal
debtor is not a party thereto. In fact, the same may
be entered into without the knowledge or consent,
or even against the will of the principal debtor.™ (b)
Qualifications of Guarantor or Surety: (1) One who is
obliged to furnish a guaranty is obliged to present a
person who possesses integrity, capacity to bind himself,
and sufficient property to answer for the obligation
which he guarantees.™ (2) The subsequent conviction
of the guarantor of a crime involving dishonesty or his
becoming an insolvent does not terminate the contract
but merely entitles the creditor to demand a replacement
of the guarantor.™ The option lies with the creditor. But
where the guarantor is personally designated by the
creditor, the subsequent insolvency or dishonesty of the
i guarantor shall not entitle the creditor to demand for
replacement.™
13.4.3 Right to Reimbursement and Subrogation Upon
Payment: (a) Applicability of Articles 2066 and 2067:
Article 2066 of the Civil Code assures that “[t]he
i guarantor who pays for a debtor must be indemnified by
the latter,” such indemnity comprising of, among others,
“the total amount of the debt.” Further, Article 2067 of
the Civil Code likewise establishes that “the guarantor
who pays is subrogated by virtue thereof to all the rights
which the creditor had against the debtor.” The rights
to indemnification and subrogation as established and
granted to the guarantor by Articles 2066 and 2067
’"Pastoral v. Mutual Security Insurance Corp., G.R. No. L-20469, August 31, 1965.
’"Willex Plastic Industries Corp. v. CA, G.R. No. 103066, April 25, 1996.
’"Art. 2050, NCC.
’"Art. 2056, NCC.
’“Art. 2057, NCC.
J9JC9B0M
R52M9UH7
extend as well to sureties as defined under Article

2047.™ (b) Right to Reimbursement: (1) Rule: The
guarantor who pays for a debtor must be indemnified
by the latter.7” (2) Exceptions: (i) If the guarantor has
paid without notifying the debtor, and the latter not
being aware of the payment, repeats the payment, the
guarantor has no remedy whatever against the debtor,
but only against the creditor.740 Nevertheless, in case of
a gratuitous guaranty, if the guarantor was prevented
by a fortuitous event from advising the debtor of the
payment, and the creditor becomes insolvent, the debtor
shall reimburse the guarantor for the amount paid.741 (ii)
If the guaranty is entered into without the knowledge
or consent, or against the will of the principal debtor,
the guarantor is entitled to indemnity only to the extent
that the payment has been beneficial to the debtor. If the
payment has not benefited the debtor at all, the guarantor
does not acquire any valid claim for reimbursement.742
(3) Extent of Indemnity: The indemnity comprises of:
(i) the total amount of the debt; (ii) the legal interest
therefrom from the time the payment was made known
to the debtor, even though it did not earn interest for
the creditor; (iii) the expenses incurred by the guarantor
after having notified the debtor that payment had been
demanded of him; and (iv) damages, if they are due.742
(4) If Guarantor Pays Before Maturity: If the debt was
for a period and the guarantor paid it before it became
due, he cannot demand reimbursement of the debtor
until the expiration of the period, unless the payment
has been ratified by the debtor.744 (5) From Whom May
Guarantor Demand Reimbursement: Ordinarily from
the principal debtor. However, if one, at the request
of another, becomes a guarantor for the debt of a third
person who is not present, the guarantor who satisfies
the debt may sue either the person so requesting or the
’’’Escafio v. Ortigas, G.R. No. 151953, June 29, 2007.

’’’Art. 2066, par. 1, NCC.
,4°Art. 2070, 1 “ sentence, NCC.
74lArt. 2070, 2nd sentence, NCC.
742Art. 2050, in relation io Art. 1236, NCC.
743Art. 2066, NCC.
744Art. 2069, NCC.
J9JC9B0M
R52M9UH7

debtor for reimbursement.’" (c) Right to subrogation:

(1) Rule: The guarantor who pays is subrogated by
virtue thereof to all the rights which the creditor had
against the debtor.7" (2) In Case of Partial Payment:
Guarantor is not yet entitled to subrogation. A guarantor
cannot exercise the right of subrogation until the
principal obligation has been fully extinguished."’
13.4.4 Remedy ofGuarantor Before Payment: (al What Remedy
May be Exercised: The remedy that may be exercised is
either to obtain release from the guaranty, or to demand
a security that shall protect him from any proceedings
by the creditor and from the danger of insolvency of the
debtor.™ (b) When Remedy May be Exercised: Even
before payment, in the following instances: (1) when
he is sued for payment; (2) in case of insolvency of the
principal debtor; (3) when the debtor has bound himself
to relieve him from the guaranty within a specified
period, and this period has expired; (4) when the debt
has become demandable, by reason of the expiration of
the period for payment; (5) after the lapse of ten years,
when the principal obligation has no fixed period for
its maturity, unless it be of such nature that it cannot
be extinguished except within a period longer than ten
years; (6) if there are reasonable grounds to fear that
the principal debtor intends to abscond; and (7) if the
principal debtor is in imminent danger of becoming
insolvent.™
13.4.5 Extinguishment of Guaranty: (a) Modes of
Extinguishment: (1) The guaranty is extinguished,
indirectly, upon the extinguishment of the principal
obligation.(2) The obligation of the guarantor is
also extinguished for the same causes as all other
obligations.751 (3) There are also special causes that may
result in the extinguishment of the guaranty, (b) Special
’"Art. 2072, NCC.

’"Art. 2067, par. 1, NCC.
’■"Somes v. Molina, 15 Phil. 133.
""Art. 2071, last par., NCC.
"’Art. 2071, NCC.
""Art. 2076, NCC
”'/</.
J9JC9B0M
R52M9UH7
540 PRE-R \R REVIEWER IN CIVIL LAW
Cause: Extension of Time Granted to Debtor: (1) Rule:

An extension granted to the debtor by the creditor
without the consent of the guarantor extinguishes
the guaranty.”2 This provision is also applicable to a
surety.”3 However, the mere failure on the part of the
creditor to demand payment after the debt has become
due does not of itself constitute any extension of time
that will result in the release of the guarantors.754 (2)
Such Protection May be Waived: The requirement that
the guarantor should consent to any extension granted
by the creditor to the debtor under Art. 2079 of the Civil
Code is for the benefit of the guarantor. Thus, even if
extensions were granted by the creditor to the principal
debtor, the guarantor could opt to waive the need for
consent to such extensions.”5 (c) Special Cause: When
Guarantor Cannot be Subrogated Due to Fault of
Creditor: (1) Rule: The guarantors, even though they
be solidary, are released from their obligation whenever
by some act of the creditor they cannot be subrogated
to the rights, mortgages, and preference of the latter.756
(2) Applicability: Article 2079 is no doubt applicable to
a mere guarantor. As to the case of a surety, the Court
has ruled that in the absence of an express stipulation,
the surety is discharged from liability if the act of the
creditor was such as would be declared negligent or
constitutive of a material alteration of the contract.757
In PNB v. Manila Surely,™ the Court en banc declared
the surety discharged from liability on account of the
creditor’s negligence. In that case, the creditor failed
to collect the amounts due to the debtor contrary to
the former’s duty to make collections as holder of
an exclusive and irrevocable power of attorney. The
negligence of the creditor allowed the assigned funds to
be exhausted without notice to the surety and ultimately
”2Art. 2079, 1“ sentence, NCC.

753Aulocorp Group v. Intra Strata Assurance Corp., G.R. No. 166662, June 27, 2008.
”4Art. 2079,2nd sentence, NCC.
”5JN Dev. Corp., el al. v. Phil. Export & Foreign Loan Guarantee Corp., 468 SCRA 555
(2005).
”6Art. 2180, NCC.
”7Carodan v. China Banking Corp., G.R. No. 210542, February 24, 2016.
”“122 Phil. 106 (1965), cited in Carodan v. China Bunking Corp., supra.
J9JC9B0M
R52M9UH7

resulted in depriving the latter of any possibility of

recourse against that security. Also, in PNB v. Luzon
Surety,™ the Court hinted at the possibility of the surety’s
discharge from liability. It was recognized in that case
that in this jurisdiction, alteration can be a ground for
release. The Court clarified, though, that this principle
can only be successfully invoked on the condition that
the alteration is material. Failure to comply with this
requisite means that the surety cannot be freed from
liability. Applying this doctrine in that case, the Court
ruled that the alterations in the form of increases in the
credit line with the full consent of the surety did not
suffice to release the surety.
13.5 Principles Applicable Only to Contract of Guaranty Proper:
13.5.1 Benefit of Excussion: (a) Concept: The guarantor cannot
be compelled to pay the creditor unless the latter has
exhausted all the property of the debtor and resorted to
all the legal remedies against the debtor. This is known
as the benefit of excussion.760 (b) Requisites to Avail
of Benefit: (1) it must be invoked at the proper time -
the guarantor must set it up against the creditor upon
the latter’s demand for payment;761 and (2) it must be
invoked in the proper way - the guarantor must point
out to the creditor available property of the debtor within
the Philippines sufficient to cover the amount of the
debt.767 (c) Effect of Failure to Comply With Requisites:
If, after having been served with the demand letter at
his office, the guarantor fails to point out to the creditor
properties of the principal debtor sufficient to cover its
debt, such failure on the guarantor's part forecloses his
right to set up the defense of excussion.’67 (d) Effect of
Compliance With Requisites: If the guarantor fulfills
the foregoing conditions and the creditor, through his
”’I6O-A Phil. 854 (1975), cited in Carodan v. China Banking Corp., supra.
,6dJN Dev. Corp., el al. v. Phil. Export & Foreign Loan Guarantee Corp., 468 SCRA 555
(2005); also in Bitanga v. Pyramid Construction Engineering Corp., G.R. No. 173526, Aug. 28,
2008 and Trade and Investment Development Corporation v. Philippine Veterans Bank, G.R. No.
233850, July 1,2019.
761 Art. 2060, NCC.
767/<Z
’“Bitanga v. Pyramid Construction Engineering Corp., G.R. No. 173526, Aug. 28, 2008.
J9JC9B0M
R52M9UH7
negligence, fails to exhaust the property pointed out, the

latter shall suffer the loss, to the extent of said property,
for the insolvency of the debtor resulting from such
negligence.764 (e) Not Condition Sine Qua Non for Filing
Action Against Guarantor: Excussion is not a condition
sine qua non for the institution of an action against a
guarantor765 and not a pre-requisite to secure a judgment
against the guarantor.766 The guarantor can still demand
deferment of the execution of the judgment against him
until after the assets of the principal debtor shall have
been exhausted.767 It is in this sense that the guarantor
cannot be held liable in the absence of a judgment
against the debtor and the latter is unable to pay.76’ (f)
Defense Personal to Guarantor: The right is granted to
the guarantor. He may choose to waive it. On the other
hand, the debtor may not raise such defense.76’ (g) When
Guarantor Not Entitled to Excussion: (1) if the guarantor
has expressly renounced it; (2) if he has bound himself
solidarily with the debtor; (3) in case of insolvency of
the debtor; (4) when debtor has absconded, or cannot be
sued within the Philippines, unless he has left a manager
or representative; or (5) if it may be presumed that an
execution on the property of the principal debtor would
not result in the satisfaction of the obligation.770
13.5.2 Benefit of Division: (a) Applicability: When there are
several guarantors of only one debtor and for the same
debt and they did not bind themselves solidarily. (b)
Concept: Any one of the of the co-guarantors has the
right to have the creditor divide the claim which he may
have against all of them, the creditor not being able
then to demand from each co-guarantor more than the
portion that devolves on him to satisfy by reason of the
said division, provided that one of them does not turn
’“Art. 2061, NCC.

’“Prudential Bank v. 1AC, 216 SCRA 257 (1992).
’“Southern Motors, Inc. v. Barbosa, 99 Phil. 263 (1956).
,6’/<7.
’“Bayion v. CA, 312 SCRA 502.
(2005) Dev. Corp., el al. v. Phil. Export & Foreign Loan Guarantee Corp., 468 SCRA 555
”"Art. 2059, NCC.
J9JC9B0M
R52M9UH7

out to be insolvent, in which case the part corresponding

to him shall be borne by the others, in accordance with
the provision of the second paragraph of Article 2073
of the Civil Code. This is known as the “benefit of
division.” (c) When Benefit Ceases: (1) if the guarantor
has expressly renounced it; (2) if he has bound himself
solidarily; (3) if his co-guarantors are insolvent; (4) if
his co-guarantors have absconded or cannot be sued
within the Philippines, unless they have left managers
or representatives; and (5) if it may be presumed that
an execution on the co-guarantor’s property would not
result in the satisfaction of their respective portion of
the obligation.
14) Real Mortgage Contract and Antichresis

14.1 Concept of Real Estate Mortgage and Antichresis: (a) Similarity:
In both, the collateral consists of real property, (b) Distinction:
Antichresis involves an express agreement between parties
whereby: (1) the creditor will have possession of the debtor’s
real property given as security; (2) such creditor will then apply
the fruits of the said property to the interest owed by the debtor,
if any, to the principal amount; (3) the creditor retains enjoyment
of such property until the debtor has totally paid what he owes;
and (4) should the obligation be duly paid, then the contract
is automatically extinguished proceeding from the accessory
character of the agreement.771 A simple mortgage does not give
the mortgagee a right to the possession of the property unless the
mortgage should contain some special provision to that effect.777
Hence, the creditor may be in possession of the immovable in
both contracts. What really distinguishes antichresis from real
estate mortgage is that in the former, there must be an express
agreement granting the creditor the right to receive the fruits of the
immovable but with a corresponding obligation to apply the same
to the payment of the interest, if any, and then to the principal.
Without such express agreement, the collateral is merely a real
estate mortgage, (c) Assignment as Security: An assignment
which is not an absolute conveyance which confers ownership on
the assignee but merely to guarantee an obligation is in effect a
77lReyes v. Heirs of Benjamin Malance, 801 SCRA 485 (2016).

777lsagani v. De Lara, G.R. No. 138053, May 31,2000.
J9JC9B0M
R52M9UH7
real estate mortgage, if the subject matter is a real property,™ or a

pledge, if the subject matter is a personal property.™ (d) Subject
Matter: (1) Nature of Obligation Guaranteed in Both Contracts:
(i) It must be a valid obligation (not void);775 (ii) it may be voidable
or unenforceable;776 (iii) it may be a civil or natural obligation;777
(iv) both may secure all kinds of obligations, be they pure or
subject to suspensive or resolutory conditions.778 (2) Obligations
Covered: (i) General Rule: As a rule, mortgage liability is usually
limited to the amount mentioned in the contract.779 (ii) Exception:
The amount named as consideration in the contract of mortgage
does not limit the amount for which the mortgage may stand as
security if, from the four comers of the instrument, the intent
to secure future and other indebtedness can be gathered.780 This
stipulation is valid and binding between the parties and is known
as the “blanket mortgage clause” (also known as the “dragnet
clause”).78' A mortgage given to secure future advancements
is a continuing security and is not discharged by repayment of
the amount named in the mortgage, until the full amount of the
advancements are paid.782 Hence, where the subsequent loans
were not covered by any security other than that for the mortgage
deed which contained the “dragnet clause,” such subsequent
loans are covered by the same mortgage.783 However, if the
subsequent advancements are secured by other collaterals, only
the deficiency after exhausting the security specified therein
shall be covered by the mortgage deed which contained the
“dragnet clause.”784 (e) Mortgagor Must be Absolute Owner: (1)
General Rule: In both contracts, the debtor-mortgagor must be
’’’People's Bank & Trust Co. v. Odom, 64 Phil. 126 (1937); DBP v. CA, 284 SCRA 14
(1998).
"’Manila Banking Corp. v. Teodoro, Jr., 169 SCRA 95 (1989).
’’’Art. 2086, in relation to Art. 2052, NCC.
mld.
™Id.
’’“Arts. 2091 and 2139, NCC.
779Banate v. Philippine Countryside Rural Bank (Liloan, Cebu), Inc., G.R. No. 163825,
July 13, 2010.
™Id.
™Id.
’“’Bank of Commerce v. Sps. Flores, G.R. No. 174006, December 8, 2010.
783Lim Julian v. Latero, 49 Phil. 704 (1926); Tad-Y v. PNB, 12 SCRA 19 (1964) and China
Banking Corp. v. CA, 333 Phil. 158(1996).
’“’Prudential Bank v. Alviar, 464 SCRA 245 (2005).
J9JC9B0M
R52M9UH7

the absolute owner of the collateral;”’ otherwise, the contract,

as well as any subsequent foreclosure sale of the mortgaged
property,786 is void.787 (2) Exception: An exception to this rule is
the doctrine of “mortgagee in good faith.” Under this doctrine,
even if the mortgagor is not the owner of the mortgaged property,
the mortgage contract and any foreclosure sale arising therefrom
are given effect by reason of public policy.788 This principle is
based on the rule that all persons dealing with property covered
by a Torrens Certificate of Title, as buyers or mortgagees, are
not required to go beyond what appears on the face of the title.789
(3) Instances When Mortgagee Cannot Rely Simply on Title:
(i) Where there are circumstances which would put a party on
guard and prompt him to investigate or inspect the property being
sold to him, such as the presence of occupants/tenants thereon,
it is, of course, expected from the purchaser of a valued piece of
land to inquire first into the status or nature of possession of the
occupants, i.e., whether or not the occupants possess the land
en concepto de dueho, in the concept of the owner. This rule
equally applies to mortgagees of real property.790 (ii) The rule
that persons dealing with registered lands can rely solely on the
certificate of title does not apply to banks791 and to investment
and financing institutions.792 These institutions are required to
ascertain the status and condition of properties offered to them
as security for loans extended by them.792 (iii) The GSIS cannot
likewise rely solely on the certificate of title. It must exercise care
and prudence in investing its funds, hence it must exercise due
diligence in dealing with properties submitted as collateral for
loans.794 (iv) A person engaged in real estate business also cannot
rely simply on the title. He is expected to ascertain the status and
condition of the properties offered to him as collaterals, as well as
’“’Art. 2085, par. 2, NCC.

’“Cavite Development Bank, Inc. v. Lim, 324 SCRA 346 (2000).
’“’Robles v. CA, 328 SCRA 97 (2000).
’““Llanto v. Alzona, 450 SCRA 288 (2005), citing Cavite Development Bank v. Lim, supra.
mld.
”“PNB V. Heirs of Estanislao Militar, G.R. No. 164801, June 30, 2006.
’’‘Rural Bank ofCompostela v. CA, 271 SCRA 76, 88 (1997), citing Tomas v. Tomas, 98
SCRA 280, 286(1980).
’’’Sunshine Finance and Investment Corp. v. 1AC, 203 SCRA 210 (1991) and State Invest
ment House, Inc. v. CA, 254 SCRA 368 (1996).
”4GSIS v. CA, 287 SCRA 204 (1998).
J9JC9B0M
R52M9UH7
to verify the identities of the persons he transacts business with.”5

(f) Third Party Mortgagor: In both contracts, third persons who
are not parties to the principal obligation may secure the latter by
mortgaging their own property;796 these third persons are known
as accommodation mortgagors. An accommodation mortgagor
is not solidarily bound with the principal debtor.”7 His liability
extends only to the property mortgaged. Should there be any
deficiency, the creditor has recourse on the principal debtor.7”
14.2 Characteristics of Both Contracts: (a) Perfection: Both contracts
are consensual or perfected upon mere consent. In antichresis,
the delivery of the immovable is not a requirement for its
perfection. Instead, upon the perfection of the said contract
by mere consent, it will create an obligation on the part of the
debtor to deliver the immovable to the creditor, (b) Formalities
Required: In order for the contract of antichresis to be valid, the
law requires that the amount of the principal and interest of the
loan contract must be specified in writing.799 Such requirement
can be accomplished in the principal contract of loan. In such a
case, the contract of antichresis need not be in writing. The real
estate mortgage contract, on the other hand, is required to be in
a public document pursuant to Article 1358 of the Civil Code.
However, even if said contract is not reduced to a public document
the contract is still valid and enforceable because the Court has
ruled that the requirement of public document in Article 1358 is
only for convenience, not for validity nor for enforceability.™0
A real estate mortgage contract is likewise not covered by the
Statute of Frauds because in relation to real properties, only the
following transactions are covered by said Statute: (1) sale of
real property; (2) lease of real property for a period longer than
one year;™1 and (3) express trusts over an immovable property.
Hence, an oral real estate mortgage agreement is a valid and
enforceable contract, therefore, obligatory, (c) Creates Real
795Adriano v. Pangilinan, 373 SCRA 544 (2002).

’’‘Arts. 2085, Iasi par., and 2139, NCC.
’’’Bank of America, NT & SA v. American Realty Corp., 321 SCRA 659 (1999).
’’“Cerna v. CA, 220 SCRA 517 (1993).
’"Art. 2134, NCC.
“Dailon v. CA, 182 SCRA 892 (1990); Agasen v. CA, 325 SCRA 504 (2000) and Penaloza
v. Santos, 363 SCR A 545 (2001).
“'Art. 1403, par. 2(e), NCC.
“’Art. 1443, NCC.
J9JC9B0M
R52M9UH7

Rights: In order to bind third persons, both contracts must be

recorded in the Registry of Property.801 However, both contracts
are nevertheless binding between the parties even if they are not
recorded in the Registry of Property.804 But once the contracts
are recorded, the same are real rights following the property,
such that in subsequent transfers by the mortgagor, the transferee
must respect the mortgage.805 (d) Indivisibility of Mortgage and
Antichresis: Both contracts are indivisible, even though the debt
may be divided among the successors in interest of the debtor or
of the creditor.806 Such indivisibility is not affected by the fact that
the debtors are not solidarity liable.807 The Court has understood
mortgage indivisibility in the sense that each and every parcel
under mortgage answers for the totality of the debt,808 regardless
of the existence or non-existence of several heirs of the debtor or
creditor. As consequences of this principle of indivisibility: (1)
the mortgage cannot be divided among the different lots which are
mortgaged to secure it;809 instead, each and every parcel of land
under mortgage answers for the totality of the debt.810 (2) A debtor
cannot ask for the release ofany portion ofthe mortgaged property
or of one or some of the several properties mortgaged unless and
until the loan thus secured has been fully paid, notwithstanding
the fact that there has been partial fulfillment of the obligation.8"
Qualifications: (i) Once the mortgage is extinguished by a
complete foreclosure thereof, said doctrine of indivisibility
ceases to apply since, with the full payment of the debt, there
is nothing more to secure.817 (ii) The concept of indivisibility
of mortgage does not apply to the right of redemption of an
accommodation mortgagor and his assignees.813 The liability of
the accommodation mortgagors extends only up to the loan value
“‘Art. 2125, par. l.NCC.

mld.
““Art. 2126, NCC; PNB v. RLB Enterprises, Inc., 430 SCRA299 (2004).
““Arts. 2089, par. I anil 2139, NCC.
““'Art. 2090, NCC.
“““PNB v. Mallorca, 128 SCRA747 (1967).
““PNB v. 1AC, G.R. No. L-62831 -32, July 31, 1986, citing Gonzales v. GS1S, 107 SCRA
492 (1981); Aquino v. Macondray & Co., Inc., el al, 97 Phil. 731 (1955).
“'“Gonzales v. GSIS, supra.
“"MBTC v. SLGT Holdings, Inc., G.R. Nos. 175181-82, Sep. 14, 2007; PNB v. Delos
Reyes, G.R. Nos. L-46898-99, Nov. 28, 1989.
“i7PNB v. Delos Reyes, G.R. Nos. L-46898-99, Nov. 28, 1989.
“l3Belo v. PNB, 353 SCRA 359 (2001).
J9JC9B0M
R52M9UH7
of their mortgaged property and not to the entire loan itself.814 (3)
Since every' portion of the property mortgaged is answerable for
the whole obligation as soon as the latter falls due, the mortgagor
cannot opt. much less compel the mortgagee, to apply any
payment made by him on a specific portion of the mortgaged
property to effect release.815 (4) The annulment of the mortgage
is an all or nothing proposition. It cannot be divided into valid or
invalid parts. The mortgage is either valid in its entirety or not
valid at all. Ergo, a declaration of nullity for violation of Section
18 of P.D. No. 957 should result to the mortgage being nullified
wholly.816 (e) Prohibition Against Pactum Commissorium: (1)
Rule: The creditor cannot appropriate the things given by way
of mortgage81’ or antichresis.818 Any stipulation to the contrary
is void.81’ Such stipulation for automatic vesting of title over
the security in the creditor in case of the debtor’s default is
known as pactum commissorium.820 (2) Elements of Pactum
Commissorium: (i) there should be a property mortgaged by way
of security for the payment of the principal obligation; and (ii)
that there should be stipulation for an automatic appropriation by
the creditor of the thing mortgaged in case of non-payment of the
principal obligation within the stipulated period.821 The essence
of pactum commissorium, which is prohibited by Article 2088
of the Civil Code, is that ownership of the security will pass to
the creditor by the mere default of the debtor.822 (3) Instances of
Pactum Commissorium: (i) If the transaction is made to appear
as a sale with right to repurchase but the property merely stands
as a security for the payment of the principal obligation and the
period for repurchase is actually the period for the payment of
the loan obligation, in which case an equitable mortgage exists,
8I4W., see also Cemu v. CA, 220 SCRA 517.

815PNB v. Amores, 155 SCRA 455 (1987).
8I6MBTC v. SLGT Holdings, Inc ., supra.
"’Art. 2088, NCC.
""Art. 2137, NCC.
"’Arts. 2088 and 2137, par. 2, NCC.
82“Vda. de Zulueta v. Octaviano, G.R. No. L-55350, March 28, 1983.
82IDBI> v. CA, G.R. No. 118342, Janaury 5, 1998; Uy Tong v. CA, 161 SCRA 383 (1988);
Bustamante v. Rosel, G.R. No. 126800, November 29, 1999 and Pen V. Julian, 778 SCRA 56
(2016).
822Briones-Vasqucz v. CA, G.R. No. 144882, Feb. 4, 2005; Northern Motors, Inc. V.
Herrera, 49 SCRA 392, 399 (1973), citing Guerrero v. Yigo, el al., 96 Phil. 37, 41-42; Puig V.
Sellner, el al., 45 Phil. 286.
J9JC9B0M
R52M9UH7

the consolidation of ownership in the person of the mortgagee

in equity, merely upon failure of the mortgagor in equity to pay
the obligation, would amount to a pactum comrnissoriurn.m (ii)
If the transaction is made to appear as a dacion en pago but the
debt subsisted despite the transfer of the property in the name
of the creditor, such circumstance rendered the transaction as a
pactum commissorium.a' For a valid dacion enpago to transpire,
the attendance of the following elements must be established,
namely: (a) the existence of a money obligation; (b) the alienation
to the creditor of a property by the debtor with the consent of
the former; and (c) the satisfaction of the money obligation
of the debtor. To have a valid dacion en pago, therefore, the
alienation of the property must fully extinguish the debt.123 (iii)
If the transaction is made to appear as an assignment of property
but the property merely stands as a security for the payment of
an existing obligation and not an absolute conveyance of title
which confers ownership on the assignee, the transaction is in
effect a mortgage.82'’ Hence, the transfer of the title to the creditor
is a case of pactum commissorium. (f) Prohibition Against
Stipulation Forbidding Mortgagor from Alienating: The law
prohibits any stipulation forbidding the owner from alienating
the immovable mortgaged, declaring any such stipulation to be
void.827 The prohibition is still violated even if the Deed of Real
Estate Mortgage contains no absolute prohibition against the
sale of the property mortgaged but only requires the mortgagor
to obtain the prior written consent of the mortgagee before any
I such sale.828 Such stipulation practically gives the mortgagee the
sole prerogative to prevent any sale of the mortgaged property
to a third party. The mortgagee can simply withhold its consent
and, thereby, prevent the mortgagor from selling the property.
This creates an unconscionable advantage for the mortgagee
and amounts to a virtual prohibition on the owner to sell his
mortgaged property.82’ However, a stipulation prohibiting the
“’Montevergin v. CA, 112 SCRA641 (1982).

“’Pen v. Julian, 778 SCRA 56 (2016).
“’/</.
“‘People’s Bank & Trust Co. V. Odom, 64 Phil. 126 (1937) and DBP v. CA, G.R. No.
118342, January 5, 1998.
“’Art. 2130, NCC; Tambunting v. Rehabilitation Finance Corp., 176 SCRA 493 (1989).
“"Lilonjua v. L & R Corp., 320 SCRA 405 (1999).
J9JC9B0M
R52M9UH7
mortgagor from entering into second or subsequent mortgages

was held to be valid.8”
14.3 Remedies in Case of Default: (a) Alternative Remedies: In
real estate mortgage, the mortgagee may either: (1) foreclose
the mortgage; or (2) file an ordinary action to collect the
debt.8’1 The same rule applies in antichresis.8” These remedies
available to the mortgagee-creditor are deemed alternative and
not cumulative. An election of one remedy operates as a waiver
of the other.8” Hence, the mere act of filing a collection suit for
the recovery of a debt secured by a mortgage constitutes waiver
of the other remedy of foreclosure.854 The mortgagee thereby
waives his mortgage lien and he will have no more priority
over the mortgaged property.8” (b) Foreclosure of Mortgage: (1)
Manner of Foreclosure: The foreclosure of the mortgage may
either be judicial or extrajudicial. The extrajudicial sale of the
property mortgaged is allowed only when the mortgagee is given
a special power or express authority to do so in the deed itself,
or in a document annexed thereto.8’6 In antichresis, however,
the foreclosure should always be judicial.8” (2) Prescriptive
Period of Mortgage Action: A mortgage action prescribes after
10 years from the time the right of action accrues,8’8 which is
obviously not the same as the date of the mortgage contract.
The right of action accrues when the mortgagor defaults in the
payment of his obligation to the mortgagee.8” (3) Recovery of
deficiency: Whether the foreclosure is judicial or extrajudicial,
there is a right to recover the deficiency.840 If the foreclosure
was done extrajudicially, the deficiency may be recovered by
“’“Philippine Industrial Co. v. El Hogur Filipino and Vallejo, 45 Phil. 336 (1923).
“’'Caltex Philippines, Inc. v. 1AC, 176 SCRA 741 (1989); Bank of America, NT & SA v.
American Really Corp., 321 SCRA 659 (1999); Suico Rattan & Buri Interiors, Inc. v. CA, G.R.
No. 138145, June 15,2006.
“’’Art. 2137, par. 2, NCC.
“Suico Rattan & Buri Interiors, Inc. v. CA, supra, citing Bank of America, NT & SA v.
American Realty Corp., supra.
“14Caltex Philippines, Inc. v. IAC, supra.
mId.
““Luna v. Encarnacion, 91 Phil. 53 (1952).
"’Art. 2137, par. 2, NCC.
““Art. 1142, NCC.
“’’Cando v. Olazo, G.R. No. 160741, March 22, 2007.
““Philippine Bank of Commerce v. De Vera, 6 SCRA 1026 (1962); Sec. 6, Rule 68, Rules
of Court.
J9JC9B0M
R52M9UH7

filing an ordinary action for collection within the same 10-year

period because a suit for the recovery of the deficiency after the
foreclosure of a mortgage is in the nature of a mortgage action.841
On the other hand, the mortgagee has the right to recover
deficiency in case of judicial foreclosure by way of a mere
motion.842 (4) Right of Redemption: (i~> If Mortgagee is a Bank:
If the mortgagee-creditor is a banking institution, the applicable
law is Sec. 47 of the General Banking Law (R.A. No. 8791),
even if the bank had already assigned the mortgage to a non
bank because in assignment the assignee steps into the shoes of
the assignor.843 Under Section 47 of the GBL, there is a right of
redemption whether the foreclosure is judicial or extrajudicial.
If the mortgagor is a natural person, the redemption period is
one year. In Commissioner of Internal Revenue v. United
Coconut Planters Bank,w the Court ruled that “for purposes
of reckoning the one-year redemption period in the case of
individual mortgagors, or the three-month redemption period for
juridical persons/mortgagors, the same shall be reckoned from
the date of the confirmation of the auction sale which is the date
when the certificate of sale is issued.” On the other hand, if the
mortgagor is a juridical person the latter is allowed to exercise
the right of redemption only “until, but not after, the registration
of the certificate of foreclosure sale” and in no case more than
three months after foreclosure, whichever comes first. The three-
month period is counted from the date when the certificate of
sale is issued.843 The shorter period for the exercise of the right
of redemption on the part of a juridical person is applicable even
if the mortgage was executed prior to the effectivity of R.A.
No. 8791 so long as the foreclosure is made during the law’s
effectivity. The constitutional proscription against impairment of
the obligation of contract is not violated because Section 47 of
the GBL does not divest juridical persons of the right to redeem
their foreclosed properties but only modified the time for the
exercise of such right by reducing the one-year period originally
M,DBP v.Tomeldan, 101 SCRA 171 (1980).

M2Sec. 6, Rule 68, Rules of Court.
w,White Marketing Development Corp. v. Grandwood Furniture & Woodwork, Inc., G.R.
No. 222407, November 23, 2016.
“GR. No. 179063, October 23,2009.
"’CIR v. UCPB, supra.
J9JC9B0M
R52M9UH7
provided in Act No. 3135.848 The difference in the treatment of

juridical persons and natural persons is based on the nature of
the properties foreclosed, whether these are used as residence, for
which the more liberal one-year redemption period is retained, or
used for industrial or commercial purposes, in which case a shorter
term is deemed necessary to reduce the period of uncertainty in
the ownership of property and enable mortgagee-banks to dispose
sooner of these acquired assets.847 (ii) If Mortgagee is Not a Bank:
If the foreclosure is made extrajudicially, the governing law is Act
No. 3135 which grants a right of redemption within a period of
one year, whether the mortgagor is a natural person or a juridical
person. The one-year period of redemption is counted from the
date of the registration of the certificate of sale.848 However, if
the foreclosure is made judicially, there is no right of redemption
but only equity of redemption,84’ except if the mortgagee is a
banking institution.88" Equity of redemption is simply the right
of the defendant mortgagor to extinguish the mortgage and retain
ownership of the property by paying the secured debt881 within a
period of not less than 90 days nor more than 120 days from the
entry ofjudgment,882 or even after the foreclosure sale but prior to
its confirmation. After such order of confirmation, no redemption
can be effected any longer.888
14.4 Antichresis: (a) Essence: In order that there be antichresis, there
must be an express agreement in the contract that the creditor
shall have the right to receive the fruits of the immovable with
the obligation of applying it to the interest, if owing, or the excess
to the principal. Without that agreement, there is no antichresis.884
Thus, if a contract of loan with security provides for the delivery
to the creditor by the debtor of the property given as security, in
order that the latter may gather its fruits but without stating that
said fruits are to be applied to the payment of interest, if any, and
“"Goldenway Merchandising Corp. v. Equitable PCI Bank, G.R. No. 195540, March 13,
2013.
“7M.
"’W„ see also Belisario v. IAC, G.R. No. 73503, August 30, 1988.
"’Limpin v. IAC, 166 SCR A 87 (1988).
88°Sec. 47, R.A. No. 8791, also known as the General Banking Law.
881 Limpin v. IAC, supra.
8s2Scc. 2, Rule 68, Rules of Court.
888Limpin v. IAC, supra.
8i4Adrid v. Morga, 108 Phil. 927 (1960); Diego v. Fernando, G.R. No. L-15128, Aug. 25,
1960.
J9JC9B0M
R52M9UH7

afterwards that of the principal, the contract is a mortgage and not

antichresis.’” (b) Creditor Entitled to Possession: In antichresis,
the delivery of the immovable to the creditor is not a requirement
for the perfection of the contract but an obligation of the debtor
upon the perfection of the contract. The debtor cannot, thereafter,
reacquire the enjoyment of the immovable without first having
totally paid what he owes the creditor.”6 (c) Obligations of
Creditor: (1) To apply the fruits to the payment of the interest, if
owing, and thereafter to the principal of his credit.”’ The measure
of such application shall be the actual market value of the fruits at
the time of the application thereof to the interest and principal.”’
(2) Unless there is a stipulation to the contrary, he is obliged to
pay the taxes and charges upon the estate.”’ He is also bound
to bear the expenses necessary for its preservation and repair.660
The sums spent for these purposes shall, however, be deducted
from the fruits.661 If the creditor wants to exempt himself from the
obligations mentioned in number 2 hereof, he may compel the
debtor to enter again upon the enjoyment of the property, except
when there is a stipulation to the contrary.““
15) Personal Property as Security

15.1 Effect of Personal Property Security Act (R.A. No. 115071: (a)
Repeal of Provisions on Pledge and Chattel Mortgage: This Act,
briefly referred to as PPSA, repealed the provisions of the Civil
Code on Pledge (Articles 2085 up to 2123), the provisions of the
Civil Code on Chattel Mortgage (Articles 2140 and 2141) and
Sections 1 to 16 of the Chattel Mortgage Law (Act No. 1508).
(b) No More Pledge and Chattel Mortgage: Under the PPSA,
contracts creating a security interest over a movable property
are referred to simply as “security agreement.”*63 Hence, the
distinction existing between the contracts of pledge and chattel
mortgage under the Civil Code is no longer applicable, (c)
“’’Diego v. Fernando, supra., citing Legaspi v. Celestial, 66 Phil. 372.

“’"Art. 2136, I “par., NCC.
’’’Art. 2132, NCC.
“’“Art. 2133, NCC.
’’’Art. 2135, 1“ par., NCC.
““Art. 2135,2nd par., NCC.
“'Art. 2135, S-'par., NCC.
“’Art. 2136,2”“ par., NCC.
“’Sec. 6, R.A. No. 11057.
J9JC9B0M
R52M9UH7
Creation of Centralized Registry: The PPSA created a centralized

and nationwide electronic registry that will be lodged in the Land
Registration Authority (LRA) where notice of a security interest
and a lien in personal property may be registered.864 (d) Scope of
PPSA: The law covers all transactions of any form that secure an
obligation with movable collateral.865 Exceptions: The law does
not apply to: (1) aircraft of Philippine registry or any interest
therein as collateral; and (2) vessels of domestic ownership as
collateral.866 The PPSA did not repeal the pertinent provisions of
the Civil Aviation Authority Act of 2008 (R.A. No. 9497) and
the Ship Mortgage Decree of 1978 (P.D. No. 1521). Hence, a
security agreement involving an aircraft of Philippine registry
must still be registered with the Philippine Civil Aviation
Authority,867 while the security agreement covering a vessel must
still be registered with the office of the Philippine Coast Guard of
the port of documentation of such vessel.“8
15.2 Creation of Security Interest: (a) Concept of Security Interest: It
is a property right in collateral that secures payment or other
performance of an obligation, regardless of whether the parties
have denominated it as a security interest, and regardless of the
type of asset, the status of the grantor or secured creditor, or the
nature of the secured obligation; including the right of a buyer of
accounts receivable and a lessor under an operating lease for not
less than one year.861' (b) Forms of Collateral Where Security
Interest Can be Created: A security interest may be created over
all forms of tangible or intangible assets or personal property as
defined by the Civil Code, including but not limited to: rights
arising from contracts (such as securities, commodities contracts,
and lease of goods including financial leases and operating leases
for a period of not less than one year), equipment, inventory,
deposit accounts, negotiable instruments, negotiable documents
of title, consumer goods, intellectual property, livestock, fixtures,
accessions and commingled goods, and future property or after
acquired assets, provided that a security interest can only be
864Secs. 26-44, R.A. No. 11057.

““Sec. 4, R.A. No. 11057.
“’Sec. 49, R.A. No. 9497.

“"Sec. 3, P.D. No. 1521.
“’Sec. 3(j), R.A. No. 11057.
J9JC9B0M
R52M9UH7

created on the asset over which the grantor has a legal right.™
Under previous law, a future property cannot be pledged or
mortgaged because the requirement used to be that the pledgor or
mortgagor must be the absolute owner over the thing pledged or
mortgaged. Under the PPSA, a security agreement may provide
for the creation of a security interest in a future property, but the
security interest in that property is created only when the grantor
acquires rights in it or the power to encumber it."1 (c) Manner of
Creating Security Interest: A security interest shall be created by
a security agreement,"2 which must be contained in a written
contract signed by the parties. It may consist of one or more
writings that, taken together, establish the intent of the parties to
create a security interest."3 Such security interest shall continue
in collateral notwithstanding sale, lease, license, exchange, or
other disposition of the collateral,"4 except: (i) as agreed upon by
the parties;"3 or (ii) the third person obtains any movable
containing a security interest in the ordinary course of business
and in good faith."6 However, he cannot claim good faith if the
security interest in the movable property was registered prior to
his obtaining the property."2 (d) Perfection of Security Interest:
(1) Importance of Perfection: Upon perfection, a security interest
becomes effective against third parties."1 (2) Manner of
Perfection: A security interest shall be perfected when a security
agreement is executed and any of the following acts is done: (i)
registration of the security interest in the electronic registry of the
Land Registration Authority; (ii) possession of the collateral by
the secured creditor; or (iii) control of investment property and
deposit account.1” In turn, a security interest in a deposit account
or investment property may be perfected by control through: (i)
the creation of the security interest in favor of the deposit-taking
institution or the intermediary; (ii) the conclusion of a control
“’“See. 2.03, IRRofR.A. No. 11057.

"'Sec. 5(b), R.A. No. 11057.
"’Sec. 5(a), R.A. No. 11057.
"’Sec. 6, par. I, R.A. No. 11057.
"4Sec. 9, R.A. No. 11057.
"’/</.
"‘Sec. 21, R.A. No. 11057.
"’/</.
"‘Sec. 11(b), R.A. No. 11057.
"’Sec. 11(a), in relation to Sec. 12, R.A. No. 11057.
J9JC9B0M
R52M9UH7
agreement; or (iii) for an investment property that is an electronic

security not held with an intermediary, the notation of the security
interest in the books maintained by or on behalf of the issuer for
the purpose of recording the name of the holder of the securities.880
(e) Priority Rules: The priority of security interests and liens in
the same collateral shall be determined according to time of
registration of a notice or perfection by other means, without
regard to the order of creation of the security interests and liens,881
subject to the following rules: (i) a security interest in a deposit
account with respect to which the secured creditor is the deposit
taking institution or the intermediary shall have priority over a
competing security interest perfected by any method;882 (ii) a
security interest in a deposit account or investment property that
is perfected by a control agreement shall have priority over a
competing security interest except a security interest of the
deposit-taking institution or the intermediary;883 (iii) a security
interest in a security certificate perfected by the secured creditor’s
possession of the certificate shall have priority over a competing
security interest perfected by registration of a notice in the
Registry;884 (iv) a security interest in electronic securities not held
with an intermediary perfected by a notation of the security
interests in the books maintained for that purpose by or on behalf
of the issuer shall have priority over a security interest in the
same securities perfected by any other method;885 (v) a security
interest in electronic securities not held with an intermediary
perfected by the conclusion of a control agreement shall have
priority over a security interest in the same securities perfected
by registration of a notice in the Registry;886 (vi) a security interest
in an instrument or negotiable document that is perfected by
possession of the instrument or the negotiable document shall
have priority over a security interest in the instrument or
negotiable document that is perfected by registration of a notice
in the Registry;88’ (vii) a person who provides services or
"“See. 13, R.A. No. 11057.

,!lSec. 17, R.A. No. 11057.
882Sec. 18(a), R.A. No. 11057.
“Sec. 18(b), R.A. No. 11057.
884Sec. 18(e), R.A. No. 11057..
88JSec. 18(1), R.A. No. 11057.
886Sec. 18(g), R.A. No. 11057.
8!’Sec. 19, R.A. No. 11057.
J9JC9B0M
R52M9UH7

materials with respect to the goods, in the ordinary course of

business, and retains possession of the goods shall have priority
over a perfected security interest in the goods until payment
thereof;888 (viii) a purchase money security interest in equipment
and its proceeds shall have priority over a conflicting security
interest, if a notice relating to the purchase money security
interest is registered within three business days after the grantor
receives possession of the equipment;8” (ix) a purchase money
security interest in consumer goods that is perfected by
registration of notice not later than three business days after the
grantor obtains possession of the consumer goods shall have
priority over a conflicting security interest;8” [Note: The purchase
money security interest in equipment or consumer goods
perfected timely in accordance with (viii) and (ix) hereof, shall
have priority over the rights of a buyer, lessee, or lien holder
which arise between delivery of the equipment or consumer
goods to the grantor and the time the notice is registered.8’1] (x) a
purchase money security interest in inventory, intellectual
property, or livestock shall have priority over a conflicting
perfected security interest in the same inventory, intellectual
property or livestock if: (1) the purchase money security interest
is perfected when the grantor receives possession of the inventory
or livestock, or acquires rights to intellectual property; and (2)
before the grantor receives possession of the inventory or
livestock, or acquires rights in intellectual property, the purchase
money secured creditor gives written notification to the holder of
the conflicting perfected security interest in the same types of
inventory, livestock, or intellectual property.”2 The notification
sent to the holder of the conflicting security interest may cover
multiple transactions between the purchase money secured
creditor and the grantor without the need to identify each
transaction;”1 (xi) a perfected security interest in livestock
securing an obligation incurred to enable the grantor to obtain
food or medicine for the livestock shall have priority over any
other security interest in the livestock, except for a perfected
‘"Set. 20. K.A. No. 11057.

•"See. 23(a), K.A. No. 11057.
‘■'■'See. 23(b), K.A. No. 11057.
”'See. 23(d), K.A. No. 11057.
"'See. 23(e), K A. No. 11057.
J9JC9B0M
R52M9UH7
purchase money security interest in the livestock, if the secured

creditor providing credit for food or medicine gives written
notification to the holder of the conflicting perfected security
interest in the same livestock before the grantor receives
possession of the food or medicine;89* and (xii) a perfected
security interest in a movable property which has become a
fixture, or has undergone accession or commingling, shall
continue provided the movable property involved can still be
reasonably traced. In determining ownership over fixtures,
accessions, and commingled goods, the provisions of Book II of
Republic Act No. 386 or the “Civil Code of the Philippines” shall
apply.895
15.3 Enforcement of Security Interest: (a) Remedies of Secured
Creditor: (1) He may sell or otherwise dispose of the collateral,
publicly or privately,896 subject to a 10-day prior notice to the
following: (i) the grantor; (ii) any other secured creditor or lien
holder who, five days before the date notification is sent to the
grantor, held a security interest or lien in the collateral that was
perfected by registration; and (iii) any other person from whom
the secured creditor received notification of a claim of an interest
in the collateral if the notification was received before the
secured creditor gave notification of the proposed disposition to
the grantor;89’ (2) he may retain the collateral in full satisfaction
of the secured obligation if any of the following persons did not
issue an objection in writing within 20 days after the proposal
for such retention is sent to: (i) the grantor; (ii) any other secured
creditor or lien holder who, five days before the proposal is sent
to the debtor and the grantor, perfected its security interest or
lien by registration; and (iii) any other person with an interest
in the collateral who has given a written notification to the
secured creditor before the proposal is sent to the debtor and the
grantor;8’8 or (3) he may retain the collateral or part thereof in
partial satisfaction of the secured obligation only if he receives
the affirmative consent of each addressee of the proposal in
8’*Sec. 24, R.A. No. 11057.

895Sec. 25, R.A. No. 11057.
s96Sec. 49(a), R.A. No. 11057.
*”Scc. 51(a), R.A. No. 11057.
“’“Sec. 54, R.A. No. 11057.
J9JC9B0M
R52M9UH7

writing within 20 days after the proposal is sent to that person.8”

(b) Right of Secured Creditor to Buy Collateral: (1) he has the
right to buy the collateral at any public disposition; (2) if the sale
is done privately, he is allowed to buy only if the collateral is of a
kind that is customarily sold on a recognized market or the subject
of widely distributed standard price quotations.”" (c) Right to
Recover Deficiency: The secured creditor has the right to recover
the deficiency. In case of surplus, the grantor is entitled to the
same.”' (d) Right of Redemption: Under the PPSA, there is now
a right of redemption in relation to personal property as security.
(1) Who May Redeem: Any of the following: (i) the grantor; (ii)
any other secured creditor or lien holder who, five days before the
date notification is sent to the grantor, held a security interest or
lien in the collateral that was perfected by registration; or (iii) any
other person from whom the secured creditor received notification
of a claim of an interest in the collateral if the notification was
received before the secured creditor gave notification of the
proposed disposition to the grantor.”2 (2) When Right May be
Exercised: The right of redemption may be exercised, unless: (i)
the person entitled to redeem has, after the default, waived in
writing the right to redeem; (ii) the collateral is sold or otherwise
disposed of, acquired or collected by the secured creditor, or until
the conclusion of an agreement by the secured creditor for that
purpose; or (iii) the secured creditor has retained the collateral.”3
16) Preference and Concurrence of Credit
16.1 In General: (a) Concent of Concurrence of Credits: The concept
applies when: (1) the same specific property of the debtor or all
of his property is subjected to the claims of several creditors; and
(2) said assets are insufficient to pay all of them.”1 (b) Concept
of Preference of Credit: A preference of credit bestows upon
the preferred creditor an advantage of having his credit satisfied
first ahead of other claims which may be established against
the debtor.™ (c) Requirement of Liquidation Proceedings: The
•"Supra.
““See. 49(b). R.A. No. 11057.
’“'Sec. 52(b), R.A. No. 11057.
’“-’Sec. 45(a), in relation to Sec. 51, R.A. No. 11057.
'"’Sec. 49(b), R.A. No. 11057.
’“‘Philippine Savings Bank v. Lantin, 124 SCRA 476 (1983).
’"’DBP v. Secretary of Labor, G.R. No. 79351, November 28, 1989.
J9JC9B0M
n
R52M9UH7
provisions on concurrence and preference of credits shall only

be applicable if there is bankruptcy, insolvency, or general
liquidation proceedings.9®
16.2 Classification of Credits: (a) Special Preferred Credits: These
credits constitute liens or encumbrances on the specific movable
or immovable property to which they relate.507 They enjoy
preference over that of ordinary preferred credits and common
credits.5® These are the credits enumerated in Articles 2241
(specific movable) and 2242 (specific immovable and real
rights). Among the special preferred credits listed in Articles
2241 and 2242, only taxes, duties, and fees on specific movables
or immovables (Article 2241 [1] and Article 2242[2]) enjoy
preference while all other special preferred credits (non-tax
liens) stand on the same footing, and to be satisfied pari passu
and pro rata.m Note that a security interest (in a personal or
movable property) perfected pursuant to the PPSA prior to the
commencement of insolvency proceedings in respect of the
grantor shall remain perfected and retain the priority it had
before the commencement of the insolvency proceedings.”” In
other words, it shall retain its classification as a special preferred
credit, (b) Ordinary Preferred Credits: These are the credits which
are not attached to a specific movable or immovable property
but they enjoy preference over that of common credits. These
are the credits enumerated in Article 2244 of the Civil Code.
Insofar as ordinary preferred credits are concerned, they are to
be paid in the order mentioned in Article 2244, except that the
worker’s claim for unpaid wages (in Article 2244, No. 2) has
been moved from second priority to first priority in the order of
preference and the one year limitation in Article 2242, No. 2 has
already been removed.”' According to the Court, the preference
given by Article 110 of the Labor Code, when not falling within
Article 2241(6) and Article 2242(3) of the Civil Code, and not
attached to any specific property, is an ordinary preferred credit,
although its impact is to move it from second priority to first
priority in the order of preference established by Article 2244
mSupra.
’’’’’Republic v. Peralta, 150 SCRA 37.
mId.
’'“See. 22, R.A.No. 11057.
’’’Republic v. Peralta,supra.
J9JC9B0M
R52M9UH7

of the Civil Code.912 (c) Common Credits: These are the credits
which are not included in Articles 2241, 2242, and 2244. They
are to be paid only after paying all special preferred and ordinary
preferred credits. Among the common credits, there shall be
no preference9'3 and they are to be paid pro rata regardless of
dates.914
9I2DBP v. NLRC, 183 SCRA 328 (1990).

9l]Art. 2245, NCC.
914Art. 2251(2), NCC.
J9JC9B0M
R52M9UH7
BOOK VI. — TORTS & DAMAGES
1) Concept of Quasi-Delict
1.1 Scone of Ouasi-Delict: (a) Requisites of Quasi-Delict: In every
tort case filed under Article 2176 of the Civil Code, the plaintiff
has to prove by a preponderance of evidence: (1) the damages
suffered by the plaintiff; (2) the fault or negligence of the
defendant or some other person for whose act he must respond;
and (3) the connection of cause and effect between the fault or
negligence and the damages incurred.1 The prescriptive period of
an action based on quasi-delict is four years from accrual of the
right of action.2 (b) Not Limited to Negligence: While there is a
holding that Article 2176, which defines quasi-delict, is limited to
negligent acts or omissions and excludes the notion of willfulness
or intent and equating the same to what is known in Spanish legal
treatises as culpa aquiliana,y the correct view is that the scope of
Article 2176 is not limited to acts or omissions resulting from
negligence.'* Well-entrenched is the doctrine that Article 2176
covers not only acts committed with negligence, but also acts
which are voluntary and intentional.’ As far back as the definitive
case of Elcano v. Hill,'' the Court already held that Article 2176,
where it refers to “fault or negligence,” covers not only acts “not
punishable by law” but also acts criminal in character, whether
'Corinthian Gardens Association, Inc. v.Tanjangco, 556 SCRA 154 (2008); Child Learning
Center Inc. v. Tagorio, 476 SCRA 236 (2005); Metro Manila Transit Corp. v. CA, 223 SCRA 521
(1993); Andamo v. IAC, 191 SCRA 195 (1990).
’Art. 1146(2), NCC.
’Gashem Shookat Bash v. CA, 219 SCRA 115 (1993).
’Safeguard Security Agency, Inc. v. Tangco, 511 SCRA 67.
’Dulay v. CA, 313 Phil. 8 (1995), cited in Safeguard Security Agency, Inc. V. Tangco,
supra.
677 SCRA 98(1977).
562
J9JC9B0M
R52M9UH7
BOOK VI. — TORTS & DAMAGES 563

PART I: QUASI-DELICT
intentional and voluntary or negligent.’ In Article 2176, the term

“fault” does not carry the same meaning as “negligence.” Fault,
in general, signifies a voluntary act or omission which causes
damage to the right of another giving rise to an obligation on the
part of the actor to repair such damage. Negligence is the failure
to observe for the protection of the interest of another person that
degree of care, precaution, and vigilance which the circumstances
justly demand. Fault requires the execution of a positive act
which causes damage to another, while negligence consists of the
omission to do acts which result in damage to another? (c) Covers
Acts or Omissions Criminal in Character: (1) Different from
Delict: Quasi-delict is a separate legal institution under the Civil
Code with a substantivity all its own, and individuality that is
entirely apart and independent from delict or crime.’ The other
differences pointed out between crimes and quasi-delicts are: (i)
that crimes affect the public interest, while cuasi-delitos are only
of private concern; (ii) that, consequently, the Penal Code
punishes or corrects the criminal act, while the Civil Code, by
means of indemnification, merely repairs the damage; and (iii)
that delicts are not as broad as quasi-delicts, because the former
are punished only if there is a penal law clearly covering them,
while the cuasi-delitos include all acts in which any kind of fault
or negligence intervenes.10 (2) But Covers Acts Criminal in
Character: As far back as the cases of Barredo v. Garcia" and
Elcano n Hill,'2 the Court categorically ruled that Article 2176,
where it refers to “fault or negligence,” covers not only acts “not
punishable by law” but also acts criminal in character, whether
intentional and voluntary or negligent.13 Thus, in every
commission of a crime so long as there is a private offended party
who suffered injuries, the same act or omission causing damages
may produce two distinct sources of obligations. An early
established rule under our law is that an act or omission, extra-
contractual in nature, causing damage to another, there being
fault or negligence, can create two separate civil liabilities on the
1Cited in Onlay v. CA, supra.

"Child Learning Cenier Inc. v. Tagorio, 476 SCRA 236 (2005), citing Judge Alicia
Gonzales-Decuno, Notes on Torts and Damages (2004), pp. 18-19.
’Barredo v. Garcia, 73 Phil. 607 (1942).
'°ld.. cited in Diana v. Batangas Transportation Co., G.R. No. L-4920, June 29, 1953.
"Supra.
"Supra.
"Reiterated in Dulay v. CA, supra, and Safeguard Security Agency, Inc. v. Tangco, supra.
J9JC9B0M
R52M9UH7
part of the offender, i.e., civil liability ex delicto and civil liability
ex quasi delicto. Either one of these two possible liabilities may
be sought to be enforced against the offender subject, however, to
the caveat under Article 2177 of the Civil Code that the offended
party cannot “recover damages twice for the same act or
omission” or under both causes.14 Outside of this proscription,
the two civil liabilities are distinct and independent of each other;
thus, and conversely against the rule on double recovery, the
failure of recovery in one will not necessarily preclude recovery
in the other.15 As consequences of the foregoing principles: (i)
The acquittal of the accused, even if based on a finding that he is
not guilty, does not carry with it the extinction of the civil liability
based on quasi-delict.16 As regards civil liability arising from
quasi-delict or culpa aquiliana, the same will not be extinguished
by an acquittal, whether it be on ground of reasonable doubt or
that the accused was not the author of the act or omission
complained of (or that there is declaration in a final judgment that
the fact from which the civil liability might arise did not exist).
The responsibility arising from fault or negligence in a quasi-
delict is entirely separate and distinct from the civil liability
arising from negligence under the Penal Code.1’ (ii) Even if the
cause of action ex quasi delicto had already prescribed, the
subsidiary liability of the employer under delict can still be
enforced. This is so because the prescription of the action ex
quasi delicto does not operate as a bar to an action to enforce the
civil liability arising from crime."' (iii) The death of the accused
pending appeal of his conviction extinguishes his criminal
liability as well as the civil liability directly arising from and
based solely on the offense committed, i.e., civil liability ex
delicto in senso strictiore, but not the civil liability based on
quasi-delict.19 (d) Effect of Pre-existing Contractual Relations:
(1) General Rule: As a rule, if there is a pre-existing contractual
l4J. Vilug, Separate Opinion in Rafael Reyes Tracking Corp. V. People, G.R. No. 129029,
April 3, 2000, citing Barredo v. Garcia, 73 Phil. 607; Mendoza v. Arrieta, 91 SCRA 113; Padilla v.
Court of Appeals, 129 SCRA 558.
"id.
'‘Manliclic v. Calaunan, 512 SCRA 642 (2007), citing Heirs of the Late Guaring, Jr. v.
Court of Appeals, 336 Phil. 274,279 (1997).
"Id.
l8Sps. Santos v. Hon. Pizardo, G.R. No. 151452, July 29, 2005; Mendoza v. La Mallorca
Bus Company, 82 SCRA 243 (1978).
'’People v. Bayotas, 236 SCRA 239 (1994).
J9JC9B0M
R52M9UH7

relation between the parties, recovery is not allowed based on

quasi-delict.20 Hence, in some decisions of the Court,21 the
absence of such pre-existing contractual relations is included as
one of the elements of quasi-delict. Generally, therefore, Article
2176 of the Civil Code does not apply when the party’s negligence
occurs in the performance of an obligation. The negligent act
would give rise to a quasi-delict only when it may be the basis for
an independent action were the parties not otherwise bound by a
contract.22 Actions based on contractual negligence and actions
based on quasi-delicts differ in terms of conditions, defenses, and
proof. They generally cannot co-exist.22 The Court differentiates
quasi-delict {culpa aquiliana) and breach of contract (culpa
contractual), as follows: (i) In quasi-delict, negligence is direct,
substantive, and independent, while in breach of contract,
negligence is merely incidental to the performance of the
contractual obligation; there is a pre-existing contract or
obligation; (ii) In quasi-delict, the defense of “good father of a
family” is a complete and proper defense insofar as parents,
guardians, and employers are concerned; while in breach of
contract, such is not a complete and proper defense in the
selection and supervision of employees; (iii) In quasi-delict,
there is no presumption of negligence and it is incumbent upon
the injured party to prove the negligence of the defendant;
otherwise, the former’s complaint will be dismissed; while in
breach of contract, negligence is presumed so long as it can be
proved that there was breach of the contract and the burden is on
the defendant to prove that there was no negligence in the
carrying out of the terms of the contract; the rule of respondeat
superior is followed.24 (2) Exception: However, there are
instances when Article 2176 may apply even when there is a pre
existing contractual relation. A party may still commit a tort or
quasi-delict against another, despite the existence of a contract
between them.2’ While it may be true that the pre-existing contract
between the parties may, as a general rule, bar the applicability of
’“Government Service Insurance System v. Spouses Labung-Dean, 417 Phil. 662 (2001)
and Syquiu v. CA, 291 Phil. 653 (1993).
2,St. Martin Polyclinic, Inc. v. LWV Construction Corp., 847 SCRA 378 (2017).
“Orient Freight International, Inc. v. Keihin-Everetl Forwarding Company, Inc., G.R. No.
191937, August 9,2017.
“/</., citing Fores v. Miranda, 105 Phil. 266,275 (1959).
“Huang v. Philippine Hoteliers, Inc., 700 Phil. 327 (2012).
“Orient Freight International, Inc. v. Kcihin-Everett Forwarding Company, Inc., supra.
J9JC9B0M
R52M9UH7
the law on quasi-delict, the liability may itself be deemed to arise

from quasi-delict, i.e., the acts which break the contract may also
be a quasi-delict.26 In fine, a liability for tort may arise even under
a contract, where tort is that which breaches the contract.27 Stated
differently, when an act which constitutes a breach of contract
would have itself constituted the source of a quasi-delictual
liability had no contract existed between the parties, the contract
can be said to have been breached by tort, thereby allowing the
rules on tort to apply.28 This doctrine can aptly govern only where
the act or omission complained of would constitute an actionable
tort independent of the contract. The test (whether a quasi-delict
can be deemed to underlie the breach of a contract) can be stated
thusly: Where, without a pre-existing contract between two
parties, an act or omission can nonetheless amount to an
actionable tort by itself, the fact that the parties are contractually
bound is no bar to the application of quasi-delict provisions to the
case.2’ However, if the act complained of would not give rise to a
cause of action for a quasi-delict independent of the contract,
then the provisions on quasi-delict or tort would be inapplicable.20
1.2 Negligence Causing Iniurv: (a) Annlicable Law: The Civil Code
makes liability for negligence clear under Article 2176 and
Article 2O.JI In St Martin Polyclinic, Inc. v. LWV Construction
Corporation,32 the Court clarified the application of Articles
2176 and 20 in relation to negligent acts or omissions. The Court
stated that Article 20 of the Civil Code concerns “violations of
existing law as basis for an injury,” whereas Article 2176 applies
when the negligent act causing damage to another does not
constitute “a breach of an existing law ora pre-existing contractual
obligation.” (b) Concent of Negligence: (1) Definition:
Negligence is the failure to observe for the protection of the
interests of another person that degree of care, precaution, and
vigilance which the circumstances justly demand, whereby such
“Coca-Bottlers Philippines, Inc. v. CA, 227 SCRA 292 (1993); Singson v. Bank of the
Philippine Islands, 23 SCRA 1117 (1968); Air France v. Carrascoso, 18 SCRA 155 (1966).
’’Light Rail Transit Authority V. Navidad, 397 SCRA 75 (2003), citing PSBA v. CA, 205
SCRA 729(1992)
28/<Z See also Orient Freight International, Inc. v. Keihin-Evcretl Forwarding Company,
Inc., supra.
29Far East Bank and Trust Company v. Court of Appeals, 311 Phil. 783 (1995).
“Orient Freight International, Inc. v. Keihin-Everett Forwarding Company, Inc., supra.
3,Abrogar v. Cosmos Bottling Company, Inc., 820 SCRA 301 (2017).
32847 SCRA 378 (2017).
J9JC9B0M
R52M9UH7

PART 1: QUAS1-DEL1CT
other person suffers injury.” Under Article 1173 of the Civil

Code, it consists of the “omission of that diligence which is
required by the nature of the obligation and corresponds with the
circumstances of the person, of the time, and of the place.” (2)
Test of Negligence: To determine the existence of negligence,
the following time-honored test has been set in Picart v. Smith:*
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
negligence. The law here in effect adopts the standard supposed
to be supplied by the imaginary conduct of the discreet pater
familias of the Roman law. The existence of negligence in a
given case is not determined by reference to the personal
judgment of the actor in the situation before him. The law
considers what would be reckless, blameworthy, or negligent in a
man of ordinary intelligence and prudence and determines
liability by that. (3) Foreseeability Test: Foreseeability is the
fundamental test of negligence. To be negligent, a defendant
must have acted or failed to act in such a way that an ordinary
reasonable man would have realized that certain interests of
certain persons were unreasonably subjected to a general but
definite class of risks.” (4) Emergency Rule: Under the
“emergency rule” adopted by the Court in Gan v. Court of
Appeals* an individual, who suddenly finds himself in a situation
of danger and is required to act without much time to consider the
best means that may be adopted to avoid the impending danger,
is not guilty of negligence if he fails to undertake what
subsequently and upon reflection may appear to be a better
solution, unless the emergency was brought by his own
negligence.” Applying this principle to a case in which the
victims in a vehicular accident swerved to the wrong lane to
avoid hitting two children suddenly darting into the street, the
Court held, in McKee v. Intermediate Appellate Court* that the
driver therein, Jose Koh, “adopted the best means possible in the
given situation” to avoid hitting the children. Using the
’’Abrogur v. Cosmos Bottling Company, Inc., supra, citing Philippine National Railways
v. Vizcara, 666 SCRA 363,374 (2012).
”7 Phil. 809 (1918), cited in Abrogar V. Cosmos Bottling Company, Inc., supra.
’’Achevarra v. Ramos, G.R. No. 175172, September 29, 2009.
“ 165 SCRA 378 (1988).
’’Valenzuela v. CA, G.R. No. 115024 (1996).
’“211 SCRA 517 (1992).
J9JC9B0M
R52M9UH7
“emergency rule” the Court concluded that Koh, in spite of the

fact that he was in the wrong lane when the collision with an
oncoming truck occurred, was not guilty of negligence. However,
the emergency rule is not applicable where the danger or
emergency is caused by the actor’s own negligence.3’ (c)
Negligence Must be Proximate Cause: fl) Requirement: In order
for liability from negligence to arise, there must be not only proof
of damage and negligence, but also proof that the damage was
the consequence of the negligence.40 In other words, for the
defendant to be liable, there must be a finding that the act or
omission considered as negligent was the proximate cause of the
injury caused because the negligence must have a causal
connection to the accident.41 However, the doctrine of proximate
cause is applicable only in actions for quasi-delict, not in actions
involving breach of contract. The doctrine is a device for imputing
liability to a person where there is no relation between him and
another party. In such a case, the obligation is created by law
itself. But, where there is a pre-existing contractual relation
between the parties, it is the parties themselves who create the
obligation, and the function of the law is merely to regulate the
relation thus created.42 (2) Concent of Proximate Cause:
Proximate cause is “that which, in natural and continuous
sequence, unbroken by any new cause, produces an event, and
without which the event would not have occurred.”43 To be
considered the proximate cause of the injury, the negligence need
not be the event closest in time to the injury; a cause is still
proximate, although farther in time in relation to the injury, if the
happening of it set other foreseeable events into motion resulting
ultimately in the damage.44 (3) Effect of Plaintiff’s Contributory
Negligence: When the plaintiff’s own negligence was the
immediate and proximate cause of his injury, he cannot recover
damages.45 However, if the negligence of the plaintiff was only
contributory, the immediate and proximate cause of the injury
’’Delsan Transport Lines, Inc. v. C & A Construction, Inc., G.R. No. 156034, October 31,
2003; Marikina Auto Line Transport Corp. v. People, G.R. No. 152040, March 31,2006.
"Abrogar v. Cosmos Bottling Company, Inc., 820 SCRA 301 (2017).
4lSt. Mary’s Academy v. Carpitanos, G.R. No. 143363, Feb. 6,2002, citing Sanitary Steam
Laundry, inc. v. Court of Appeals, 360 Phil. 199, 208 (1998).
"Calalas v. CA, 332 SCRA 356 (2000).
41Abrogar v. Cosmos Bottling Company, Inc., supra.
"Id.
45Art. 2179, 1“ sentence, NCC.
J9JC9B0M
R52M9UH7

being the defendant’s lack of due care, the plaintiff may recover
damages, but the courts shall mitigate the damages to be
awarded.’6 In accordance with this rule, the contributory
negligence of the party injured will not defeat the action if it is
shown that the defendant might, by the exercise of reasonable
care and prudence, have avoided the consequences of the
negligence of the injured party. The negligence of the plaintiff is,
however, contributory to the accident and must be considered as
a mitigating circumstance.47 (4) Doctrine of Last Clear Chance:
The doctrine, stated broadly, is that the negligence of the plaintiff
does not preclude a recovery for the negligence of the defendant
where it appears that the defendant, by exercising reasonable
care and prudence, might have avoided injurious consequences
to the plaintiff notwithstanding the plaintiff’s negligence. In
other words, the doctrine of last clear chance means that even
though a person’s own acts may have placed him in a position of
peril, and an injury results, the injured person is entitled to
recovery. As the doctrine is usually stated, a person who has the
last clear chance or opportunity of avoiding an accident,
notwithstanding the negligent acts of his opponent or that of a
third person imputed to the opponent is considered in law solely
responsible for the consequences of the accident.4" Under this
rule, the antecedent negligence of a person does not preclude the
recovery of damages for supervening negligence of, or bar a
defense against the liability sought by, another if the latter, who
had the last fair chance, could have avoided the impending harm
by the exercise of due diligence.4’ The principle of “last clear
chance” applies in a suit between the owners and drivers of
colliding vehicles. It does not arise where a passenger demands
responsibility from the carrier to enforce its contractual
obligations, for it would be inequitable to exempt the negligent
driver and its owners on the ground that the other driver was
likewise guilty of negligence?” However, the doctrine does not
apply where the party charged is required to act instantaneously,
46Art. 2179, 2“" sentence, NCC.

47Del Prado v. Manila Electric Company, Inc., G.R. No. L-29462, March 17, 1929.
"Bustamante v. CA, G.R. No. 89880, February 6, 1991.
"LBC Air Cargo, Inc. v. CA, G.R. No. 101683, Feb. 23, 1995, citing Pantranco Nonh
Express, Inc. v. Baesa, 179 SCR A 384 (1989) and Gian People’s Lumber and Hardware v.
Intermediate Appellate Court, 173 SCRA464.
"’Philippine Rabbit Bus Lines, Inc. v. IAC, G.R. Nos. 66102-04, Aug. 30, !990andAnuran
v. Buno, 17 SCRA 224 (1966); Tiu v. Arriesgado, G.R. No. 138060, Sep. 1,2004.
J9JC9B0M
R52M9UH7
and the injury cannot be avoided by the application of all means

at hand after the peril is or should have been discovered.51 (5)
Doctrine of Assumption of Risk: The doctrine of assumption of
risk means that one who voluntarily exposes himself to an
obvious, known, and appreciated danger assumes the risk of
injury that may result therefrom. It rests on the fact that the
person injured has consented to relieve the defendant of an
obligation of conduct toward him and to take his chance of injury
from a known risk, and whether the former has exercised proper
caution or not is immaterial. In other words, it is based on
voluntary consent, express or implied, to accept danger of a
known and appreciated risk; it may sometimes include acceptance
of risk arising from the defendant’s negligence, but one does not
ordinarily assume risk of any negligence which he does not know
and appreciate. As a defense in negligence cases, therefore, the
doctrine requires the concurrence of three elements, namely: (1)
the plaintiff must know that the risk is present; (2) he must further
understand its nature; and (3) his choice to incur it must be free
and voluntary.52 (d) Burden of Proof: (1) Rule: As a rule, it is the
plaintiff in quasi-delict who has the burden of proof and who is
required to establish the existence of negligence which is the
basis of the action.5’ (2) Exceptions: (i) when the law provides for
presumption of negligence; and (ii) when the doctrine of res ipsa
loquitur is applicable. (3) Doctrine of Res Ipsa Loquitur. Res
ipsa loquitur literally means the thing or transaction speaks for
itself, or in one jurisdiction, that the thing or instrumentality
speaks for itself.54 It holds a defendant liable where the thing
which caused the injury complained of is shown to be under the
latter’s management and the accident is such that, in the ordinary
course of things, cannot be expected to happen if those who have
its management or control use proper care.55 Resort to the
doctrine, however, may be allowed only when (a) the event is of
a kind which does not ordinarily occur in the absence of
negligence; (b) other responsible causes, including the conduct
of the plaintiff and third persons, are sufficiently eliminated by
the evidence; (c) the indicated negligence is within the scope of
’’Bustamante v. CA, supra.

“Abrogar v. Cosmos Bottling Company, Inc., 820 SCRA 301 (2017).
"Calalas v. CA, 332 SCRA 356 (2000).
54D.M. Consunji, Inc. v. CA, G.R. No. 137873. April 20,2001.
55FGU Insurance Corp. v. G.R Sarmiento Trucking Corp., G.R. No. 141910, August 6,
2002.
J9JC9B0M
R52M9UH7

the defendant’s duty to the plaintiff;’6 and (d) it is caused by an

instrumentality within the exclusive control of the defendant or
defendants.” The defendant’s negligence is presumed or inferred
when the plaintiff establishes the requisites for the application of
res ipsa loquitur.'1 (4) Instances When Negligence is Presumed:
(i) in motor vehicle mishaps, it is indisputably 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;” (ii) 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;" (iii) there is a prima facie presumption of
negligence on the part of the defendant if the death or injury
results from his possession of dangerous weapons or substances,
such as firearms and poison;61 and (iv) it has been said that drivers
of vehicles “who bump the rear of another vehicle” are presumed
to be the cause of the accident, unless contradicted by other
evidence, the rationale behind the presumption is that the driver
of the rear vehicle has full control of the situation as he is in a
position to observe the vehicle in front of him.62 In number (i)
hereof, the owner of the vehicle who was present is solidarily
liable with his driver if he could have prevented the mishap by
the exercise of due diligence.62 If the owner was not in the motor
vehicle, the provisions of Article 2180 are applicable.”
2) Vicarious Liability
2.1 Concent of Vicarious Liability: Article 2180 of the Civil Code
provides that a person is not only liable for one’s own quasi-
delictual acts, but also for those persons for whom one is
responsible for. This liability is popularly known as vicarious or
imputed liability.” The principle of vicarious liability is based on
'“Supra.
”Tun v. Jam Transit, Inc., G.R. No. 183198, Nov. 25, 2009, citing Mucalinao v. Ong, 477
SCRA 740, 755 (2005).
5"D.M. Consunji, Inc. v. CA, G.R. No. 137873, supra.
’’Art. 2184, 2nd sentence, 1“ par., NCC.
“Art. 2185, NCC.
“Art. 2188, NCC.
“Raynera v. Iliceta, G.R. No. 120027, April 21,1999.
“Art. 2184, I** sentence, par. 1, NCC.
“Art. 2184, par. 2, NCC.
“Jayme v. Apostol, G.R. No. 163609, November 27,2008.
J9JC9B0M
R52M9UH7
the civil law principle ofpaterfamilias for failure to exercise due

care and vigilance over the acts of one’s subordinates to prevent
damage to another.66
2.2 Vicarious l iability of Persons Exercising Parental Authority:
(a) Basis: This principle of parental liability is a species of what
is frequently designated as vicarious liability, or the doctrine of
“imputed negligence” under Anglo-American tort law, where
a person is not only liable for torts committed by himself, but
also for torts committed by others with whom he has a certain
relationship and for whom he is responsible. Thus, parental
liability is made a natural or logical consequence of the duties
and responsibilities of parents—their parental authority—which
includes the instructing, controlling, and disciplining of the
child.67 The civil liability imposed upon parents for the torts of
their minor children living with them, may be seen to be based
upon the parental authority vested by the Civil Code upon such
parents. The civil law assumes that when an unemancipated
child living with its parents commits a tortious act, the parents
were negligent in the performance of their legal and natural
duty closely to supervise the child who is in their custody and
control. Parental liability is, in other words, anchored upon
parental authority coupled with presumed parental dereliction
in the discharge of the duties accompanying such authority.
The parental dereliction is, of course, only presumed and the
presumption can be overturned by proof that the parents had
exercised all the diligence of a good father of a family to prevent
the damage.68 Hence, the retroactive effect may not be given to the
decree of adoption so as to impose a liability upon the adopting
parents accruing at a time when adopting parents had no actual or
physical custody over the adopted child.69 (b) If Child is Minor:
The applicable laws are the provisions of the Family Code. Under
the Family Code, parents and other persons exercising parental
authority shall be civilly liable for the injuries and damages
caused by the acts or omissions of their unemancipated children
living in their company and under their parental authority subject
to the appropriate defenses provided by law.™ However, if the
“Filcar Transport Services v. Espinas, 674 SCRA 117 (2012).

“’Tamargo v. CA, G.R. No. 85044, June 3, 1992.
“/</.
’"Art. 221, FC.
J9JC9B0M
R52M9UH7

quasi-delict is committed by the child while he is under the actual

supervision, instruction, or custody of those persons exercising
special parental authority, it is the latter who shall be principally
and solidarily liable for damages caused by the acts or omissions
of the unemancipated minor. The parents, judicial guardians, or
the persons exercising substitute parental authority over said
minor shall be subsidiarily liable.71 However, they will not be
liable if they can prove that they exercised the proper diligence
required under the particular circumstances to prevent damage.72
(c) If At Least 18 But Below 21: The applicable provisions are
the second and third paragraphs of Article 2180. According to
Article 236 of the Family Code, the vicarious liability of those
persons exercising parental authority (parents and guardians)
shall continue to be applicable provided the following conditions
are satisfied: (i) the age of the child is at least 18 but below 21;”
and (ii) the child is living in their company.74 (d) Comparison
Between Family Code and Civil Code Provisions: Under Article
2180 of the Civil Code, the responsibility of the father and
mother is not simultaneous, but alternate. The father is primarily
responsible while the mother answers only “in case of his death
or incapacity.”75 In the Family Code, however, specifically
Article 221, the responsibilities of the father and mother are now
simultaneous and not alternate.
2.3 Vicarious Liability of Employers: (a) Concept: When the
employee causes damage due to his own negligence while
performing his own duties, there arises the juris tantum
presumption that the employer is negligent, rebuttable only by
proof of observance of the diligence of a good father of a family.76
The “diligence of a good father” referred to in the last paragraph
of Article 2180 means diligence in the selection and supervision
of employees.77 In other words, to avoid liability for a quasi
delict committed by his employee, an employer must overcome
the presumption by presenting convincing proof that he exercised
71 Art. 219, par. I, FC.

"Art. 219, par. 2, FC.
’’Art. 236, FC.
"Art. 2180, pars. 2 and 3, NCC.
’’Romano v. Parillas, 101 Phil. 141 (1957).
’“Reyes v. Doctolero, G.R. No. 185597, August 2,2017, riling Metro Manila Transit Corp.
v.CA. 223SCRA521 (1993).
11Id, citing Yambao v. Zutliga, G.R. No. 146173, December II, 2003, 418 SCRA 266
(2003); Burredo v. Garcia, 73 Phil. 607 (1942).
J9JC9B0M
R52M9UH7
the care and diligence of a good father of a family in the selection

and supervision of his employee.78 (b) Requisites for Employer’s.
Presumed Liability: fl) Proof of Two Requisites: In order for the
presumed liability of the employer to attach, Article 2180 requires
proof of two things: (i) existence of an employer-employee
relationship; and (ii) that the employee acted within the scope of
his or her assigned tasks.” It is only after proving such requisites
that the employer may find it necessary to interpose the defense
of due diligence in the selection and supervision ofthe employee.80
(2) Employer-Employee Relationship: It is necessary to establish
the employer-employee relationship,81 for the same cannot be
assumed.82 It is incumbent upon the plaintiff to prove the
relationship by preponderant evidence. In Belen v. Belen,83 the
Court ruled that it was enough for the defendant to deny an
alleged employment relationship. The defendant is under no
obligation to prove the negative averment.84 (i) In Filcar
Transport Services v. Espinas •• the Court held that the registered
owner is deemed the employer of the negligent driver, and is thus
vicariously liable under Article 2176, in relation to Article 2180,
of the Civil Code. Citing Equitable Leasing Corporation v.
Suyom,K the Court ruled that insofar as third persons are
concerned, the registered owner of the motor vehicle is the
employer of the negligent driver, and the actual employer is
considered merely as an agent of such owner. Thus, whether
there is an employer-employee relationship between the
registered owner and the driver is irrelevant in determining the
liability of the registered owner who the law holds primarily and
directly responsible for any accident, injury, or death caused by
the operation of the vehicle in the streets and highways.87 This
does not mean, however, that the registered owner is left without
any recourse against the actual employer of the driver and the
driver himself. Under the civil law principle of unjust enrichment,
78Delsan Transport Lines, Inc. v. C & A Construction, Inc., 459 Phil. 156 (2003).
’“Caravan Travel and Tours International, Inc. v. Abejar, 783 SCRA 368 (2016),
“Castilex Industrial Corp. v. Vasquez, G.R. No. 132266, December 21, 1999.
"Id.
“Jayme v. Apostol, G.R. No. 163609, November 27, 2008.
8313 Phil. 202(1909).
84Sps. Jayme v. Apostol, supra.
8i674 SCRA 117(2012).
“437 Phil. 244, 252 (2002).
“’Mendoza v. Gomez, G.R. No. 160110, June 18, 2014.
J9JC9B0M
R52M9UH7
I

PART 1: QUAS1-DELICT
the registered owner of the motor vehicle has a right to be

indemnified by the actual employer of the driver of the amount
that he may be required to pay as damages for the injury caused
to another.88 (ii) In Mamaril v. Boy Scouts ofthe Philippines,” the
Court found that there was no employer-employee relationship
between Boy Scouts of the Philippines (BSP) and the security
guards assigned to it by an agency pursuant to a Guard Service
Contract. In the absence of such relationship, vicarious liability
under Article 2180 of the Civil Code cannot apply as against
BSP. It is settled that where the security agency recruits, hires,
and assigns the work of its watchmen or security guards, the
agency is the employer of such guards and watchmen. Liability
for illegal or harmful acts committed by the security guards
attaches to the employer agency, and not to the clients or
customers of such agency.’0 (iii) In the absence of an employer
employee relationship establishing vicarious liability, the driver’s
negligence should not be attributed to a fellow employee who
only happens to be an occupant of the vehicle. Whatever right of
control the occupant may have over the driver is not sufficient by
itself to justify an application of the doctrine of vicarious
liability.’1 (3) Performing Assigned Task: The burden of proving
that the employee was acting within the scope of his assigned
task is incumbent upon the plaintiff and not on the employer. It is
enough for the employer to deny that the employee was acting
within the scope of his duties.’2 In Filainer Christian Institute v.
Intermediate Appellate Court,” the Court had the occasion to
hold that, the clause “within the scope of their assigned tasks” for
purposes of raising the presumption of liability of an employer,
includes any act done by an employee in furtherance of the
interests of the employer or for the account of the employer at the
time of the infliction of the injury or damage. (4) Registered-
Owner Rule: Under the registered owner rule, the registered
owner of a motor vehicle is liable for death or injuries caused by
the operation of the vehicle.” The principle upon which this
“Filcar Transport Services v. Espinas, supra.

’’Mamaril v. Boy Scouts of the Philippines, 688 SCRA 437 (2013). See also Reyes v.
Doctolcro, G.R. No. 185597, August 2, 2017.
’“Soliman, Jr. v. Tuazon, 209 SCRA 47 (1992).
’*Jayme v. Apostol, supra.
’•’Castilex Industrial Corp. v. Vasquez, supra.
”212 SCRA 637(1992).
“Filcar Transport Services v. Espinas, 674 SCRA 117 (2012); Villanueva v. Domingo,
G.R. No. 144274, September 20, 2004.
J9JC9B0M
R52M9UH7
doctrine is based is that in dealing with registered motor vehicles,

the public has the right to assume or presume that the registered
owner is the actual owner thereof, for it would be difficult for the
public to enforce the actions that they may have for injuries
caused to them by the vehicles being negligently operated if the
public should be required to prove who the actual owner is.’5 In
BA Finance Corp. v. C4,96 the Court held the registered owner
liable even if, at the time of the accident, the vehicle was leased
by another party and was driven by the lessees employee. In
Aguilar, Sr. v. Commercial Savings Bank,™ the registered-owner
bank answered for damages for the accident even if the vehicle
was being driven by the Vice-President of the Bank in his private
capacity and not as an officer of the Bank, as claimed by the
Bank. The issue of whether or not the driver of the vehicle during
the accident was authorized is not at all relevant in determining
the liability of the registered owner. This must be so if we are to
comply with the rationale and principle behind the registration
requirement under the motor vehicle law.’8 (5) Where Employer
is Also Registered Owner of Vehicle: In a situation where the
employer is also the registered owner of the vehicle which caused
the injury, the decisions of the Court in the past are conflicting.
There are decisions which relied on the requisites of Article
2180, but there are also decisions which applied the registered
owner rule. In Aguilar Sr. v. Commercial Savings Bank" and Del
Carmen, Jr. v. Bacoy,m the Court preferred the registered owner
rule over the requirements of Article 2180. In Filcar Transport
Services v. Espinas,101 the Court in fact ruled that the registered
owner of a vehicle can no longer use the defenses found in Article
2180. In Caravan Travel and Tours International, Inc. v.
Abejar,m the Court harmonized those conflicting rulings. The
Court ruled therein that Aguilar, Sr., Del Carmen, and Filcar
Mendoza should not be taken to mean that Article 2180 of the
Civil Code should be completely discarded in cases where the
registered-owner rule finds application. In harmonizing the
’’Erezo v. Jeple, 102 Phil. 103 (1957).

”215 SCRA 715 (1992).
”412 Phil. 834(2001).
’8Villanueva v. Domingo, supra.
"412 Phil. 834(2001).
,00686 Phil. 799(2012).
l0'688 Phil. 430 (2012).
'"783 SCRA368 (2016).
J9JC9B0M
R52M9UH7
BOOK VI. — TORTS & DAM AGES 577

registered-owner rule with Articles 2176 and 2180, the Court

held that the appropriate approach in cases where both the
registered-owner rule and Article 2180 apply is that the plaintiff
must first establish that the employer is the registered owner of
the vehicle in question. Once the plaintiff successfully proves
ownership, there arises a disputable presumption that the
. .1 ■ requirements ofArticle 2180 have been proven. As a consequence,
the burden of proof shifts to the defendant (employer) to show
that no liability under Article 2180 has arisen. This it can do by
presenting proof of any of the following: first, that it has no
employment relationship with the alleged employee; second, that
the employee acted outside the scope of his assigned tasks; or
third, that it exercised the diligence of a good father of a family
in the selection and supervision of the employee, (c) Emolover’s
Defense: To avoid liability for a quasi-delict committed by his
employee, an employer must overcome the presumption by
presenting convincing proof that he exercised the care and
diligence of a good father of a family in the selection and
supervision of his employee.103 It should be stressed that the
required diligence of a good father of a family pertains not only
to the selection, but also to the supervision of employees. It is not
enough that the employees chosen be competent and qualified,
inasmuch as the employer is still required to exercise due
diligence in supervising its employees.101 In the selection of
prospective employees, employers are required to examine them
as to their qualifications, experience, and service records.10’ On
the other hand, due diligence in supervision requires the
formulation of rules and regulations for the guidance of
employees and the issuance of proper instructions as well as
actual implementation and monitoring of consistent compliance
with the rules.100 To establish diligence in the supervision of
employees, the issuance of company policies must be coupled
with proof of compliance.107 Unlike in culpa aquiliana (quasi-
delict), the defense of exercising the required diligence in the
selection and supervision of employees is not a complete defense
in culpa contractual."" Under Article 1172, “liability (for culpa
'“'Delsan Transport Lines, Inc. v. C & A Construction, Inc., 459 Phil. 156 (2003).
'“’Metro Manila Transit Corp. V. CA, G.R. No. 116617, November 16,1998.
'"“Fabre Jr. v. CA, G.R. No. 111127, July 26,1996.
'“’Caravan Travel and Tours International, Inc. v. Abejar, 783 SCRA 368 (2016).
'““The Consolidated Bank and Trust Corporation v. CA, G.R. No. 138569, September 11,
2003.
J9JC9B0M
R52M9UH7
contractual) may be regulated by the courts, according to the

circumstances.” This means that if the defendant exercised the
proper diligence in the selection and supervision of its employee,
or if the plaintiff was guilty of contributory negligence, then the
courts may reduce the award of damages.109 (d) Nature of
Employer’s Liability: (If Under Article 2180: The liability of the
employer for the negligent conduct of the subordinate is direct
and primary, subject to the defense of due diligence in the
selection and supervision of the employee. The enforcement of
the judgment against the employer in an action based on Article
2176 does not require the employee to be insolvent since the
nature of the liability of the employer with that of the employee,
the two being statutorily considered joint tortfeasors, is solidary."0
(2) Article 2180 Inapplicable in Delict: If the cause of action
against the employee is based on delict, it is not correct to hold
the employer jointly and severally liable with the employee,
based on quasi-delict under Articles 2176 and 2180 of the Civil
Code. Articles 2176 and 2180 of the Civil Code pertain to the
vicarious liability of an employer for quasi-delicts that an
employee has committed. Such provisions of law do not apply to
civil liability arising from delict.1" (3) Compared with Employer’s
Liability in Delict: In delict, the liability of the employer is
merely subsidiary,"2 not solidary. Before the employers’
subsidiary liability is enforced, adequate evidence must exist
establishing that: (1) they are indeed the employers of the
convicted employees; (2) they are engaged in some kind of
industry; (3) the crime was committed by the employees in the
discharge of their duties; and (4) the execution against the latter
has not been satisfied due to insolvency."’
2.4 Vicarious Liability of Schools. Administrators, and Teachers: (a)
When Student is a Minor: If the student who commits the quasi-
delict is still a minor, the provisions of the Family Code will apply.
Under the Family Code, when a minor student commits a quasi-
delict while he or she is under the actual supervision, instruction,
or custody of those persons granted special parental authority.
,mld.
"“Rafuel Reyes Trucking Corp. v. People of the Phil., G.R. No. 129029, April 3, 2000;
Metro Manila Transit Corp. v. CA, G.R. No. 116617 November 16, 1998.
'"Calang v. People, 626 SCRA679 (2010).
"’Art. 103, RPC.
"’Calang v. People, supra, citing Pangonorom v. People, 495 Phil. 195 (2005).
J9JC9B0M
R52M9UH7
1

it is the latter who shall be principally and solidarity liable for

damages caused by the acts or omissions of the unemancipated
minor; while the parents, guardians, or the persons exercising
parental authority over said minor shall be subsidiarily liable."4
They shall not be liable, however, if they are able to prove that
they exercised the proper diligence required under the particular
circumstances to prevent damage."’ Under the Family Code,
the following shall have parental authority over the minor child
under their supervision, instruction, or custody: (1) the school;
(2) its administrators; (3) its teachers; or (4) the individual, entity,
or institution engaged in child care."’ Ordinarily, such special
parental authority is limited within the confines of the school
premises. However, such special parental authority shall also
apply even outside the premises ofthe school, entity, or institution
so long as the minor is pursuing an authorized activity."’ (b)
When Student is No Longer a Minor: (1) Applicable law: The
applicable law is Article 2180, paragraph 7 of the Civil Code.
The said provision is applicable to all schools, academic as
well as non-academic. Where the school is academic rather
than technical or vocational in nature, responsibility for the tort
committed by the student will attach to the teacher in charge of
such student, following the first part of the provision. This is the
general rule. In the case of establishments of arts and trades, il
is the head thereof, and only he, who shall be held liable as an
exception to the general rule. In other words, teachers in general
shall be liable for the acts of their students except where the
school is technical in nature, in which case it is the head thereof
who shall be answerable."’ (2) When Student is Considered
Under Custody: The student is in the custody of the school
authorities as long as he is under the control and influence of the
school and within its premises, whether the semester has not yet
begun or has already ended."'' As long as it can be shown that
the student is in the school premises in pursuance of a legitimate
student objective, in the exercise of a legitimate student right,
and even in the enjoyment of a legitimate student privilege, the
responsibility of the school authorities over the student continues.
"4Art. 219, par. 1,FC.

"’Art. 219, par. 2, FC.
"‘Art. 218, par. l.FC.
"’Art. 218, par. 2, FC.
"’Amadora v. CA, 160 SCRA 315 (1988).
mId.
J9JC9B0M
R52M9UH7
Indeed, even if the student should be doing nothing more than

relaxing in the campus in the company of his classmates and
friends and enjoying the ambience and atmosphere of the school,
he is still within the custody and subject to the discipline of the
school authorities under the provisions of Article 2180.120 (3)
When Assailant is Not Its Student: Article 2180 plainly provides
that the damage should have been caused or inflicted by pupils
or students of the educational institution sought to be held liable
for the acts of its pupils or students while in its custody. Said
law does not apply where the injuries suffered by a student
of the school was caused by outsiders (or not students of the
school).121 In this case, the recovery of damages is based on the
relationship between the student-victim and the school, with their
relationship being based on the enrollment contract. Hence, the
school’s liability to its student who suffered injuries inside the
school premises shall be based upon the “enrollment contract”
rule. (4) Enrollment Contract Rule: Under the enrollment
contract, institutions of learning have the “built-in” obligation of
providing a conducive atmosphere for learning, an atmosphere
where there are no constant threats to life and limb, and one
where peace and order are maintained.122 In other words, it is
a “built-in” obligation of the school to ensure the safety of its
students while they are inside the school premises. A breach of
this obligation shall render the school liable to its students. In
Saludaga u FEU,m where a sophomore law student of the FEU
was shot and injured by one of the security guards on duty at the
school premises, the Court held the school liable for breach of the
school-student (enrollment) contract because the school failed to
prove that it exercised due diligence in order to prevent damage.
Under the enrollment contract rule, however, the school may
still avoid liability by proving that the breach of Us contractual
obligation to the students was not due to Us negligence.'2*
2.5 Vicarious Liability of the Stale: (a) Two Aspects: The liability of
the State has two aspects, namely: (1) Its public or governmental
,2“Snpra.
,2lPhiIippine School of Business Administration (PSBA) v. CA, 205 SCRA 729 (1992);
Saludaga v. FEU, 553 SCRA 741 (2008); St. Luke’s College of Medicine - William H. Quasha
Memorial Foundation v. Perez, 804 SCRA 380 (2016).
mId.
mSupra.
l2JSt. Luke’s College of Medicine - William H. Quasha Memorial Foundation v. Perez,
supra, citing PSBA v. CA, supra.
J9JC9B0M
R52M9UH7

aspect where it is liable for the tortious acts of special agents

only; and (2) Its private or business aspect (as when it engages
in private enterprises) where it becomes liable as an ordinary
employer.125 In the first, the State assumes a limited liability
for the damage caused by the tortious acts or conduct of its
special agent.126 Under the Civil Code, the State is responsible
vicariously when it acts through a special agent; but not when the
damage has been caused by the official to whom the task done
properly pertains, in which case what is provided in Article 2176
shall be applicable.127 Under this rule, the State assumes a limited
liability for the damage caused by the tortious acts or conduct
of its special agent.125 (b) Special Agent: (1) If Public Official:
The State’s agent, if a public official, must not only be specially
commissioned to do a particular task but that such task must be
foreign to said official’s usual governmental functions.'2’ (2) If
Private Person: If the State’s agent is not a public official, and
is commissioned to perform non-governmental functions, then
the State assumes the role of an ordinary employer and will be
held liable as such for its agent’s ton. Where the government
commissions a private individual for a special governmental
task, it is acting through a special agent within the meaning of
the provision.155 Certain functions and activities, which can be
performed only by the government, are more or less generally
agreed to be "governmental" in character, and so the State
is immune from tort liability. On the other hand, a service
which might as well be provided by a private corporation, ar.d
particularly when it collects revenues from it. the function is
considered a “proprietary” one. as to which there may be liability
for the torts of agents within the scope of their employment-1' (cl
Test of liability: (1) If Discharging Governmental Functions: (i)
Rule: If the injury is caused in the course of the performance of
a governmental function or duty, the principle of non-suability
of the State applies. Hence, the State is also not liable. However,
for local government units (LGUs), the Local Government Code
of 1991 provides that LGUs and their officials are not exempt
l25l;onUinilla v. Maliaman, 194 SCRA495 (1989).

'“/</.
'"Art. 2180,6'* par., NCC.
""Fontanilla v. Maliaman, supra.
mld.
"‘‘Id.
"'Id.
J9JC9B0M
R52M9UH7
from liability for the death or injury to persons or damage to

property.'” Hence, LGUs (provinces, cities, and municipalities)
may be sued. Nevertheless, they are generally not liable for torts
committed by them in the discharge of governmental functions
and can be held answerable only if it can be shown that they
were acting in a proprietary capacity. For example, when an
employee of the Municipality of San Fernando was driving the
municipal’s dump truck to get gravel and sands for the repair
of roads, the truck collided with a passenger jeepney resulting
into death and physical injuries of some of the passengers
of the jeep. The Court ruled that since the employee of the
Municipality was performing a governmental function, the
municipality cannot be held liable for the torts committed by
its regular employee, who was then engaged in the discharge of
governmental functions.'” (ii) Exception: It is a well-entrenched
rule in this jurisdiction, embodied in Article 2180 of the Civil
Code of the Philippines, that the State is liable only for torts
caused by its special agents, specially commissioned to carry out
the acts complained of outside of such agent’s regular duties.”4
However, the State is not liable for the damage caused by public
officials who are in the performance of their usual governmental
functions. In the latter case, the said public official may be held
liable for the commission of quasi-delict under Article 2176.'”
For example, when the Irrigation Service Unit (ISU), an office
of the Department of Public Works and Communications, was
sued for damages because it allegedly induced the Handong
Irrigation Association, Inc. to invade and occupy the land of the
plaintiff Ildefonso Ortiz, the Court ruled that the ISU is an office
in the Government of the Republic of the Philippines performing
governmental functions. Hence, neither the State nor its funds
can be made liable for the alleged tortious inducement committed
by ISU since it is not a special agent.”6 (2) If Discharging Private
or Proprietary Functions: If the State or the LGUs engages in
private or proprietary functions, it becomes liable as an ordinary
employer under Article 2180, par. 5 of the Civil Code.'” To
illustrate, when a driver-employee of the National Irrigation
’’“See. 24, R.A. No. 7160, also known as the Local Government Code.
’’’Municipality of San Fernando, La Union v. Firme, 195 SCRA 692 (1991).
’’■’Republic v. Palacios, 23 SCRA 899 (1968); Art. 2180, par. 6, NCC.
’’’Art. 2180, par. 6, NCC.
’’‘Republic v. Palacio, 23 SCRA 899 (1968).
’’’Fontanilla v. Maliaman, supra.
J9JC9B0M
R52M9UH7
I
I

Administration (NIA), on official business using the NIA’s

vehicle, bumped a bicycle rider resulting into the rider’s death,
the Court held the NIA liable for the tortious act of its driver
employee as an ordinary employer under paragraph 5 of Article
2180. The Court explained that since the NIA is a government
corporation with juridical personality and not a mere agency
of the government performing non-governmental functions, it
assumes the responsibility of an ordinary employer and as such,
it becomes answerable for damages because it failed to prove that
it exercised due diligence in the selection and supervision of its
employee.13’
3) Special Cases
3.1 Liability Without Fault: (a) Possessors or Users of Animals: The
possessors 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.13’ However, the foregoing responsibility shall
cease only in case the damage should come from force ntajeure
or from the fault of the person who has suffered damage.140 (b)
Product Liability: Manufacturers and processors of foodstuffs,
drinks, toilet articles, and similar goods shall be liable for death
or injuries caused by any noxious or harmful substances used,
although no contractual relation exists between them and the
consumers.141 However, in order to establish liability for death
or injury under Article 2187 of the Civil Code, the injured
plaintiff seeking recovery of damages therefor must allege and
prove that: (1) the defendant is a manufacturer or processor of
foodstuff, drinks, toilet articles, and similar goods; (2) he used
noxious or harmful substances in the manufacture or processing
of the foodstuff, drink, or toilet articles consumed or used by
the plaintiff; (3) the plaintiff’s death or injury was caused by the
products so consumed or used; and (4) the damages sustained and
claimed by the plaintiff and the amount thereof.142 (c) Liability of
Head of Family: The head of a family that lives in a building or a
part thereof, is responsible for damages caused by things thrown
or falling from the same.143
"‘Supra.
lwArt. 2183, NCC.
,4'Art. 2187, NCC.

l42Sangco, Torts and Damages, Vol. 2, 1994 e<l., p. 716.
143Art. 2193, NCC.
J9JC9B0M
R52M9UH7
3.2 Other Cases of Tort Liability: (a) Liability of LGUs: Provinces,

cities, and municipalities shall be liable for damages for the
death of, or injuries suffered by, any person by reason of the
defective condition of roads, streets, bridges, public buildings,
and other public works under their control or supervision.144 It
is not necessary that the defective roads or streets belong to the
province, city, or municipality. What the law requires is that the
province, city, or municipality have either “control or supervision”
over said street or road.145 (b) Liability of Proprietors: (1) For
Collanse of Buildings or Structures: The proprietor of a building
or structure is responsible for the damages resulting from its total
or partial collapse, if it should be due to the lack of necessary
repairs.146 If a building, wall, column, or any other construction
is in danger of falling, the owner shall be obliged to demolish
it or to execute the necessary work in order to prevent it from
falling.147 In this situation, if the structure falls or collapses the
owner shall be liable for damages caused even if the same is by
reason of fortuitous event because the owner is already negligent
for failing to take the necessary measures to insure public safety.
(2) For Falling Trees: Proprietors shall be liable for damages
caused by the falling of trees situated at or near highways or
lanes, if not caused by force majeure.'** Whenever a large tree
threatens to fall in such a way as to cause damage to the land or
tenement of another or to travelers over a public or private road,
the owner of the tree shall be obliged to fell and remove it; and
should he not do so, it shall be done at his expense by order of the
administrative authorities.14’ In this situation, if the tree falls the
owner shall be liable for damages caused even if the same is by
reason of fortuitous event because the owner is already negligent
for failing to take the necessary measures to insure public safety.
(3) Other Liabilities: Proprietors shall also be responsible for
damages caused: (i) by the explosion of machinery which has
not been taken care with due diligence, and the inflammation
of explosive substances which have not been kept in a safe and
144Art. 2189, NCC.

l45City of Manila v. Teotico, 22 SCRA 267; Jimenez v. City of Manila, 150 SCRA 511
(1987).
l46Art. 2190, NCC.
,47Art. 482,1“ par., NCC.
148Art. 2191, No. 3, NCC.
14,Art. 483, NCC.
J9JC9B0M
R52M9UH7

adequate place;150 (ii) by the excessive smoke, which may be

harmful to persons or property;151 and (iii) by emanations from
tubes, canals, sewers, or deposits of infectious matter, constructed
without precautions suitable to the place.152 (c) Liability of
Builders and Architects: If the building or structure collapses
within 15 years from the completion of the structure by reason of
a defect in the plans and specifications drawn by an engineer or
an architect, or due to the defects in the ground, the third person
suffering damages may proceed only against the engineer or
architect within 10 years following the collapse of the building.151
If the edifice falls within 15 years from the completion of the
structure, on account of defects in the construction or the use of
the materials of inferior quality furnished by him, or due to any
violation of the terms of the contract, the third person suffering
damages may proceed only against the contractor within 10 years
following the collapse of the building.154 In the latter case, if the
engineer or architect supervises the construction, he shall be
solidarily liable with the contractor.155 (d) Tortious Interference
with Contractual Relations: (1) Concept: Article 1314 of the
Civil Code provides that any third person who induces another
to violate his contract shall be liable for damages to the other
contracting party. The tort recognized in that provision is known
as interference with contractual relations. The interference is
penalized because it violates the property rights of a party in a
contract to reap the benefits that should result therefrom.155 (2)
Elements of Tortious Interference: The Court, in the case of
So Ping Bun v. Court of Appeals,'51 laid down the elements of
tortious interference with contractual relations: (i) existence of a
valid contract; (ii) knowledge on the part of the third person of the
existence of the contract; and (iii) interference of the third person
without legal justification or excuse. As regards the first element,
the existence of a valid contract must be duly established.15’
The second element, on the other hand, requires that there be
l50Art. 2191, No. l.NCC.

15lArt. 2191, No. 2.NCC.
152Art. 2191, No. 4.NCC.
l3,Art. 2192, in relation to Art. 1723, NCC.
wId.
155 Art. 1723, NCC.
156Lagon v. CA, G.R. No. 119107, March 18,2005.
157314 SCRA751,758 (1999).
l58Lagon v. CA, supra.
J9JC9B0M
R52M9UH7
knowledge on the part of the interferer that the contract exists.

Knowledge of the subsistence of the contract is an essential
element to state a cause of action for tortious interference. A
defendant in such a case cannot be made liable for interfering
with a contract he is unaware of. While it is not necessary to
prove actual knowledge, he must nonetheless be aware of the
facts which, if followed by a reasonable inquiry, will lead to a
complete disclosure of the contractual relations and rights of the
parties in the contract.'” Anent the third element, the interferer
may be held liable only when there was no legal justification
or excuse for his action or when his conduct was stirred by a
wrongful motive. To sustain a case for tortious interference, the
defendant must have acted with malice or must have been driven
by purely impious reasons to injure the plaintiff. In other words,
his act of interference cannot be justified.160 (3) Advancement of
Proper Business Interest. Not Malicious Interference: In the very
early case of Gilchrist v. Cuddy,161 the Court declared that a person
is not a malicious interferer if his conduct is impelled by a proper
business interest. In other words, a financial or profit motivation
will not necessarily make a person an officious interferer liable
for damages as long as there is no malice or bad faith involved.162
4) Joint Tortfeasors
4.1 Concent and Nature of Liability: (a) Concent: Joint tortfeasors
are 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.16’ They are each liable as principals, to the same extent
and in the same manner as if they had performed the wrongful
act themselves.164 (b) Solidary Liability of Joint Tortfeasors: The
responsibility of two or more persons who are liable for quasi
delict is solidary.165 Joint tortfeasors are jointly and severally
liable for the tort which they commit. The persons injured may
mSupra.
>MId.
I6'29 Phil. 542.
'^Ciled in Lagon v. CA, supra.
'“Pilipinas Broadcasting Network, Inc. v. Ago Medical and Educational Center - Bicol
Christian College of Medicine (AMEC-BCCM), G.R. No. 141994, Jan. 17, 2005.
'“Lafarge Cement v. Continental Cement Corporation, 443 SCRA 522 (2004); citing
Worcester v. Ocampo, 22 Phil. 42 (1912).
'“Art. 2194, NCC.
J9JC9B0M
R52M9UH7
BOOK VI. —TORTS & DAMAGES 587

sue all of them or any number less than all. Each is liable for the
whole damages caused by all, and all together are jointly liable
for the whole damage. It is no defense for one sued alone that
the others who participated in the wrongful act are not joined
with him as defendants; nor is it any excuse for him that his
participation in the tort was insignificant as compared to that of
the others.166
4.2 Solidary Liability of Employer and Employee Under Quasi
delict: (a) For Negligent Act of Employee, Employer May be Sued
Alone: An employer’s liability based on a quasi-delict is primary
and direct.167 Although liability under Article 2180 originates
from the negligent act of the employee, the aggrieved party may
sue the employer directly. When an employee causes damage, the
law presumes that the employer has himself committed an act of
negligence in not preventing or avoiding the damage. This is the
fault that the law condemns.168 Stated otherwise, the employer
is also civilly liable directly and separately for his own civil
negligence in failing to exercise due diligence in selecting and
supervising his employee.169 The action can be brought directly
against the person responsible (for another), without including the
author ofthe act. The action against the principal is accessory in the
sense that it implies the existence of a prejudicial act committed
by the employee, but it is not subsidiary in the sense that it cannot
be instituted till after the judgment against the author of the act or
at least, that it is subsidiary to the principal action; the action for
responsibility (of the employer) is in itself a principal action.170
(b) If Sued with the Employee, Employer is Solidarily Liable:
Under Article 2180 of the Civil Code an employer may be held
solidarily liable for the negligent acts of his employee.171 While
Article 2180 does not expressly provide for solidary liability, the
same can be inferred from the wordings of the first paragraph of
Article 2180 which states that “the obligation imposed by article
2176 is demandable not only for one’s own acts or omissions,
but also for those of persons for whom one is responsible.”173
l66Lafarge Cement v. Continental Cement Corp., supra, citing Worcester v. Ocampo, supra.
l67Cerezo v. Tuazon, G.R. No. 141538, March 23,2004.
I68W
“’/</.
l70Barredo v. Garcia, 73 Phil. 607 (1942), cited in Cento v. Tuazon, supra.
l71Delsan Transport Lines, Inc. V. C & A Construction, Inc., G.R. No. 156034, Oct. 1,2003.
l73Sps. Hernandez v. Sps. Dolor, G.R. No. 160286, July 30,2004.
J9JC9B0M
R52M9UH7
Moreover, Article 2180 should be read with Article 2194 of the

same Code, which categorically states that the responsibility of
two or more persons who are liable for quasi-delict is solidary.
In other words, the liability ofjoint tortfeasors is solidary. Verily,
under Article 2180 of the Civil Code, an employer may be held
solidarity liable for the negligent acts of his employee.173 (c)
Solidary Liability Attaches Even If Driver is Sued Under Quasi-
delict and Employer Under Culpa Contractual'. In Fabre, Jr. v.
Court of Appeals,'1' where the driver and the common carrier
were sued together, the Court made this pronouncement: “it is
unnecessary for our purpose to determine whether to decide this
case on the theory that petitioners are liable for breach of contract
of carriage or culpa contractual or on the theory of quasi delict or
culpa aquiliana as both the Regional Trial Court and the Court of
Appeals held, for although the relation of passenger and carrier
is ‘contractual both in origin and nature,’ nevertheless ‘the act
that breaks the contract may be also a tort.’ In either case, the
question is whether the bus driver, petitioner Porfirio Cabil, was
negligent.” In the said case, the common carrier was held liable
under the contract of carriage while the driver was held liable
under quasi-delict, and the liability of the two was declared to
be solidary.
4.3 Concurring Negligence of Two or More Persons Resulting in
Damage to Third Party: It may be said, as a general rule, that
negligence in order to render a person liable need not be the sole
cause of an injury. It is sufficient that his negligence, concurring
with one or more efficient causes other than plaintiff’s, is the
proximate cause of the injury. Accordingly, where several causes
combine to produce injuries, a person is not relieved from liability
because he is responsible for only one of them, it being sufficient
that the negligence of the person charged with injury is an
efficient cause without which the injury would not have resulted
to as great an extent, and that such cause is not attributable to
the person injured. It is no defense to one of the concurrent
tortfeasors that the injury would not have resulted from his
negligence alone, without the negligence or wrongful acts of the
other concurrent tortfeasor. Where several causes producing an
injury are concurrent and each is an efficient cause without which
the injury would not have happened, the injury may be attributed
mSupra.
I74328 Phil. 774(1996).
J9JC9B0M
R52M9UH7

to all or any of the causes and recovery may be had against any or
all of the responsible persons although under the circumstances
of the case, it may appear that one of them was more culpable,
and that the duty owed by them to the injured person was not
the same. No actor’s negligence ceases to be a proximate cause
merely because it does not exceed the negligence of other actors.
Each wrongdoer is responsible for the entire result and is liable
as though his acts were the sole cause of the injury.175 There is no
contribution between joint tortfeasors whose liability is solidary
since both of them are liable for the total damage. Where the
concurrent or successive negligent acts or omissions of two or
more persons, although acting independently, are in combination
the direct and proximate cause of a single injury to a third person,
it is impossible to determine in what proportion each contributed
to the injury and either of them is responsible for the whole
injury. Where their concurring negligence resulted in injury or
damage to a third party, they become joint tortfeasors and are
solidarity liable for the resulting damage under Article 2194 of
the Civil Code.176
4.4. Liability of Common Carrier and Independent Contractor: In
Light Rail Transit Authority v. Navidad,171 the common carrier
(LRTA) was held liable under the contract ofcarriage for the death
of the commuter. But in that case, the employer of the security
guard was an independent contractor (Prudent Security Agency).
So, it was asked in that case if Prudent could likewise be held
liable for the death of the commuter? The Court ruled that, if at
all, that liability could only be for tort under the provisions of
Article 2176 and related provisions, in conjunction with Article
2180 of the Civil Code. In this case, the Court explained that the
LRTA, as a common carrier and whose liability is based on breach
of contract, and Prudent, as independent contractor and employer
of the security guard who committed the quasi-delict and whose
liability is based on the vicarious liability of the employer
under Article 2180 of the Civil Code, may be considered joint
tortfeasors under Article 2194 of the Civil Code. This is because
a contractual obligation can be breached by tort and when the
l,5Far Eastern Shipping v. CA, 357 Phil. 703, 751-752 (1998); see also Loadmasters
Customs Services, Inc. v. Glodel Brokerage Corp., G.R. No. 179446, Jan. 10,2011.
mId.
'11Supra.
J9JC9B0M
same act or omission causes the injury, one resulting in culpa

contractual and the other in culpa aquiliana, Article 2194 of
the Civil Code can well apply. In fine, a liability for tort may
arise even under a contract, where tort is that which breaches
the contract. Stated differently, when an act which constitutes
a breach of contract would have itself constituted the source of
a quasi-delictual liability had no contract existed between the
parties, the contract can be said to have been breached by tort,
thereby allowing the rules on tort to apply. [Note: However, in
this case, it was ruled that Prudent is not liable since there was
nothing to link Prudent to the death of the commuter because, in
the first place, the negligence of its employee (the security guard)
was not duly proven.]
4.5 Solidarity Liability of Operators and Drivers of Colliding
Vehicles: The rule of solidary liability was applied in situations
where the negligence of the driver of the bus on which the
plaintiff was riding concurred with the negligence of a third
party who was the driver of another vehicle, thus causing an
accident.178 In Anuran v. Buno,179 Batangas Laguna Tayabas Bus
Co. v. Intermediate Appellate Court,180 and Metro Manila Transit
Corporation v. Court ofAppeals,'6' the bus company, its driver,
the operator of the other vehicle, and the driver of the vehicle
were held jointly and severally liable to the injured passenger
or the latter’s heirs. In this situation, it does not matter that the
liability of the bus operator springs from contract while that of
the other vehicle owner and its driver arises from quasi-delict.*82
But in Philippine Rabbit Bus Lines, Inc. v. Court of Appeals,'n
the Court exonerated the jeepney driver from liability to the
injured passengers and their families while holding the owners
of the jeepney jointly and severally liable, but that is because that
case was expressly tried and decided exclusively on the theory of
culpa contractual. As the Court there explained: “The trial court
was therefore right in finding that Manalo [the driver] and spouses
Mangune and Carreon [the jeepney owners] were negligent.
However, its ruling that spouses Mangune and Carreon are
l78Fabre, Jr. v. CA, supra.

17’17SCRA 224(1966).
180167 SCRA 379 (1988).
I8,223 SCRA 521 (1993).
l82Viluan v. CA, 16 SCRA 742 (1966).
I83189 SCRA 158 (1988).
J9JC9B0M
PART 2: DAMAGES
jointly and severally liable with Manalo is erroneous. The driver

cannot be held jointly and severally liable with the carrier in case
of breach of the contract of carriage. The rationale behind this is
readily discernible. Firstly, the contract of carriage is between the
carrier and the passenger, and in the event of contractual liability,
the carrier is exclusively responsible therefore to the passenger,
even if such breach be due to the negligence of his driver.”
PART 2: DAMAGES
5) Kinds of Damages
5.1 Actual or Compensatory: (a) Concept: Actual or compensatory
1
damages are those awarded in order to compensate a party for an
injury or loss he suffered. They arise out of a sense of natural
justice and are aimed at repairing the wrong done.184 Pertaining as
they do to such injuries or losses that are actually sustained and
susceptible of measurement, they are intended to put the injured
party in the position in which he was before he was injured.185 (b)
Two components: While compensatory and actual damages are
dealt with in the Civil Code under the same Chapter 2 thereof and
that the two terms are used therein as equivalent to one another,
there are actually two components to actual or compensatory
damages.186 As provided for in Article 2200 of the Civil Code,
which is part of the aforementioned Chapter 2, indemnification
for damages shall comprehend not only the value of the loss
suffered, or actual damages ( "damnum emergens ”), but also that
of the profits which the obligee failed to obtain, or compensatory
damages ( "lucrum cessans ”). Hence, it is not entirely erroneous
to grant both items of damages, as what was done in in A/D
Transit & Taxi Co., Inc. v. Court ofAppeals.187 (c~) Actual Proof of
Amount of Loss: (1) Requirement of proof: Article 2199 of the
Civil Code provides that “except as provided by law or by
stipulation, one is entitled to an adequate compensation only for
such pecuniary loss suffered by him as he has duly proved.”
184Estrada v. Philippine Rabbit Bus Lines, Inc., 831 SCRA 349 (2017), citing Philippine
National Railways v. Brunty, 537 Phil. 161, 177-178 (2006).
,85Oceaneering Contractors (Phils.), Inc. v. Barretto, G.R. No. 184215, February 9, 2011
and Duefias v. Guce-Africa, G.R. No. 165679, October 5, 2009.
I86RCPI v. CA, G.R. No. L-55194, February 26, 1981.
,8722 SCRA 55 (1968).
J9JC9B0M
R52M9UH7
Conformably with the foregoing provision, the rule is long and

well settled that there must be pleading and proof of actual
damages suffered for the same to be recovered. In addition to the
fact that the amount of loss must be capable of proof, it must also
be actually proven with a reasonable degree of certainty, premised
upon competent proof or the best evidence obtainable. The
burden of proof of the damage suffered is, consequently, imposed
on the party claiming the same who should adduce the best
evidence available in support thereof, like sales and delivery
receipts, cash and check vouchers, and other pieces of
documentary evidence of the same nature. In the absence of
corroborative evidence, it has been held that self-serving
statements of account are not sufficient basis for an award of
actual damages. Corollary to the principle that a claim for actual
damages cannot be predicated on flimsy, remote, speculative, and
insubstantial proof, courts are likewise required to state the
factual bases of the award.188 (2) When Loss Cannot be Proved
with Certainty: In the absence of competent proof on the amount
of actual damages, courts may allow the party to receive
temperate damages. Temperate or moderate damages, which are
more than nominal but less than compensatory damages, may be
recovered when the court finds that some pecuniary loss has been
suffered but its amount cannot, from the nature of the case, be
proved with certainty.18'' The amount thereof is usually left to the
discretion of the courts but the same should be reasonable,
bearing in mind that temperate damages should be more than
nominal but less than compensatory.'1'" (d) Measure of Damages:
(1) In general: Indemnification for damages comprehends not
only the loss suffered, that is to say actual damages (damnum
emergens), but also profits which the obligee failed to obtain,
referred to as compensatory damages (lucrum cessans).m (2) In
Contracts and Ouasi-contracts: In contracts and quasi-contracts,
the damages for which the obligor who acted in good faith shall
be those that are the natural and probable consequences of the
breach of the obligation, and which the parties have foreseen or
could have reasonably foreseen at the time the obligation was
"“Oceaneering Contractors (Phils.), Inc. v. Barrclto, supra.

'""Kabisig Real Wealth Dev., Inc. v. Young Builders Corp., 816 SCRA 30 (2017).
l90Dueflas v. Guce-Africa, supra.
1,1 Art. 2200, NCC; Integrated Packing Corp. v. CA, G.R. No. 115117, June 8, 2000; Coca-
Cola Bottlers Phils., Inc. v. Roque, G.R. No. 118985, June 14, 1999; Radio Communications of the
Philippines, Inc. v. CA, 103 SCRA 359.
J9JC9B0M
R52M9UH7

PART 2: DAMAGES
constituted.192 For example, in Mendoza v. Philippine Airlines,

Inc.,m the Court did not award to Mendoza the alleged profits
which he failed to realize when he was not able to exhibit the film
during the town fiesta because PAL’s employees negligently
failed to unload it from the plane when it arrived at the Naga
Airport and was consequently brought back to Manila. In this
case, PAL acted in good faith and without knowledge of
Mendoza’s plan to exhibit the film during the town fiesta. On the
other hand, in case of fraud, bad faith, malice, or wanton attitude,
the obligor shall be responsible for all damages which may be
reasonably attributed to the non-performance of the obligation.194
To illustrate, in General Enterprises, Inc. v. Lianga Bay Logging
Company, Inc.,195 Lianga entered into a contract with General
Enterprises, whereby the former, a producer of logs from a timber
concession, designated the latter as distributor of a portion of its
log production to Korea and Europe on condition that it would
pay the distributor a commission of 13% of the gross f.o.b. value
of the logs exported. In bad faith, the former stopped its contract
with the latter. As a consequence, the Court awarded General
Enterprises commissions for transactions that would have
transpired had the contract not been unjustifiably terminated by
Lianga. (3) In Crimes and Ouasi-delicts: In crimes and quasi
delicts, the defendants shall be liable for all damages which are
the natural and probable consequences of the act or omission
complained of. It is not necessary that such damages have been
foreseen or could have reasonably been foreseen by the
defendant.199 In crimes, the damages to be adjudicated may be
respectively increased or lessened according to the aggravating
circumstances or mitigating circumstances.197 (4) Recoverable
Damaues When Death Occurs as a Result of Crime of Quasi
delict: Article 2206 specifically applies when death occurs as a
result of a crime or a quasi-delict.19* Under said article, the
following damages may be recovered: (i) Death indemnity -
Initially fixed by the Civil Code at P3,000, the amount of the
192Art. 2201, I1’par., NCC.

'”90 Phil. 836 (1952).
194 Art. 2201,2'“ par., NCC.
'”G.R. No. L-18487, Nov. 28, 1964.
'“Art. 2202, NCC.
197Art. 2204, NCC.
'’“Torreon v. Aparra, G.R. No. 188493, December 13,2017.
J9JC9B0M
R52M9UH7
indemnity is currently fixed at P50,000.'w This kind of civil

indemnity is separate and distinct from other forms of indemnity
for damages and is automatically awarded without need of further
proof other than the fact of death and the responsibility of the
accused therefor.’00 (2) Loss of earning capacity - The indemnity
for the deceased’s lost earning capacity is meant to compensate
the heirs for the income they would have received had the
deceased continued to live.201 The case of Pleyto v. Lomboy™
provided the formula to compute a deceased’s earning capacity:
Net Earning Capacity = [2/3 x (80 - age at time of death) x
(gross annual income - reasonable and necessary living
expensesj. However, the formula provided by the Court is
presumptive, z.e., it should be applied in the absence of proof in
terms of statistics and actuarial presented by the plaintiff.203 It is,
however, settled that “damages for loss [or impairment] of
earning capacity is in the nature of actual damages.204 Thus, as a
rule, documentary evidence should be presented to substantiate
the claim for damages for loss of earning capacity. By way of
exception, damages for loss [or impairment] of earning capacity
may be awarded despite the absence of documentary evidence
when (1) the deceased [or the injured] was self-employed and
earning less than the minimum wage under current labor laws, in
which case, judicial notice may be taken of the fact that in the
deceased’s line of work no documentary evidence is available; or
(2) the deceased was employed as a daily worker earning less
than the minimum wage under current labor laws.”205 In Torreon
u Aparra,M however, the Court ruled that testimonial evidence
suffices to establish a basis for which the court can make a fair
and reasonable estimate of the loss of earning capacity. The Court
further ruled that the employer and co-workers are deemed
competent to testify on the compensation that the deceased was
receiving before his death. (3) Support - If the deceased was
obliged to give support according to the provisions of Article 291
(now Articles 195 and 196 of the Family Code), the recipient
mSupra.
“"People v. Catbagan, G.R. Nos. 149430-32, Feb. 23, 2004.
’“'Torreon v. Aparra, supra.
’"-’476 Phil. 373 (2004).
’“Torreon v. Aparra, supra.
’“Estrada v. Philippine Rabbit Bus Lines, Inc., 831 SCRA 349 (2017).
’“/</.
’“G.R. No. 188493, December 13, 2017.
J9JC9B0M
R52M9UH7

PART 2: DAMAGES
who is not an heir called to the decedent’s inheritance by the law

of testate or intestate succession, may demand support from the
person causing the death, for a period not exceeding five years,
the exact duration to be fixed by the court.’07 (4) Moral damages
- But only the spouse, legitimate and illegitimate descendants
and ascendants of the deceased may demand moral damages for
mental anguish by reason of the death of the deceased.’1" Brothers
and sisters and other collateral blood relatives are not included
among the persons entitled to recover moral damages for mental
anguish by reason of the death of the deceased. The omission
from Article 2206(3) of the brothers and sisters of the deceased
reveals the legislative intent to exclude them from the recovery
of such moral damages.’09 However, if the collateral blood
relative is exercising substitute parental authority over the
deceased, he or she is entitled to recover moral damages for
mental anguish by reason of the death of the deceased because he
or she is to be considered as an ascendant for the purpose of
awarding moral damages. Considering the policy underlying
Articles 216 and 220 of the Family Code as well as the purposes
for awarding moral damages, the Court has ruled that a person
exercising substitute parental authority is rightly considered an
ascendant of the deceased, within the meaning ofArticle 2206(3)
of the Civil Code.’10 (5) Injury to Plaintiff’s Business Standing or
Commercial Credit: The financial credit of a businessman is a
prized and valuable asset, it being a significant part of the
foundation of his business. Any adverse reflection thereon
constitutes some material loss to him. Hence, the same is
compensable.’" In RCP1 v. Court of Appeals,2'2 compensatory
damages were also awarded for injury to Yabut’s “business
reputation or business standing,” “loss of goodwill and loss of
customers or shippers who shi fled their patronage to competitors.”
The grant thereof, according to the Court, is proper under the
provisions of Article 2205 of the Civil Code, which provides that
damages may be recovered "for injury to the plaintiff’s business
standing or commercial credit.” And even if not recoverable as
compensatory damages, they may still be awarded in the concept
“’Art. 2206(2), NCC.

’“Art. 2206(3), NCC.
’“Sulpicio Lines, Inc. v. Curso, G.R. No. 157009, March 17,2010.
’“Caravan Travel and Tours International, Inc. v. Abejar, 783 SCRA 368 (2016).
’"Aranetav. Bank of America, 40 SCRA 144(1971).
”’G.R. No. L-55194, Feb. 26, 1981.
J9JC9B0M
R52M9UH7
of temperate or moderate damages.2'3 There are cases where from

the nature of the case, definite proof of pecuniary loss cannot be
offered, although the court is convinced that there has been such
loss. For instance, injury to one’s commercial credit or to the
goodwill of the business firm is often hard to show with certainty
in terms of money. Should damages be denied for the reason?
The judge should be empowered to calculate moderate damages
in such cases, rather than that the plaintiff should suffer, without
redress from the defendant’s wrongful act.214
5.2 Moral Damages: (a) Concept: Moral damages are meant to
compensate the claimant for any physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injuries
unjustly caused.215 Moral damages are awarded to achieve a
“spiritual status quo.”216 These damages are awarded to enable
the injured party to obtain means, diversions, or amusements that
will serve to alleviate the moral suffering he/she has undergone,
by reason of the defendant’s culpable action.21’ (b) Requisites For
Grant of Moral Damages: An award of moral damages would
require: (i) evidence of besmirched reputation or physical,
mental, or psychological suffering sustained by the claimant; (ii)
a culpable act or omission factually established; (iii) proof that
the wrongful act or omission of the defendant is the proximate
cause of the damages sustained by the claimant; and (iv) that
the case is predicated on any of the instances expressed or
envisioned by Article 2219 and Article 2220 of the Civil Code.218
(c) Instances Where Moral Damages May be Recovered: (1)
Those Enumerated in Articles 2219 and 2220: (i) criminal offense
resulting in physical injuries; (ii) quasi-delicts causing physical
injuries; (iii) seduction, abduction, rape, or other lascivious acts;
(iv) adultery or concubinage; (v) illegal or arbitrary detention or
arrest; (vi) illegal search; (vii) libel, slander, or any other form of
defamation; (viii) malicious prosecution; (ix) acts mentioned in
Article 309; (x) acts and actions referred to in Articles 21,26,27,
mSupra.
2'*ld„ citing Aranclu v. Bank of America, supra.
215Samson, Jr. v. BPI, G.R. No. 150487, July 10, 2003.
2I6/<Z
2I7M.
2I“PT & T Corp. v. CA, G.R. No. 139268, September 3, 2002; B.F. Metal (Corporation) v.
Sps. Lomolan, G.R. No. 170813, April 16, 2008.
J9JC9B0M
R52M9UH7

PART 2: DAMAGES
28, 29, 30, 32, 34, and 35;21’ (xi) willful injury to property may
be a legal ground for awarding moral damages if the court should
find that, under circumstances, such damages are justly due; and
(xii) breaches of contract where the defendant acted fraudulently
or in bad faith.220 (2) Recovery of Moral Damages in Breach
of Contract: Since breach of contract is not one of the items
enumerated under Articles 2219 and 2220, moral damages, as a
general rule, are not recoverable in actions for damages predicated
on breach of contract.221 By way of exceptions, such damages are
recoverable in an action for breach of contract: (i) in cases in
which the mishap results in the death of a passenger, as provided
in Article 1764, in relation to Article 2206(3) of the Civil Code;
(ii) in cases in which the carrier is guilty of fraud or bad faith,
as provided in Article 2220;— and (iii) in cases when the act of
breach of contract itself is constitutive of tort resulting in physical
injuries or for the breach of contract which was palpably wanton,
reckless, malicious or in bad faith, oppressive, or abusive,223 as
it is also accepted in this jurisdiction that liability for a quasi
delict may still exist despite the presence of contractual relations,
that is, the act which violates the contract may also constitute a
quasi-delict.224 (d) Right of Juridical Persons to Recover Moral
Damages: (i) Rule: A juridical person, including the Republic
of the Philippines,225 is generally not entitled to moral damages
because, unlike a natural person, it cannot experience physical
suffering or such sentiments as wounded feelings, serious
anxiety, mental anguish, or moral shock.225 (ii) Exception: Article
2219, No. 7 of the Civil Code expressly authorizes the recovery
2l’Art. 2219, NCC.

““Art. 2220, NCC.
“'Estrada v. Philippine Rabbit Bus Lines, Inc., 831 SCRA 349 (2017). See also Fores v.
Miranda, 105 Phil. 266 (1959); Cachero v. Manila Yellow Taxicab Co. Inc., 101 Phil., 523; 54 0IT.
Gaz., (26], 6599; Necesito, el al. V. Paras, 104 Phil., 75; 56 Off. Gaz., [23], 4023; See also Verzosa
v. Buytun, G.R. No. L-14092, April 29, I960.
“2M.
“’Go v. CA, G.R. No. 114791, May 29, 1997.
“4M.
“’Republic v. Tuvera, G.R. No. 148246, February 16, 2007.
“‘Crystal v. BPI, G.R. No. 172428, November 28, 2008; Manila Electric Company v.
T.E.A.M. Electronics Corp., G.R. No. 131723, Dec. 13, 2007; Republic of the Phil. v. Tuvera,
G.R. No. 148246, February 16, 2007; Filipinas Broadcasting Network, Inc. v. Ago Medical and
Educational Center-Bicol Christian College of Medicine (AMEC-BCCM),448 SCRA413 (2005);
ABS-CBN Corp. v. CA, 361 Phil. 499 (1999); Simex International (Manila), Incorporated v. CA,
183 SCRA 360 (1990).
J9JC9B0M
R52M9UH7
of moral damages in cases of libel, slander, or any other form

of defamation. Article 2219(7) does not qualify whether the
plaintiff is a natural or juridical person. Therefore, a juridical
person such as a corporation can validly complain for libel or
any other form of defamation and claim for moral damages.™
(e) Amount of Moral Damages: There is no hard-and-fast rule
in determining what would be a fair and reasonable amount of
moral damages, since each case must be governed by its own
peculiar facts. Trial courts are given discretion in determining
the amount, with the limitation that it should not be palpably and
scandalously excessive. Indeed, it must be commensurate to the
loss or injury suffered.228
5.3 Nominal Damages: (a) Concept: Nominal damages are given
in order that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized, and
not for the purpose of indemnifying the plaintiff for any loss
suffered by him.“’ Thus, these kinds of damages are recoverable
where a legal right is technically violated and must be vindicated
against an invasion that has produced no actual present loss of
any kind or where there has been a breach of contract and no
substantial injury or actual damages whatsoever have been or can
be shown.230 (b) Cannot Co-exist with Compensatory Damages: It
is an established rule that nominal damages cannot co-exist with
compensatory damages.211 Thus, if the court has already awarded
compensatory and exemplary damages that are in themselves a
judicial recognition that plaintiff’s right was violated, the award
of nominal damages is unnecessary and improper.232 (c) Nominal
and Temnerate (or Moderate) Damages Cannot be Awarded
Concurrently: It is wrong to award, along with nominal damages,
temperate or moderate damages. The two awards are incompatible
and cannot be granted concurrently. Nominal damages are given
in order that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized, and
“’Filipinas Broadcasting Network, Inc. v. Ago Medical and Educational Centcr-Bicol

Christian College of Medicine (AMEC-BCCM), supra and Republic v. Tuvera, supra.
““Samson, Jr. V. BPI, G.R. No. 150487, July 10, 2003.
“’Art. 2221, NCC.
“°MCC Industrial Sales Corp. v. Ssangyong Corp., G.R. No. 170633, Oct. 17,2007.
“'Northwest Airlines, Inc. v. Cuenca, G.R. No. L-22425, August 31, 1965; LRTA v.
Navidad, supra; Medina, el al. v. Cresencia, 99 Phil. 506 (1956).
alVda. de Medina v. Cresencia, supra.
J9JC9B0M
R52M9UH7

PART 2: DAMAGES
not for the purpose of indemnifying the plaintiff for any loss
suffered by him (Art. 2221)."’ Temperate or moderate damages,
which are more than nominal but less than compensatory
damages, on the other hand, may be recovered when the court
finds that some pecuniary loss has been suffered but its amount
cannot, from the nature of the case, be proved with reasonable
certainty (Art. 2224)."1 (d) Amount of Nominal Damages: The
assessment of nominal damages is left to the discretion of the
court, according to the circumstances of the case."’
5.4 Temperate or Moderate Damages: (a) Concent: Temperate or
moderate damages, which are more than nominal but less than
compensatory damages, avail when the court finds that some
pecuniary loss has been suffered but its amount cannot from
the nature of the case, be proved with certainty."6 The rationale
behind temperate damages is precisely that from the nature of
the case, definite proof of pecuniary loss cannot be offered.
When the court is convinced that there has been such loss, the
judge is empowered to calculate moderate damages, rather than
let the complainant suffer without redress from the defendant’s
wrongful act."’ To illustrate, the Court, in the past, has awarded
temperate damages in lieu of actual damages for loss of earning
capacity where earning capacity is plainly established but no
evidence was presented to support the allegation of the injured
party’s actual income."’ (b) May Still be Awarded Even If Case
is Susceptible to Proof of Pecuniary Loss: The textual language
might betray an intent that temperate damages do not avail when
the case, by its nature, is susceptible to proof of pecuniary loss.
Still, jurisprudence applying Article 2224 is clear that temperate
damages may be awarded even in instances where pecuniary
loss could theoretically have been proved with certainty."’ In
a host of criminal cases,"0 the Court has awarded temperate
damages to the heirs of the victim in cases where the amount
"’Citytrust Bunking Corp. v. 1AC, G.R. No. 84281, May 27,1994.

’»/</.
“’Ventanilla v. Centeno, G.R. No. L-14333, January 28, 1961.
"’Art. 2224, NCC; Republic v. Tuvera, supra.
"’GSIS v. Deang, G.R. No. 135644, September 17,2001.
n,Ciledln Tan v.OMC Carriers, Inc., G.R. No. 190521, Jan. 12,2011.
"’Republic v. Tuvera, supra.
"’People v. Oliano, 350 Phil. 604 (1998); People v. Suplito, 373 Phil. 269 (1999); People
v. De la Tongga, 391 Phil. 582 (2000); People v. Briones, 398 Phil. 31 (2000) and People v. Plazo,
403 Phil. 347 (2001).
J9JC9B0M
R52M9UH7
of actual damages was not proven due to the inadequacy of the

evidence presented by the prosecution. In Viron Transportation
Co., Inc. v. Delos Santos,2*' a civil action for damages involving
a vehicular collision, temperate damages were awarded for the
resulting damage sustained by a cargo truck, after the plaintiff
had failed to submit competent proof of actual damages, (c)
Amount of Temperate or Moderate Damases: The amount of
temperate or moderate damages is usually left to the discretion
of the courts but the same should be reasonable, bearing in mind
that temperate damages should be more than nominal but less
than compensatory.242
5.5 Exemplary or Corrective Damases: (a) Concept: Exemplary or
corrective damages are imposed, by way of example or correction
for the public good, only in addition to the moral, temperate,
liquidated, or compensatory damages,243 but they could not be
recovered as a matter of right, their determination depending upon
the discretion of the court.244 In essence, exemplary damages are
designed by our civil law to permit the courts to reshape behavior
that is socially deleterious in its consequence by creating negative
incentives or deterrents against such behavior.243 (b) When It Can
be Awarded: (1) Pre-requisite: Before the court may consider an
award for exemplary damages, the plaintiff must first show that
he is entitled to moral, temperate, or compensatory damages;246
but it is not necessary that he prove the monetary value thereof.247
In case liquidated damages have been agreed upon, although no
proof is necessary in order that such liquidated damages may be
recovered, nevertheless, before the court may consider the question
of granting exemplary in addition to the liquidated damages, the
plaintiff must show that he would be entitled to moral, temperate,
or compensatory damages were it not for the stipulation for
liquidated damages.24" (2) Award is Nevertheless Discretionary:
But exemplary damages cannot be recovered as a matter of right;
241399 Phil. 243 (2000).

242Dueiias v. Guce-Africa, supra.
243Art. 2229, NCC.
244Singson v. Aragon, G.R. No. L-5164, January 27, 1953; B.F. Melal (Corporation) v. Sps.
Lomotan, G.R. No. 170813, April 16,2008.
243Trans-Asia Shipping Lincs, Inc. v. CA. G.R. No. 118126, March 4, 1996.
246Art. 2234, NCC; Trans-Asia Shipping Lincs, Inc. v. CA, supra', PT & T v. CA, supra.
247Trans-Asia Shipping Lincs, Inc. v. CA, supra.
24,Art. 2234, NCC.
J9JC9B0M
R52M9UH7

PART 2: DAMAGES
the court will decide whether or not they should be adjudicated.24’

In other words, its recovery is based entirely on the discretion of
the court.2’0 (3) What Cases May It be Awarded: (i) In Contracts
and Ouasi-contracts: Exemplary damages may be awarded if the
defendant acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner.251 (ii) In Ouasi-delict: Exemplary damages
may be granted if the defendant acted with gross negligence.252
(iii) In Criminal Offenses: Exemplaiy damages as a part of the
civil indemnity may be imposed when the crime was committed
with one or more aggravating circumstances. Such damages are
separate and distinct from fines and shall be paid to the offended
party.255 (c) Amount of Exemplary Damages: The amount of
exemplary damages need not be proven, because its determination
depends upon the amount of compensatory damages that may be
awarded to the claimant.254 If the amount of exemplary damages
need not be proven, it need not also be alleged, and the reason
is obvious because it is merely incidental or dependent upon
what the court may award as compensatory damages. Unless
and until this premises is determined and established, what may
be claimed as exemplary damages would amount to a mere
surmise or speculation. It follows as a necessary consequence
that the amount of exemplary damages need not be pleaded it
the complaint because the same cannot be predetermined by
the court.2” The grant, however, should be tempered, as it is
not intended to enrich one party or to impoverish another.255
(d) Cannot be Renounced in Advance: A stipulation whereby
exemplary damages are renounced in advance shall be null and
void.2”
5.6 Liquidated Damages: (a) Concept: Liquidated damages are those
agreed upon by the parties to a contract, to be paid in case of
breach thereof.2’" (b) Liquidated Damages and Penalty: There is
24*Art. 2232, NCC; see also B.F. Metal (Corporation) v. CA, supra and Trans-Asia
Shipping Lines, Inc. v. CA, supra.
"“Kierulf v. CA, supra.
"'Art. 2232, NCC.
252Art. 2231, NCC.
"’Art. 2230, NCC.
254Singson v. Aragon, G.R. No. L-5164, Jan. 27,2953.
2”W.
"°Tan v. OMC Carriers, Inc., supra.
“’Art. 2235, NCC.
’’“Art. 2226, NCC.
J9JC9B0M
R52M9UH7
no justification for the Civil Code to make an apparent distinction

between penalty and liquidated damages because the settled rule
is that there is no difference between penalty and liquidated
damages insofar as legal results are concerned and that either may
be recovered without the necessity of proving actual damages
and both may be reduced when proper.25’ The Supreme Court
in Laureano v. KilaykoM instructed that a distinction between a
penalty clause imposed essentially as penalty in case of breach
and a penalty clause imposed as indemnity for damages should be
made in cases where there has been neither partial nor irregular
compliance with the terms of the contract. In cases where
there has been partial or irregular compliance, there will be no
substantial difference between a penalty and liquidated damages
insofar as legal results are concerned.261 The distinction is thus
more apparent than real especially in the light of the provisions
of Articles 2226 and 2227 of the Civil Code, (c) Courts May
Reduce If Iniquitous or Unconscionable: Liquidated damages,
whether intended as an indemnity or penalty, shall be equitably
reduced if they are iniquitous or unconscionable.262 The reason
is that in both cases, the stipulation is contra bonos mores under
Article 1306 of the Civil Code. It is a mere technicality to refuse
to lessen the damages to their just amount simply because the
stipulation is not meant to be a penalty. An immoral stipulation is
nonetheless immoral because it is called an indemnity.26’
5.7 Attorney’s Fees and Litigation Expenses: (a) Two concepts of
Attorney’s Fees: There are two commonly accepted concepts
of attorney’s fees, the so-called ordinary and extraordinary.
In its ordinary concept, an attorney’s fee is the reasonable
compensation paid to a lawyer by his client for the legal services
he has rendered to the latter. The basis of this compensation is the
fact of his employment by and his agreement with the client.2"
In its extraordinary concept, an attorney’s fee is an indemnity for
damages ordered by the court to be paid by the losing party in a
’’’Pamintuan v. CA, 94 Phil. 556 (1979), citing Arts. 1229, 2216, and 2227, NC'C, and
observations of Justice J.B.L. Reyes, died in IV Tolentino’s Civil Code. p. 251.
’“32 Phil. 194.
“‘Filinvest Land, Inc. v. CA, supra,
262Art. 2227, NCC.
’“Joe’s Radio & Electrical Supply v. Alto Electrical Supply, 104 Phil. 344 (1958).
’"Traders Royal Bank Employees Union-Independent v. NLRC, G.R. No. 120592, March
14, 1997.
J9JC9B0M
R52M9UH7
BOOK VI. —TORTS & DAMAGES 603

PART 2: DAMAGES
litigation. The basis of this is any of the cases provided by law

where such award can be made, such as those authorized in Article
2208 of the Civil Code, and is payable not to the lawyer but to
the client, unless they have agreed that the award shall pertain to
the lawyer as additional compensation or as part thereof.161 (b)
Attorney’s Fees as Item of Damases: (1) Nature: In attorney’s
fees as an item of damages under Article 2208 of the Civil Code,
the award is made in favor of the litigant, not of his counsel,
and the litigant, not his counsel, is the judgment creditor who
may enforce the judgment for attorney’s fees by execution.166 (2)
Generally Not Recoverable: Attorney’s fees which are granted as
an item of damages are generally not recoverable167 because of the
policy that no premium should be placed on the right to litigate.16*
The award thereof as an item of damages is the exception rather
than the rule, and counsel’s fees are not to be awarded every time
a party wins a suit. The power of the court to award attorney’s fees
under Article 2208 of the Civil Code demands factual, legal, and
equitable justification, without which the award is a conclusion
without a premise, its basis being improperly left to speculator
and conjecture. In all events, the court must explicitly state ill
the text of the decision, and not only in the decretal portioi
thereof, the legal reason for the award of attorney’s fees.169 (3)
When recoverable: In the absence of stipulation, attorney’s fees
and expenses of litigation, other than judicial costs, cannot be
recovered, except: (i) when exemplary damages are awarded; (ii)
when the defendant’s act or omission has compelled the plaintiff
to litigate with third persons or to incur expenses to protect his
interest; (iii) in criminal cases of malicious prosecution against
the plaintiff; (iv) in case of a clearly unfounded civil action or
proceeding against the plaintiff; (v) where the defendant acted
in gross and evident bad faith in refusing to satisfy the plaintiff’s
plainly valid, just, and demandable claim; (vi) in actions for
legal support; (vii) in actions for the recovery of wages of
household helpers, laborers, and skilled workers; (viii) in actions
for indemnity under workmen’s compensation and employer’s
MSupra.
266Quirante v. IAC, G.R. No. 73886, Jan. 31, 1989.
“’GSIS v. Labung-Deang, G.R. No. 135644, Sep. 17,2001.
26*Firestone Tire & Rubber Company of the Phil. v. Ines Chavez & Co., Ltd., G.R. No.
L-17106, Oct. 19, 1966.
269Filipinas Broadcasting Network, Inc. v. Ago Medical and Educational Center - Bicol
Christian College of Medicine (AMEC-BCCM), supra.
J9JC9B0M
R52M9UH7
liability laws; (ix) in a separate civil action to recover civil liability

arising from a crime; (x) when at least double judicial costs are
awarded; (xi) in any other case where the court deems it just and
equitable that attorney’s fees and expenses of litigation should
be recovered.270 (c) Recoverable as Actual Damages: Under
Article 2208 of the Civil Code, attorney’s fees are recoverable
only in the concept of actual damages,271 not as moral damages272
nor judicial costs.27’ Hence, to merit such an award, it is settled
that the amount thereof must be proven. Moreover, such must
be specifically prayed for and may not be deemed incorporated
within a general prayer for “such other relief and remedy as this
court may deem just and equitable.”274 (d) Attorney’s Fees as
Liquidated Damages: Attorney’s fees as provided in penal clauses
are in the nature of liquidated damages,275 and not the attorney’s
fees recoverable as between attorney and client enunciated and
regulated by the Rules of Court.276 So long as such stipulation
does not contravene any law, morals, or public order, it is binding
upon the parties. The attorneys’ fees so provided are awarded
in favor of the litigant, not his counsel. It is the litigant, not
counsel, who is the judgment creditor entitled to enforce the
judgment by execution.277 Nonetheless, courts are empowered to
reduce the amount of attorney’s fees if the same is “iniquitous or
unconscionable” pursuant to Articles 1229 and 2227 of the Civil
Code.278
270Art. 2208, NCC.

27lTrans-Asia Shipping Lines, Inc. v. CA, G.R. No. 118126, March 4, 1996, citing Fores
v. Miranda, 105 Phil. 266, 272 (1959); PCIB v. Intermediate Appellate Court, 196 SCRA 29, 39
(1991).
mId„ citing Mirasol v. de la Cruz, 84 SCRA 337, 342 (1978).
mId„ citing Damasen v. Hernando, 104 SCRA 111, 116-117 (1981).
'-'"Id.
275First Metro Investment Corp. v. Este Del Sol Mountain Reserve, Inc., G.R. No. 141811,
Nov. 15,2001.
276Suatengco v. Reyes, G.R. No. 162729, Dec. 17, 2008.
277Polytrade Corp. v. Blanco, G.R. No. L-27033, Oct. 31, 1969.
2,8First Metro Investment Corp. v. Este Del Sol Mountain Reserve, Inc., supra.
J9JC9B0M
R52M9UH7
BOOK VII. — LAND TITLES & DEEDS
1) Classification of Lands
l.l Classification Based on Ownership: Land, which is an immovable
property, may be classified as either of public dominion or of
private ownership. Land is considered of public dominion if it
either: (a) is intended for public use; or (b) belongs to the State,
without being for public use, and is intended for some public
service or for the development of the national wealth.' Land that
belongs to the State but which is not or is no longer intended
for public use, for some public service, or for the development
of the national wealth, is patrimonial property; it is property
owned by the State in its private capacity. Provinces, cities, and
municipalities may also hold patrimonial lands.2 The Civil Code
classifies property of private ownership into three categories:
(1) patrimonial property of the State under Articles 421 and
422; (2) patrimonial property of LGUs under Article 424; and
(3) property belonging to private individuals under Article
425.’ Stated otherwise, private properly consists of all property
belonging to private persons, either individually or collectively,
as well as the patrimonial property of the State, provinces, cities,
and municipalities.4
1.2 Classification of Public Lands According to Alienability: Whether
or not land of the public domain is alienable and disposable
primarily rests on the classification of public lands made under
the Constitution. Under the 1935 Constitution, lands of the
public domain were classified into three, namely, agricultural,
timber, and mineral. Section 10, Article XIV of the 1973
Constitution classified lands of the public domain into seven,
'Heirs of Mario Malabanan v. Republic, 704 SCRA 56! (2013).

’Heirs of Leopoldo Delfin and Soledad Delfin v. NHA, 810 SCRA 478 (2016).
’Republic v. Alejandre, G.R. No. 217336, Oct. 17,2018.
'Heirs of Leopoldo Delfin and Soledad Delfin v. NHA, supra.
605
J9JC9B0M
R52M9UH7
specifically, agricultural, industrial or commercial, residential,

resettlement, mineral, timber or forest, and grazing land, with
the reservation that the law might provide other classifications.
The 1987 Constitution adopted the classification under the 1935
Constitution into agricultural, forest or timber, and mineral, but
added national parks. Agricultural lands may be further classified
by law according to the uses to which they may be devoted. The
identification of lands according to their legal classification is
done exclusively by and through a positive act of the Executive
Department.5 Based on the foregoing, the Constitution places a
limit on the type of public land that may be alienated. Under
Section 2, Article XII of the 1987 Constitution, only agricultural
lands of the public domain may be alienated; all other natural
resources may not be.6
1.3 Concept of “Alienable and Disposable” Lands of the State:
Alienable and disposable lands of the State fall into two
categories, to wit: (a) patrimonial lands of the State, or those
classified as lands of private ownership under Article 425 of
the Civil Code, without limitation; and (b) lands of the public
domain, or the public lands as provided by the Constitution,
but with the limitation that the lands must only be agricultural.
Consequently, lands classified as forest or timber, mineral, or
national parks are not susceptible of alienation or disposition
unless they are reclassified as agricultural. A positive act of the
Government is necessary to enable such reclassification, and
the exclusive prerogative to classify public lands under existing
laws is vested in the Executive Department, not in the courts.
If, however, public land will be classified as neither agricultural,
forest or timber, mineral, or national park, or when public land is
no longer intended for public service or for the development of
the national wealth, thereby effectively removing the land from
the ambit of public dominion, a declaration of such conversion
must be made in the form of a law duly enacted by Congress or
by a Presidential proclamation in cases where the President is
duly authorized by law to that effect. Thus, until the Executive
Department exercises its prerogative to classify or reclassify
lands, or until Congress or the President declares that the State
no longer intends the land to be used for public service or for
5Heirs of Mario Malabanun v. Republic (2013), supra.

kId.
J9JC9B0M
R52M9UH7
BOOK VII. — LAND TITLES & DEEDS 607
the development of national wealth, the Regalian Doctrine is

applicable.7
1.4 Classification of Public Lands: Classification of lands of the
public domain may be found under Article Xll of the 1987
Philippine Constitution. More specifically, Section 3 of Article
XII classifies lands of the public domain into (1) agricultural,
(2) forest or timber, (3) mineral, and (4) national parks. Of these
four classifications, only agricultural lands may be alienated
and disposed of by the State.8 The 1987 Philippine Constitution
also provides that “agricultural lands of the public domain may
be further classified by law according to the uses to which they
may be devoted.” Based on the foregoing, it is clear that the
classification of lands of the public domain is first and foremost
provided by the Constitution itself. Of the classifications of
lands of the public domain, agricultural lands may further be
classified by law, according to the uses it may be devoted to.’
The classification of lands of the public domain into agricultural
lands, as well as their further classification into alienable and
disposable lands of the public domain, is a legislative prerogative
which may be exercised only through the enactment of a vali<
law. This prerogative has long been exercised by the legislativ
department through the enactment of Commonwealth Act No
141 (C.A.No. 141) or the Public LandActof 1936 (PLA). Section
6 of C.A. No. 141 remains to this day the existing general law
governing the classification of lands of the public domain into
alienable and disposable lands of the public domain.10 Under the
1987 Philippine Constitution, the power to classify agricultural
lands of the public domain into alienable and disposable lands
of the public domain is exercised “by law” or through legislative
enactment. In accordance with Section 6 of C.A. No. 141, this
power is delegated to the President who may, based on his sound
discretion, classify agricultural lands as alienable and disposable
lands of the public domain. This delegated power to so classify
public agricultural lands may no longer be redelegated by the
President—what has once been delegated may no longer be
delegated to another. Likewise, the same discretionary power has
’Heirs ofMario Malabanan v. Republic (2013), supra.

“Dumo v. Republic, 865 SCRA 119 (2018).
'‘Id.
'“Id.
J9JC9B0M
R52M9UH7
been delegated “by law” to the DENR Secretary who, of course,

cannot redelegate the same to his subordinates." As it is only the
President or the DENR Secretary who may classify as alienable
and disposable the lands of the public domain, an applicant for
land registration must prove that the land sought to be registered
has been declared by the President or DENR Secretary as
alienable and disposable land of the public domain.12
1.5 Agricultural Lands: (a) Concent: Agricultural public lands may
be defined as those alienable portions of the lands of the public
domain which are not forest or timber, mineral,13 or national
parks.14 Their disposition is provided for under Commonwealth
Act No. 141 (Sections 6-7), which states that it is only the
President, upon the recommendation of the proper department
head, who has the authority to classify the lands of the public
domain into alienable or disposable, timber, and mineral lands.
The classification of public lands, therefore, is an exclusive
prerogative of the Executive Department of the Government and
not of the courts.15 In the absence of such classification, the land
remains as unclassified land until it is released therefrom and
rendered open to disposition." This is in consonance with the
Regalian doctrine that all lands of the public domain belong to
the State, and that the State is the source of any asserted right
to ownership in land and charged with the conservation of such
patrimony.1’ As such, all lands not appearing to be clearly within
private ownership are presumed to belong to the State. Unless
public land is shown to have been reclassified or alienated to
a private person by the State, it remains part of the inalienable
public domain. To overcome this presumption, incontrovertible
evidence must be established that the land subject of the
application is alienable or disposable." (b) When Agricultural
Lands of Public Domain Become Patrimonial Property: The fact
that agricultural lands of the public domain have been declared
alienable and disposable does not automatically convert them to
"Supra.
"id.
"See Republic v. De Porkan, 151 SCR A 88; Krivenko v. Register of Deeds, 79 SCRA 461;
Mapa v. Insular Government, 10 Phil. 175.
'’See Sec. 3, Art. XII, 1987 Constitution.
'’Director of Lands v. CA, 129 SCRA 689, 692.
“Id.
"Id.
"Republic v. Lao, 405 SCRA 291, 298.
J9JC9B0M
R52M9UH7
patrimonial property of the State. In the landmark case of Heirs

of Malabanan v. Republic,19 the Court categorically ruled that
“for as long as the property belongs to the State, although already
1
classified as alienable or disposable, it remains property of the
public dominion if when it is intended for some public service
or for the development of the national wealth.” Hence, in order
to convert agricultural lands already declared alienable and
disposable into patrimonial property, there must be an express
declaration by the State that the public dominion property is
no longer intended for public service or the development of
the national wealth or that the property has been converted into
patrimonial. Without such express declaration, the property, even
if classified as alienable or disposable, remains property of the
public dominion, pursuant to Article 420(2) of the Civil Code,
and thus incapable of acquisition by prescription. It is only when
such alienable and disposable lands are expressly declared by
the State to be no longer intended for public service or for the
development of the national wealth that the period of acquisitive
prescription can begin to run. Such declaration shall be in
the form of a law duly enacted by Congress or a Presidential
Proclamation in cases where the President is duly authorized bj
law.2"
2) Modes of Disposition of Public Agricultural Lands

2.1 Modes of Disposition: Entitlement to agricultural lands of the
public domain requires compliance with the provisions of
Commonwealth Act No. 141, otherwise known as the Public
Land Act. There are four modes of disposition of agricultural
lands under Section 11 of the Public Land Act, namely: (1)
for homestead settlement; (2) by sale; (3) by lease; or (4) by
confirmation of imperfect or incomplete titles.21 (a) Homestead:
The applicant of a homestead must be a “citizen ofthe Philippines
over the age of eighteen years, or the head of a family.” The
applicant must prove compliance with the residency and
cultivation requirements under Chapter IV of the Public Land
Act. Under the Constitution, only 12 hectares of agricultural land
ofthe public domain may be acquired through homestead.22 Any
'’587 SCRA 172 (2009).

aId.
2lTaarv. Lawan, 842 SCRA365 (2017).
22Id.
J9JC9B0M
R52M9UH7
application for a homestead settlement recognizes that the land

belongs to the public domain. Prior to its disposition, the public
land has to be classified first as alienable and disposable through a
positive act of the government.23 Only lands of the public domain
which have been classified as public agricultural lands may
be disposed of through homestead settlement.24 The rule that a
certificate of title issued pursuant to a homestead patent becomes
indefeasible after one year, is subject to the proviso that the land
covered by said certificate is a disposable public land within
the contemplation of the Public Land Law. When the property
covered by a homestead patent is part of the inalienable land of
the public domain, the title issued pursuant to it is null and void,
and the rule on indefeasibility of title will not apply.25 (b) Sales
Patent: Sales patents are governed by Chapter V of the Public
Land Act. The applicant must be a citizen of the Philippines who
is of legal age or a head of the family. The land must first be
appraised before it can be sold through public bidding. As an
additional requirement, the purchaser must “have not less than
one-fifth of the land broken and cultivated within five years after
the date of the award.” The purchaser must also show “actual
occupancy, cultivation, and improvement of at least one-fifth
of the land applied for until the date on which final payment is
made” before the issuance of a sales patent. Only 12 hectares
of agricultural land of the public domain may be acquired
through a sales patent. The Public Land Act authorized domestic
corporations to apply for sales patents over agricultural lands.
However, under the present Constitution, private corporations
and associations can only lease agricultural lands.26 (c) Lease:
The third mode of disposition of agricultural lands of the public
domain is through a lease. The government can only award the
right to lease through an auction, the procedure of which shall
be the same as that prescribed for sales patents. An inherent
condition of the lease is that the lessee should have cultivated
one-third (!6) of the land “within five years after the date of the
approval of the lease.” Under the Constitution, citizens may
lease not more than 500 hectares of agricultural lands of the
public domain. For private corporations and associations, they
“Republic v. Heirs of Daquer, G.R. No. 193657, September 4, 2018.
2iId., citing Spouses De Guzman v. Agbagala, 569 Phil. 607,615 (2008).

26Taar v. Lawan, 842 SCRA 365 (2017).
J9JC9B0M
R52M9UH7
may lease a maximum of 1,000 hectares of agricultural lands

for a period of 25 years, renewable for another 25 years.2’ (d)
Confirmation of Imperfect or Incomplete Title: The last mode of
disposition is by confirmation of imperfect or incomplete titles
either through judicial legalization or through administrative
legalization. The second sub-category refers to the grant of free
patents.28 Under Section 11 of the Public Land Act (PLA), there
are two modes of disposing public lands through confirmation of
imperfect or incomplete titles: (1) by judicial confirmation; and
(2) by administrative legalization, otherwise known as the grant
of free patents.2’
2.2 Confirmation of Imperfect Title: (a) Judicial Confirmation: The
substantive provisions governing judicial confirmation are found
in Chapter VIII (Sections 47-57) of the PLA while its procedural
aspect is governed by Chapter III (Sections 14-38) of the Property
Registration Decree.30 Section 48 of the PLA particularly
specifies who are entitled to judicial confirmation or completion
of imperfect titles: “(/>) Those who by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive,
and notorious possession and, occupation of agricultural lands
of the public domain, under a bona fide claim of acquisition
or ownership, since June 12, 1945, immediately preceding the
filing of the application for confirmation of title, except when
prevented by war or force majeure. Those shall be conclusively
presumed to have performed all the conditions essential to a
government grant and shall be entitled to a certificate of title
under the provisions of this chapter." Upon compliance with the
conditions of Sec. 48(b) of the PLA, the possessor is deemed to
have acquired, by operation of law, a right to a grant over the
land. For all legal intents and purposes, the land is segregated
from the public domain, because the beneficiary is conclusively
presumed to have performed all the conditions essential to a
Government grant. The land becomes private in character and
is now beyond the authority of the director of lands to dispose
of.31 At that point, original registration of the title, via judicial
27Supra.
aId.
’’De Leon v. De Leon-Reyes, 791 SCRA407 (2016).
3,ld.
J9JC9B0M
R52M9UH7
proceedings, takes place as a matter of course; the registration

court does not grant the applicant title over the property but
merely recognizes the applicant’s existing title which had already
vested upon the applicant’s compliance with the requirement
of open, continuous, exclusive, and notorious possession and
occupation of the land since June 12, 1945.32 (b) Administrative
Confirmation: On the other hand, Chapter VII (Sections 44-46)
of the PLA substantively governs administrative legalization
through the grant of free patents, as amended by R.A. No. 782.
Under paragraph 1, Section 44, Chapter VII of Commonwealth
Act No. 141, as amended by R.A. No. 782, the free patent
applicant: (1) has to be a natural bom citizen of the Philippines
who is not the owner of more than 24 hectares; and (2) since
4 July 1945 or prior thereto, has continuously occupied and
cultivated, whether by himself or his predecessor-in-interest, a
tract of or tracts of public agricultural lands subject to disposition
not exceeding 24 hectares. Moreover, the application must be
accompanied by a map and the technical description of the land
occupied, along with affidavits proving his occupancy from
two disinterested persons residing in the municipality or barrio
where the land may be located.33 Unlike an applicant injudicial
confirmation of title who claims ownership over the land, the
applicant for a free patent recognizes that the land applied for
belongs to the government. A patent, by its very definition, is
a governmental grant of a right, a privilege, or authority. A free
patent is an instrument by which the government conveys a
grant of public land to a private person.34 Thus, the filing of a
free patent application amounts to an admission that the land is
a public land, and thus, he could not be the rightful owner of the
same.33
2.3 Judicial Confirmation of Imperfect Title: (a) Basis of Riidit:
Section 11 of the Public Land Act acknowledges that public
lands suitable for agricultural purposes may be disposed of “by
confirmation of imperfect or incomplete titles” through “judicial
legalization.” Section 48(b) of the Public Land Act, as amended
by P.D. No. 1073, supplies the details and unmistakably grants
32Supra.
33Republic v. Lasmarias, 825 SCRA43 (2017).
34De Leon v. De Leon-Reyes, 791 SCRA407 (2016).
33Yabut v. Alcantara, 819 SCRA232 (2017).
J9JC9B0M
R52M9UH7
I
that right, subject to the requisites stated therein:36 "Sec. 48.

The following described citizens of the Philippines, occupying
lands of the public domain or claiming to own any such land
or an interest therein, but whose titles have not been perfected
or completed, may apply to the Court of First Instance of the
province where the land is located for confirmation of their
claims and the issuance ofa certificate oftitle therefor, under the
Land Registration Act, to wit: xxx (b) Those who by themselves
or through their predecessors in interest have been in open,
continuous, exclusive, and notorious possession and occupation
of alienable and disposable lands of the public domain, under a
bonafide claim ofacquisition ofownership, since June 12,1945,
or earlier, immediately preceding the filing of the application
for confirmation of title except when prevented by war or
force majeure. Those shall be conclusively presumed to have
performed all the conditions essential to a Government grant
and shall be entitled to a certificate of title under the provisions
of this chapter. " Section 48(b) of C.A. No. 141 is virtually the
same as Section 14(1) of the Property Registration Decree. Said
Decree codified the various laws relative to the registration of
property, including lands of the public domain. It is Section 14(1)
that operationalizes the registration of such lands of the public
domain.3’The provision reads: "SECTION 14. Who may apply.—
The following persons may file in the proper Court of First
Instance an application for registration of title to land, whether
personally or through their duly authorized representatives:
(1) those who by themselves or through their predecessors-in-
interest have been in open, continuous, exclusive and notorious
possession and occupation of alienable and disposable lands of
the public domain under a bona fide claim of ownership since
I June 12, 1945, or earlier, xxx" (b) Requisites for Registration
Under Sec. 14(14. PRD: An application for registration under
Section 14( 1) of the Property Registration Decree (P.D. No. 1529)
must establish the following requisites, namely: (1) the land is
I alienable and disposable property of the public domain; (2) the
applicant and its predecessors-in-interest have been in open,
I continuous, exclusive, and notorious possession and occupation
of the land under a bona fide claim of ownership; and (3) the
applicant and its predecessors-in-interest have possessed and
36Heirs of Mariano Malabanan v. Republic, 587 SCRA 172 (2009).
J9JC9B0M
R52M9UH7
occupied the land since June 12,1945, or earlier.38 This mode of

disposition is referred to as judicial confirmation of imperfect
or incomplete title under Section 48(b) of the Public Land Act.
Here, the agricultural land subject of the application needs only
to be classified as alienable and disposable as of the time of the
application, provided the applicant’s possession and occupation
of the land dated back to June 12, 1945, or earlier. Thereby, a
conclusive presumption that the applicant has performed all
the conditions essential to a government grant arises, and the
applicant becomes the owner of the land by virtue of an imperfect
or incomplete title. By legal fiction, the land has already
ceased to be part of the public domain and has become private
property.3’ When a person applies for judicial confirmation of
title, he or she already holds an incomplete or imperfect title
over the property being applied for, after having been in open,
continuous, exclusive, and notorious possession and occupation
from June 12, 1945 or earlier. The date “June 12, 1945” is the
reckoning date of the applicant’s possession and occupation,
and not the reckoning date of when the property was classified
as alienable and disposable." The Court has resolved the issue
on the correct interpretation of Section 14(1) of P.D. No. 1529
in Republic v. Court ofAppeals and Corazon Naguit" (Naguit
case) where it was held that “the more reasonable interpretation
of Section 14(1) is that it merely requires the property sought
to be registered as already alienable and disposable at the time
the application for registration of title is filed.” In the en banc
case of Heirs ofMalabanan v. Republic" the Court affirmed the
earlier pronouncement in Naguit, (c) Proof of Alienability: As to
the requirement of proof of alienability, jurisprudence is replete
with cases which emphasize that a positive act of the Executive
“Republic v. Alonso, G.R. No. 210738, Aug. 14, 2019; Republic v. Science Park of the
Philippines, Inc., G.R. No. 237714, Nov. 12, 2018; Republic v. Bautista, G.R. No. 211664, Nov.
12, 2018; Republic v. Manahan-Jazmines, G.R. No. 227388, July 23, 2018; Dumo v. Republic,
865 SCRA 119 (2018); Republic v. Malijan-Javier, 860 SCRA 443 (2018); Leonidas v. Vargas,
849 SCRA 210 (2017); Espiritu, Jr. v. Republic, 828 SCRA 77 (2017); Republic v. The Estate of
Virginia Santos, 813 SCRA 541 (2016); Republic v. Local Superior of the Institute of the Sisters of
the Sacred Heart of Jesus of Ragusa, 783 SCRA 501 (2016); Republic v. Dayaoen, 762 SCRA 310
(2015); Republic v. Alba, 767 SCRA 385 (2015); Republic v. Zurbaran Realty and Development
Corp., 719 SCRA 601 (2014)
’’Heirs of Mario Malabanan v. Republic (2013), supra.
"Republic v. Noval, 840 SCRA 11 (2017) and Republic v. Go, 834 SCRA 166 (2017).
'”448 SCRA 442 (2005), decided by the Second Division.
435 8 7 SCRA 172 (2009).
J9JC9B0M
R52M9UH7
Department, specifically certifications from the Community

Environment and Natural Resources Office (CENRO) or
Provincial Environment and Natural Resources Office (PENRO),
and the Department of Environment and Natural Resources
(DENR) Secretary, is indispensable for the determination of the
nature of land as alienable and disposable.43 It is not enough for
the PENRO or CENRO to certify that a land is alienable and
disposable. The applicant for land registration must prove that
the DENR Secretary had approved the land classification and
released the land of the public domain as alienable and disposable,
and that the land subject of the application for registration
falls within the approved area per verification through survey
by the PENRO or CENRO. In addition, the applicant for land
registration must present a copy of the original classification
approved by the DENR Secretary and certified as a true copy by
the legal custodian of the official records. These facts must be
established to prove that the land is alienable and disposable.44
In Republic v. T.A.N. Properties, Inc.,*5 the Court held that there
are two documents which must be presented to prove that the
land subject of the application for registration is alienable and
disposable: (1) a copy of the original classification approved
by the DENR Secretary and certified as a true copy by the legal
custodian of the official records, and (2) a certificate of land
classification status issued by the CENRO or the PENRO based
on the land classification approved by the DENR Secretary.40
2.4 Registration Under Sec. 14(2), PRD: (a) Requisites for
registration: Registration under Section 14(2) requires the
applicant to establish the following requisites: (i) the land is an
alienable and disposable, and patrimonial property of the public
■*5Republic v. Alonso, supra.

^Republic v. T.A.N. Properties, Inc., 555 SCRA 477 (2008), reiterated in DM Consunji,
Inc. v. Republic, G.R. No. 233339, Feb. 13, 2019; Republic v. Bautista, G.R. No. 211664, Nov.
12, 2018; Highpoint Development Corp. v. Republic, G.R. No. 224389, Nov. 7,2018; Republic v.
Aluntinos lee Plant and Cold Storage, Inc., G.R. No. 189723, July 11,2018; Republic v. Malijan-
Javier, 860 SCRA 443 (2018); Republic v. Go, 834 SCRA 166 (2017); Republic v. Heirs of
Spouses Tomasa Estacio and Eulalio Ocol, 808 SCRA 549 (2016); Republic v. Local Superior
of the Institute of the Sisters of the Sacred Heart of Jesus of Ragusa, 783 SCRA 501 (2016); La
Tondena, Inc. v. Republic, 765 SCRA 265 (2015); Republic v. Rcmman Enterprises, Inc., 717
SCRA 171 (2014); Republic v. De Guzman K/a. de Joson, 718 SCRA 228 (2014).
vSupra.
46DM Consunji, Inc. v. Republic, G.R. No. 233339, Feb. 13, 2019; Republic v. Science
Park of the Philippines, Inc., G.R. No. 237714, Nov. 12,2018; Dunto v. Republic, 865 SCRA 119
(2018); Republic v. Nicolas, 841 SCRA 328 (2017); Republic v. Lualhali, 754 SCRA 352 (2015).
J9JC9B0M
R52M9UH7
domain; (ii) the applicant and its predecessors-in-interest have

been in possession of the land for at least 10 years, in good faith
and with just title, or for at least 30 years, regardless of good
faith or just title; and (iii) the land had already been converted to
or declared as patrimonial property of the State at the beginning
of the said 10-year or 30-year period of possession.47 fl) How to
Prove Patrimonial Character: When property of public dominion
is no longer intended for public use or for public service, it
becomes part of the patrimonial property of the State. When this
happens, the property is withdrawn from public dominion and
becomes property of private ownership, albeit still owned by the
State. The property is now brought within the commerce of man
and becomes susceptible to the concepts of legal possession and
prescription.4’ To establish that the land subject of the application
has been converted into patrimonial property of the State, an
applicant must prove the following: (i) the subject property
has been classified as agricultural land; (ii) the property has
been declared alienable and disposable; (iii) there is an express
government declaration or manifestation that the property is
already patrimonial, or is no longer retained for public service or
the development of national wealth;49 and (iv) such declaration
shall be in the form of a law duly enacted by Congress or a
Presidential Proclamation in cases where the President is duly
authorized by law.50 It must be emphasized that without the
concurrence of these conditions, the land remains part of public
dominion and thus incapable of acquisition by prescription.51 (2)
Declaration ofAlienahilitv Not Sullieient: As regards the first and
most important requisite mentioned above, the Court has clarified
that declaration of alienability and disposability is not enough for
the registration of land under Section 14(2) of P.D. No. 1529.“
For land of the public domain to be converted into patrimonial
property, there must be an express declaration—in the form of a
law duly enacted by Congress or a Presidential Proclamation in
cases where the President is duly authorized by law—that "the
■•’Republic v. Bautista, G.R. No. 211664, Nov. 12, 2018; Espiritu, Jr. v. Republic, 828
SCRA 77 (2017); Republic v. Zurbaran Realty and Development Corp., 719 SCRA 601 (2014).
■"•Republic v. Tan, 783 SCRA 643 (2016), cited in Republic v. Nicolas, 841 SCRA 328
(2017).
"'Republic v. Nicolas, 841 SCRA 328 (2017); Republic v. Tan, 783 SCRA 643 (2016).
30l leirs of Mario Malabanan v. Republic (2009), supra.
slRepublic v. Nicolas, supra.
“Espiritu, Jr. v. Republic, supra.
J9JC9B0M
R52M9UH7
public dominion property is no longer intended for public service

or the development of the national wealth or that the property has
been converted into patrimonial.”5’ Accordingly, although lands
of the public domain that are considered patrimonial may be
acquired by prescription under Section 14(2) of RD. No. 1529,
before acquisitive prescription could commence, the property
sought to be registered must not only be classified as alienable
and disposable; it must also be declared by the State that it is no
longer intended for public use, public service or the development
of the national wealth. Thus, absent an express declaration by
the State, the land remains to be property of public dominion.54
For acquisitive prescription to set in, therefore, the land being
possessed and occupied must already be classified or declared
as patrimonial property of the State. Otherwise, no length of
possession would vest any right in the possessor if the property
has remained land of the public dominion. Malabanan stresses
that even if the land is later converted to patrimonial property
of the State, possession of it prior to such conversion will not be
counted to meet the requisites of acquisitive prescription. Thus,
registration under Section 14(2) of RD. No. 1529 requires that
the land had already been converted to patrimonial property of
the State at the onset of the period of possession required by the
law on prescription.55 Stated otherwise, the period of acquisitive
prescription would only begin to run from the time that the State
officially declares that the public dominion property is no longer
intended for public use, public service, or for the development
of national wealth.56 This is only logical because acquisitive
prescription could only run against private properties, which
include patrimonial properties of the State, but never against
public properties.5’ (b) Distinctions Between Sec. 14(1) and
Sec. 14(2). PRD: (1) The bases for registration under these two
provisions of law differ from one another. Registration under
Section 14(1) is based on possession; whereas registration
“Heirs of Leopoldo Delfin and Soledad Delfin V. NHA, 810 SCRA478 (2016), citing Heirs
of Mario Malubanan v. Republic, supra.
“Republic v. Cortez, 715 SCRA416 (2014); Republic v. East Silverlane Really Develop
ment Corp., 666 SCRA401 (2012); Republic v. Espinosa, 677 SCRA 92 (2012).
“Republic v. Zurbaran Realty and Development Corp., supra', Republic v. De Guzman
Vda. de Joson, 718 SCRA 228 (2014).
“Republic v. Heirs of Spouses Tomasa Estacio and Eulalio Ocol, 808 SCRA 549 (2016),
citing Republic v. Cortez, 715 SCRA417 (2014).
“Espiritu, Jr. v. Republic, supra.
J9JC9B0M
R52M9UH7
under Section 14(2) is based on prescription.58 Stated otherwise,

registration under Section 14(1) of P.D. No. 1529 is based on
possession and occupation of the alienable and disposable land
of the public domain since June 12, 1945 or earlier, without
regard to whether the land was susceptible to private ownership
at that time.5’ On the other hand, registration under Section
14(2) of P.D. No. 1529 is based on acquisitive prescription and
must comply with the law on prescription as provided by the
Civil Code.00 (2) Registration under the first mode is extended
under the aegis of the P.D. No. 1529 and the Public Land Act
(PLA) while under the second mode is made available both by
P.D. No. 1529 and the Civil Code.6' (3) Under the first mode,
the land subject matter of the application for registration used
to be agricultural land of the public domain but already declared
alienable and disposable; while under the second mode, the land
used to be patrimonial property of the State. (4) Under Section
14(1), it is not necessary for the land applied for to be alienable
and disposable at the beginning of the possession on or before
June 12, 1945—Section 14(1) only requires that the property
sought to be registered is alienable and disposable at the time of
the filing of the application for registration. However, in Section
14(2), the alienable and disposable character of the land, as well
as its declaration as patrimonial property of the State, must exist
at the beginning of the relevant period of possession?2
3) Indefeasibility of Title
3.1 Principle of Indefeasibility of Title: (a) Statement of principle:
Under the Land Registration Act, title to the property covered by
a Torrens certificate becomes indefeasible after expiration of one
year from the entry of the decree of registration. Such a decree of
registration is incontrovertible and becomes binding on all
persons whether or not they were notified of, or participated in,
the in rem registration process?’ Pursuant to Section 32 of P.D.
’“Republic v. Bautista, G.R. No. 211664, Nov. 12,2018, citing Republic v. Rovency Realty
and Development Corp., 850 SCRA 188 (2018).
’’Republic v. Heirs of Spouses Tomasa Estacio and Eulalio Ocol, 808 SCRA 549 (2016).
“/rf.
“Kawayan Hills Corp. v. CA, G.R. No. 203090, Sep. 5, 2018, citing Canlas v. Republic,
739 SCRA 404 (2014).
“Republic v. Bautista, G.R. No. 211664, Nov. 12, 2018.
“Heirs of Simplicio Santiago v. Heirs of Mariano Santiago, G.R. No. 151440, June 17,
2003.
J9JC9B0M
R52M9UH7
1529, a decree of registration may be reopened or subjected to

review within one year from the date of the entry of such decree
of registration if a party is deprived of his interest in the land by
reason of actual fraud. Unlike ordinary civil actions, however,
the adjudication of land in a cadastral or land registration
proceeding does not become final, in the sense of incontro-
vertibility until after the expiration of one year from the entry of
the final decree of registration. As long as a final decree has not
yet been entered by the LRA and the period of one year has not
elapsed from date of entry, the title is not finally adjudicated and
the decision in the registration proceeding continues to be under
the control and sound discretion of the court rendering it.“ Upon
the expiration of said period of one year, the decree of registration
and the certificate of title issued shall become incontrovertible.6’
(b) Only Actual or Extrinsic Fraud as Ground for Review: Only
actual and extrinsic fraud has been accepted and is contemplated
by the law as a ground to review or reopen a decree of
registration." Fraud is extrinsic if it is employed to deprive
parties of their day in court and thus prevent them from asserting
their right to the property registered in the name of the applicant.67
Thus, relief is granted to a party deprived of his interest in land
where the fraud consists in a deliberate misrepresentation that the
lots are not contested when in fact they are; or in willfully
misrepresenting that there are no other claims; or in deliberately
failing to notify the party entitled to notice; or in inducing him
not to oppose an application; or in misrepresenting about the
identity of the lot to the true owner by the applicant causing the
former to withdraw his application. In all these examples, the
overriding consideration is that the fraudulent scheme of the
prevailing litigant prevented a party from having his day in court
or from presenting his case. The fraud, therefore, is one that
afreets and goes into the jurisdiction of the court.68 On the other
hand, relief on the ground of fraud will not be granted where the
alleged fraud goes into the merits of the case, is intrinsic and not
collateral, and has been controverted and decided. Thus, the
“Francisco v. Rojas, G.R. No. 167120, April 23, 2014; Lozada v. Bracewell, G.R. No.
April 2,2014; Gomez v. Court of Appeals, 250 Phil. 504, 510(1988).
“Sec. 32, P.D. No. 1529.
“Republic v. Guerrero, G.R. No. 133168, March 28,2006.
"Id.
aId„ citing Libudan v. Gil, 45 SCRA 17 (1972).
I
J9JC9B0M
R52M9UH7
Court has underscored the denial of relief where it appears that

the fraud consisted in the presentation at the trial of a supposed
forged document, or a false and perjured testimony; or in basing
the judgment on a fraudulent compromise agreement; or in the
alleged fraudulent acts or omission of the counsel which
prevented the petitioner from properly presenting the case.6’ (c)
Counting of One Cl’I-vear Period in Public Land Patent: There is
no specific provision in the Public Land Law or the Land
Registration Act (Act No. 496), now Presidential Decree 1529,
fixing a similar one-year period within which a public land patent
can be considered open to review on the ground of actual fraud
(such as that provided for in Section 38 of the Land Registration
Act, and now Section 32 of Presidential Decree 1529), and
clothing a public land patent certificate oftitle with indefeasibility.
Nevertheless, the Court has repeatedly applied Section 32 of
Presidential Decree No. 1529 to a patent issued by the Director of
Lands, approved by the Secretary of Natural Resources, under
the signature of the President of the Philippines. The date of the
issuance of the patent corresponds to the date of the issuance of
the decree in ordinary cases. Just as the decree finally awards the
land applied for registration to the party entitled to it, the patent
issued by the Director of Lands equally and finally grants and
conveys the land applied for to the applicant.™ Thus, in the case
of public land grants or patents, the one-year period commences
from the issuance of the patent by the government.’1 (d) When
One (l)-Year Period Not Applicable: The one-year prescriptive
period, however, does not apply when the person seeking
annulment of title or reconveyance is in possession of the lot.
This is because the action partakes of a suit to quiet title which is
imprescriptible.” In David v. Malay," the Court held that a person
in actual possession of a piece of land under claim of ownership
may wait until his possession is disturbed or his title is attacked
before taking steps to vindicate his right, and his undisturbed
possession gives him the continuing right to seek the aid of a
court of equity to ascertain and determine the nature of the
“Libudan v. Gil, G.R. Nos. L-21163 and L-25495, May 17, 1972.
’“Heirs of Simplicio Santiago v. Heirs of Mariano Santiago, supra.
’’Republic v. Guerrero, G.R. No. 133168, March 28, 2006.
’’Heirs of Simplicio Santiago v. Heirs of Mariano Santiago, supra., also cited in Tappa v.
Heirs of Bacud, G.R. No. 187633, April 4, 2016.
’’318SCRA711 (1999).
J9JC9B0M
r
R52M9UH7
adverse claim of a third party and its effect on his title, (e) Petition
For Review Within One (1) Year Not Exclusive Remedy: While
Section 38 of Act No. 496 states that the petition for review to
question a decree of registration must be filed within one year
after entry of the decree, such provision is not the only remedy of
an aggrieved party who was deprived of land by fraudulent
means. The remedy of the landowner whose property has been
wrongfully or erroneously registered in another’s name is, after
one year from the date of the decree, not to set aside the decree,
but, respecting the decree as incontrovertible and no longer open
to review, to bring an ordinary action in the ordinary court of
justice for reconveyance or, if the property has passed into the
hands of an innocent purchaser for value, for damages.74 (f)
Action For Reconveyance: The law creates the obligation of the
trustee to reconvey the property and its title in favor of the true
owner. Correlating Section 53, paragraph 3 of P.D. No. 1529 and
Article 1456 of the Civil Code with Article 1144(2) of the Civil
Code, the prescriptive period for the reconveyance of fraudulently
registered real property is 10 years reckoned from the date of the
issuance of the certificate of title. This 10-year prescriptive period
begins to run from the date the adverse party repudiates the
implied trust, which repudiation takes place when the adverse
party registers the land. An exception to this rule is when th
party seeking reconveyance based on implied or constructiv
trust is in actual, continuous, and peaceful possession of thi
property involved. Prescription does not commence to run against
him because the action would be in the nature of a suit for
quieting of title, an action that is imprescriptible.” Thus, when
the action for reconveyance is based on an implied or constructive
trust, the prescriptive period is 10 years, or it is imprescriptible if
the movant is in the actual, continuous, and peacefill possession
of the property involved.76 On the other hand, when the action for
reconveyance is based on a void deed or contract the action is
imprescriptible under Article 1410 of the New Civil Code. As
long as the land wrongfully registered under the Torrens system
is still in the name of the person who caused such registration, an
action in personam will lie to compel him to reconvey the
74Yu Hwa Ping v. Ayala Land, Inc., 832 SCRA427 (2017).

7sUy v. CA, G.R. No. 173186, September 16,2015
76Yu Hwa Ping v. Ayala Land, Inc., supra.
J9JC9B0M
R52M9UH7
property to the real owner.” (g) Where there are two conflicting
titles: (1) General rule: The general rule is that in case of two
certificates of title purporting to include the same land, the earlier
date prevails.78 (2) Exception: Nevertheless, the rule on superiority
is not absolute. If the inclusion of the land in the earlier registered
title was a result of a mistake, then the latter registered title will
prevail.” The ratio decidendi of this exception is to prevent a title
that was earlier registered, which erroneously contained a parcel
of land that should not have been included, from defeating a title
that was later registered but is legitimately entitled to the said
land.80
3.2 Action for Compensation Against the Assurance Fund: (a) Nature
and purpose of fund: It is intended to safeguard the rights of
prejudiced parties rightfully entitled to an interest in land but shut
off from obtaining titles thereto because of the indefeasibility of a
Torrens title. Therefore, as suppletory to the registration of titles,
pecuniary compensation by way of damages was provided for
in certain cases for persons who had lost their property. For this
purpose, an assurance fund was created.81 The Assurance Fund
was meant as a form of State insurance that allows recompense
to an original title holder who, without any negligence on his part
whatsoever, had been apparently deprived of his land initially
by a usurper. The ordinary remedies against the usurper would
have allowed the original title holder to recover his property.
However, if the usurper is able to transfer the same to an innocent
purchaser for value and he is unable to compensate the original
title holder for the loss, then the latter is now left without proper
recourse.81 The intent of the Assurance Fund is to indemnify the
innocent original title holder for his property loss, which loss is
attributable to not only the acts of a usurper but ultimately the
operation of the Torrens System of registration which, by reasons
of public policy, tilts the scales in favor of innocent purchasers
for value.88 (b) When Recovery Against the Fund Proper: An
11Supra.
78Legarda v. Saleeby, 31 Phil. 590 (1915); Garcia v. CA, 184 Phil. 358 (1980); MWSS v.
CA, 290 Phil. 284 (1992); Spouses Carpo v. Ayala Land, Inc., 25 Phil. 277 (2010); and Jose Yulo
Agricultural Corp. v. Spouses Davis, 764 SCRA 589 (2015).
’’Legarda v. Saleeby, supra.
80Yu Hwa Ping v. Ayala Land, Inc., supra.
"'Estrellado v. Martinez, 48 Phil. 256 (1925).
82Stilianopoulos v. RD for Legazpi City, G.R. No. 224678, July 23,2018.
8JW.
J9JC9B0M
R52M9UH7
action against the Assurance Fund on the ground of “fraudulent

registration under the Torrens system after the land’s original
registration” may be brought only after the claimant’s property is
registered in the name of an innocent purchaser for value. This is
because it is only after the registration of the innocent purchaser
for value’s title (and not the usurper’s title which constitutes
a breach of trust) can it be said that the claimant effectively
“sustains loss or damage, or is deprived of land or any estate
or interest therein in consequence of the bringing of the land
under the operation of the Torrens system." The registration of
the innocent purchaser for value’s title is therefore a condition
sine qua non in order to properly claim against the Assurance
Fund.84 In addition, Section 101 of P.D. No. 1529 explicitly
provides that “the Assurance Fund shall not be liable for any
loss, damage or deprivation caused or occasioned by a breach of
trust, whether express, implied or constructive or by any mistake
in the resurvey or subdivision of registered land resulting in
the expansion of area in the certificate of title.” It is hombook
doctrine that when a party uses fraud or concealment to obtain
a certificate of title of property, a constructive trust is created in
favor of the defrauded party. However, as stated in Section 101
of P.D. No. 1529, the inability to recover from the defrauding
party does not make the Assurance Fund liable therefor. Instead,
the loss, damage, or deprivation becomes compensable under the
Assurance Fund when the property has been further registered
in the name of an innocent purchaser for value. This is because
in this instance, the loss, damage, or deprivation are not actually
caused by any breach of trust but rather, by the operation of the
Torrens system of registration which renders indefeasible the title
of the innocent purchaser for value.” (c) Prescriptive Period of
Action for Compensation Against the Fund: Section 102 of P.D.
No. 1529 sets a six-year prescriptive period “from the time the
right to bring such action first occurred” within which one may
proceed to file an action for compensation against the Assurance
Fund. Prescription, for purposes of determining the right to
bring an action against the Assurance Fund, should be reckoned
from the moment the innocent purchaser for value registers his
or her title and upon actual knowledge thereof of the original
Supra.
,sId.
J9JC9B0M
R52M9UH7
title holder/claimant.86 In actions for compensation against the

Assurance Fund grounded on fraud, registration of the innocent
purchaser for value’s title should only be considered as a
condition sine qua non to file such an action and not as a form of
constructive notice for the purpose of reckoning prescription. This
is because the concept of registration as a form of constructive
notice is essentially premised on the policy of protecting the
innocent purchaser for value’s title, which consideration does
not, however, obtain in Assurance Fund cases. An action against
the Assurance Fund operates as form of relief in favor of the
original property owner who had been deprived of his land by
virtue of the operation of the Torrens registration system. It does
not, in any way, affect the rights of the innocent purchaser for
value who had apparently obtained the property from a usurper
but nonetheless, stands secure because of the indefeasibility of
his Torrens certificate of title. The underlying rationale for the
constructive notice rule—given that it is meant to protect the i
interest of the innocent purchaser for value and not the original
title holder/claimant—is therefore absent in Assurance Fund
cases. Accordingly, it should not be applied, especially since its
application with respect to reckoning prescription would actually
defeat the Assurance Fund’s laudable purpose.
4) Certificate of Title Not Subject to Collateral Attack

4.1 Not Subject to Collateral Attack: (a) Rule: A certificate of title
cannot be attacked collaterally. This rule is provided under
Section 48 of P.D. No. 1529 which states that a certificate of title
shall not be subject to collateral attack and cannot be altered,
modified, or canceled except in a direct proceeding. It is a well-
known doctrine that the issue as to whether title was procured
by falsification or fraud can only be raised in an action expressly
instituted for the purpose. A Torrens title can be attacked only
for fraud, within one year after the date of the issuance of the
decree of registration. Such attack must be direct, and not by
a collateral proceeding. The title represented by the certificate
cannot be changed, altered, modified, enlarged, or diminished
in a collateral proceeding."’ An application for registration of an
already titled land constitutes a collateral attack on the existing
“Supra.
"’Lagrosa v. CA, 371 Phil. 238 (1999).
J9JC9B0M
R52M9UH7
title. The title may be challenged only in a proceeding for that

purpose, not in an application for registration of a land already
registered in the name of another person. After one year from its
registration, the title is incontrovertible and is no longer open to
review.88 (b) Direct and Collateral Attack: An action is an attack
on a title when the object of the action is to nullify the title, and
j
thus challenge the judgment or proceeding pursuant to which the
title was decreed. The attack is direct when the object of an action
is to annul or set aside such judgment, or enjoin its enforcement.
On the other hand, the attack is indirect or collateral when, in an
action to obtain a different relief, an attack on the judgment or
proceeding is nevertheless made as an incident thereof.89
i 4.2 Action for Reconveyance. Not Collateral Attack: Registration,
however, does not deprive an aggrieved party of a remedy in law.
What cannot be collaterally attacked is the certificate of title and
not the title or ownership which is represented by such certificate.
Ownership is different from a certificate of title. The fact that a
person was able to secure a title in his name did not operate to vest
ownership upon him of the subject land. Registration of a piece
of land under the Torrens System does not create or vest title
because it is not a mode of acquiring ownership. A certificate ol
title is merely an evidence of ownership or title over the particular
property described therein. It cannot be used to protect a usurper
from the true owner; nor cun it he used as a shield for the
commission offraud; neither does it permit one to enrich himself
at the expense of others. Its issuance in favor of a particular
person does not foreclose the possibility that the real property
may be co-owned with persons not named in the certificate, or
that it may be held in trust for another person by the registered
owner.’" Reconveyance is based on Section 55 of Act No. 496,
ns amended by Act No. 3322, which states that in all cases of
registration procured by fraud the owner may pursue all his legal
and equitable remedies against the parties to such fraud, without
prejudice, however, to the rights of any innocent holder for value
of a certificate of title. It is an action in personam available to a
person whose property has been wrongfully registered under the
Torrens system in another’s name."’ It does not seek to set aside
“Carvajal v. CA, 345 Phil. 592 (1997).

“’Heirs of Simplicio Santiago v. Heirs of Mariano Santiago, G.R. No. 151440, June 17,
2003.
“Wee v. Mardo, G.R. No. 202414, June 4,2014 citing Naval v. CA, 518 Phil. 271 (2006).
J9JC9B0M
R52M9UH7
the decree but, respecting it as incontrovertible and no longer

open to review, seeks to transfer or reconvey the land from the
registered owner to the rightful owner. Reconveyance is always
available as long as the property has not passed to an innocent
third person for value.’1
4.3 Action to Annul Certificate of Title is Direct Attack: An action
for annulment of certificate of title is a direct attack on the title
I5
J
because it challenges the judgment decree of title.’2 In Goco v.
Court ofAppeals'” the Court said that “an action for annulment
I
of certificates of title to property goes into the issue of ownership
of the land covered by a Torrens title and the relief generally I
prayed for by the plaintiff is to be declared as the land’s true
owner.” Hence, there is no violation of Section 48 of P.D. No.
§
•<;
1529 when the title is declared null and void by the court.” i
Likewise, a counterclaim raising the nullity of the title is not a
violation of Section 48 of P.D. No. 1529 because a counterclaim §
can be considered a direct attack on the title.” In Development
Bank of the Philippines v. Court of Appeals,the Court ruled
on the validity of a certificate of title despite the fact that the
nullity thereof was raised only as a counterclaim. It was held that
a counterclaim is considered a complaint, only this time, it is the
original defendant who becomes the plaintiff. It stands on the
same footing and is to be tested by the same rules as if it were an
independent action.
4.4 In Ejectment Case: When the ejectment court resolves the issue
of ownership based on a certificate of title to determine the issue
of possession, the question is posed: is this a situation where the
Torrens title is being subjected to a collateral attack proscribed by
Section 48 of Presidential Decree No. 1529? The answer to this is
“No” because there is no real attack, whether direct or collateral,
on the certificate of title in question for the simple reason that the
resolution by the ejectment court cannot alter, modify, or cancel
the certificate of title. Thus, the issue of whether the attack on a
Torrens title is collateral or direct is immaterial in forcible entry
"Supra.
,2De Pedro v. Romasan Development Corporation, 748 Phil. 706 (2014).
”617 SCRA 397(2010).
”/</.
’’Heirs of Simplicio Santiago v. Heirs of Mariano Santiago, G.R. No. 151440, June 17,
2003.
”331 SCRA267 (2000).
J9JC9B0M
R52M9UH7
and unlawful detainer cases because the resolution of the issue

of ownership is allowed by the Rules of Court on a provisional
4 basis only. To repeat: when the issue of ownership is raised by the
defendant in his pleadings and the question of possession cannot
be resolved without deciding the issue of ownership, the issue
I of ownership shall be resolved only to determine the issue of
possession.”
? 4.5 In Action Publiciana: The issue in an action publiciana is the
“better right of possession” of real property independent of title.
This “better right of possession” may or may not proceed from
a Torrens title. Thus, a lessee, by virtue of a registered lease
contract or an unregistered lease contract with a term longer than
one year, can file, as against the owner or intruder, an action
publiciana if he has been dispossessed for more than one year. In
the same manner, a registered owner or one with a Torrens title
i can likewise file an action publiciana to recover possession if
the one-year prescriptive period for forcible entry and unlawful
detainer has already passed.” While there is no express grant in
the Rules of Court that the court wherein an action publiciana
is lodged can provisionally resolve the issue of ownership,
unlike an ordinary ejectment court which is expressly conferred
such authority (albeit in a limited or provisional manner only,
i.e., for purposes of resolving the issue of possession), there
is ample jurisprudential support for upholding the power of a
court hearing an action publiciana to also rule on the issue of
ownership.” However, in an action publiciana, the defense of
ownership (i.e., that the defendant, and not the plaintiff, is the
rightful owner) will not trigger a collateral attack on the plaintiffs
Torrens or certificate of title because the resolution of the issue
of ownership is done only to determine the issue of possession.1"0
Thus, while the RTC could have resolved the issue of ownership
provisionally to determine the “better right of possession,” which
is allowed in an action publiciana, it was without any power
or jurisdiction to order the reconveyance of the land in dispute
because that can be done only upon a definitive ruling on the said
issue—something that cannot be done in an actionpubliciana.'11'
97Hcirs ofCullado v. Gutierrez, G.R. No. 212938, July 30, 2019.
”M.
IWM.
""Id.
J9JC9B0M

Civil Law Review by Rabuya

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Civil Law Review by Rabuya

Uploaded by

Copyright:

Available Formats

R52M9UH7

Published & Distributed by

S REX Book Store .....

FOR YOU WHO INSPIRED ME:

I DEDICATE THIS WORK

BOOK I. - PERSONS & FAMILY RELATIONS

FAMILY CODE OF THE PHILIPPINES

BOOK 11. - PROPERTY

BOOK III. - SUCCESSION

Basic Principles 241

Intestate or Legal Succession 313

BOOK IV. - OBLIGATIONS AND CONTRACTS

BOOK V. - SPECIAL CONTRACTS

Obligations of the Parties 451

PART 2: CONTRACT OF LEASE

Lease of Things 467

PART 3: CONTRACT OF COMMON CARRIER

PART 4: CONTRACT OF PARTNERSHIP

PART 5: CONTRACT OF AGENCY

PART 6: CONTRACTS OF LOAN AND DEPOSIT

PART 7: ACCESSORY CONTRACTS

BOOK VI. - TORTS & DAMAGES

Nominal Damages 598

BOOK VII. - LAND TITLES & DEEDS

BOOK I. — PERSONS & FAMILY RELATIONS

'Art. 2, New Civil Code (NCC), as amended by E.O. No. 200.

2 PRE-BAR REVIEWER IN CIVIL LAW

1.2 Presumption of Knowledge of Laws: (a) As to domestic laws:

BOOK I. — PERSONS & FAMILY RELATIONS 3

nature, because no vested right may attach to nor arise from

'’Systems Factors Corp. v. NLRC, 346 SCRA 149 (2000).

4 PRE-BAR REVIEWER IN CIVIL LAW

“Sec. 22, Chapter 5, Book 1, Administrative Code of 1987.

BOOK I. — PERSONS & FAMILY RELATIONS 5

issue is raised." The rule on stare decisis promotes stability in the

6 PRE-BAR REVIEWER IN CIVIL LAW

from February 1,2008 until February 29,2008; the next calendar

2) Basic Conflict of Laws Rules

BOOK I. — PERSONS & FAMILY RELATIONS 7

2.2 Nationality Principle: (a) Rule: On the matter of status of persons,

4iLavadia v. Heirs of Juan Luces Luna, 730 SCRA 376 (2014).

S PRE-BAR REVIEWER IN CIVIL LAW

applies for purposes of determining his legal capacity. However,

!lOrion Savings Bank v. Suzuki, 740 SCRA 345 (2014).

BOOK I. — PERSONS & FAMILY RELATIONS 9

’’Art. 16, par. I, NCC.

10 PRE-BAR REVIEWER IN CIVIL LAW

2.4 Principle of Lex Loci Celebrationis: (a) Forms and solemnities

6!Art. 16, par. 2, NCC.

BOOK 1. — PERSONS & FAMILY RELATIONS 11

parties are allowed to select the law applicable to their contract,

12 PRE-BAR REVIEWER IN CIVIL LAW

BOOK I. — PERSONS & FAMILY RELATIONS 13

“Tan v. Valeriano, 833 SCRA 649 (2017).

14 PRE-BAR REVIEWER IN CIVIL LAW

"Gashem Sliookat Baksh v. CA, 219 SCRA 115,125 (1993).

BOOK I. — PERSONS & FAMILY RELATIONS 15

benefit to the loss of another, or when a person retains money or

"Land Bank of the Philippines v. Ong, 636 SCRA 266 (2010).

16 PRE-0AR REVIEWER IN CIVIL LAW

competitor, briber}' of his employees, misrepresentation of all

l03Willaware Products Corporation v. Jcsichris Manufacturing Corp., 734 SCRA 238

BOOK I. — PERSONS & FAMILY RELATIONS 17

charged has not happened or has not been committed by the