PERSONS AND FAMILY RELATIONS

1. Differentiate lex nationalii, lex loci celebrationis, and lex rei sitae.
Lex Nationalii Lex Loci celebrationis lex rei sitae
Laws relating to family rights and The forms and solemnities of contracts, Real property as well as personal
duties, or to the status, condition and wills, and other public instruments shall property is subject to the law of the
legal capacity of persons are binding be governed by the laws of the country country where it is situated.
upon citizens of the Philippines, even in which they are executed..
though living abroad.
The Philippine State may require, for This is a conflict of law principle that This general principle includes all
effectivity in the Philippines, comes into play when there are rules governing the descent,
recognition by Philippine courts of a substantive issues relating to a contract alienation and transfer of immovable
foreign judgment affecting its citizen, that is celebrated elsewhere than the property and the validity, effect and
over whom it exercises personal place of citizenship of its parties construction of wills and other
jurisdiction relating to the status, conveyances.
condition and legal capacity of such
citizen.
(Article 15, 16, 17, Civil Code; Fujiki v. Marinay, G.R. No. 196049, June 26, 2013; Ambrose v. Seque-Ambrose, G.R. No. 206761, June 23,
2021; Orion Savings Bank v. Suzuki, G.R. No. 205487, November 12, 2014)

2. When is a child considered born for civil purposes?

Intra-uterine life of more than 7 months Deemed born
Dies within twenty-four hours after its complete Not deemed born
Intra-uterine life of less than 7 delivery from the maternal womb.
months Does not die within twenty four hours after its complete Deemed born
delivery from the maternal womb.
(Article 41, Civil Code)

3. What is the rule on presumptive death for purposes of remarriage?

A person may be presumed dead if he is:
a. absent for four consecutive years and the spouse present has a well-founded belief that the absent spouse was already
dead; or
b. if he is absent for two years in case of disappearance where there is danger of death. (Article 41, Family Code)

4. Does the requirement of a judicial declaration of absolute nullity for the purpose of remarriage under Article 40 of
the Family Code apply to contracted during the Civil Code?
Yes. Article 40 has retroactive application to marriages contracted prior to the effectivity of the Family Code but only for the
purpose of remarriage. In order to remarry, a judicial declaration of nullity is required for prior marriages contracted before
the effectivity of the Family Code. Without a judicial declaration of absolute nullity of the first marriage having been obtained,
the second marriage is rendered void ab initio even though the first marriage is also considered void ab initio. (Pulido vs.
POP, G.R. No. 220149, July 27, 2021)

5. Is a void ab initio marriage a valid defense for bigamy even without a judicial declaration of absolute nullity of such
marriage?
Yes, a void ab initio marriage is a valid defense in the prosecution for bigamy even without a judicial declaration of absolute
nullity. Consequently, a judicial declaration of absolute nullity of either the first and second marriages obtained by the
accused is considered a valid defense in bigamy. (Pulido vs. POP, G.R. No. 220149, July 27, 2021)

6. What is psychological incapacity?

Psychological incapacity consists of clear acts of dysfunctionality that show a lack of understanding and concomitant
compliance with one's essential marital obligations due to psychic causes. It is not a medical illness that has to be medically
or clinically identified; hence, expert opinion is not required. (Tan-Andal v. Andal, G.R. No, 196359, May 11, 2021)

7. Discuss the requisite of “incurability” with regard to the declaration of absolute nullity of marriage on the ground
of psychological incapacity.
The psychological incapacity contemplated in Article 36 of the Family Code is incurable, not in the medical, but in the legal
sense; hence, the third Molina guideline is amended accordingly. This means that the incapacity is so enduring and
persistent with respect to a specific partner, and contemplates a situation where the couple's respective personality
structures are so incompatible and antagonistic that the only result of the union would be the inevitable and irreparable
breakdown of the marriage. An undeniable pattern of such persisting failure [to be a present, loving, faithful, respectful, and
supportive spouse] must be established so as to demonstrate that there is indeed a psychological anomaly or incongruity
in the spouse relative to the other." (Tan-Andal v. Andal, G.R. No, 196359, May 11, 2021)

8. Discuss the requisite of “juridical antecedence” with regard to the declaration of absolute nullity of marriage on
the ground of psychological incapacity.
The incapacity must be proven to be existing at "the time of the celebration" of the marriage. The manifestation of the illness
need not be perceivable at such time, but the illness itself must have attached at such moment, or prior thereto. (Tan-Andal
v. Andal, G.R. No, 196359, May 11, 2021)

9. Discuss the requisite of “gravity” with regard to the declaration of absolute nullity of marriage on the ground of
psychological incapacity.
Such illness must be grave enough to bring about the disability of the party to assume the essential obligations of marriage.
Thus, "mild characteriological peculiarities, mood changes, occasional emotional outbursts" cannot be accepted as root
causes. The illness must be shown as downright incapacity or inability, not a refusal, neglect or difficulty, much less ill will.
In other words, there is a natal or supervening disabling factor in the person, an adverse integral element in the personality

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 structure that effectively incapacitates the person from really accepting and thereby complying with the obligations essential
to marriage. (Tan-Andal v. Andal, G.R. No, 196359, May 11, 2021)

10. Under present jurisprudence, is psychological incapacity a mental incapacity that must be proven by expert
opinion?
No. Psychological incapacity is neither a mental incapacity nor a personality disorder that must be proven through expert
opinion. There must be proof, however, of the durable or enduring aspects of a person's personality, called "personality
structure," which manifests itself through clear acts of dysfunctionality that undermines the family. The spouse's personality
structure must make it impossible for him or her to understand and to comply with his or her essential marital obligations.
Proof of these aspects of personality need not be given by an expert. Ordinary witnesses who have been present in the life
of the spouses before the latter contracted marriage may testify on behaviors that they have consistently observed from the
supposedly incapacitated spouse. (Carullo-Padua vs. Padua, G.R. No. 208258. April 27, 2022, J. Hernando)

11. What is the totality of the evidence rule?

So long as the totality of evidence sufficiently proves the psychological incapacity of one or both of the spouses, a decree
of nullity of marriage may be issued. (Tan-Andal v. Andal, G.R. No, 196359, May 11, 2021)

12. Who may file a petition for declaration of nullity of a subsequent bigamous marriage?
A petition for declaration of absolute nullity of void marriage may be filed solely by the husband or the wife of the subsisting
marriage. Under Article 35(4) of the Family Code, bigamous marriages are void from the beginning. Thus, the parties in a
bigamous marriage are neither the husband nor the wife under the law. The husband or the wife of the prior subsisting
marriage is the one who has the personality to file a petition for declaration of absolute nullity of void marriage under Section
2(a) of A.M. No. 02-11-10-SC. (Fujiki v. Marinay, G.R. No. 196049, June 26, 2013)

13. AAA and BBB got married and had 5 children. Later, their marriage was declared void on the ground of
psychological incapacity. BBB contracted a second marriage with CCC without complying with the provisions of
Article 52 and 53 of the Family Code. BBB died intestate. During the settlement of estate of BBB, may his children
collaterally attack the validity of the subsequent marriage?
Yes. Under the Rationale of the Rules on Annulment of Voidable Marriages and Declaration of Absolute Nullity of Void
Marriages, Legal Separation and Provisional Orders, compulsory or intestate heirs can still question the validity of the
marriage of the spouses, not in a proceeding for declaration of nullity, but upon the death of a spouse in a proceeding for
the settlement of the estate of the deceased spouse filed in the regular courts. Thus, heirs of BBB can certainly amply
protect their successional rights by collaterally raising the issue on the validity of BBB and CCC’s marriage in the pending
estate proceedings. (David vs. Calilung, G.R. No. 241036, January 26, 2021)

14. Distinguish STD (sexually transmitted disease) as ground for annulment under Article 45 versus Article 46 of the
Family Code.
Article 45, Family Code Article 46, Family Code
Ground for annulment Affliction Concealment, as it constitutes fraud
Presence of concealment Not necessary Necessary
Nature of the disease Must be serious and appears to be incurable Does not need to be serious and incurable

15. What is the rule on marriages between Filipinos solemnized abroad in accordance with the law in force in said
country?
GR: Marriages between Filipinos solemnized outside the Philippines in accordance with the law of the foreign country where
it is celebrated, if valid there, shall be valid here as such.
XPNs: It shall be void, even if it is valid in the foreign country where the marriage was celebrated, if any of the following
circumstances are present:
1. Those contracted by any party below eighteen years of age even with the consent of parents or guardians;
2. Those bigamous or polygamous marriages not failing under Article 41 (on terminable bigamous marriages);
3. Those contracted through mistake of one contracting party as to the identity of the other;
4. Those subsequent marriages contracted following the annulment or declaration of nullity of a previous marriage but
before the partition and distribution of the properties of the spouses and the delivery of the children's presumptive
legitimes;
5. Void marriages due to psychological incapacity;
6. Incestuous marriages; and
7. Void marriages by reason of public policy. (Article 26, Family Code)

15. Does it matter who among the parties obtained the divorce decree as regards to the capacity to remarry?
No. As long as a valid divorce decree is obtained capacitating an alien to remarry, it is immaterial who between the parties
obtained divorce decree. (Republic v. Manalo, G.R. No. 220129, April 24, 2018)

16. After obtaining a foreign divorce decree, is the Filipino spouse capacitated to remarry?
Yes. When this Court recognized a foreign divorce decree that was initiated and obtained by the Filipino spouse and
extended its legal effects on the issues of child custody and property relation, it should not stop short in a likewise
acknowledging that one of the usual and necessary consequences of absolute divorce is the right to remarry. Indeed, there
is no longer a mutual obligation to live together and observe fidelity. When the marriage tie is severed and ceased to exist,
the civil status and the domestic relation of the former spouses change as both of them are freed from the marital bond.
(Republic v. Manalo, G.R. No. 220129, April 24, 2018)

18. AAA, a Filipino citizen, married BBB, a citizen of the United States, in Hong Kong. Thereafter they established
residence in the Philippines. Eventually, the parties were divorced in Nevada. BBB filed a suit against AAA, asking
for AAA to be ordered to render an accounting of her business in Ermita, Manila and be declared with right to
manage the conjugal property. What is the effect of the foreign divorce on the parties and their alleged conjugal

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 property in the Philippines?
The divorce in Nevada released BBB from the marriage from the standards of American law, under which divorce dissolves
the marriage. Thus, pursuant to his national law, BBB is no longer, the husband of BBB. He would have no standing to sue
as AAA’s husband entitled to exercise control over conjugal assets. (Van Dorn v. Romillo, Jr., G.R. No. L--68470 October 8, 1985)

19. Distinguish absolute community property (ACP), conjugal partnership of gains (CPG), regime of separation of
property (SOP).
ACP CPG SOP

Default property regime for marriages a. Default property regime for a. Agreed upon in the marriage
celebrated during the effectivity of the marriages celebrated before the settlements by the spouse.
Family Code (August 3, 1988). Family Code took effect; and b. Mandatory for subsequent
b. For marriages after the Family marriages contracted by a
Code, if agreed to by the parties surviving spouse without
through a marriage settlement. judicial.
b. settlement of previous
property regime.
c. Judicial separation of
property.
d. Default property regime
when there is reconciliation
between spouses after
judicial separation of
property unless the spouses
agree to revive their former
property regime.

The following are excluded:
Property acquired during the marriage by
gratuitous title by either spouse, and the
fruits as well as the income thereof, if
any.
XPN:
a. It is expressly provided by the donor,
testator or grantor that they shall
form part of the community property;
b. Property for personal and exclusive
use of either spouse. XPN: jewelry
c. Property acquired before the
marriage by either spouse who has
legitimate descendants by a former
marriage, and the fruits as well as the
income, if any, of such property.
The following are excluded: The following are excluded:
a. That which is brought to the In partial regime of separation of
marriage as his or her own; property, property not considered
b. That which each acquires during separate is presumed to pertain to
the marriage by gratuitous title; the ACP.
c. That which is acquired by right of
redemption, by barter or by
exchange with property belonging
to only one of the spouses; and
d. That which is purchased with
exclusive money of the wife or of
the husband.

Terminates upon:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage.
(Articles 66, 75, 92, 99, 103, 105, 109, 126, 130, 134, 143 & 144, Family Code)

20. AAA married BBB during the effectivity of the Civil Code. Later, AAA died and no liquidation of the conjugal
property was effected. BBB remarried after the Family Code took effect. BBB then sold a part of the conjugal
property with his first wife without the consent of the second. Is the sale valid?
Yes. The third paragraph of Article 130 of the Family Code provides that a mandatory regime of complete separation of
property shall govern the property relations of the subsequent marriage should the surviving spouse contract a subsequent
marriage without liquidating the conjugal partnership property. Given that complete separation of property governed the
subsequent marriage of BBB, the undivided share or interest in the property of AAA belonged to him and remained with him
as his separate property when he remarried. Thus, he could have disposed of this without need of consent from the second
wife. (Heirs of Caburnay vs. Heirs of Sison, G.R. No. 230934, December 2, 2020)

21. Distinguish ordinary co-ownership and “special co-ownership under Article 147 of the Family Code.
Ordinary A co-owner may validly alienate or encumber his undivided share in the common property without the
Co-ownership consent of the other co-owners.

Special As long as the cohabitation lasts and the co-ownership exists, no disposition inter vivos of such
Co-ownership undivided share can be validly made by one party without the consent of the other.
Care and maintenance is recognized as a valuable contribution which will entitle the contributor to half
of the property acquired. Since the property is presumed to have been acquired through their joint work
and industry, both spouses are co-owners of the said property in equal shares.
(Perez v. Perez-Senerpida, GR No. 233365, March 24, 2021)

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21. Distinguish the property regimes of unions without marriage under Article 147 and 148 of the Family Code.
Article 147, Family Code Article 148, Family Code

a. Parties must be both capacitated to marry each other; a. In cases of cohabitation not falling under Art. 147.
b. They live exclusively with each other as husband and wife; b. Parties are not capacitated to marry each other
c. Without the benefit of marriage or under a void marriage: due to some legal impediments, although it may
1. Void marriages under Art. 35: also fall under a void marriage.
i. Those solemnized by any person not legally c. Incestuous marriages under Art. 37;
authorized to perform marriages in bad faith; d. Void marriages against public policy under Art. 38;
ii. Those solemnized without a license, except those e. Void marriages under Art. 35, paragraphs 1 and 4;
covered by the preceding chapter; f. Bigamous marriage under Art. 41.
iii. Mistake in identity.
2. Void marriages under Art. 36; or
3. Void marriages under Art 53.

Salaries owned in equal shares. Salaries separately owned by the parties. If any of them
is married, his/her salary is the property of the ACP or
CPG of the legitimate marriage.

Governed by the rules on co-ownership when the presumption of Owned by them in common in proportion to their
joint acquisition and equal sharing applies. respective contributions.

Presumption of joint acquisition and equal sharing as to property No presumption of joint acquisition. When there is
acquired while they live together. Efforts in care and maintenance evidence of joint acquisition but none as to the extent
of family and household considered contribution in acquisition. of actual contribution, there is a presumption of equal
sharing.

22. Can there be a retroactive application of Article 148 if the adulterous cohabitation occurred before the Family
Code?
Yes. Although the adulterous cohabitation of the parties or the acquisition of the property occurred before the effectivity of
the Family Code on August 3, 1988, Article 148 applies because the said provision was intended precisely to fill up the
hiatus in Article 144 of the Civil Code. (Atienza v. De Castro, G.R. No. 169698, November 29, 2006)

23. AAA claims to be the legitimate child of spouses BBB but lacks official birth records or a documented filiation. Can
AAA rely on testimonies from close relatives who personally knew AAA's status and testimony of other people
based on information relayed by deceased family members?
Yes. In the absence of the record of birth and admission of legitimate filiation, Article 267 of the Civil Code and Article 172
of the Family Code provide that filiation shall be proved by any other means allowed by the Rules of Court and special laws,
such as, baptismal certificate, a judicial admission, a family bible in which his or her name has been entered, common
reputation respecting his or her pedigree, admission by silence, the testimonies of witnesses and other kinds of proof
admissible under Rule 130 of the Rules of Court. (Ende vs. Roman Catholic Prelate of the Prelature Nullius of Cotobato, Inc., G.R.
No. 191867. December 6, 2021, J. Hernando)

24. Can a child born during a valid marriage be deemed illegitimate based solely on the mother's admission of the
child’s illegitimacy being the child of the mother’s lover?
No. It stated that the rule is that “the mother is barred from impugning or declaring against the legitimacy of her child, and
only the father or in exceptional instances, his heirs, can contest in an appropriate action the legitimacy of a child born to
his wife based on any of the grounds enumerated under Article 166 of the Family Code.” (Ordoña v. LCR of Pasig and Fulgueras,
G.R. No. 215370. November 09, 2021)

27. DDD, who alleged to be CCC's only child, sought inclusion in the distribution of AAA's estate in 2003, based on
overt acts by AAA's clan recognizing her as CCC's child. BBB, son of AAA, opposed this, arguing that DDD lacked
sufficient evidence to prove her filiation and that she was time-barred from claiming nonmarital filiation to CCC as
she was born after his death and failed to file an action for recognition within four years of turning 18 in 1996. Can
DDD still prove her filiation even if CCC died before she was born?
Yes. DDD, who was not yet born when the Family Code took effect, has the right to prove that she was her father's daughter
under Article 285 of the Civil Code within four years from attaining the age of majority. Under Article 402 of the Civil Code,
the age of majority is 21 years old. DDD attained majority on October 9, 1999. She had until October 9, 2003 to assert her
right to prove her filiation with CCC. Moreover, DNA testing is a valid means of determining paternity and filiation and the
Court has affirmed the use of DNA testing in an instance when the putative father was dead. Thus, issues on her filiation
may still be proved and may be done thru reception of DNA evidence upon consultation and coordination with experts in
the field. (Aquino vs. Aquino, G.R. No. 208912, December 07, 2021 [Landmark Case Q&A])

28. Does changing a person's name affect their status as a legitimate child?
No. 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.
(Tan vs. Office of the Civil Registrar, G.R. No. 222857, November 10, 2021 [Landmark Case Q&A])

29. May a birth certificate be registered by the biological father of an illegitimate child without the knowledge and
consent of the child’s biological mother?
No. Civil Registry Law states that in case of an illegitimate child, the birth certificate shall be signed and sworn to jointly by
the parents of the infant or only the mother if the father refuses. Thus, 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. (In the
Matter of Petition for Cancellation of Certificates of Live Birth of Barcelote Tinitigan vs. Republic, G.R. No. 222095, August 7, 2017)

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25. What are the differences between impugning and claiming legitimacy?
Category Action to Impugn Legitimacy Action to Claim Legitimacy

Party-in- GR: Husband. GR: Child.

interest XPNs: Heirs of the husband, in cases where:
i. The husband died before the expiration of
the period fixed for bringing his action;
ii. He died after the filing of the complaint
without having desisted therefrom; or
b. (3) The child was born after the death of the
husband.
XPNs: Heirs of the child in cases where:
i. When the child dies during minority;
ii. When the child dies in a state of insanity;
or
iii. When the child dies after the
commencement of the action

Prescription a. 1 year - from the knowledge of the birth or its
recording in the civil register, if the
husband/heirs (in his default) should reside
in the city or municipality where the birth took
place or was recorded.
b. 2 years - if husband/heir does not reside in
the same municipality or city but within PH;
c. 3 years - if the husband/heirs is living
abroad.
(Art. 170, Family Code; Article 171, Family Code; Bernardo v. Fernando, G.R. Nos. 211034 & 211076, November 18, 2020, Caguio a
Case; Paulino vs. Paulino, G.R. No.L-15091, December 28, 1961)
GR: During the lifetime of the child
XPNs:
a. 5 years - for heirs of the child should the
child die during minority or in a state of
insanity;
b. Lifetime of the putative father - in cases
where the action is for recognition of
illegitimate children by "open and
continuous possession" of the status.

30. Whose consent is necessary for the adoption of a child under R.A. 11642 or the “Domestic Administrative Adoption
and Alternative Child Care Act”?
After being properly counseled and informed of the right to give or withhold approval of the adoption, the written consent of
the following to the adoption are hereby required:
a. The adoptee, if ten (10) years of age or over;
b. The biological parents of the child, if known, or the legal guardian, or the proper government instrumentality which has
legal custody of the child, except in the case of a Filipino of legal age if, prior to the adoption, said person has been
consistently considered and treated as their own child by the adopters for at least three (3) years;
c. The legitimate and adopted children, ten (10) years of age or over, of the adopters, if any;
d. The illegitimate children, ten (10) years of age or over, of the adopter if living with said adopter or over whom the adopter
exercises parental authority and the latter’s spouse, if any; and
e. The spouse, if any, of the person adopting or to be adopted. Provided, that children under ten (10) years of age shall
be counseled and consulted, but shall not be required to execute written consent. (Sec. 23, RA 11642)

31. What is the effect of adoption on the legitimacy of the adoptee?

The adoptee shall be considered the legitimate child of the adopter and is entitled to all rights and obligations provided by
law to legitimate children. The legitimate filiation that is created between the adopter and adoptee shall be extended to the
adopter’s parents, adopter’s legitimate siblings, and legitimate descendants. (Sec. 41, RA 11642)

PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS

32. Distinguish Accion Interdictal, Accion Publiciana and Accion Reindivicatoria.
Accion Interdictal Accion Publiciana Accion Reivindicatoria

Comprises two distinct causes of action,
namely, forcible entry and unlawful
detainer for recovery of possession.
(Cullado v. Gutierrez, G.R. No. 212938, 2019)
An ordinary civil proceeding to An action whereby the plaintiff alleges
determine the better right of ownership over a parcel of land and
possession of realty seeks recovery of its full possession.
independently of title.

32. May a person file an Application for Original Registration of Title over a lot which he had been in open, continuous,
exclusive and notorious possession for 25 years preceding the application but not before June 12, 1945?
Yes. Sec. 14 of the amended Land Registration Act or PD 1529 states that a person may file an application before the
proper RTC provided that that he 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 not covered by existing
certificates of title or patents under a bona fide claim of ownership for at least twenty (20) years immediately preceding the
filing of the application for confirmation of title except when prevented by war or force majeure. (Sec. 6, RA 11573)

33. Distinguish a possessor in good faith and a possessor in the concept of an owner.
Possessor in Good Faith Possessor in the Concept of an Owner

A possessor in good faith is the one who is not aware that A possessor in the concept of an owner is one who
there exists in his title or mode of acquisition any flaw which believes in good faith that he or she has just title to the
invalidates it. property that he/she is occupying.

(Article 526, Civil Code; Republic v. Roasa, GR No. 176022, February 2, 2015)

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34. What are the rules when one builds, plants, or sows on land owned by another, using his own materials?
Landowner Landowner:
and builder, a. Acquire improvements after paying builder, planter, or sower for their value; or
planter, or b. Oblige the one who built or planted to pay the price of the land, unless its value is considerably
sower are more than that of the building or trees, and the one who sowed, the proper rent.
both in c. If the value is considerably more, the court can force the parties to enter into a forced lease.
good faith.
Builder, planter, and sower:
Option is 1. Right to reimbursement for the improvement, necessary or useful expenses, and in proper cases,
given solely expenses for luxury or mere pleasure
to land 2. Pending land owner’s payment, has right to retention of the land (during this period, builder, planter,
owner and sower is not required to pay rent).
3. Whatever fruits (rents) he receives during the period of retention must be deducted from whatever
indemnity is due to him; and in case it exceeds the value of the indemnity, the excess shall be
returned to the owner of the land.

Both in bad Treated as though both acted in good faith.

faith.

Landowner Land owner:

in bad faith, a. Must indemnify the builder, planter, and sower for the improvements and pay damages as if he
Builder, himself did the building, planting, or sowing.
planter, and b. No option to sell the land and cannot compel builder, planter, and sower to buy the land without
sower in the latter’s consent.
good Builder, planter, and sower:
faith. a. Absolute right of removal and right to indemnification for damages; or
b. Right to reimbursement for the value of materials and right to indemnification for damages.
c. Right to reimbursement of necessary expenses for preservation of the land.

Land owner Land owner:

in good a. Right to collect damages in any case;
faith, b. Option to: (a) Acquire improvements without paying indemnity if the improvements are still standing
Builder, on the land; (b) Sell the land to builder, planter and sower or collect rent from the sower; or (c)
planter, and Order demolition of improvements or restoration of land to its former condition at the expense of
sower in the builder, planter and sower.
bad faith. Builder, planter and sower:
a. Pay damages to the landowner.
b. Lose materials without right to indemnity.
c. No right to refuse to buy the land.
d. Recover necessary expenses for preservation of land
(Arts 447-454, NCC)

35. What are the rules when one builds on another’s land using another’s materials?
Owner of Owner of materials: (a) Loses the materials; (b) Must pay damages.
materials in
bad faith. Landowner: (a) Appropriate the improvement without paying indemnity, and claim damages from the
owner of materials; and (b)Compel the builder to buy the land, without any reimbursement to the builder.

Builder: (a) If in good faith: claim from land owner reasonable compensation for his labor; and If in bad
faith: (i) not entitled to anything; (ii) Must pay damages to the landowner.

Owner of Owner of materials: right to reimbursement for the value of his materials.
materials in
good faith. Builder: will be primarily liable: (a) If in good faith: must indemnify owner of materials; and (b) If in bad
faith: must indemnify owner of materials and pay damages - After payment, he becomes a builder using
his own materials

Landowner: (a) Appropriate the improvement, (i) If the builder is insolvent, the land owner must indemnify
the owner of the materials, and he then becomes the owner of materials, (ii) If builder is in bad faith: land
owner can demand damages from the builder, (iii) If builder is in good faith: he must pay the land owner
reasonable compensation, (iv) If the builder indemnified the owner of materials: the rules when the builder
is using in own materials will apply; and (b) Has other options available in rules when the builder is using
his own materials
(Article 474, Civil Code)

38. What are the modes of acquiring easements?

1. By Title;
a. Continuous non-apparent easements
b. Discontinuous apparent easements
c. Discontinuous non-apparent easements.
2. By Prescription within a period of 10 years, if the easement is both continuous and apparent.;
3. By Deed of Recognition or Final Judgment in the absence of a document or proof showing the origin of an easement
which cannot be acquired by prescription; and

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 4. By Apparent sign established by the owner of the two adjoining estates, except, unless at the time the ownership of the
two estates is divided, there are contrary stipulations or the sign is removed before the execution of the deed. (Articles
620, 623, 624, Civil Code).

36. Discuss the three kinds of legal easement: right of way, easement of light and view and water easement.
Legal or Compulsory Right of Way Easement of Light and Water Easement
View

This may be claimed when the four (4) requisites are present: This refers to an easement Lower estates are obliged
a. the estate is surrounded by other immovables and is whereby the dominant estate to receive the waters
without adequate outlet to a public highway; enjoys the right to have free which naturally and
b. after payment of the proper indemnity; access to light, a little air, without intervention of
c. the isolation was not due to the proprietor’s own acts; and a view overlooking the man descend from the
and adjoining estate, i.e., the higher estates, as well as
d. the right of way claimed is at a point least prejudicial to servient estate. the stones or earth which
the servient estate. they carry with them.

Positive easement. May be positive or negative. Positive easement.

Discontinuous easement. Continuous easement. Continuous easement.

Title only. Title or Prescription.

(Bartolata v. Republic, G.R. No. 223334, June 07, 2017; Sps. Garcia v. Santos, G.R. No. 228334, June 17, 2019; Arts. 616, 620, 622 &
637, Civil Code)

37. Differentiate kinds of easements (1) as to the recipient of the benefit; (2) as to the manner of the exercise; (3) as
to whether their existence are indicated; (4) as to the servient owner; (5) as to source.
As to the Real Easement - imposed upon an immovable for the benefit of another immovable belonging to
recipient of the a different owner.
benefit
Personal Easement - established for the benefit of a community, or of one or more persons to
whom the encumbered estate does not belong.

As to the Continuous Easement - those the use of which is or may be incessant, without the intervention
manner of the of any act of man.
exercise
Discontinuous Easement - those which are used at intervals and depend upon the acts of man.

As to whether Apparent Easement - those which are made known and are continually kept in view by external
their existence signs that reveal the use and enjoyment of the same.
are indicated
Non-apparent Easement - those which show no external indication of their existence.

As to the Positive Easement - one which imposes upon the owner of the servient estate the obligation of
servient owner allowing something to be done or doing it himself.
The time of position shall be computed from the day on which the owner of the dominant estate, or
the person who may have made use of the easement, commenced to exercise it upon the servient
estate.

Negative Easement - that which prohibits the owner of the servient estate from doing something
which he could lawfully do if the easement did not exist.
The time of position shall be computed 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 an easement.

As to source Legal Easement - established by law; those imposed by law have for their object either public use
or the interest of private persons.

Voluntary Easement - established by will of the owners; those which may be established by the
owner of a tenement of piece of land as he may deem suitable, and in the manner and form which
he may deem best, provided that he does not contravene the laws, public policy or public order.

Mixed Easement - created partly by agreement and party by law.

(Articles 613, 614, 615, 616, 621, 634, 688, Civil Code; Pilar Development Corp. vs. Dumadag, G.R. No. 194336, March 11, 2013 )

47. What is the effect of an automatic revocation clause in a deed of donation?

Where a donation has an automatic revocation clause, the occurrence of the condition agreed to by the parties as to cause
the revocation, is sufficient for a party to consider the donation revoked without need of any judicial action. 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. Nevertheless, even in such a case, the decision of the court will be merely
declaratory of the revocation, but it is not in itself the revocatory act. (Province of Camarines Sur vs. Bodega Glassware GR No.
194199, March 22, 2017)

7
39. Differentiate prescription as a mode of acquiring easement under Article 620 and ordinary acquisitive prescription
under Title V of the Civil Code.
Prescription under Article 620 Prescription under Title V

Requires 10 years irrespective of the good Ownership and other real rights over immovable property are acquired by
or bad faith, the presence or absence of just ordinary prescription through possession of 10 years. Ordinary
title on the part of the possessor. The acquisitive prescription requires possession of things in good faith and
general rules on prescription are not with just title for the time fixed by law. Ownership and other real rights
applicable in cases of prescription provided over immovables also prescribe through uninterrupted adverse
for by special or particular provisions. possession thereof for 30 years, without need of title or of good faith.
(Article 1115, Civil Code; Paras, Civil Code of the Philippines Annotated, Property, 2018; Articles 111, 1134, & 1137, Civil Code)

40. What are the four types of donation?

Pure or Remuneratory or Conditional or modal Onerous
simple compensatory
One where the One made for the One where the donation is made in That which imposes upon the donee
underlying purpose of rewarding consideration of future services or a reciprocal obligation or, to be
cause is plain the donee for past where the donor imposes certain more precise, this is the kind of
gratuity. This is services, which conditions, limitations or charges donation made for a valuable
donation in its services do not upon the donee, the value of which consideration, the cost of which is
truest form. amount to a is inferior than that of the donation equal to or more than the thing
demandable debt. given donated
(Estate of Rodriguez vs. Republic, G.R. No. 214590, April 27, 2022, J. Hernando)

41. Distinguish donation mortis causa and donation inter vivos.

inter vivos mortis causa

Effectivity To take effect during the donor’s lifetime To take effect upon the donor’s
death

Formalities The donation of a movable property may be made orally or in writing. Donation must be in the form of
In order that the donation of an immovable property may be valid, it a will, with all the formalities for
must be made in a public document, specifying therein the property the validity.
donated and the value of the charges which the donee must satisfy.

Revocation Once accepted, it becomes irrevocable. Revocable

(Articles 728, 729, 748, 749, 760, 765, Civil Code)

42. Differentiate acquisitive prescription from extinctive prescription.

Acquisitive Prescription Extinctive Prescription
As to Applicable to ownership and other real rights. Applicable to all kinds of rights, whether real or
applicability personal.
As to its legal Vests ownership or other real rights in the occupant. Produces the extinction of rights or bars a right
effect of action.
Results in the acquisition of ownership or other real
rights in a person as well as the loss of said ownership Results in the loss of real or personal right, or
or real rights in another. bars the cause of action to enforce said right.
As to Possession by a claimant who is not the owner. Inaction of the owner out of possession or
requisite neglect of one with a right to bring his action.
As a defense Can be proven under the general issue without it being Should be affirmatively pleaded and proved to
affirmatively pleaded. bar the action or claim of the adverse party.
As to results Results in the acquisition of ownership or other real Merely results in the loss of a real or personal
rights in a person as well as the loss of said ownership right, or bars the cause of action to enforce said
or real rights in another. right.
(De Leon, Comments and Cases on Property, 2015)

48. The decedent executed a deed of conditional donation in favor of the Republic over a parcel of land for the purpose
of constructing thereon a mental facility. Five out of the 32 hectares of land subject of the donation are being used
by the Republic for the operation of its mental hospital, while a portion of the land is occupied by the informal
settlers. The Republic filed an ejectment case against the informal settlers, and a judgment favorable to the
Republic was rendered. It became final and executory in 1995. However, the Republic failed to have the Decision
executed by filing a motion for execution within five years or a motion to revive the judgment within 10 years from
the finality of Civil Case. In 2007, the estate filed a complaint against the Republic for revocation of the donation.
Was the complaint filed within the prescriptive period?
Yes. The donation involved is an onerous one since the burden imposed upon the donee is to build a mental hospital on
the donated property. Article 1144 of the Civil Code shall govern which provides that all actions upon a written contract
shall be brought within ten (10) years from accrual of the right of action. The estate’s complaint filed in 2007 is well within
the prescriptive period, which is 10 years from the lapse of the period within which the Republic could file a motion for
revival of judgment of the Civil Case. (Estate of Rodriguez vs. Republic, G.R. No. 214590, April 27, 2022, J. Hernando)

49. Explain the principle of indefeasibility of Torrens title.

A Torrens Certificate of title is indefeasible and binding upon the whole world unless and until it has been nullified by a
court of competent jurisdiction. It is conclusive evidence with respect to the ownership of the land described therein.
(Ginaendaya v. Villaos, G.R. 202426, January 27, 2016)

8
50. Is Implied resulting trust an exception to the Constitutional ban against ownership of Philippine lands by a non-
Filipino?
No. Our fundamental law dictates that non-Filipinos cannot acquire or hold title to private lands or to lands of the public
domain, except only by way of legal succession. The primary purpose of the Constitutional provision is the conservation
of the national patrimony in the hands of Filipino citizens. (Gaw vs. Ben Chua, G.R. No. 206404. February 14, 2022, J. Hernando)

51. What are the guidelines on the application of R.A. 11573 (An Act Improving the Confirmation Process for Imperfect
Land Titles, amending CA 141 and PD 1529?
1. RA 11573 shall apply retroactively to all applications for judicial confirmation of title which remain pending as of
September 1, 2021, or the date when RA 11573 took effect. These include all applications pending resolution at the
first instance before all Regional Trial Courts, and applications pending appeal before the Court of Appeals.
2. Applications for judicial confirmation of title filed on the basis of the old Section 14(1) and 14(2) of PD 1529 and which
remain pending before the Regional Trial Court or Court of Appeals as of September 1, 2021 shall be resolved following
the period and manner of possession required under the new Section 14(1). Thus, beginning September 1, 2021, proof
of "open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the
public domain not covered by existing certificates of title or patents under a bona fide claim of ownership for at least
twenty (20) years immediately preceding the filing of the application for confirmation" shall be sufficient for purposes of
judicial confirmation of title, and shall entitle the applicant to a decree of registration. (Republic v. Pasig Rizal Co., Inc., G.R.
No. 213207, February 15, 2022)

52. Who is an innocent purchaser for value and what are his or her rights?
It refers to someone who buys the property of another without notice that some other person has a right to or interest in it,
and who pays in full and fair the price at the time of the purchase or without receiving any notice of another person's claim.
Where an innocent purchaser for value has acquired a land or an interest therein, the decree of registration of said land
can no longer be reopened or revised and the sale shall remain valid. However, the protection of the right of an innocent
purchaser for value does not apply when they are not dealing with the registered owner of the land. (Aledro-Runa vs Lead
Export and Agro-Development Corporation, G.R. No. 225896, July 23, 2018)

53. What is the mirror doctrine and what are its exceptions?
The mirror doctrine provides that every person dealing with registered land may safely rely on the correctness of the
certificate of title issued therefor and is in no way obliged to go beyond the certificate to determine the condition of the
property. Every registered owner and every subsequent purchaser for value in good faith holds the title to the property free
from all encumbrances except those noted in the certificate. The exceptions are: (a) when there exist important facts that
would create otherwise reasonable man to go beyond the present title and to investigate those that preceded it; (b) when
the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such
inquiry, (c) in case of banking institutions, (d) in case of Investment and financing corporations. (Rosarosa vs. Soria, G.R. No.
194846, June 19, 2013)

54. Can a purchaser of real property be considered a purchaser in good faith when he/she relied on the declarations
of alleged heirs or sellers who are not the registered owners or whose alleged rights were not registered or duly
annotated on the certificate of title?
No. The purchasers should have examined the certificate of title and all factual circumstances necessary for them to
determine whether or not flaws existed that might invalidate their title, especially when these purchasers acquired the
subject property or a portion thereof from persons who are not the registered owners and whose alleged rights were not
registered or duly annotated on the title. Well-settled is the rule that "a purchaser of real estate with knowledge of any
defect or lack of title of the vendor cannot claim that he has acquired title thereto in good faith as against the true owner of
the land or interest therein." The same rule also applies to those with knowledge of facts that should have put one on
inquiry and investigation as might be necessary to be acquainted with the defects in the title of the vendor, as in the case
at bar. (Ende vs. Roman Catholic Prelate of the Prelature Nullius of Cotabato, Inc., G.R. No. 191867, December 6, 2021, J. Hernando)

55. What are the requisites that must be complied with for an order for reconstitution to be issued?
The following requisites must be complied with for an order for reconstitution to be issued: (a) that the certificate of title
had been lost or destroyed; (b) that the documents presented by petitioner are sufficient and proper to warrant
reconstitution of the lost or destroyed certificate of title; (c) that the petitioner is the registered owner of the property or had
an interest therein; (d) that the certificate of title was in force at the time it was lost and destroyed; and (e) that the
description, area and boundaries of the property are substantially the same as those contained in the lost or destroyed
certificate of title. (Republic vs. Abellanosa, G.R. No. 205817. October 6, 2021, J. Hernando)

56. What are the sources or bases of the original certificates of title for filing the petition for reconstitution?
a. The owner's duplicate of the certificate of title;
b. The co-owner's, mortgagee's, or lessee's duplicate of the certificate of title;
c. A certified copy of the certificate of title, previously issued by the register of deeds or by a legal custodian thereof;
d. An authenticated copy of the decree of registration or patent, as the case may be, pursuant to which the original
certificate of title was issued;
e. A document, on file in the registry of deeds, by which the property, the description of which is given in said document,
is mortgaged, leased or encumbered, or an authenticated copy of said document showing that its original had been
registered; and
f. Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting the lost or
destroyed certificate of title. (Republic vs. Abellanosa, G.R. No. 205817. October 6, 2021, J. Hernando)

57. Who may apply for registration of title to land?

The following persons under the amendatory law may file at any time an application for registration of title, not exceeding
12 hectares:
1. Those who by themselves or through their predecessors-in-interest have been in OCENPO of alienable and
disposable agricultural lands of the public domain, under a bona fide claim of ownership, for at least 20 years
immediately preceding the filing of the application for confirmation of title;

9
 2. XPN: When prevented by war or force majeure;
3. Those who have acquired ownership of private lands or abandoned riverbeds by right of accession or accretion under
the provision of existing laws; and
4. Those who have acquired ownership of land in any other manner provided by law. (Section 6, R.A. 11573, Republic v.
Pasig Rizal Co., Inc., G.R. No. 213207, February 15, 2022)

58. Are the liabilities of spouses AAA as sellers of a property in a contract of sale transmissible to their heirs?
Yes, the death of spouses AAA did not extinguish their contractual obligations since as a rule, a party's contractual rights
and obligations are transmissible to the successors. Art. 776 of the Civil Code states: “the inheritance includes all the
property, rights and obligations of a person which are not extinguished by his/her death.” A contract of sale and contract
to sell involving land or immovable property involve patrimonial rights and obligations, which by their nature are essentially
transmissible or transferrable. (Heirs of Gonzales vs. Spouses Basas, G.R. No. 206847. June 15, 2022, J. Hernando)

59. The attestation clause omitted to mention the number of pages comprising the will. Nevertheless, the
acknowledgment portion of the will supplied the omission by stating that the will has five pages, to wit: "Ang
HULING HABILING ito ay binubuo ng lima (5) na dahon, kasama ang dahong kinaroroonan ng Pagpapatunay at
Pagpapatotoong ito." Is there substantial compliance with Art. 805 of the Civil Code?
Yes, such substantially complied with Article 805 of the Civil Code. Mere reading and observation of the will, without
resorting to other extrinsic evidence, yields the conclusion that there are actually five pages even if the said information
was not provided in the attestation clause. When the number of pages was provided in the acknowledgment portion instead
of the attestation clause, "[t]he spirit behind the law was served though the letter was not. Although there should be strict
compliance with the substantial requirements of the law in order to insure the authenticity of the will, the formal
imperfections should be brushed aside when they do not affect its purpose and which, when taken into account, may only
defeat the testator's will." (Tanchano v. Santos, G.R. No. 204793, June 08, 2020, J. Hernando)

60. What is the doctrine of dependent relative revocation?

The doctrine of dependent relative revocation is where the testator cancels or destroys a will or executes an instrument
intended to revoke a will with a present intention to make a new testamentary disposition as a substitute for the old, and
the new disposition is not made or, if made, fails of effect for same reason. It must appear that the revocation is dependent
upon the valid execution of a new will. (Molo v. Molo, G.R. No. L-2538, September 21, 1951)

61. What are the legitimes of compulsory heirs?

Legend: Legitimate Children or Descendants (LC), Legitimate Parents or Ascendants (LP), Surviving Spouse (SS), Illegitimate Children
(ILC), and Illegitimate Parents (ILP).
Amount of Legitime Intestate Succession

LC 1/2 (in equal portions) Entire estate

One LC 1/2 1/2
SS 1/4 1/2
LC 1/2
SS same share of one LC
SS same share of one LC
LC 1/2 IL C: 1/2 of a LC after giving to
ILC each IC: 1/2 of a LC them their legitime
LC 1/2
ILC 1/2 of one LC SS = same share as 1 LC
SS same share of one LC
LP 1/2 Entire Estate
LP 1/2 1/2
ILC 1/4 1/2
LP 1/2 1/2
SS 1/4 1/2
LP 1/2 1/2
ILC 1/4 1/4
SS 1/8 1/4
ILC 1/2 Entire Estate
ILC 1/3 1/2
SS 1/3 1/2

1/2 or
1/3 - marriage in articulo mortis, testator died
SS within 3 months Entire Estate
1/2 - marriage in articulo mortis, testator died
within 3 months, cohabiting more than 5yrs

ILP 1/2 Entire Estate

ILP None
Entire Estate to Children
LC/ILC 1/2
ILP 1/4 1/2
SS 1/4 1/2
(Articles 888-890. 892-901, 903, Civil Code)

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62. Distinguish disinheritance and preterition.
Disinheritance Preterition

Disinheritance, in turn, "is a testamentary disposition
depriving any compulsory heir of his share in the legitime
for a cause authorized by law.
Express deprivation of legitime
Always voluntary
There is some legal cause
If valid, compulsory heir is totally excluded from inheritance
If disinheritance is not lawfully made, the compulsory heir is
merely restored to his legitime. In disinheritance the nullity
is limited to that portion of the estate of which the
disinherited heirs have been illegally deprived.
(Article. 918, Civil Code, Nuguid v. NUguid, G. R. No. L-23445, June 23, 1966)
Preterition "consists in the omission in the testator's will of
the forced heirs or anyone of them, either because they are
not mentioned therein, or, though mentioned, they are
neither instituted as heirs nor are expressly disinherited."
Tacit deprivation of legitime
May also be voluntary, but the presumption of the law is
that it is involuntary
Law presumes that there has been merely an oversight or
mistake on the part of the testator
Omitted heir gets not only his legitime but also his share in
the free portion not disposed if by way of legacies and
devises. Annuls the institution of the heir totally. The
annulment is in toto, unless in the will there are, in addition,
testamentary dispositions in the form of devises or
legacies.

63. Can AAA, the nonmarital child of BBB, who was a predeceased marital child of the decedent inherit from her
grandfather’s estate?
Yes. The Court adopted a construction of Article 992 that makes children, regardless of the circumstances of their births,
qualified to inherit from their direct ascendants — such as their grandparent — by their right of representation. Both marital
and nonmarital children, whether born from a marital or nonmarital child, are blood relatives of their parents and other
ascendants. However, this ruling will apply when the nonmarital child has a right of representation to their parent's share
in her grandparent's legitime. It is silent on collateral relatives where the nonmarital child may inherit by themself. (Aquino
vs. Aquino, G.R. No. 208912, December 07, 2021 [Landmark Case Q&A])

64. What are the rules on the successional rights of adopted children and adopting parents?
In testate and intestate succession, the adopters and the adoptee shall have reciprocal rights of succession without
distinction from legitimate filiations. However, if the adoptees and their biological parents have left a will, the law on
testamentary succession shall govern. (Section 43, RA 11642)

OBLIGATIONS AND CONTRACTS

65. Distinguish the three subsidiary remedies of creditors.
Accion subrogatoria Accion pauliana Accion directa
The right of the creditor to exercise all of Creditors may also impugn the acts which the Any third person who
the rights and bring all the actions which debtor may have done to defraud them. induces another to violate
his debtor may have against third his contract can be made
persons. liable for damages to the
other contracting party.

Requisites: Requisites:
1) The person to whom the right of action 1) That the plaintiff asking for rescission, has
pertains must be indebted to the creditor; a credit prior to the alienation, although
2) The debt is due and demandable; demandable later;
3) The creditor must be prejudiced by the 2) That the debtor has made a subsequent
failure of the debtor to collect his debts contract conveying a patrimonial benefit to a
due to him from third persons, either third person;
through malice or negligence; 3) That the creditor has no other legal remedy
4) The debtor's assets are insufficient to satisfy his claim, but would benefit by
(debtor is insolvent); and rescission of the conveyance to the third
5) The right of action is not purely person;
personal to the debtor. 4) That the act being impugned is fraudulent;
and
5) That the third person who received the
property conveyed, if by onerous title, has
been an accomplice in the fraud.
(Articles 1177, 1652, Civil Code; Anchor Savings Bank v. Furigay, G.R. No. 191178, March 13, 2013; Sps. Lagandaon v. CA, G.R. Nos.
102526-31, May 21, 1998; Cheng v. CA, G.R. No. 144169, March 28, 2001)

66. What are the instances where legal subrogation is present?

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 confusion as to the latter's share (Article 1302, Civil Code)

11
67. What are the effects of payment made by a third person?
Third person has an interest in the Third person who has interest in the fulfilment of the obligation
fulfilment of the obligation or when the include those subsidiarily liable such as guarantors and
debtor consents. mortgagors, and codebtors.
Can be compelled to receive payment. Cannot be compelled to receive payment

The third-party payor may demand
reimbursement for the full amount.
There is subrogation. The third-party payor
may exercise rights belonging to the creditor,
such as going against the guarantor or
foreclosure of mortgage.
Yes
(Articles 1236, 1237, 1238, Civil Code)
The third-party payor can only demand reimbursement up to the extent
that has been beneficial to the debtor.
There is no subrogation. The third-party payor cannot go against
guarantors or foreclose the mortgage.
Yes

68. Distinguish the forms of payment.

Dation in Payment
Definition Alienation by the debtor of
a particular property in
favor of his creditor, with
the latter’s consent, for the
satisfaction of the former’s
money obligation to the
latter, with the effect of
extinguishing the said
money obligation.
Requisites 1. There must be the
performance of the
prestation in lieu of
payment 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;
3. There must be an
agreement between the
creditor and debtor that the
obligation is immediately
extinguished (to the extent
of agreed valuation) by
reason of the performance
of a prestation different
from that due.
Payment by Cession
Debtor cedes his property to his
creditors so the latter may sell the
same and the proceeds realized
applied to the debts of the debtor.
1. Plurality of Debts;
2. Partial or relative insolvency of
the debtor; and
3. Acceptance of the cession by
the creditors
Consignation
Act of depositing the object of the
obligation with the court or
competent authority after the
creditor has unjustifiably refused to
accept the same or is not in a
position to accept it due to certain
reasons or circumstances.
1. There is a debt due;
2. That the consignation has been
made either because the creditor to
whom the tender of payment was
made refused to accept the
payment without just cause or
because any of the causes stated
by the law for effective consignation
without previous tender of payment
exists;
3. That previous notice of the
consignation had been given to the
persons interested in the fulfillment
of the
obligation;
4. That the thing or amount due had
been placed at the disposal of
judicial authority; and
5. That after consignation had been
made, the persons interested in
fulfillment of the obligation had
been notified.

Necessity of Yes. None. The Creditors are merely Not necessary

transfer of constituted as agents to sell the
ownership properties
upon the
delivery
Effect as to Total, unless it is not the Up to the extent of net proceeds, Total if the payment was accepted
extinguishmen clear intention of the unless it is not the clear intention by the creditor, unless the creditor
t of the parties of the parties made reservation if the payment is
obligation insufficient.
Consent Debtor: Yes Debtor: Yes Debtor: Yes
Creditor: Yes Creditor: Yes Creditor: No. The court will be the
one to determine if the consignation
is proper or not.

Refusal to accept the obligation

refers to tender of payment, which
is not a mode of extinguishment.
Financial Not necessarily in a state of Debtor must be insolvent --
status of the financial difficulty
debtor
(Art. 1232 to 1261, Civil Code, Tolentino, 1991; Filinvest vs. Philippine Acetyline, G.R. No. L-50449, January 30, 1982; De Leon, 2014)

69. When can the delivery of a check result in the payment effect?
When payment in check is delivered and accepted, it produces the effect of payment only when the check is cleared
(retroacts to the date the check was deposited) and the funds are transferred to the account of the creditor. Stale checks

12
 (those not presented for payment within 6 months from date of check) do not produce the effect of payment and debtor
can be required to issue a new check or pay in cash since the obligation is not yet deemed paid. Debtor cannot however
be liable for interest or penalty and cannot be declared in default since creditor could have immediately presented it for
payment. It is only in cases where the value is impaired through creditor’s fault (i.e., creditor misplaced the check and
someone else encashed it), that the debtor is deemed to have paid his obligation without having to issue a new check or
paying in cash. (Evangelista v. Screenex, Inc., G.R. No. 211564, 2017)

70. What are the circumstances under which the debtor shall be released from responsibility by the consignation of
the thing or sum due?
1. If the creditor to whom tender of payment has been made refuses without just cause to accept it
2. When the creditor is absent or unknown, or does not appear at the place of payment;
3. When he is incapacitated to receive the payment at the time it is due;
4. When, without just cause, he refuses to give a receipt;
5. When two or more persons claim the same right to collect;
6. When the title of the obligation has been lost.
(Article 1256, Civil Code; Spouses Cacayorin v. Armed Forces and Police Mutual Benefit Association, Inc., G.R. No. 171298, April 15,
2013).

71. Distinguish between Legal and Conventional Compensation.

Legal Compensation Conventional Compensation
By operation of law By agreement of parties
It takes effect when all the following requisites are present: GR: The mutual debts must be both due.
1. Parties must be creditors and debtors of each other in their XPN: The parties may agree that their mutual debts be
own right. compensated even if the same are not yet due.
2. The parties must be bound principally.
3. Both debts consist in 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.
4. Both debts must be due, liquidated, and demandable.
5. Over neither of them there be any retention or controversy,
commenced by third persons, and communicated in due time
to the debtor.
(Articles 1279, 1282, 1290 Civil Code)

72. What are the basic principles in novation?

Novation
Definition It is the substitution or change of an obligation by another, resulting in its extinguishment or
modification, either by changing the object or principal conditions, or by substituting another in the
place of the debtor or by subrogating a third person to the rights of the creditor. (Pineda, 2000)
Requisites 1. Valid Old obligation
XPNs:
a. When the annulment may be claimed only by the debtor and he consented to the
novation; and
b. When ratification validates acts which are voidable.
2. Intent to extinguish or modify the old obligation;
3. Capacity and consent of all the parties to the new obligation
XPN: in case of expromission where the old debtor does not participate
4. Substantial difference of the old and new obligation – on every point incompatible with each other
(implied novation); and
5. Valid New obligation.
Presumption Never presumed; it must be proven by fact. The intent to make a new obligation, whether totally or
partially, must appear by express agreement of the parties or by their acts that too clear and
unequivocal to be mistaken.

73. Would the proposal of an entrustee for a staggered mode of returning the money representing the proceeds of
the sale of the goods/items tantamount to a “novation” or a change of terms of the trust receipt agreement as to
blunt the ill-effects of the breach and reduce the crime of Estafa into a mere civil liability?
No. A necessary element of novation is the cancellation of the old obligation by the new one, which may be effected
expressly or impliedly. It is never presumed and must be proven as a fact. There is an express novation if the new obligation
unequivocally declares that it extinguishes or substitutes the old obligation; on the other hand, there is an implied novation
if the old and the new obligations are on every point incompatible with each other. The test of incompatibility is whether
the two contracts can stand together, each one having an independent existence. The incompatibility must take place in
any of the essential elements of the obligation, such as its object, cause or principal conditions thereof; otherwise, the
change would be merely modificatory in nature and insufficient to extinguish the original obligation. (Chua vs. Secretary of
Justice, G.R. No. 214960. June 15, 2022, J. Hernando)

74. What is the principle of mutuality in contracts? Do contracts of adhesion violate this principle?
The principle of mutuality of contracts, found in Article 1308 of the Civil Code, states that a "contract must bind both
contracting parties; its validity or compliance cannot be left to the will of one of them." In accordance with this principle,
when the execution of the contract's terms is skewed in favor of one party, the contract must be rendered void. A contract
of adhesion is so-called because its terms are prepared by only one party while the other party merely affixes his signature
signifying his adhesion thereto. Nevertheless, contracts of adhesion are not invalid per se and they are not entirely
prohibited. The one who adheres to the contract is in reality free to reject it entirely, if he adheres, he gives his consent.
Accordingly, a contract duly executed is the law between the parties, and they are obliged to comply fully and not selectively
with its terms. A contract of adhesion is no exception. (Goldwell Properties Tagaytay, Inc. vs. Metropolitan Bank and Trust
Company, G.R. No. 209837, May 12, 2021, J. Hernando)

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75. In loan obligations wherein there are multiple collaterals, may the debtor demand from the creditor the partial
release of collaterals on the ground of partial payments?
No. The debtor cannot ask for the release of any portion of the mortgaged property or of one or some of the several lots
mortgaged unless and until the loan thus secured has. been fully paid, notwithstanding the fact that there has been a
partial fulfillment of the obligation. The fact that the loan value of the some of the collaterals is immaterial; the mortgage
would still be in effect since the loans have not been fully settled. (Goldwell Properties Tagaytay Inc. vs Metropolitan Bank and
Trust Co., G.R.No. 2097, May 12, 2021, J. Hernando)

76. What is the exception to the validity of contract of adhesion?

If the waiver is contained in a contract of adhesion, the contract is void because consent to such a waiver was not freely
given, the waiver being in a contract of adhesion affects the voluntariness of the act. (Cabanting vs. BPI Family Savings
Bank, February 17, 2016, G.R. No. 201927)

77. Distinguish Voidable, Unenforceable, Rescissible, and Void Contracts.

Voidable Unenforceable Rescissible Void

Binding, unless they Cannot be enforced Valid and enforceable until rescinded. Not binding.
are annulled. unless ratified.

Susceptible to Susceptible to Not susceptible to ratification. Not susceptible to ratification.

ratification ratification.

a. Those where one a. Those entered into a. Those which are entered into by a. Those whose cause, object or
of the parties is in guardians whenever the wards whom purpose is contrary to law, morals,
incapable of giving the name of another they represent suffer lesion good customs, public order or
consent to a person by one who by more than one-fourth of the value of public policy;
contract; has been given no the things which are the object thereof; b. Those which are absolutely
b. Those where the authority or legal b. Those agreed upon in representation simulated or fictitious;
consent is vitiated representation, or of absentees, if the latter suffer the c. Those whose cause or object did
by mistake, who has acted lesion stated not exist at the time of the
violence, beyond his powers; in the preceding number; transaction;
intimidation, undue b. Those that do not c. Those undertaken in fraud of d. Those whose object is outside
influence or fraud. comply with the creditors when the latter cannot in the commerce of men;
Statute of Frauds. any other manner collect the claims due e. Those which contemplate an
c. Those where both them; impossible service;
parties are incapable d. Those which refer to things under f. Those where the intention of the
of giving consent to a litigation if they have been entered into parties relative to the principal
contract. by the defendant object of the contract cannot be
without the knowledge and approval of ascertained;
the litigants or o competent judicial g. Those expressly prohibited or
authority; declared void by law.
e. All other contracts specially declared
by law to be subject to
rescission.
(Articles 1381, 1390, 1403, 1409, Civil Code)

78. What are the requisites for intimidation to vitiate consent?

For intimidation to vitiate consent, the following requisites must be present: (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 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.
(Spouses Genotiva vs. Equitable-PCI Bank, G.R. No. 213796, June 28, 2021, J. Hernando)

79. Is the Deed of Absolute Sale valid when it was signed and executed by the seller after her death?
No. If any one party to a supposed contract was already dead at the time of Its execution, such contract is undoubtedly
simulated and false, and, therefore, null and void by reason of its having been made after the death of the party who
appears as one of the contracting parties therein. Indeed, "no one can give what one does not have; nemo dat quod non
habet. One can sell only what one owns or is authorized to sell, and the buyer can acquire no more right than what the
seller can transfer legally." (Arakor Construction and Development Corporation vs. Sta. Maria, G.R. No. 215006. January 11, 2021;
see also City of Tanauan vs. Millonte, G.R. No. 219292. June 28, 2021, J. Hernando)

SPECIAL CONTRACTS
80. AAA and BBB are co-owners of a property. AAA sold to CCC a definite portion of the same property. When AAA
pointed out to BBB the boundaries of the said portion, BBB did not object. Was the sale between AAA and CCC
valid even if the sale was made without the consent of the co-owner BBB?
Yes, because the moment AAA pointed out the boundaries of the property and BBB made no objection, there is, in effect,
a partial partition of the co-owned property. The title may be pro-indiviso or inchoate but the moment the co-owner as
vendor pointed out its location and even indicated the boundaries over which the fences were to be erected without
objection, protest or complaint by the other co-owners, on the contrary they acquiesced and tolerated such alienation,
occupation and possession, a factual partition or termination of the co-ownership, although partial, was created. (Heirs of
Marquez vs. Heirs of Hernandez, G.R. No. 236826. March 23, 2022, J. Hernando)

14
81. What will happen to the earnest money paid by the buyer if the sale in a contract to sell does not push through?
GR: When the seller seeks to rescind the sale, he is obliged to return the thing which was the object of the contract along
with fruits and interest. (Art. 1385, NCC)
XPN: When the seller is not at fault, the earnest money should not be returned. In a contract to sell, the payment of
earnest money represents the seller’s opportunity cost of holding in abeyance the search for other buyers or better deals.
(Racelis v. Spouses Javier, G.R. No. 189609, January 29, 2018).

82. What are the requisites of Double Sale?

1. The two (or more) sales transactions in issue must pertain to exactly the same subject matter, and must be valid
sales transactions;
2. The two (or more) buyers at odds over the rightful ownership of the subject matter must each represent conflicting
interests; and
3. The two (or more) buyers at odds over the rightful ownership of the subject matter must each have bought from the
very same seller. (Cheng v. Genato, G.R. No. 129760 December 29, 1998)

89. What are the rules of preference in Double Sale?

For movable properties, the first possessor in good faith is preferred. For immovable properties, the order of preference
is as follows:
a. The buyer who first registered in good faith;
b. First possessor in good faith; and
c. Oldest title.

90. What are the remedies of a defaulting buyer of real property on installments in the absence of a valid rescission?
A defaulting buyer of real property on installments, whether or not she or he has paid two (2) years of installments has
three (3) common legal remedies in the absence of a valid rescission, granted by Section 6 of RA 6552 and jurisprudence
(a) Pay in advance any installment at any time, necessarily without interest; (b) Pay the full unpaid balance of the purchase
price at any time without interest, and to have such full payment of the purchase price annotated in the certificate of title
covering the real property subject of the transaction under RA 9552; or (c) Claim an equitable refund of prior payments
and/or deposits made by the defaulting buyer to the seller pertinent to their transaction under RA 9552, if any. (Pryce
Properties Corp., vs. Nolasco, Jr., G.R. No. 203990. August 24, 2020, J. Hernando)

91. When does a sale become an equitable mortgage?

A sale with conventional redemption is deemed to be an equitable mortgage in any of the following cases:
a. Price of the sale with right to repurchase is unusually Inadequate.
b. Seller Remains in possession as lessee or otherwise.
c. Upon or after the expiration of the right to repurchase Another instrument extending the period of redemption or
granting a new period is executed .
d. Purchaser retains for himself a part of the purchase price.
e. Seller binds himself to pay the Taxes on the thing sold.
f. In any other case where the real intention of the parties is that the transaction shall Secure the payment of a debt or
the performance of any other obligation.
g. A contract purporting to be an Absolute sale.
NB: In case of doubt in determining whether it is equitable mortgage or sale a retro (with right of repurchase); it shall be
construed as equitable mortgage. (Art. 1602, 1604, Civil Code)

92. What are the effects of a sale being declared an equitable mortgage?
1. The apparent seller may ask for the reformation of the instrument;
2. Money, fruit or other benefit to be received by the buyer as rent or otherwise shall be considered as interest;
3. The court may decree that “vendor” pay his outstanding loan to the “vendee;” and
4. A remand of the case to the trial court where the latter did not pass upon the mortgagor’s claim that he had paid his
mortgage obligation, only for the purpose of the determining whether said obligation has been paid, and if not, how
much should still be paid. (Art. 1602, 1605, Banga v. Bello, G.R. No. 156705, 30 Sept. 2005)

93. May the court reduce the interest on unpaid rentals stipulated and agreed by the parties?
Yes, as the imposition of an interest on unpaid rentals takes the nature of a penalty clause. Even if such was specified in
the contract, public morals and policy dictate that the interest rate should still be reasonable and equitable. Although a
court is not at liberty to ignore the freedom of the parties to agree on such terms and conditions as they see fit that
contravene neither law nor morals, good customs, public order or public policy, a stipulated penalty, nevertheless, may be
equitably reduced by the courts if it is iniquitous or unconscionable or if the principal obligation has been partly or irregularly
complied with. As provided in Article 1229 of the Civil Code, The judge shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with by the debtor. Even if there has been no performance, the penalty
may also be reduced by the courts if it is iniquitous or unconscionable. (PNTC Colleges, Inc. vs. Time Realty, Inc., G.R. No.
219698. September 27, 2021, J. Hernando)

94. What are the requisites of an implied lease?

An implied new lease or tacita reconduccion will set in when the following requisites are found to exist: a) the term of the
original contract of lease has expired; b) the lessor has not given the lessee a notice to vacate; and c) the lessee continued
enjoying the thing leased for fifteen days with the acquiescence of the lessor. (Samelo vs. Manotok Services, Inc., G.R. No.
170509, June 27, 2012)

95. What are the essential elements of a contract of agency?

1. There is consent, express or implied, of the parties to establish the relationship;
2. The object is the execution of a juridical act in relation to third persons;
3. The agent acts as a representative and not for himself; and
4. The agent acts within the scope of his authority. (Rallos v. Chan, G.R. No. L-24332 January 31, 1978)

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96. How can a principal's appointment of an agent be implied?
The principal's appointment of an agent can be implied in the following ways:
a. From the principal's acts;
b. From the principal's silence or lack of action; or
c. From the principal's failure to repudiate the agency, knowing that another person is acting on his behalf without
authority. (Article 1869, Civil Code)

97. When is the principal not liable for acts of its agent?
a. Acted in contravention of principal’s instruction;
b. Fault of agent;
c. Agent incurred with knowledge of unfavorable result; or
d. Stipulated (Article 1918, Civil Code)
98. What are the modes of extinguishment of agency?
The modes of extinguishment of an agency are:
a. By its revocation;
b. By the withdrawal of the agent;
c. By the death, civil interdiction, insanity, or insolvency of the principal or of the agent;
d. By the dissolution of the firm or corporation which entrusted or accepted the agency;
e. By the accomplishment of the object or purpose of the agency;
f. By the expiration of the period for which the agency was constituted. (Article 1919, Civil Code)

99. What is the doctrine of apparent authority?

Under the doctrine of apparent authority, if a corporation knowingly permits one of its officers or any other agent to act
within the scope of an apparent authority, it holds the agent out to the public as possessing the power to do those acts;
thus the corporation will, as against anyone who has in good faith dealt with it through such agent, be estopped from
denying the agent's authority. (Agro Food and Processing Corp. vs. Vitarich Corporation, G.R. No. 217454. January 11, 2021, J.
Hernando)

100. Distinguish Commodatum and Mutuum.

Commodatum Mutuum
One of the parties delivers to another, either something One of the parties delivers to another, money or other
not consumable so that the latter may use the same for consumable thing, upon the condition that the same amount
a certain time and return it. of the same kind and quality shall be paid.
It is essentially gratuitous. It may be gratuitous or with a stipulation to pay interest.
The bailor retains the ownership of the thing loaned. The ownership passes to the borrower.
(Article 1933, Civil Code)

101. What are prevailing guidelines for the imposition of interest?

Guidelines Interest Due Interest Calculation Compounding Additional Legal Claims or
Interest Interest Damages
a.Obligation As per written Computed from default Not unless Interest due on NA
breached agreement (extrajudicial/judicial stipulated by principal as of
involving (allowed if not demand) until full parties, law, or judicial demand
monetary excessive/unc payment regulation. earns an additional
payment (loan or onscionable). legal interest
forbearance) and separately at the
interest is prevailing rate by
stipulated by Bangko Sentral ng
parties. Pilipinas, until full
payment.
b.Obligation Prevailing Computed from default Not unless Interest due on NA
breached legal interest (extrajudicial/judicial stipulated by principal as of
involving rate by demand) until full law or judicial demand
monetary Bangko payment. regulation. earns an additional
payment (loan or Sentral ng legal interest
forbearance) Pilipinas. separately at the
without prevailing rate by
stipulated Bangko Sentral ng
interest. Pilipinas, until full
payment.
c.Obligation Imposed by Begins when claim is Not unless NA No interest on
breached not court at made stipulated by unliquidated
involving a loan prevailing (extrajudicially/judicially law or claims or
or forbearance. legal interest ) until full payment. regulation. damages until
rate by Starts from the demand can
Bangko judgement date if the be established
Sentral ng claim's amount is not with
Pilipinas. reasonably ascertained reasonable
at the time of demand. certainty
(Lara's Gifts & Decors, Inc. vs. Midtown Industrial Sales, Inc., G.R. No. 225433 (2019).

102. Discuss the floating interest rate system.

There may be instances wherein an interest rate scheme which does not specifically indicate a particular interest rate may
be validly imposed. Such an interest rate scheme refers to what is typically called a floating interest rate system. The
Bangko Sentral ng Pilipinas (BSP) allows backs and borrowers to agree on a floating rate of interest, provided that it must

16
 be based on market-based reference rates: (Manual of Regulations for Banks) X305.3 Floating rates of interest. - The rate
of Interest on a floating rate loan during each interest period shall be stated on the basis of Manila Reference Rates
(MRRs), T-Bill Rates or other market based reference rates plus a margin as may be agreed upon by the parties. This
BSP requirement is consistent with the principle that the determination of interest rates cannot be left solely to the will of
one party. It further emphasized that the reference rate must be stated in writing, and must be agreed upon by the parties.
Hence, in order for the concept of a floating rate of interest to apply, it presupposes that a market-based reference rate is
indicated in writing and agreed upon by the parties. (Goldwell Properties Tagaytay, Inc. vs. Metropolitan Bank and Trust
Company, G.R. No. 209837. May 12, 2021, J. Hernando)

103. Distinguish Guaranty and Suretyship.

Guaranty Suretyship
The person binds himself to the creditor to fulfill The person binds himself solidarily with the principal
the obligation of the principal debtor in case the debtor.
latter should fail to do so.
The guarantor is secondarily liable. The surety is primarily liable.
Guarantor can avail of the benefit of excussion Surety cannot avail of the benefit of
and division in case creditor proceeds against him. excussion and division.
(Articles 2047 & 2058, Civil Code)

104. If there are many properties used as collateral, can borrowers compel the bank to release certain collateral upon
payment of loan values of said collateral even if the total loan is not yet paid?
No. Under this Article 2089 of the Civil Code, it provides that the "debtor cannot ask for the release of any portion of the
mortgaged property or of one or some of the several lots mortgaged unless and until the loan thus secured has. been fully
paid, notwithstanding the fact that there has been a partial fulfillment of the obligation. Hence, it is provided that the debtor
who has paid a part of the debt cannot ask for the proportionate extinguishment of the mortgage as long as the debt is not
completely satisfied." Thus, the fact that the borrower paid for the loan value of certain properties is immaterial; the
mortgage would still be in effect since the loans have not been fully settled. (Goldwell Properties Tagaytay, Inc. vs.
Metropolitan Bank and Trust Company, G.R. No. 209837. May 12, 2021, J. Hernando)

105. It was alleged that the deed of mortgage was spurious because: the document was supposedly executed and
notarized on March 4, 1998, but was entered in a 2001 notarial book by a notary public whose notarial commission
ended in 2001; that the entry indicated in the notarial register actually pertained to a deed of sale of a motor
vehicle; that different typewriters were used in typing the contents of the Deed of Mortgage and its notarization;
and that the acknowledgment was written on the back of the document, despite the considerable space allotted
and remaining below the Deed of Mortgage. Will these infirmities in the notarization of the instrument invalidate
the mortgage?
No. An irregular notarization merely reduces the evidentiary value of a document to that of a private document, which
requires proof of its due execution and authenticity to be admissible as evidence. The irregular notarization — or, for that
matter, the lack of notarization — does not thus necessarily affect the validity of the contract reflected in the document.
Errors in, or even absence of, notarization on a deed of mortgage will not invalidate an already perfected mortgage
agreement. If anything, these would only depreciate the evidentiary value of the said written deed, as the same would be
demoted from a public document to a private one. (Ganancial vs. Cabugao, G.R. No. 203348. July 6, 2020, J. Hernando)

106. What is the rule on mortgages?

GR: The mortgagor should be the absolute owner of the property to be mortgaged, otherwise, the mortgage is considered
null and void.
XPN: Doctrine of the mortgagee in good faith. 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.
The prevailing jurisprudence is that a mortgagee has a right to rely in good faith on the certificate of title of the mortgagor
to the property given as security and, in the absence of any sign that might arouse suspicion, has no obligation to undertake
further investigation. Hence, even if the mortgagor is not the rightful owner of, or does not have a valid title to, the
mortgaged property, the mortgagee in good faith is, nonetheless, entitled to protection. (Duque-Rosario v. Banco Filipino
Savings and Mortgage Bank, G.R. No. 140528, 07 Dec. 2011)

107. When does doctrine of mortgagee in good faith apply?

The doctrine of mortgagees in good faith applies when the following requisites concur, namely: (a) the mortgagor is not
the rightful owner of, or does not have valid title to, the property; (b) the mortgagor succeeded in obtaining a Torrens title
over the property; (c) the mortgagor succeeded in mortgaging the property to another person; (d) the mortgagee relied on
what appears on the title and there exists no facts and circumstances that would compel a reasonably cautious man to
inquire into the status of the property; and (e) the mortgage contract was registered.
Note: The doctrine does not apply to a situation where the title is still in the name of the rightful owner and the mortgagor
is a different person pretending to be the owner. In such a case, the mortgagee is not an innocent mortgagee for value,
and the registered owner will generally not lose his title. (Jimenez v. Jimenez, G.R. No. 228011, February 10, 2021 [Landmark
Case Q&A]; Ereña v. Querrer-Kauffman, G.R. No. 165853, 22 June 2006)

108. Can a bank assail the defense of mortgagee in good faith?

No. In the case of banks and other financial institutions, however, greater care and due diligence are required since they
are imbued with public interest, failing which renders the mortgagee in bad faith. (Philippine Banking Corporation v. Dy, et al.,
G.R. No. 183774, 14 Nov. 2012)

109. Can DDD’s adverse claim annotated at the back of a certificate of title of a foreclosed property affect the rights of
CCCs, the purchasers in the foreclosure sale?
No. A subsequent lien or encumbrance annotated at the back of a certificate of title of a foreclosed property will not affect
the rights of a purchaser in a foreclosure sale because such sale retroacts to the date of the registration of the mortgage,
making the sale prior in time to the lien or encumbrance. The foreclosure sale retroacts to the date of registration of the

17
 mortgage because it is incidental to the fulfilment of the mortgagor's obligation in the mortgage contract upon his default.
In turn, the purchaser in a foreclosure sale essentially derives his right from the previously registered mortgage. Once the
mortgagor defaulted in the fulfilment of his obligation, the mortgagee in good faith can still cause the foreclosure of the
mortgage. In such case, the purchaser in the foreclosure sale acquires the right of the mortgagee in good faith, making
the sale prior in time as against any subsequent lien or encumbrance. The protection granted to a mortgagee in good faith
extends to the purchaser at a public auction even if he or she had notice of the adverse claim. Otherwise, the value of the
mortgage could be easily destroyed by a subsequent record of an adverse claim, for no one would purchase at a
foreclosure sale if bound by the posterior claim. Accordingly, DDD's adverse claim, which was annotated after the
registered mortgage in favor of CCCs, cannot prevail over CCCs's rights as mortgagees in good faith and purchasers in
the foreclosure sale. Being mortgagees in good faith, they have a superior lien over that of DDD, and their right to foreclose
is reserved. Therefore, CCCs's purchase of the property in the foreclosure sale retroacted to the date of the registration of
the mortgage, making the sale superior to the adverse claim. Their knowledge of the adverse claim is of no moment
because their right as mortgagees in good faith extends up to the time of the foreclosure sale and in their capacity as
purchasers. (Jimenez v. Jimenez, G.R. No. 228011, February 10, 2021 [Landmark Case Q&A])

110. Is there unjust enrichment on the act of AAA retaining the properties of BBB for the unpaid rentals, pursuant to
Paragraph 23 of the Contract of Lease which provided that AAA can retain the properties of BBB's as security in
case of breach of default?
No. There would be no unjust enrichment to speak of, as AAA withheld the properties pursuant to Paragraph 23 of the
Contract of Lease, a provision which BBB knowingly agreed to. In other words, AAA retained the said properties as security
to compel BBB to pay and not to unduly enrich itself. Jurisprudence holds that there is unjust enrichment when a person
unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the
fundamental principles of justice, equity and good conscience. The statutory basis for the principle of unjust enrichment is
Article 22 of the Civil Code which provides that 'every person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall
return the same to him.' The principle of unjust enrichment under Article 33 requires two conditions: (1) that a person is
benefited without a valid basis or justification, and (2) that such benefit is derived at another's expense or damage. There
is no unjust enrichment when the person who will benefit has a valid claim to such benefit. Here, it does not show that AAA
unjustly benefitted from the retention of the properties without valid basis, as it merely acted in accordance with the lease
contract to ensure recovery of what is due to it. If anything, the so-called "benefit" which AAA is "enjoying" by withholding
the properties is the assurance that it would be able to collect from BBB. (PNTC Colleges, Inc. vs. Time Realty, Inc., G.R. No.
219698. September 27, 2021, J. Hernando)

111. What is the principle of vicarious liability?

The vicarious liability principle is based on Art. 2180 of the Civil Code which states that the obligation imposed by Art. 2176
of the Civil Code for quasi-delicts is demandable not only for one's own acts or omissions, but also for those persons for
whom one is responsible, as follows:
a. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor
children who live in their company.
b. Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and
live in their company.
c. The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their
employees in the service of the branches in which the latter are employed or on the occasion of their functions.
d. Employers shall be liable for the damages caused by their employees and household helpers acting within the scope
of their assigned tasks, even though the former are not engaged in any business or industry. (Note: The nature of
the vicarious liability of the employers, owners, and managers is direct and immediate. It is not conditioned upon a
prior recourse against the negligent employee or a prior showing of insolvency of such employee. It is also joint and
solidary with the employee.)
e. The State is responsible in like manner 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.
f. Teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and
students or apprentices, so long as they remain in their custody.
The vicarious responsibility shall cease when the persons herein mentioned prove that they observed all the diligence of
a good father of a family to prevent damage. (Art. 2180, Civil Code; Pineda, 2009, citing Mercury Drug Corporation v. Huang, G.R.
No. 172122, 22 June 2007)

112. A six-year old child was sideswiped by AAA's vehicle driven by driver named BBB and dragged for three meters,
resulting in a fractured right leg. BBB was found to be negligent. Can AAA be held vicariously liable?
Yes. In relation to Article 2176, Article 2180 of the Civil Code provides the basis for the concept of vicarious liability in our
jurisdiction, to wit: “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. Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged
in any business or industry.” Applying these concepts to the present case, the finding of negligence against BBB gave rise
to the presumption of negligence on the part of AAA in the latter's selection and/or supervision of the former. Therefore, it
is incumbent upon AAA to prove that she exercised the diligence of a good father of a family in the selection and supervision
of her employee, BBB. (Maitim vs. Aguila, G.R. No. 218344, March 21, 2022, J. Hernando)

113. Can the doctrine of res ipsa loquitur be applied to presume the driver negligent for sideswiping a six-year old
child?
Yes. It is sufficient that the accident itself be established, and once established through the admission of evidence, whether
hearsay or not, the rule on res ipsa loquitur already starts to apply. Since it is clearly established that there was a vehicular
accident that caused injuries, then the rule on res ipsa loquitur shall apply. An inference of negligence on the part of the
driver, the person who controls the instrumentality (vehicle) causing the injury, arises, and he has the burden of presenting
proof to the contrary. (Maitim vs. Aguila, G.R. No. 218344, March 21, 2022, J. Hernando)

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114. The respective townhouse units of AAA and BBB are approximately nine meters apart, separated only by a
driveway jointly used by the townhouse unit owners. While AAA’s vehicle was driven by her driver CCC along the
common driveway, DDD, the six-year old daughter of BBB, was sideswiped and dragged for three meters,
resulting in a fractured right leg. DDD had exited their door and was on her way towards the garage to board their
car. CCC was found to be negligent. Is there contributory negligence on DDD's part?
No. The driveway was a common area to both parties' townhouse units, which meant that the driveway is as much a part
of BBB's residence as it is of AAA's. DDD was not just running or loitering around but was actually on her way to board
their car. There is no negligence on the part of BBB when she allowed DDD to exit their door and walk towards their
garage. There is a reasonable expectation of safety, considering that the driveway is still within the premises of their
residence and not on the street where vehicles ordinarily drive by. Moreover, given the location and relatively narrow profile
of the driveway, it can be reasonably expected that anyone who traverses such driveway with a motor vehicle would drive
slowly and with utmost caution. (Maitim vs. Aguila, G.R. No. 218344, March 21, 2022, J. Hernando)

115. How is the airline’s liability for damages determined?

Under Article 2216 of the Civil Code, the assessment of damages is left to the discretion of the court according to the
circumstances of each case. The courts must adhere to the principle that the amount of damages awarded should not be
palpably excessive as to indicate that it was the result of prejudice or corruption on the part of the trial court. It must
therefore be fair, reasonable, and proportionate to the injury. (KLM Royal Dutch Airlines vs. Tiongco, G.R. No. 212136. October
4, 2021, J. Hernando)

116. Is an airline liable for moral and exemplary and nominal damages if a passenger loses his luggage containing his
resource materials and other possessions considering that nobody from the airline’s personnel updated the
passenger of what happened to the search for the luggage, that it was only when the passenger wrote the airline
a demand letter that the latter reached out to him asking for time to investigate the matter, that it did not even
notify him of the result of the purported investigation, and that when it was eventually found, the airline did not
inform the passenger that his luggage had been found or took the necessary steps to transport it back?
Yes. The bad faith on the part of the airline renders the same liable for moral and exemplary damages. The award of moral
damages is proper to enable the injured party to obtain means of diversion or amusement that will serve to alleviate the
moral suffering they underwent because of another's culpable action. (KLM Royal Dutch Airlines vs. Tiongco, G.R. No. 212136.
October 4, 2021, J. Hernando)

117. Define the different kinds of damages awarded.

Actual/ Art. 2199 of the Civil Code expressly mandates that “except as provided by law or by stipulation, one
Compensatory is entitled to an adequate compensation only for such.
Actual or compensatory damages proceed from a sense of natural justice and are designed to repair
the wrong that has been done, to compensate for the injury inflicted.
Moral It includes physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury.
In cases of simple negligence does not justify an award of moral damages. Such is proper only in
cases of gross negligence amounting to bad faith.
Moral damages apply both to natural and juridical persons. Moral damages are generally not awarded
in favor of a juridical person, unless it enjoys a good reputation that was debased by the offending
party resulting in social humiliation.
Exemplary Exemplary damages or corrective damages are imposed, by way of example or correction for the
public good, in addition to the moral, temperate, liquidated or compensatory damages.
To recover moral damages, the plaintiff must allege and prove:
a. The factual basis for moral damages; and
b. The causal relation to the defendant’s act
XPN: Moral damages may be awarded to the victim in criminal proceedings without the need for
pleading of proof or the basis thereof.
Nominal Nominal damages are adjudged 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. Nominal damages cannot co-exist with other damages.
Elements:
a. Plaintiff has a right;
b. Such right is violated; and
c. The purpose of awarding damages is to vindicate or recognize the right violated.
Liquidated Fixed damages previously agreed by the parties to the contract and payable to the innocent party in
case of breach by the other.
Temperate Temperate damages are those damages, which are more than nominal but less than compensatory,
and may be recovered when the court finds that some pecuniary loss has been suffered but its
amount cannot be proved with certainty.
Temperate damages may be awarded in the following cases:
a. In lieu of actual damages; or
b. In lieu of loss of earning capacity.
Elements:
a.Some pecuniary loss;
b. Loss is incapable of pecuniary estimation; and
c. The damages awarded are reasonable.
(Arts. 2199, 2217, 2229, 2224, 2221, Civil Code; Pineda, 2009; Kabisig Real Wealth Dev., Inc. v. Young Builders Corp., G.R. No.
212375, 25 Jan. 2017; ABS-CBN v. CA, G.R. No. 128690, 21 Jan. 1999; Villanueva v. Salvador, G.R. No. 139436, 25 Jan. 2006)

118. Is the award for temperate damages proper in the case of AAA who was unable to use productively the 102
hectares of its landholdings after it was deprived of its possession in 1972?

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 Yes. With the passage of time, it is impossible to determine AAA's losses with any certainty. Thus, considering the particular
circumstances of this case, the award of temperate damages is reasonable. (Land Bank of the Philippines vs. Del Moral, Inc.,
G.R. No. 187307. October 14, 2020, J. Hernando)

119. AAA, engaged in the production of liquid forms of gasses which require a very stable source of power,
experienced power fluctuations and interruptions causing losses amounting to more than 21 million pesos. There
is no indication as to where this figure was based or how it was derived. There is likewise no receipt nor any
supporting document offered in court to support such figure. Despite Meralco's repeated assurance of better
electric supply, and despite knowledge of the serious production losses experienced by AAA due to the power
fluctuations and interruptions, it still failed to provide any remedy. Is Meralco liable for temperate damages,
exemplary damages, and attorney’s fees?
He is liable only for temperate and exemplary damages, but not for attorney’s fees.
Liable for temperate damages: Under Article 2224 of the Civil Code, "[t]emperate 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 provided with certainty." Here, without indication as
to where the figure for loss was based or how it was derived and without any supporting receipts, the resulting figure may
very well be a product of speculation or sheer estimation. Nevertheless, Meralco cannot escape liability for this sole reason.
This is because Meralco failed to provide any concrete proof of the cause of the power interruptions and fluctuation.
Meralco is liable for temperate damages to an amount equivalent to a certain percentage of the actual damages claimed
by AAA.
Liable for exemplary damages: Despite Meralco's repeated assurance of better electric supply, and despite knowledge of
the serious production losses experienced by AAA due to the power fluctuations and interruptions, it still failed to provide
any remedy, in wanton disregard of its contractual obligation to deliver energy "at reasonably constant potential and
frequency." As a public utility vested with vital public interest, Meralco should be reminded of its "obligation to discharge
its functions with utmost care and diligence."
Not liable for Attorney’s fees: Jurisprudence instructs that "the award of attorney's fees is an exception rather than the
general rule; thus, there must be compelling legal reason to bring the case within the exceptions provided under Article
2208 of the Civil Code to justify the award." There is no compelling legal reason here. (Go vs. Teruel, A.C. No. 11119. November
4, 2020, J. Hernando)

120. AAA filed a complaint for damages claiming that Union Bank negligently handled his credit card account. AAA
maintained that he suffered embarrassment, social humiliation, mental anguish, serious anxieties, besmirched
reputation, and wounded feelings when his card was dishonored at Gourdo's Restaurant. Per records of the case,
the card was dishonored because his account was already in "past due" status for failure to pay the minimum
amount due. Is AAA entitled to moral damages, exemplary damages, and attorney's fees due to the alleged gross
negligence of Union Bank?
No. The use of a credit card to pay for a purchase is only an offer to the credit card company to enter into a loan agreement
with the credit card holder. Before the credit card issuer accepts this offer, no obligation relating to the loan agreement
exists between them. While it is true that with the issuance of the credit card to AAA, Union Bank granted him a credit
facility or a pre-approved amount which the card holder may use in his purchase of goods and services, this is not a
demandable right which the card holder may hold against the credit card company as if he is entitled to be granted a loan
whenever he or she wants to, or that the bank owes him or her money by the mere issuance of a credit card. Union Bank
may or may not approve AAA's purchase requests based on the latter's credit standing, credit card history, and financial
capability. Union Bank disapproved AAA's use of credit card due to the latter's failure to pay the minimum amount due of
his SOA. Hence, as it was AAA's own action which was the proximate cause of his embarrassing and humiliating
experience, the award of moral damages is clearly unjustified. (Rico vs. Union Bank of the Philippines, G.R. No. 210928, February
14, 2022, J. Hernando)

121. When the commission of a crime results in death, what awards are the heirs of the victim entitled to?
When death results in the commission of a crime, the heirs of the victim are entitled to (a) civil indemnity ex delicto for the
death of the victim without need of evidence other than the commission of the crime; (b) actual or compensatory damages
to the extent proved, or temperate damages when some pecuniary loss has been suffered but its amount cannot be
provided with certainty; (c) moral damages; and (d) exemplary damages when the crime was committed with one or more
aggravating circumstances. (People vs. Camarino, G.R. No. 222655. December 9, 2020, J. Hernando)

SOAR HIGH, HERON!

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