EQUALLY POSSIBLE:

 Difference between Commodatum and Mutuum, Lease

 Obligations of the Bailee (Borrower) in Commodatum and Mutuum
 Difference between Monetary and Compensatory Interest
 Types of Deposit
 Hotelkeepers as Depositary; requisites; when not liable; validity of stipulations
 Perfection and order of preference of personal security interests

 PUBLICATION (Article 2, NCC) - Laws shall take effect after fifteen days
following the completion of their publication in the Official Gazette or in a
newspaper of general circulation in the Philippines, unless it is otherwise provided.
Publication is indispensable in every case, but the legislature may in its discretion
provide that the usual fifteen-day period shall be shortened or extended.

PERSONS AND FAMILY RELATIONS

1) A foreigner got married to a Filipino citizen in the Philippines. Subsequently, the

foreigner filed a petition to declare the marriage void pursuant to Article 36 of the Family
Code. Will the petition prosper? ANS: Yes, the petition will prosper pursuant to the
principle of lex loci celebrationis. Since the marriage is celebrated in the Philippines
and one of the parties is a citizen of the Philippines, the validity of the marriage will be
governed by the law of the Philippines, as a rule, because it is the place where the
marriage was celebrated.

2) Both spouses are foreigners and residing in the Philippines. One of them filed a petition
to declare the marriage void pursuant to Article 36 of the Family Code. Will the petition
prosper? ANS: No, the petition will not prosper pursuant to the nationality
principle. Since the parties are both foreigners, the Family Code of the Philippines will
not apply because the validity of the marriage of the parties shall be governed by their
national laws. Under Article 15 of the Civil Code, the issue of status, condition, legal
capacity, and family rights and duties shall be governed by the national law of the person
involved.

3) The siblings of A filed an action against A for reconveyance of their hereditary share in
the property allegedly left by their deceased parents, who are both Indian nationals.
The complainants claimed that the parcel of land in Bel Air, Makati was actually
purchased by their parents but registered only in the name of A in trust for the parents
and the other siblings. Will the action prosper? ANS: No, because the complaint failed
to state a cause of action. The siblings of A cannot possibly acquire successional rights
over the parcel of land located in Bel Air, Makati because their parents, being foreigners,
are prohibited by the Philippine Constitution from acquiring and owning lands in the
Philippines. The legal capacity of foreigners to acquire lands in the Philippines shall be
governed by the Philippine laws pursuant to the principle of lex rei sitae, and not by the
nationality principle.

1
4) Yes, although the case involves a criminal action which preceded the institution of the
civil action, the strict sequence of institution of the two actions as provided for by the
Rules of Criminal Procedure is more directory than mandatory. Hence, the
prejudicial factual finding of genuineness of the seller’s signatures on the questioned
Deeds of Sale in the civil case must operate to bar the prosecution of the accused for the
falsification of the same signatures on the same questioned Deeds of Sale. The doctrine
of a prejudicial question serves the following purposes: (i) to avoid multiplicity of suits;
(ii) avoid unnecessary litigation;
(iii) avoid conflicting decisions; (iv) safeguard the rights of the accused; and (v) unclog
the courts' dockets.

5) SANTOS – REVILLA: If you were the court, will you grant the petition? ANS: No,
because a change of surname is not a right but a mere privilege that can only be granted if
there is a valid reason. Here, there is no valid reason to allow S to change his surname.
Instead, the change of surname of S will only result into confusion because while he may
be a biological child of S, he remains to be the legitimate son of P by virtue of the
adoption. Under the law, an adopted child must use the surname of the adopter. In
addition, a sincere desire to associate oneself to a certain person or family, without more,
does not justify a change of surname.

6) The trial court dismissed the petition and ruled that the jurisdiction lies with the
Matrimonial Tribunal of the Catholic Church since the marriage took place pursuant to
the Canon Law of the Catholic Church. Is the Court correct? ANS: No, because the
nature, consequences, and incidents of a marriage are all governed by law, including
the matter of the validity of the marriage. The annulment of the marriage on the ground of
psychological incapacity under the Canon Law is different from the declaration of nullity
of a marriage based on the same ground under the Family Code. The former does not
bind the State. It is the latter which is binding upon the State. Hence, our courts have
jurisdiction over the petition filed by A, applying the Family Code and BP 129.

7) X, a Filipino citizen, entered into an arrangement with Y, a Japanese national. In their

agreement, they have decided to simulate a marriage to facilitate the application of X for
a Japanese visa. But they agreed that the marriage contract is not to be registered in the
Civil Registry. They got married before a religious solemnizer in the City Hall of Manila,
where they were made to sign a blank marriage contract by the solemnizing officer in the
latter’s presence. X was surprised to find out that the marriage contract was registered in
the Civil Registry of San Juan City. Upon checking, X discovered that the license
appearing in the marriage contract was never really issued by the Civil Registry of San
Juan City. Is the marriage void? ANS: Yes, the marriage is void because it was celebrated
without a valid marriage license. Under the law, a marriage which has been celebrated
without a valid marriage license is a void marriage if the same is not exempt from the
requirement of a marriage license. In addition, the absence of a valid marriage license is
proof that the marriage of X and Y is merely simulated or fake.

8) O, a Filipino citizen, applied for a Certificate of No Marriage (CeNoMar) from the PSA.
She was not, however, issued a CeNoMar because she was already married to a Korean
national. O filed a petition for the correction and/or cancellation of entry in the Civil
2
 Registry under Rule 108, claiming that someone used her identity in contracting a
marriage to the Korean national. The OSG opposed the petition on the ground that the
proper remedy of O is to file a petition to declare the marriage void. Is the OSG correct?
ANS: No, the OSG is not correct because if it is true that someone made use of O’s
identity in contracting the marriage to the Korean national, there is no marriage involving
O that can be the subject of a declaration of absolute nullity. A petition for declaration of
nullity of a marriage presupposes that the petitioner had contracted a marriage, but such
marriage is declared by law to be void ab initio.

9) X contracted two marriages during the effectivity of the Family Code. The first marriage
was to A; the second, to B. When X was prosecuted for bigamy, he put up the defense
that the prior marriage was void because it was celebrated without a valid marriage
license. To prove the absence of a marriage license, the only proof presented by X is a
certification issued by the Local Civil Registrar that the license does not appear in the
record of the local civil registry. Is the proof submitted by X sufficient to prove that the
first marriage was celebrated without a valid marriage license? ANS: No, because if such
certification is presented for the purpose of obtaining an acquittal in a criminal
prosecution for bigamy, said certification may not be accorded the presumption of
regularity in the performance of official duties. Hence, such certification alone is not a
sufficient proof of the absence of a valid marriage license at the time of the celebration of
the marriage. [On the other hand, if such certification is presented in a civil action for
declaration of nullity of the marriage, the same is sufficient proof because it enjoys the
presumption of regularity.]

10) F, a Filipino citizen, was married to J, a Japanese national. In 2015, F obtained a decree
of divorce in Japan, which divorce capacitated J to contract another marriage. In 2016, F
married X, another Filipino citizen. In 2021, F filed a petition for the judicial recognition
of the decree of divorce which she obtained in Japan. Will the petition prosper? ANS:
Yes, because according to the en banc ruling in Republic v. Manalo, Article 26, par. 2,
of the Family Code is applicable regardless of who may have obtained the decree of
divorce abroad. If the decree of divorce obtained abroad has the effect of releasing the
foreigner spouse from the marriage, then the Filipino spouse is also released from the
marriage applying Article 26, par. 2, of the Family Code, regardless of who may have
obtained the decree of divorce.

11) In the previous problem, F was prosecuted for bigamy for contracting a subsequent
marriage without a previous judicial recognition of the decree of divorce obtained abroad.
It is the position of the prosecution that F does not automatically regain her capacity to
remarry upon the issuance of the divorce but will only regain such capacity once the
divorce is judicially recognized. Is the prosecution correct? ANS: No, because F may
prove in the criminal action that when she contracted the subsequent marriage, she was
already released from the previous marriage. In other words, the judicial recognition of
the divorce obtained abroad need not be done in a separate proceeding solely for the said
purpose. Instead, the judicial recognition can be put up as a defense in the criminal action
for bigamy.

12) The marriage of A and B was declared void in 2015 on the ground of B’s
3
 psychological incapacity. In 2018, A contracted another marriage to X. Upon the death of
A in 2020, B and her children with A filed a petition to declare the marriage of A to X
void on the ground of failure to comply with the procedural requirements of Article 52 of
the Family Code prior to contracting the subsequent marriage. Will the petition prosper?
ANS: No, the petition will not prosper because the petitioners do not have the legal
personality to file the petition. In the en banc ruling of the Court in David v. Calilung, it
was held that for marriages contracted during the effectivity of the Family Code, only the
husband or the wife of the marriage to be declared void who shall have the legal
personality to file the petition pursuant to AM No. 02-11-10-SC. The only exception is
when the ground is bigamy, where the aggrieved spouse in the prior marriage also has the
personality to file the petition. Hence, B has no legal personality to file the petition
because she is no longer the
wife of A considering that her marriage to A was already declared void by the court. The
children of A and B likewise do not have the personality to file the petition. However,
they may still question the validity of the marriage of A to X during the settlement of the
estate of A.

13) In the above problem, what if the children of A and B raised the issue of the absolute
nullity of the marriage between A and X during the settlement of the estate of A, on the
ground of failure to comply with the procedural requirements of Article 52 of the Family
Code prior to the celebration of the subsequent marriage of A and
X. May the court declare the marriage of A and X void? ANS: No, because Article 52 of
the FC will only be applicable if the prior marriage is a voidable marriage which has been
annulled by a final judgment of the court or it is a void marriage under Article 40 of the
Family Code which has been declared void by the court. Article 52 does not apply if the
prior marriage is declared void for a reason other than Article 40 of the Family Code, for
in the latter situation the property regime of the parties in the prior void marriage is either
Article 147 or 148, and not absolute community nor conjugal partnership of gains.

14) X filed a petition for the declaration of nullity of his marriage to Y on the ground of the
latter’s psychological incapacity to fulfill the essential marital obligations. X presented
witnesses who testified: that they knew Y since she was a child; that Y grew up in a
dysfunctional family where the father was known for abusing his children (physically,
verbally, psychologically and even sexually); that was the reason why Y became care-
free and promiscuous. X also testified that during their marriage, Y had several extra-
marital affairs, even to some of his friends. He also testified that Y never maintained and
took care of the household and their family. After trial, the RTC dismissed the petition
for failure of the petitioner to prove that Y’s incapacity was by reason of psychological
illness. The trial court also faulted X for failing to present an expert witness who could
have established the root cause of Y’s alleged psychological incapacity. X filed an
appeal. Will the appeal prosper? ANS: Yes, because the Supreme Court, in its en banc
ruling in Tan-Andal v. Andal, already abandoned previous decisions which declare
psychological incapacity in Article 36 of the FC to be a form of mental or psychological
illness. Instead, the Court clarified in Tan-Andal, that psychological incapacity is an
enduring and durable aspect of one’s personality structure which is so dysfunctional that
it renders him or her totally unable to comply with the essential marital obligations. Since
psychological incapacity is no longer viewed as an illness but a personal condition of the
4
 spouse suffering from it, the cause of such incapacity is not medical but brought about by
genuine serious psychic cause that can be testified to by ordinary witnesses. Hence, the
testimony of an expert witness is not necessary. In this case, the totality of the evidence
presented establishes Y’s psychological incapacity. Hence, the marriage is void.
15) X is married to Y. While they were still living together in 2017, X, without the
knowledge of Y, obtained a judgement from the RTC of Tarlac City declaring Y
presumptively dead. After obtaining the judgment, X abandoned Y and married A in
2018. In 2019, when Y discovered the subsequent marriage of X to A, she filed a petition
for the declaration of nullity of said marriage on the ground of bigamy. The trial court
dismissed the petition on two grounds: (1) that the proper remedy of Y is to file an
affidavit of reappearance in the appropriate civil registry; and (2) Y has no legal
personality to file the petition because she is not a party to the marriage subject matter of
the petition. Is the court correct? ANS: No, because the remedy of recording of affidavit
of reappearance is not applicable if the subsequent marriage is void for the simple reason
that there is nothing to be terminated in a void marriage. The subsequent marriage is void
on the ground of bigamy because the following requisites are not complied with prior to
the celebration of the subsequent marriage: (1) the prior spouse must have been absent for
a period of four or two years; (2) the spouse present must have a well-founded belief that
the absentee spouse is already dead; and (3) the spouse present obtained a judicial
declaration of presumptive death of the absentee spouse. Since the subsequent marriage is
void on the ground of bigamy, Y, being the aggrieved spouse in a prior marriage, has the
personality to file the petition to declare the subsequent marriage void pursuant to the
ruling of the Court in Juliano-Llave v. Republic and Fujiki v. Marinay.

16) When E and D were still sweethearts, D got pregnant. Convinced by D that he is the
father of the child, E decided to live with D as husband and wife when D gave birth to the
child. When the child was already three years old, E and D decided to marry each other.
After the marriage, E still doubted his paternity over the child. Hence, he decided to
undergo DNA test. The DNA test revealed that E was not the child’s father. Thereafter, E
filed a petition to annul his marriage to D on the ground of fraud, specifically under
Article 45(3), in relation to Article 46(2), of the Family Code. Will the action prosper?
ANS: No, the petition will not prosper because to constitute fraud that warrants
annulment under Article 46(2), it is necessary that: (1) the wife must have been pregnant
by a man other than her husband at the time of the marriage; and (2) the wife must have
fraudulently concealed the same. In this case, the facts do not warrant annulment of the
marriage under Article 46(2) of the FC because the wife was not pregnant at the time of
the marriage since the child was already three years old when the marriage was
celebrated.

17) T and M got married in 2012, without a marriage settlement. In 2014, T acquired a house
and lot in Makati City through his salaries. Since M was merely maintaining the
household without a gainful employment, T made her sign a waiver of her interest over
the house and lot in Makati City in favor of T. After the waiver, T donated the house and
lot to his child in the previous marriage, named A. In 2019, T obtained a judgment from
the court declaring his marriage to M void on the
ground of psychological incapacity on the part of both parties. Upon the death of T in
2021, M filed an action in court to declare void both the waiver she made in favor of T
5
 and the donation made by T in favor of A. M argued that the waiver she made is void
pursuant to Article 89 of the Family Code; while the donation without her consent is also
void pursuant to Article 98 of the same Code. With respect to the waiver of M’s interest
over the house and lot, is M correct that such waiver is void pursuant to Article 89 of the
Family Code? ANS: Yes, M is correct that the waiver is void but the applicable law is not
Article 89. Article 89 is not applicable in this case because the property regime of M and
T is neither absolute community of property nor conjugal partnership of gains. Instead,
the property regime of M and T is that which is provided for under Article 147 of the
Family Code considering that the marriage of the parties is void by reason of
psychological incapacity. But even if the marriage of M and T is void ab initio, the
second sentence of Article 87 prohibits persons living together as husband and wife
without a valid marriage from donating to each other. Since the waiver made by M in
favor of T is gratuitous, it partakes of the nature of a donation which is prohibited under
the second sentence of Article 87. Hence, the donation or waiver is void.

18) In the previous problem, is M correct that the donation of the house and lot without her
consent is void pursuant to Article 98 of the Family Code? ANS: Yes, M is correct that
the donation made by T without her consent is void, but the applicable law is not Article
98. Article 98 is not applicable because the property regime of the parties is Article 147
and not absolute community. Pursuant to Article 147, the subject property is deemed a
co-owned property of T and M because the latter contributed in its acquisition by her acts
of maintaining the household. Since the subject property is a co-owned property, the third
paragraph of Article 147 prohibits T from disposing the entire property without the
consent of M. Under said provision, T is prohibited from disposing his ideal share during
the cohabitation without the consent of his co-owner M. If T is prohibited from disposing
even his ideal share without M’s consent, it is with more reason that he may not dispose
of the entire co-owned property without M’s consent. Hence, the disposition of the entire
co- owned property during the cohabitation without the consent of the other co-owner is
void.

19) Prior to their marriage in 1997, X and Y executed a marriage settlement providing for
conjugal partnership of gains as their property regime. In 2004, the spouses X and Y
acquired a parcel of land in Tagaytay City. In 2015, Y died. She was survived by X and
her two siblings, A and B. Without liquidating the conjugal partnership of his prior
marriage, X contracted another marriage to W in 2017, without a marriage settlement. In
2018, X sold the parcel of land in Tagaytay City to R. The sale was made without the
consent of W. After the death of X in 2020, A and B filed an action against R for the
declaration of nullity of the sale made by X to R, reconveyance of ownership, partition
and damages. They claimed to be co-owners of the subject property, being the legal heirs
of Y. They contended that the sale toR is void because X failed to comply with the
mandatory requirement of liquidation of the property regime of X and Y. In the said
action, W intervened claiming that the subject property is an absolute community
property of X and W and that the sale made by X of such property without her consent is
void pursuant to Article 96 of the Family Code. R sought the dismissal of the complaint
for failure of the complainants to establish their status as legal heirs of Y in a special
proceeding. R also opposed the right of W to intervene, claiming that the subject property
is an exclusive property of X.
6
 May the action filed by A and B prosper despite the lack of a prior and separate judicial
declaration of heirship in relation to the estate of Y? ANS: Yes, the action will prosper. In
Treyes v. Larlar, the Court en banc ruled that unless there is a pending special
proceeding for the settlement of the decedent's estate or for the determination of heirship,
the compulsory or intestate heirs may commence an ordinary civil action to declare the
nullity of a deed or instrument, and for recovery of property, or any other action in the
enforcement of their ownership rights acquired by virtue of succession, without the
necessity of a prior and separate judicial declaration of their status as such. However, the
Court clarified that the ruling of the trial court shall only be in relation to the cause of
action of the ordinary civil action, i.e., the nullification of a deed or instrument, and
recovery or reconveyance of property, which ruling is binding only between and among
the parties.

20) In Question No. 19, is the sale made by X to R entirely void in view of the failure of X to
liquidate the conjugal partnership of X and Y within one year from the death of Y, as
mandatorily required under Article 130 of the Family Code? ANS: No, the sale is not
entirely void because upon the death of Y, one-half of the subject property was
automatically reserved in favor of the surviving spouse, X, as his share in the conjugal
partnership. The other half is Y’s share, which is transmitted to her legal heirs, X, A, and
B, with X inheriting ½ of Y’s estate, while A and B inheriting the other half. Thus, the
subject property was under a state of co- ownership when X sold said property to R.
While X cannot sell the entire property because he cannot validly sell the shares of A and
B in the co-ownership, he can freely sell and dispose of his undivided interest, equivalent
to ¾ undivided share in the subject property. Consequently, the sale by X of his ¾
undivided share in the subject property is not necessarily void, for his right as a co-owner
thereof was effectively transferred, making the buyer, R, a co-owner of the subject
property. But the sale did not affect the undivided shares of A and B in the subject
property.

21) In Question No. 19, is the sale of X’s undivided share in the subject property to R void in
view of the absence of W’s consent to the transaction? ANS: No, the sale is valid because
the undivided share of X in the subject property is his separate property. This is so
because the property regime of the marriage of X and W is the mandatory regime of
complete separation pursuant to Article 130 of the FamilyCode. According to Article
130, if the conjugal partnership is terminated by reason of death of one of the spouses and
the surviving spouse failed to liquidate the conjugal partnership within one year from the
death of the deceased spouse, the mandatory regime of complete separation will apply to
the subsequent marriage of the surviving spouse. As applied in the problem, since X
failed to liquidate the conjugal partnership of the previous marriage within the one-year
period, the mandatory regime of complete separation applies to the marriage of X and W.
Hence, X brought his ¾ undivided share in the subject property to the subsequent
marriage as his separate property. Consequently, the consent of W is not needed for its
disposition.

22) A and B got married prior to the effectivity of the Family Code, without a marriage
settlement. During their marriage, B donated a parcel of land acquired during the
7
 marriage in favor of S, her child in a previous marriage. Such donation was without the
knowledge and consent of A. Thereafter, S sold the subject property to R. Upon
discovery of the donation and sale, A filed an action against B, S, and R for the
declaration of nullity of the donation and sale. During the pendency of the action, B died.
If you were the court, will you declare the donation and sale void? ANS: No, because
upon the death of B, the conjugal partnership was already terminated and her one-half
undivided share in the subject property already became an actual title that she may
validly dispose of without the consent of her husband A. Accordingly, the right of
S, as donee, is limited only to the one half undivided portion that B owned. The donation
insofar as it covered the remaining one-half undivided portion of the subject property is
null and void, A not having consented to the donation of his undivided half. Hence, the
sale made by S to R is also valid, but only with respect to the one-half undivided portion
of the subject property that was validly acquired by S.

23) X and Y got married in 1979, without a marriage settlement. In 1986, X sold to M a
property acquired during the marriage without the knowledge and consent of Y. Upon the
death of X in 2015, Y filed an action to declare the sale made by X to M void on the
ground that the sale involved a conjugal property and the same was made without her
consent. If you were the court, will you declare the sale void? ANS: No, the sale is not
void but merely voidable but the right of Y to annul the contract had long prescribed. The
property regime of X and Y is conjugal partnership because they got married without a
marriage settlement during the effectivity of the Civil Code. Therefore, the subject
property is presumed to be a conjugal property. According to the en banc ruling of the
Court in Cuenco v. Bautista, the proper characterization of a contract of sale of conjugal
property by one of the spouses without the consent of the other spouse made during the
effectivity of the Civil Code is that the same is merely voidable and not void because the
aggrieved spouse is given by law the right to annul the contract within a period of ten
years from the date of the questioned transaction. Since the questioned transaction took
place in 1986, the right of Y to file the action forannulment had already prescribed
in 1997. Hence, the action filed by Y in 2015 can no longer prosper.

24) Husband H borrowed from creditor C the amount of P1 Million, without the
knowledge and consent of his wife W. H also issued a post-dated check in favor of C in
the amount of P1.2 Million. H gambled and lost the entire proceeds of the loan in the
casino. In the meantime, the check issued by H to C bounced. In the criminal action filed
by C against H for violation of BP 22, the criminal case was dismissed but the court
rendered a decision on the civil aspect of the BP 22 case against H, finding him liable for
the amount of P1.2 Million representing the value of the bounced check and P100,000 as
attorney’s fees and other litigation expenses. To satisfy the judgment, C caused the
attachment of the conjugal property of H and W contending that the conjugal property
may be levied upon to answer for the civil liability adjudged against one spouse in a
criminal case. May the conjugal partnership property be levied to answer for the civil
liability imposed upon H? ANS: No, the conjugal property of H and W is not liable for
the civil liability imposed upon H. While there is jurisprudence to the effect that conjugal
properties may be levied to answer for the civil liability adjudged against one spouse in a
criminal case, in those cases the erring spouses were found guilty beyond reasonable
doubt of the crimes charged against them and thus, the civil liabilities referred to in
8
 Article 122 of the Family Code. In this case, however, the criminal case was dismissed
and only the civil aspect of the BP 22 case was resolved, i.e., the liability for the loan
obtained by H as evidenced by the bounced check, and thus, is properly characterized as a
"debt or obligation." Since the debt of H was contracted without the consent of W and
the same did not redound to the benefit of the family (because H gambled and lost the
proceeds of the loan), the conjugal partnership is not liable to pay the civil liability
imposed upon H. Hence, the conjugal property cannot be levied to answer for H’s sole
liability.

25) D had an illicit relationship with a married man, M, with whom she had a child, A. D did
not register the birth of A in the Civil Registry to avoid humiliation. Unknown to D, M
registered the birth of A in the Civil Registry. He registered A following his surname.
Eventually, D and M got separated. When D filed an application for the delayed
registration of the birth of A, the application was denied on the ground that A’s birth was
already registered in the Civil Registry. D filed an action to cancel the birth certificate of
A registered by M. Will the action prosper? ANS: Yes, because the birth certificate
registered by M is void. Under the law, 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. Since the birth certificate registered by M is contrary to
the mandatory provision of the law, the same is null and void.
26) In the above problem, can A use the surname of M on the basis of the recognition of
paternity made by M in his birth certificate? ANS: No, because the right of an illegitimate
child to use the surname of the illegitimate father is subject to compliance with the
requirements of Article 176, as amended by RA 9255. In this case, there is no express
recognition of paternity made by the father in the child’s birth certificate, nor in any
instrument, whether public or private handwritten instrument. The child may not rely
on the birth certificate registered by the illegitimate father as basis to acquire the right to
use the father’s surname because said birth certificate is null and void.

27) Jose Chiong died leaving several parcels of land in Metro Manila. After his death, his
collateral relatives (surnamed Chiong Fernando) executed a deed of extrajudicial
settlement of his estate. Subsequently, or in 2002, they caused the cancellation of the
titles of the subject properties under the original collective name of "Heirs of Jose
Chiong" and had them transferred to their names. In 2003, several persons (surnamed
Chiong Bernardo) claimed to be the rightful heirs of the late Jose Chiong. They filed an
action for annulment, reconveyance and accounting. In their complaint, they claimed that
their deceased mother (Bernarda Chiong) was born to the Spouses Jose Chiong and
Ambrosia Domingo. As proof, they presented the birth certificate and baptismal
certificate of Bernarda Chiong. Will the action prosper? ANS: No, the action will not
prosper because the same had already prescribed. The action filed by the complainants is
effectively an action to establish the legitimate filiation of Bernarda Chiong to the late
Jose Chiong. Under the law, such kind of action may only prosper if the same is filed
during the lifetime of Bernarda Chiong. While an action to establish legitimate filiation
can be transmitted to the child’s heirs, such transmissibility is only allowed in two
situations: (1) when the child dies during minority; or (2) when the child dies during a
state of insanity. Neither of the two situations apply in this case. Hence, the action to
establish the legitimate filiation of Bernarda Chiong to the late Jose Chiong can no longer
9
 prosper because the same had already prescribed.

28) A is the child of X and Y, who are not married to each other. Since Y is studying in
Manila, A was left in the custody of her father, X. One day, Y instructed her parents to
obtain the custody of A from X. Thus, while A was in school, she was fetched by her
maternal grandfather and was never returned to X, prompting the latter to file a petition
for habeas corpus against Y and the latter’s parents. In his petition, X alleged that Y and
her parents are unfit to exercise parental authority over A. Without affording X the
opportunity to present evidence to prove his allegations, the trial court dismissed the
petition of X. The court ruled that X is not entitled to obtain custody of A because he is
not granted by law parental authority over his illegitimate child. Is the court correct in
dismissing the petition? ANS: No, the court is not correct. While an illegitimate father,
like X, is not granted by law parental authority, it is still possible for X to exercise
parental authority over his illegitimate child in view of the peculiar situation in this case.
Here, X was the actual custodian
of A. Hence, if the allegation of X that Y and her parents are unfit to exercise parental
authority over A, then X will be entitled to exercise substitute parental authority over A
pursuant to Article 216 of the Family Code, in case of default of the child’s mother and
maternal grandparents. As such, the trial court committed an error when it did not afford
X the right to substantiate his allegations.

29) Jiro is a child of a Filipino mother, Helen Valdez, and a Japanese father, Ubi Honda.
When Jiro was ten years old, his parents divorced in Japan. Thereafter, Jiro’s mother
contracted another marriage to another Japanese national, Yori Suzuki. After the
marriage, Suzuki adopted Jiro in Japan based on Japanese law. At the age of 24, Jiro filed
for judicial recognition of the foreign decree of adoption before the RTC of Marikina.
The RTC dismissed the petition because the adoption is not in accordance with Philippine
laws. The trial court ruled that an adoption is only valid if made within the legal
framework on adoption as enunciated in Republic Act No. (RA) 8043 known as the Inter-
Country Adoption Act of 1995, and RA 8552 known as the Domestic Adoption Act of
1998. Is the RTC correct? ANS: No, the RTC is not correct because the availability of
RA 8552 as a means to adopt Jiro should not automatically foreclose proceedings to
recognize his adoption decree obtained under Japanese law. The principle behind the
recognition and enforcement of a foreign judgment derives its force not only from our
Rules of Court but from the fact that such act of recognition is considered part of what is
known as the "generally accepted principles of international law.” Besides, the adoption
by an alien of the legitimate child of his/her Filipino spouse is valid and legal based on
the Family Code and the Domestic Adoption Act.

 NATIONALITY RULE (Article 15, NCC) - Laws relating to family rights and
duties, or to the status, condition and legal capacity of persons are binding upon
citizens of the Philippines, even though living abroad.

 LEX REI SITAE (Article 16 NCC) - Real property as well as personal property is
subject to the law of the country where it is situated. However, intestate and
testamentary successions, both with respect to the order of succession and to the
amount of successional rights and to the intrinsic validity of testamentary
10
 provisions, shall be regulated by the national law of the person whose succession is
under consideration, whatever may be the nature of the property and regardless of
the country wherein said property may be found.

 LEX LOCI CELEBRATIONIS (Article 17 NCC) - The forms and solemnities of

contracts, wills, and other public instruments shall be governed by the laws of the
country in which they are executed.. Prohibitive laws concerning persons, their acts
or property, and those which have for their object public order, public policy and
good customs shall not be rendered ineffective by laws or judgments promulgated,
or by determinations or conventions agreed upon in a foreign country.

 SUMMARY OF RULES (ARTICLES 14,15,16,17 NCC)

(i) With respect to penal laws and laws of public security – Penal laws are
obligatory upon those who live or sojourn in Philippine territory, but, this rule is
subject to the principles of public international law and to treaty stipulations.
(ii) With respect to laws relating to Family Rights and Duties or to the Status,
Condition and Legal Capacity of Persons – As a general rule, nationality rule
applies regardless of their place of residence. However, if a divorce is validly
obtained abroad by alien spouse capacitating him or her to remarry, the Filipino
spouse shall have the capacity to remarry under Philippine law.
(iii) With respect to Laws on Real and Personal Property – The doctrine of Lex Rei
Sitae shall govern which provides that the law of the country where the property
is situated shall govern property transactions.
EXCEPT – Order of succession, Amount of successional rights and Intrinsic
validity of testamentary provisions.
(iv) With respect to Laws on Forms and Solemnities – The doctrine of Lex Loci
Celebrationis shall govern which provides that forms and solemnities of
contracts, wills and other public instruments (pertaining to extrinsic validity) shall
be governed by the laws of the country in which they are executed.

 HUMAN RELATIONS/ ACTION FOR DAMAGES

(i) NORMS OF CONDUCT (Article 19 NCC) - Every person must, in the exercise of
his rights and in the performance of his duties, act with justice, give everyone his
due, and observe honesty and good faith.
(ii) ACTS IN VIOLATION OF LAW (Article 20 NCC) - Every person who, contrary to
law, wilfully or negligently causes damage to another, shall indemnify the latter for
the same.
(iii) CONTRA BONUS MORES (Article 21 NCC) - Any person who wilfully causes
loss or injury to another in manner that is contrary to morals, good customs or public
policy shall compensate the latter for the damage.

 INJURY vs. DAMAGE - INJURY is the illegal invasion of a legal right; DAMAGE
is the loss, hurt, or harm which results from the injury; and, DAMAGES are the
recompense or compensation awarded for the damage suffered. There can be
damage without injury in those instances in which the loss or harm was not the
result of a violation of a legal duty. In such cases, the consequences must be borne
by the injured person alone.

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 DOCTRINE OF DAMNUM ABSQUE INJURIA - It means damage without injury. One
who merely
exercises one’s rights does no actionable injury and cannot be held liable for damages.

 BREACH OF PROMISE TO MARRY - Breach of promise to marry per se is not an

actionable wrong. However, there are instances where SC awarded damages based
on Articles 20 or 21 NCC:
(i) Seduction
(ii) Act constitutes tort in the sense that it is wilful and that it is contrary to
morals, good customs or public policy, or in that there is an abuse of rights.
(iii) Expenses were incurred upon the faith of the promise to marry.

A. PERSONS
 CIVIL PERSONALITY - Civil Personality is the aptitude of being the subject of
rights and obligations. It synonymous with Juridical Capacity which is “the fitness
to be the subject of legal relations.” Capacity to Act, on the other hand, is to “power
to do acts with legal effects”.

 PRESUMPTIVE CIVIL PERSONALITY - Conceived child shall be considered

born for all purposes favorable to it, provided it is born later with the conditions
specified in Article 41, to wit: A fetus with an intra-uterine life of Less than 7
months - Must survive for at least 24 hours after its complete delivery from the
maternal womb; Intrauterine line of at least 7 months - If born alive, it shall be
considered born even if it dies within 24 hours after complete delivery.

 USE OF SURNAMES
 ARTICLE 174. Legitimate children shall have the right:
(1) To bear the surnames of the father and the mother, in conformity with the
provisions of the Civil Code on Surnames.
 In turn, Article 364 of the Civil Code provides: Legitimate and legitimated children
shall
principally use the surname of the father.
 Indeed, the provision states that legitimate children shall "principally" use the
surname of the father, but "principally" does not mean "exclusively."
 Children conceived before the decree annulling a voidable marriage shall
principally use the surname of the father.
 Illegitimate children shall bear the surname of the mother.
 RA 9255 – allows illegitimate child to use the surname of the father provided,
filiation is recognized: (i) record of birth appearing in the civil register, (ii)
admission in public document/ private hand-written instrument

 The rules under RA 9048, as amended, may be summarized as follows:

o 1. A person seeking: a) to change his or her first name; b) to correct
clerical or typographical errors in the civil register; c) to change/correct
the day and/or month of his or her date of birth, and/or d) to
change/correct his or her sex, where it is patently clear that there was a
12
 clerical or typographical error or mistake, must first file a verified
petition with the local civil registry office of the city or municipality
where the record being sought to be corrected or changed is kept, in
accordance with the administrative proceeding provided under R.A.
9048. A person may only avail of the appropriate judicial remedies under
Rule 103 or Rule 108 in the aforementioned entries after the petition in
the administrative proceedings is filed and later denied.
o 2. A person seeking: a) to change his or her surname or b) to change both
his or her first name and surname may file a petition for change of name
under Rule 103, provided that the jurisprudential grounds are present.
-Jurisprudence has recognized, inter alia, the following grounds as being
sufficient to warrant a change of name: (a) when the name is ridiculous,
dishonorable or extremely difficult to write or pronounce; (b) when the
change results as a legal consequence of legitimation or adoption; (c) when
the change will avoid confusion; (d) when one has continuously used and
been known since childhood by a Filipino name and was unaware of alien
parentage; (e) and (f) when the surname causes embarrassment and there is
no showing that the desired change of name was for a fraudulent purpose or
that the change of name would prejudice public interest.
o 3. A person seeking substantial cancellations or corrections of entries in
the civil registry may file a petition for cancellation or correction of
entries under Rule 108.
R.A. 9048 "removed from the ambit of Rule 108 of the Rules of Court
the correction of such errors. Rule 108 now applies only to substantial
changes and corrections in entries in the civil register."

 PRESUMPTION OF DEATH –Articles 390 and 391 of the Civil Code express the
general rule regarding presumptions of death for any civil purpose.
 In our jurisdiction, a petition whose sole objective is to have a person declared
presumptively dead under the Civil Code is not regarded as a valid suit and no
court has any authority to take cognizance of the same, because:
1. Articles 390 and 391 of the Civil Code merely express rules of evidence that
only allow a court or a tribunal to presume that a person is dead upon the
establishment of certain facts.
2. Since Articles 390 and 391 of the Civil Code merely express rules of
evidence, an action brought exclusively to declare a person presumptively dead
under either of the said articles actually presents no actual controversy that a
court could decide. In such action, there would be no actual rights to be
enforced, no wrong to be remedied nor any status to be established.
3. A judicial pronouncement declaring a person presumptively dead would never
really become "final" as the same only confirms the existence of a prima facie or
disputable presumption.
4. Moreover, a court action to declare a person presumptively dead under
Articles 390 and 391 of the Civil Code would be unnecessary. The presumption
in the said articles is already established by law.

 DECLARATION OF PRESUMPTIVE DEATH FOR PURPOSE OF REMARRIAGE

(Article 41 FC)
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  All bigamous marriages are void, except marriage after Judicial Declaration of
presumptive Death;
 Requisites:
(i) Absence of 2 years or 4 years of missing spouse
(ii) Spouse present wishes to remarry
(iii) Spouse present has a well-founded belief that the absent spouse is already dead;
(iv) Spouse present must institute a summary proceeding for the declaration
of presumptive death of the absentee, without prejudice to the effect of
reappearance of the absent spouse.

 The law did not define what is meant by “well-founded belief.” To be able to comply
with this requirement, the present spouse must prove that his/her belief was the result of
diligent and reasonable efforts and inquiries to locate the absent spouse and that based on
these efforts and inquiries, he/she believes that under the circumstances, the absent
spouse is already dead.
B. MARRIAGE
 ESSENTIAL
REQUISITES
(i) Legal capacity of the contracting parties -
(ii) Consent freely given by the contracting parties before the solemnizing officer
 FORMAL REQUISITES
(i) Authority of the solemnizing officer
(ii) A valid marriage license; and
(iii) Marriage ceremony

 EXCEPTION FROM MARRIAGE LICENSE REQUIREMENT

 Marriage license is valid for 120days; marriage with expired license or without
license is void.
 Unless exempt:
(i) Marriage in articulo mortis;
(ii) parties are residents of remote place where there is no means of
transportation going to the office of the civil registrar;
(iii) marriage between muslims and members of ethnic cultural communities,
provided that it is celebrated in accordance with customs, rites, traditions
and practices;
(iv) parties have been cohabiting for at least 5 years characterized by
continuity and exclusivity.
 MARRIAGES SOLEMNIZED ABROAD
- If marriage is valid abroad, it is also valid in the Philippines. [Art 26 (1)] Except:
(i) Art 35 (1) - lack of legal capacity
(ii) Art 35 (4) - bigamous or polygamous marriage
(iii) Art 35 (5) - mistake as to identity
(iv) Art 35 (6) – non-compliance with registration requirements before
remarriage
(v) Art 36 – psychological incapacity
(vi) Art 37 – incestuous marriage
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 (vii) Art 38 – void due to public policy

In mixed marriages involving a Filipino and a foreigner, the former is allowed to contract a
subsequent marriage in case the absolute divorce is validly obtained abroad by the alien
spouse capacitating him or her to remarry.
- In the case of Manalo the Court extended the scope [of] Article 26 (2) and
removed the distinction between a Filipino who initiated a foreign divorce
proceeding and a Filipino who is at the receiving end of an alien initiated
proceeding.

 ARTICLE 36: PSYCHOLOGICAL INCAPACITY

- Marriage contracted by any party who, at the time of celebration, was
psychologically incapacitated to comply with the essential marital obligations of
marriage.
- Psychological incapacity is not medical but a legal concept; It 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, more important, to comply with his or her essential marital
obligations.
- Psychological incapacity is INCURABLE, not in the medical, but in the legal sense;
- Juridical antecedence - Must be existing at the time of celebration although
overt manifestations may emerge only after the marriage;
- Gravity -
- TOTALITY OF EVIDENCE – testimony of psychologist or psychiatrist is not
mandatory. Totality of evidence must show CLEAR and CONVINCING
EVIDENCE to cause the declaration of nullity of marriage. This is a quantum of
proof that requires more than preponderant evidence but less than proof beyond
reasonable doubt.

 VOIDABLE MARRIAGES - Article 45 FC - A marriage may be annulled for any

of the following causes, existing at the time of the marriage:
(i) 18 years old but below 21 without parental consent
(ii) Insanity
(iii) Vitiated consent due to Fraud

 FOUR CIRCUMSTANCES OF FRAUD (Article 46 FC)

(i) Concealment by the wife of the fact that at the time of the marriage, she was
pregnant by a man other than her husband
(ii) Concealment of sexually transmissible disease, regardless of its nature,
existing at the time of the marriage; or

C. LEGAL SEPARATION
 LEGAL SEPARATION - available to parties in a valid but failed marriage for the
purpose of obtaining a decree from the court entitling him or her certain reliefs such

15
 as the right to live separately from each other (without affecting the marital bond
that exists between them), the dissolution and liquidation of their absolute
community or conjugal partnership property regime and the custody of their minor
children.

D. PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE

 MARRIAGE SETTLEMENT - It is a contract entered into by a man and a woman
who intend or plan to get married fixing the property regime that will govern their
present and future properties during their marriage.
 ABSOLUTE COMMUNITY OF PROPERTY - A property regime wherein the
spouses are considered co-owners of all property brought into the marriage as well
as those acquired during the marriage, which are not otherwise excluded from the
community either by the provisions of the Family Code or by the marriage
settlement..
 CONJUGAL PARTNERSHIP OF GAINS - It is the property relation by the
husband and the wife by placing in a common fund: Proceeds, product, fruits and
income of their separate properties; and, Those acquired by either or both of them
through efforts or by Chance (Art 106 FC)
 SEPARATION OF PROPERTY AND ADMINISTRATION OF COMMON
PROPERTY BY ONE SPOUSE DURING THE MARRIAGE - In the absence of an
express declaration in the marriage settlements, the separation of property between
spouses during the marriage shall not take place except by judicial order. Such
judicial separations of property may either be VOLUNTARY or SUFFICIENT
CAUSE. (Art 134 FC)
 REGIME OF SEPARATION OF PROPERTY - The system of CSOP will
govern the property relations between the spouses only in the following cases:
(i) When it is expressly provided for in the marriage settlement (Art 143, FC);
(ii) When it is so decreed by the court (Legal Separation, Judicial Sep of Property);

 Mandatory regime of complete separation of property -- By failure of the surviving

spouse to liquidate the absolute community or conjugal partnership of gains of a
previous marriage which has been terminated by death within the one-year period
required by law prior to contracting another marriage. The subsequent marriage is
mandatorily governed by a regime of complete separation. (Art 103 FC)

 PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE - Property regime of

Unions without marriage is Co-ownership either under Article 147 or Article 148
FC
- Article 147 FC - The man and the woman must be capacitated to marry each
other Live exclusively with each other as husband and wife; and Their union is
without the benefit/ void marriage (Parties capacitated to marry and without
legal impediments to marry; Void marriage on the ground of absence of formal
requisites, or psychological incapacity)
- Article 148 FC - The man and the woman must be incapacitated to marry each
other; or they do not live exclusively with each other as husband and wife; and
their union is without the benefit of marriage/ void marriage. (Parties with legal
impediments caused by: Adulterous relationships; Bigamous/ polygamous

16
 marriages; Incestuous void marriages under Art. 37; Void marriages by reason of
public policy; Absence of legal capacity)

E. FAMILY HOME – It is the dwelling house where the husband and wife and their
family reside, and the land on which it is situated. It is constituted jointly by the
husband and the wife or by an unmarried head of a family; exempt from execution,
forced sale or attachment.

F. PATERNITY AND FILIATION

 LEGITIMATE CHILDREN - Those who are conceived OR born during the
marriage of the parents (Art 164 FC) Exception: Born outside of a valid marriage
(void marriages) but considered as legitimate child: (i) Children of marriages
which are declared void under Art. 36; and (ii) Children of marriages which are
declared void under Art. 53.

 PROOFS OF FILIATION – Primary and Secondary Proofs

- Primary proofs
(i) The record of birth appearing in the civil register or a final judgment; or
(ii) An admission of legitimate filiation in a public document or a private
handwritten instrument and signed by the parent concerned.
- Secondary proofs - In the absence of the foregoing evidence, the legitimate
filiation shall be proved by:
(i) The open and continuous possession of the status of a legitimate child; or

 PRESCRIPTIVE PERIOD IN CLAIMING FILIATION

- Legitimate Filiation - may be brought by the child during his or her lifetime and
shall be transmitted to the heirs should the child die during minority or in a state
of insanity. In these cases, the heirs shall have a period of five years within
which to institute the action.
- Illegitimate Filiation - illegitimate children may establish their illegitimate
filiation in the same way and on the same evidence as legitimate children.
However, if claim is based on second paragraph of Article 172 (Secondary
Proofs), in which case the action may be brought during the lifetime of the
alleged parent.

 LEGITIMATED CHILDREN – conceived and born outside of wedlock of parents

without impediment to marry at the time of conception or were so disqualified only
because either or both of them were below 18 years of age (FC, Art. 177, RA 9858)

 DOMESTIC ADOPTION - Refers to an administrative adoption proceeding

where the Order of Adoption is issued within the Philippines and is undertaken
between a Filipino child and eligible adoptive parents.

 Spouses shall jointly adopt, EXCEPT:

(i) If one spouse seeks to adopt the legitimate child of the other; or
(ii) If one spouse seeks to adopt own illegitimate child; Provided, That
the other spouse has signified consent thereto; or

17
 (iii) If the spouses are legally separated from each other.

G. SUPPORT - It comprises everything indispensable for sustenance, dwelling,

clothing, medical attendance, education and transportation, in keeping with the
financial capacity of the family including the education of the person entitled to be
supported until he completes his education or training for some profession, trade or
vocation, even beyond the age of majority. Transportation – includes expenses
going to and from school, or to from place of work.

 The amount of support shall be in proportion to the: Resources or means of the

giver/obligor, and Necessities of the recipient/obligee. Amount may change
over time, hence, provisional as it may be increased or decreased in proportion
to the aforementioned factors.

H. PARENTAL AUTHORITY - It is the natural right and duty of parents over the
person and property of their unemancipated children, parental authority and
responsibility shall include the caring for and rearing them for civic consciousness
and efficiency and the development of their moral, mental and physical character
and well-being.
In case of separation - “Tender age presumption” - If child under 7 years old, the
mother shall exercise parental authority unless there is compelling reason to separate
child from the mother. Maternal preference rule.
SUBSTITUTE PARENTAL AUTHORITY - In default of parents or a judicially
appointed guardian, the following person shall exercise substitute parental authority over
the child in the order indicated: (1) The surviving grandparent; (2) The oldest brother or
sister, over twenty-one years of age, unless unfit or disqualified; and (3) The child's actual
custodian, over twenty-one years of age, unless unfit or disqualified.
 SPECIAL PARENTAL AUTHORITY - The school, its administrators and
teachers, or the individual, entity or institution engaged in child care shall have
special parental authority and responsibility over the minor child while under
their supervision, instruction or custody.

 VICARIOUS LIABILITY OR DOCTRINE OF IMPUTED NEGLIGENCE -

Parents and other persons exercising parental authority shall be civilly liable for
the injuries and damages caused by acts or omissions of their unemancipated
children living in their company and under their parental authority subject to
appropriate defenses provided by law. Liability is due to failure to supervise in
order to prevent them from causing damage or injury.
o Defense: show exercised the due diligence of a good father of a family.

I. SUCCESSION

A. GENERAL PROVISIONS
- Succession is a mode of acquisition by virtue of which property, rights and
obligations to the extent of the value of the inheritance of a person are transmitted
through his death to another or others either by his will or by operation of law.
- The possession of hereditary property is deemed to be transmitted to the heir
without interruption from the instant of the death of the decedent, in case the
18
inheritance be accepted.

B. TESTAMENTARY SUCCESSION
 WILLS - A will is an act whereby a person is permitted, with the formalities
prescribed by law, to control to a certain degree the disposition of his estate, to take
effect after his death. Strictly personal; Unilateral and individual act; Formal and
solemn; Mortis causa; Ambulatory and revocable.

 TESTAMENTARY CAPACITY - Refers to the ability as well as the power to make

a will. All persons not expressly prohibited by law, 18 years old and above and of
Sound mind.
(iv) Sound Mind - To be of sound mind, it is not necessary that the testator
be in full possession of all his reasoning faculties, or that his mind be
wholly unbroken, unimpaired, or unshattered by disease, injury or
other cause. (Article 799 NCC)

 KINDS OF WILLS: Notarial will (Articles 804-806, & 807-808 in special cases)
and Holographic (Articles 804 & 810). Common requirements that apply to the 2
kinds of wills - In writing, and In a language or dialect known to the testator

 REQUISITES OF VALID HOLOGRAPHIC WILL: (i) In writing; (ii) Executed in

a language or dialect known to the testator; (iii) Entirely written, dated & signed by
the hand of the testator himself.

 REQUISITES FOR VALID NOTARIAL WILL:

(i) In writing
(ii) Executed in a language or dialect known to the testator
(iii) Subscribed by the testator himself or by the testator’s name written
by some other person in his presence & under his express direction at
the end thereof, at the presence of witnesses
(iv) Attested & subscribed by at least 3 credible witnesses in the presence
of the testator and of one another
(v) Each & every page must be signed by the testator or by the person
requested by him to write is name, & by instrumental witnesses in
the presence of each other, on the left margin (location of marginal
signature on the left margin is directory, but marginal signature is
mandatory)
(vi) Each & every page of the will must be numbered correlatively in
letters placed on the upper part of each page (page number on each
and every page is mandatory, its location on upper part is directory)
(vii) Must contain an attestation clause
(viii) Must be acknowledged before a notary public

 TREYES V. LARLAR - The rule is: unless there is a pending special

proceeding for the settlement of the decedent's estate or for the determination
of heirship, the compulsory or intestate heirs may commence an ordinary civil
action to declare the nullity of a deed or instrument, and for recovery of property, or

19
 any other action in the enforcement of their ownership rights acquired by virtue of
succession, without the necessity of a prior and separate judicial declaration of their
status as such. The ruling of the trial court shall only be in relation to the cause of
action of the ordinary civil action, i.e., the nullification of a deed or instrument, and
recovery or reconveyance of property, which ruling is binding only between and
among the parties.

 LEGITIME - is that part of the testator’s property which he cannot dispose of because the
law has reserved it for certain heirs who are called compulsory heirs (Article 886 NCC )

 COMPULSORY HEIRS – are those for whom the law has reserved a portion of the
testator’s estate which is known as the legitime.
(i) Legitimate children and descendants
(ii) Surviving spouse
(iii) Illegitimate children & descendants,
(iv) Legitimate parents & other legitimate ascendants
(v) Illegitimate parents

 RULES ON LEGITIME
o Legitimate child/children always get ½ of estate
o Legitimate parents always get ½ (if not excluded by legit child)
o No representation in the ascending line
o Legitime of spouse is same as 1 legit child, except when there is only
one child, give ¼ taken from free portion
o Get legitime of illegitimate children from free portion after surviving
spouse is paid
o Never reduce the legitime of legitimate children and surviving spouse
because they are the preferred compulsory heirs.
o Legitime of illegitimate children will be reduced pro-rata and without
preference among them if the estate is insufficient

 PRETERITION - “The preterition or omission of one, some or all of the compulsory

heirs in the direct line, whether living at the time of the execution of the will or born
after the death of the testator, shall annul the institution of heir; but the devises and
legacies shall be valid in so far as they are not inofficious. If the omitted compulsory
heirs should die before the testator, the institution shall be effectual, without
prejudice to the right of representation.”

 REQUISITES of Preterition – (a) There is a valid will; (b) The heir omitted must be
a compulsory heir in the direct line; (c) The omission must be total and complete in
character; (d) Heir must have received nothing from the testator either by way of (i)
testamentary succession; (ii) legacy or devise; (iii) donation inter vivos; or (iv)
intestacy; (e) The compulsory heir omitted should survive the testator, save in case
of representation.

 Preterition is the TACIT deprivation of the legitime as distinguished from

disinheritance which is an EXPRESS deprivation of the legitime.
20
  DISINHERITANCE - A compulsory heir may, in consequence of disinheritance, be
deprived of his legitime, for causes expressly stated by law.

 REQUISITES of Disinheritance - (a) Disinherited heir must be clearly identified;

(b) Must be for a cause provided for by law (Art. 915); (c) Must be express, stating
the cause in the will (Art. 916); (d) Cause must be legal, true, and existing (Art.
916); (e) Must be unconditional;
(f) Can't be partial; must be total or complete. If partial, disinheritance is not valid,
and the heir gets his or her legitime.
C. LEGAL AND INTESTATE SUCCESSION
 LEGAL SUCCESSION - That kind of succession prescribed by law (and presumed
by it to be the desire of the deceased) which takes place when the expressed will of
the decedent has not been set down in a will.

 INSTESTATE HEIRS
(i) Legitimate children or descendants
(ii) Illegitimate children or descendants
(iii) Legitimate parents or ascendants
(iv) Illegitimate parents
(v) Surviving spouse
(vi) Brothers and sisters, nephews and nieces
(vii) Other collateral relatives up to the 5th degree
(viii) The State.

 IMPORTANT RULES IN LEGAL SUCCESSION/ INTESTACY

- EXCLUSION AND CONCURRENCE - Intestacy operates on the same
principles as succession to the legitime. There are two principles,
operating sometimes simultaneously, sometimes singly: exclusion and
concurrence.
- THE RULE OF PROXIMITY OF DEGREE - Relatives nearer or nearest in
degree exclude the more distant ones, saving the right of representation when
proper.
- THE RULE OF PREFERENCE OF LINES – The three lines of relationship are:
the descending; the ascending; and the collateral. The law lays down an order of
preference among these lines, such that the descending excludes the ascending
and the collateral, and the ascending excludes and collateral.
- THE RULE OF EQUALITY AMONG RELATIVES OF THE SAME DEGREE –
Relatives in the same degree inherit in equal shares.

1. Equitable Mortgage

The law provides that a sale with right of repurchase is an equitable mortgage when the
seller intended to only deliver the property as security for the payment of a loan and not to
transfer ownership thereof. As mortgagor, the seller can redeem the property with ten years.
The law also provides that the remedy of the buyer, who is actually the creditor, is to foreclose
the property, sell it on public auction and to apply the proceeds to the indebtedness.
21
 In this case, Alfredo did not intend to sell his house to Benjamin. It was intended to serve
only as collateral for the loan of P1 Million. The two-year period stipulated in their contract does
not bind. Alfredo may redeem the property within ten years from the accrual of the cause of
action. Finally, it is wrong for Benjamin to consolidate ownership. He should foreclose it, sell it
on public auction and apply the proceeds to Alfredo’s indebtedness.

2. Real Estate Mortgage

According to law and jurisprudence, a stipulation forbidding the owner from alienating
the mortgaged property shall be void. A mortgage is just an encumbrance on realty. It does not
extinguish the title of the debtor who does not lose his principal attribute as owner and that is the
right to dispose of his property.

In this case, the stipulation that required Benjamin’s prior written consent if Alfredo
wanted to sell the mortgaged property amounts to a prohibition because it gives Benjamin the
right or prerogative to forbid the sale. This is a violation of the law.

3. Interests

According to jurisprudence, the imposition of an interest rate of 5% per month or 60%

per annum is unconscionable, immoral and unjust even if knowingly and voluntarily assumed.

In this case, Alfredo’s willingness to agree and enter into the loan is inconsequential
because by its very imposition, the interest rate is void. Thus, Alfredo is not bound to pay the
stipulated interest but should be liable only for legal interest which is 6% per annum.

4. Guaranty

According to jurisprudence, a guarantor who engages to directly shoulder the debt of the
debtor, waiving the benefit of excussion and the requirement of prior presentment, demand,
protest or notice of any kind, undoubtedly makes himself/herself solidarily liable to the creditor.

In this case, although Benjamin was a “guarantor” under the Guaranty Agreement, he
nevertheless agreed that the bank may have a direct recourse to Benjamin in case Alfredo failed
to pay. Here, Alfredo failed to pay upon the loan’s maturity.

I. PROPERTY

5. Co-Ownership

According to law and jurisprudence, a sale made by a co-owner of a specific portion of

the property owned in common is not void. It is merely ineffective; it may be ratified by the
other co- owners. If not ratified, the co-owner selling a specific portion without the consent of
the other co- owner could only sell his undivided share in the property.

In this case, Alfredo sold the northern half of the co-owned property without the consent
22
of Benjamin. It was ineffective against Benjamin. Since Benjamin did not ratify the sale,
Eduardo cannot take possession of the northern half of the property. Nevertheless, Eduardo
became a co-owner of the property with Benjamin.

Thus, the sale was merely ineffective, not void. (Bulatao vs. Estonactoc, G.R. No.
235020, December 10, 2019)

6. Donations

No, the donation cannot be revoked.

According to law and jurisprudence, conditional donations are governed by the law on
obligations and contracts. Necessarily, revocation of conditional donations must comply with
requisites of rescission. Rescission is proper only when there is a substantial breach of the
obligation.

In this case, the main condition of the donation was to construct a school for the blind
and deaf. Benjamin was able to perform this condition. The leasing of a space in the building’s
ground floor was insignificant, if not unrelated, to the main condition attached to the donation.
7. Easement of Right of Way

Question:

Alfredo Properties, Inc. was constructing a condominium project along EDSA in

Mandaluyong City. For it to be able to bring in construction materials, it needed to use a portion
of the vacant land owned by Benjamin which was behind the construction site. It was the only
viable option because EDSA could not be used as access as that would disrupt the busy traffic
along the said national road. When Benjamin refused, Alfredo Properties filed an action for
temporary easement of right of way, asserting its urgency. The trial court agreed with the
purpose and ordered Benjamin to allow Alfredo Properties to temporarily use his property.
Benjamin moved for reconsideration on the ground that he had not been paid. The trial court
denied the motion, ruling that it was a justified temporary taking of property.

Is the trial court correct?

Answer:

No, the trial court is not correct.

The Civil Code provides that temporary easement of right of way requires prior payment
of indemnity for the damages caused to the servient estate.

In this case, the right of way which Alfredo Properties is demanding, albeit temporary,
will cause prejudice and damage to Benjamin. Payment of indemnity is required before a
temporary easement can be granted.

Hence, the trial court should first determine the indemnity, and order Alfredo Properties
to pay the same to Benjamin, before Alfredo Properties can be granted a temporary easement of
23
right of way. (AMA Land vs. Wack Wack Residents Assoc., G.R. No. 202342, July 19, 2017)

8. Builder, Planter, Sower

In the 1990’s Alfredo asked his uncle Benjamin if he (Alfredo) could cultivate his uncle’s
farm for five years, to which Benjamin agreed. The original five year period was extend to two
years then five years, until the year 2020, when, after Benjamin died, his heirs demanded that
Alfredo vacate the property. Alfredo claimed that he is a builder, planter, sower in good faith and
should be indemnified for the improvements he introduced in the property.

Is he correct? Why?

Answer: No, Alfredo is not correct.

The Civil Code provision on builder, planter and sower in good faith does not apply to a
possessor who is merely tolerated. However, when the landowner is aware of the construction or
building and did not object, the landowner is also deemed in bad faith. They shall both be treated
as in good faith. The possessor is entitled to indemnity before he can be compelled to vacate the
premises.

In this case, Alfredo was aware that the property belonged to Benjamin. Benjamin
tolerated Alfredo’s possession. Both being in bad faith, they shall be treated in good faith and the
Civil Code provision on Builder, Planter and Sower in good faith shall apply.

Thus, if Benjamin wants to evict Alfredo and he (Benjamin) wants to appropriate

Alfredo’s improvements, Benjamin must first indemnify Alfredo the value of these
improvements. (Belvis vs. Erola, G.R. 239727, July 24, 2019)

9. Actions to Recover Property

Alfredo applied for and was issued a free patent over an agricultural land in Maragondon,
Cavite. Forthwith, he was issued OCT No. 1234. However, the property was squatted by
Benjamin, Alfredo’s cousin on the father side. When Benjamin refused to vacate the property,
Alfredo filed an accion publiciana. In his Answer, Benjamin claimed that Alfredo’s free patent
was fraudulently applied because he (Alfredo) was never in possession of the property. The trial
court dismissed the accion publiciana on the ground that the issue involves ownership and
outside the jurisdiction of the court.

Is Alfredo precluded from recovering possession of the property under an accion

publiciana on the ground that Benjamin assails Alfredo’s title? Why?

Answer:

No, Alfredo is not precluded from recovering possession of the property by the mere
challenge against his title.

Under the law and jurisprudence, a registered owner has the right to possess the property
registered in his name. Accion publiciana is a remedy to recover possession of the property
24
independent of title. Jurisprudence further holds that the court may provisionally pass upon the
issue of ownership which is not deemed a collateral attack against the certificate of title.

In this case, Alfredo is the registered owner of the property occupied by Benjamin. As
owner he has a cause of action to file an accion publiciana. Benjamin’s challenge against
Alfredo’s title may be passed upon provisionally for the purpose of determining who between
them has a better right to the property.

Thus, the trial court erred when it outrightly dismissed Alfredo’s action without passing
upon
his right to the possession of the property. (Cullado vs. Gutierrez, G.R. No. 212938, July 30,
2019)

EQUALLY POSSIBLE:

 Kinds of property (immovable and movable; when movable becomes an immovable)

 Limitations to ownership; nuisance; expropriation
 Easement of light and view; how acquired; distance
Land Registration

10. Reversion

In 1976, Alfredo applied for a free patent and was issued a title over a parcel of land. In
1990, he sold it to Benjamin. In 1994, a neighbor named Eduardo sent a letter to the Office of the
Solicitor General to report that the land was fraudulently titled to Alfredo. According to Eduardo,
Alfredo did not meet the requirements for a free patent. The OSG investigated and confirmed
that Alfredo was not in possession of the property at the time of the application for free patent
and that the actual possessor back then was a person named Marvic. In 2020, the OSG filed an
action for reversion to recover the land and return it to the public domain. Benjamin, the present
owner, filed a motion to dismiss, claiming that the action was filed more than 24 years after the
OSG had the cause of action. Accordingly, the action for reversion has prescribed and/or is
barred by laches.

Should the motion to dismiss be granted? Why?

Answer:

No, the motion to dismiss should not be granted.

According to jurisprudence, an action for reversion may be barred by equitable laches

AND convincing evidence that the present owner is an Innocent Purchaser for Value.

In this case, laches is not enough. Benjamin should also prove that he is an innocent
purchaser for value.

Thus, failing to prove that he is an innocent purchaser for value, the motion to dismiss
should be denied. (Republic vs. Sundiam, G.R. No. 236381, August 27, 2020)

25
EQUALLY POSSIBLE:

 Regalian doctrine; prerogative of the State to classify lands

 When a private corporation may apply for original registrant of title to land (Director of
Lands vs. IAC [1986])
 Removable of the prohibition against sale, encumbrance or mortgage of a property
acquired by free patent within five years from the date of the issuance of the free patent.
(Republic Act No. 11231)
 Grounds for a Petition for Surrender of Owner’s Duplicate of the Certificate of Title (Sec.
107 of PD 1529)
 Broad jurisdiction of the RTC as land registration court to hear and determine all
questions arising upon the petition related to land registration.

II. OBLIGATIONS AND CONTRACTS

A. OBLIGATIONS
 ESSENTIAL ELEMENTS OF OBLIGATIONS
(i) Juridical tie or vinculum juris – the efficient cause established by the various
sources of obligations (law, contracts, quasi-contracts, delicts and quasi-delicts);
(ii) Object – the prestation or the particular conduct required to be observed by the
debtor (to give, to do or not to do);
(iii) Active subject (oblige or creditor) – the person who can demand the
fulfillment of the obligation;
(iv) Passive subject (obligor or debtor) – the person from whom the obligation is
juridically demandable.

 SOURCES OF OBLIGATION (EXCLUSIVE) – Law; Contract; Quasi-contract; Delict;

Quasi-delict.

 BREACH OF OBLIGATION - Those who in the performance of their obligations

are guilty of FRAUD, NEGLIGENCE, or DELAY, and those who in any manner
CONTRAVENE THE TENOR thereof, are LIABLE FOR DAMAGES without
need for a contractual stipulation or prior agreement.

 FORTUITOUS EVENTS - No person shall be responsible for those events which,

could not be foreseen (accident) or which though foreseen were inevitable (force
majeure). Except in cases: (i) Expressly specified by law (i.e. delay); (ii) When it is
otherwise declared by stipulation, or (iii) When the nature of the obligation requires
the assumption of risk (Article 1174 NCC)
D. Requisites: The event must be independent of the will of the debtor; The event must
be either unforeseeable or inevitable; The event must have prevented the debtor
from complying with his obligation in a normal manner; The debtor must be free
from any participation in the aggravation of the injury resulting to the creditor.

 JOINT AND SOLIDARY OBLIGATION

E. Joint Obligations - Each of the debtors liable only for their proportionate share of
the debt; Each of the creditors entitled only for their proportionate part of the credit

26
 from each debtor; The whole obligation is to be paid or fulfilled proportionately by
different debtors or demanded proportionately by different creditors.
F. Solidary Obligation - Each one of the debtors is bound to render and/or each one of
the creditors has a right to demand entire compliance with the prestation.

 PRESUMED JOINT - Obligation is presumed joint if there is concurrence of

several creditors OR of several debtors OR of several creditors and debtors in one
and the same obligation. Exceptions:
(i) The obligation expressly states that there is solidarity: Jointly and severally;
Individually and collectively; “I promise to pay” followed by the signatures of
two or more persons.
(ii) The law requires solidarity - tort, quasi-contracts, liability of principals,
accomplices and accessories of a felony, obligations of devisees and legatees,
bailees in commodatum
(iii) Nature of the obligation requires solidarity.
(iv) When a charge or condition is imposed upon heirs of legatees, and the
testament expressly makes the charge or condition in solidum.
(v) When a solidary responsibility is imputed by a final judgment upon several defendants.

 MODES OF EXTINGUISHMENT OF OBLIGATIONS:

(i) Payment/performance
(ii) Loss of the thing due
(iii) Condonation or remission of debt
(iv) Confusion or merger
(v) Compensation
(vi) Novation
(vii) Annulment, Rescission, Fulfillment of a resolutory condition, Prescription.

 LOSS OF THE THING DUE - An obligation which consists in the delivery of a

determinate thing shall be extinguished if it should be lost or destroyed without the
fault of the debtor, and before he has incurred in delay. (Article 1262 NCC)
Exceptions:
(i) When the law so provides
(ii) When the stipulation so provides
(iii) When the nature of the obligation requires an assumption of risk
(iv) Loss of the thing is partly due to the fault of the debtor
(v) Loss of the thing occurs after the debtor incurred in delay
(vi) When the debtor promised to deliver the same thing to two persons who do not
have the same interest;
(vii) When the obligation to deliver arises from a criminal offense; and
(viii) When the obligation is generic
G. A thing is lost “when it perishes, or goes out of commerce, or disappears in such a
way that its existence is unknown or (even if known) it cannot be recovered”. (Art
1189 NCC) In obligations to do, the equivalent term of loss is “impossibility”.

 COMPENSATION - Compensation shall take place when two persons, in their own
right, are creditors and debtors of each other (Article 1278 NCC); Mode of
27
 extinguishing in the concurrent amount of the obligation of those persons who are
reciprocally debtors and creditors of each other. Compensation may be total if two
debts are of the same amount, or partial if two debts vary in amounts –
compensation shall only be to the extent of the concurrent amount.

 REQUISITES OF LEGAL COMPENSATION

(i) The parties must be creditors and debtors of each other in their own right.
(ii) The parties must be bound principally.
(iii) Both debts consist of a sum of money, or if the things due are consumable,
they be of the same kind, and also the same quality if the latter has been
stated.
(iv) Both debts must be due, liquidated and demandable.
(v) Over neither of them there be retention or controversy, commenced by third
persons and communicated in due time to the debtor.

 NOVATION - is a change in any of the elements of an obligation. It is

EXTINCTIVE when the old obligation is extinguished by the creation of a new
one that takes place of the former,or MODIFICATORY, when the old obligation
subsists, as amended, to the extent it remains compatible with the novatory agreement.

B. CONTRACTS
 CONTRACT - is a meeting of minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some service.
- Perfection - The contract is perfected (birth of contract) in consensual
contracts at the moment there is meeting of minds upon the object and the
cause thereof. In real contracts, it is perfected upon delivery of thing which is
the object thereof.

 ESSENTIAL ELEMENTS OF CONTRACTS – those without which there can be

no contract (Art. 1318) - (i) Consent; (ii) Object or subject matter; (iii) Cause or
consideration

 FORMS OF CONTRACTS - Contracts shall be obligatory, in whatever form they

may have been entered into, provided all the essential requisites for their validity are
present (Article 1356 NCC). Exceptions:
(i) When the law requires that the contract be in a certain form to be valid (Art. 1356)
(ii) When law requires that the contract be in a certain form to be enforceable
(Statute of Frauds)
(iii) When required to make the contract effective as against third parties (Art.
1357- 1358)

C. NATURAL OBLIGATIONS - Natural obligations are those based on equity and

natural law, which are not enforceable by means of a court action, but which, after
voluntary fulfillment by the obligor, authorize the retention by the obligee of what
has been delivered or rendered by reason thereof.
- These refer to obligations without a sanction, susceptible of voluntary
performance, but not through compulsion by legal means.

28
 - Civil vs Natural - Civil obligations are based on positive law, Natural
obligations are based on equity and natural law; Civil obligations are
enforceable by court action, Natural obligations are not enforceable by court
action.

D. ESTOPPEL - Estoppel is a condition or a state by virtue of which an admission or

representation is rendered conclusive upon the person making it, and cannot be
denied or disproved as against the person relying thereon.
- Estoppel is a bar which precludes a person from denying or asserting anything to
the contrary of that which has, in contemplation of law, been established as the
truth, either by the acts of judicial or legislative officers or by his own deed or
representation, either expressed or implied.
- It concludes the truth in order to prevent fraud and falsehood, and imposes
silence on a party only when in conscience and honesty he should not be
allowed to speak.
- The State is not estopped by mistake or error on the part of its officials or
agents; the erroneous application and enforcement of the law by public officers
does not prevent a subsequent correct application of the statute.

E. TRUSTS - It is the legal relationship between one person having an equitable

ownership in a certain property and another person owning the legal title to such
property.
- Express trust - one in which can come into existence only by the execution of an
intention to create it by the trustor or the parties; or
- Implied trust - one which comes into being by operation of law; this latter
trust being either:
o Resulting trust - It is a trust raised by implication of law and presumed
always to have been contemplated by the parties, the intention as to
which is to be found in the nature of their transactions, but not expressed
in the deeds or instrument of conveyance. (INTENTION-ENFORCING
TRUST)
o Constructive trust - It is a trust not created by any words either expressly
or impliedly evincing a direct intention to create a trust but by the
construction of equity in order to satisfy the demands of justice. It does
not arise by agreement or intention but by operation of law. (FRAUD-
RECTIFYING TRUST); It is substantially an equitable remedy against
unjust enrichment.

F. QUASI-CONTRACTS - Certain lawful, voluntary and unilateral acts give rise to

the juridical relation of quasi-contract to the end that no one shall be unjustly
enriched or benefited at the expense of another.
- Kinds of Quasi-Contracts
(i) Negotiorum Gestio – voluntary management of the property or
affairs of another without the knowledge or consent of the latter.
(Art. 2144-2153)
o Whoever voluntarily takes charge of the agency or management of the
business or property of another, without any power from the latter, is
obliged to continue the same until the termination of the affair and its
29
 incidents , or to require the person concerned to substitute him, if the
owner is in the position to do so.
(ii) Solutio Indebiti – juridical relation which is created when something is
received when there is no right to demand it and it was unduly delivered
by mistake. (Art. 2154-2163)
o If something is received when there is no right to demand it, and it was
unduly delivered through mistake, the obligation to return it arises;
Mistake in payment (Arts. 2154 – 2163)
o The responsibility of two or more payees, when there has been
mistake of payment, is solidary (Art 2157)
(iii) Other cases (Art. 2164-2175)

III.SALES
 SALE - By the contract of sale one of the contracting parties obligates himself
to transfer the ownership and to deliver a determinate thing, and the other to pay
therefor a price certain in money or its equivalent. A contract of sale may be
absolute or conditional.
 Consensual – perfected by mere consent; Perfection – meeting of the minds
upon the object and price.
 CONTRACT TO SELL V. CONTRACT OF SALE
- CONTRACT TO SELL - The ownership is reserved to the seller and is not to pass until
full payment of the price.
- The title remains in the vendor if the vendee does not comply with the condition
precedent of making payment at the time specified in the contract.
- In case of non-payment of price, there can be no action for specific performance but
only for damages.
- Failure to fully pay the price is not a breach but an event that prevents the obligation of
the vendor to convey title from becoming effective.

- CONTRACT OF SALE - The title passes to the buyer upon the delivery of the thing
sold.
- The vendor has lost and cannot recover the ownership of the thing sold until and
unless the contract of sale itself is resolved and set aside.
In case of non-payment of price, an action for specific performance or for rescission can be filed by
injured party.

 STATUTE OF FRAUDS - While contract of sale is consensual, the Statute of

Frauds requires certain sales transaction to be in writing or evidenced by some note
or memorandum, and subscribed by the party charged, or by his agent to be
enforceable:
o An agreement that by its terms is not to be performed within a year from the
making thereof;
o An agreement for the sale of goods, chattels or things in action, at a price not
less than five hundred pesos, unless the buyer accept and receive part of such
goods and chattels, or the evidences, or some of them, of such things in
action or pay at the time some part of the purchase money; but when a sale is
made by auction and entry is made by the auctioneer in his sales book, at the
30
 time of the sale, of the amount and kind of property sold, terms of sale, price,
names of the purchasers and person on whose account the sale is made, it is
a sufficient memorandum; and,
o An agreement for the sale of real property or of an interest therein.
- EXCEPTIONS:
o There has been partial performance/execution
o There has been failure to object to presentation of evidence aliunde as to
the existence of a contract without being in writing and which is covered by
the Statute of Fraud
o When sales are effected through electronic commerce.
 PUBLIC INSTRUMENT is not necessary for validity of sale of parcel of land - The
provision of Article 1358 of the Civil Code on the necessity of a public document is
only for convenience, not for validity or enforceability. It is not a requirement for
the validity of the contract of sale of a parcel of land that this be embodied in a
public instrument. Thus, the non-appearance of the parties before the notary public
who notarized the deed noes not necessarily nullify nor render the parties’
transaction void ab initio. (Penalosa vs. Santos, 363 SCRA 545). Note however of
Statute of Frauds that requires the sale of land or any interest therein to be in writing
for enforceability.
- If sale is already enforceable due to doctrine of part performance (Statute of Frauds
only applies to executory contracts), the remedy is under Article 1357 of the Civil
Code;
- Right to compel the other to execute the proper public instrument so that a valid
contract can be registered; this applies to cases where contract is valid and
enforceable, but specific form (public instrument) is required for convenience
(registration).

IV. LEASE
 LEASE - A lease is a contract where one of the parties binds himself to give to
another the enjoyment or use of a thing for the certain price and for the period which
may be definite or indefinite but not more than 99 years.

- Assignment- Lessee cannot assign the lease contract without the consent of the
lessor, unless there is a stipulation to the contrary
- Sublease- When in the contract of lease of things there is no express prohibition, the
lessee may sublet the thing leased, in whole or in part, without prejudice to his
responsibility for the performance of the contract toward the lessor.

 RIGHT TO IMPROVEMENTS
- If Lessee in good faith makes USEFUL improvements – Lessor shall pay ½ of the
value; if Lessor refuses, Lessee may remove even though it will cause damage to the
principal thing. He shall not cause any more impairment than necessary.
- ORNAMENTAL expenses – Lessee is not entitled to reimbursement; he may
remove provided no damage is caused to the principal thing, and if Lessor does not
chose to retain by paying their value at the time the lease is extinguished.

V. PARTNERSHIP
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 PARTNERSHIP - is a contract whereby two or more persons bind themselves to
contribute money, property, or industry to a common fund, with the intention of
dividing the profits among themselves. Two or more persons may also form a
partnership for the exercise of a profession.
 CAPITALIST vs. INDUSTRIAL
- Capitalist partner cannot engage for their own account in any operation which is of
the kind of business in which the partnership is engaged, UNLESS there is a
stipulation to the contrary. VIOLATION – capitalist partner shall bring to the
common funds any profits accruing to him from his transactions, and shall
personally bear the losses.
- Industrial partner cannot engage in business for himself, unless the partnership
expressly permits him to do so. VIOLATION – capitalist partners may exclude him
from the firm OR avail themselves of the benefits which industrial partner may have
obtained in violation of the prohibition, with damages in either case.

 PARTNERSHIP TORT - There is partnership tort where: (i) By any wrongful act or
omission of any partner, acting in the ordinary course of business of the partnership
or with authority of his co-partners, loss or injury is caused to any person, not being
a partner in the partnership;
(ii) One partner, acting within the scope of his apparent authority, receives money or
property from a third person, and misapplies it; or (iii) The partnership, in the course
of its business, receives money or property, and it is misapplied by any partner
while it is in the custody of the partnership.
- Partners are SOLIDARILY LIABLE with the partnership for any penalty or damage
arising from a partnership tort.

 GENERAL vs. LIMITED

- General Partnership – One where ALL PARTNERS ARE GENERAL PARTNERS
who are liable even with respect to their individual properties, after the assets if the
partnership have been exhausted.
- Limited Partnership – One formed by two or more persons having as members one
or more general partners and one or more limited partners, the latter not being
personally liable for the obligations for the obligations of the partnership (NCC, Art.
1843).

 LIMITED PARTNERSHIP - It is one formed by two or more persons having as

members one or more general partners and one or more limited partners, the latter
not being personally liable for partnership debts (NCC, Art. 1843)

 LIMITED PARTNERS
- Liability extends only to his capital contributions
- No share in the management
- Must contribute cash or property but not services.
- Not a proper party to proceedings by or against a partnership unless he is also a GP,
or where the object of the proceedings is to enforce a limited partner’s right against
or liability to, the partnership

32
- Interest is freely assignable, with the assignee acquiring all the rights of the limited
partner.
- As a general rule, name must not appear in the firm name

VI. AGENCY

 AGENCY – By the contract of agency, a person binds himself to render some

service or to do something in representation or on behalf of another, with the
consent or authority of the latter. (Article 1868, NCC)

 FORMALITY OF AGENCY - There are no formal requirements governing the

appointment of an agent. Exception: when the law requires a specific form.

 AGENCY MUST BE WRITTEN IN SALE OF LAND THROUGH AN AGENT -

When sale of land or any interest therein is through an agent, the authority of the
latter must be in writing; otherwise, the sale shall be void (Article 1874 NCC)

 DUTY TO RENDER AN ACCOUNTING - Every agent is bound to render an

account of his transaction and to deliver to the principal whatever he may have
received by virtue of the agency, even though it may not be owing to the principal.
Stipulation exempting the agent of this obligation to render an accounting is void
(Article 1891 NCC)

 THEORY OF IMPUTED KNOWLEDGE - Knowledge of the agent is imputed to

the principal even though the agent never communicated it to his principal.
Exceptions:
(i) Interest of the agent is adverse to the principal
(ii) Agent’s duty is not to disclose the information
(iii) Agent acts in bad faith
(iv) Agent colludes with the person claiming the benefit to defraud the principal

VII. CREDIT TRANSACTIONS

A. LOAN
 LOAN - One of the parties delivers to another, either something not consumable so
that the latter may use the same for a certain time and return it, in which case the
contract is called a commodatum; or money or other consumable thing, upon the
condition that the same amount of the same kind and quality shall be paid, in which
case the contract is simply called a loan or mutuum.

 RULES ON INTEREST
- When obligation breached is Monetary Obligation, ex. Loans of forbearance of money:
(i) Interest due shall be that stipulated in writing;
(ii) Interest due shall earn legal interest of 6% from date of judicial demand (filing
of the case)
(iii) If no stipulation in writing, interest shall be 6% per annum to be computed from
33
 default (either failure to pay upon extra-judicial demand or upon judicial
demand whichever is appropriate and subject to the provisions of Article 1169 of
the Civil Code)
- When obligation breached is Non-Monetary Obligation
(i) If already liquidated, rate of interest shall be 6% per annum, demandable from
date of judicial or extra-judicial demand (Article 1169, Civil Code)
(ii) If unliquidated, no interest. Except: When later on established with certainty.
Interest shall still be 6% per annum demandable from the date of judgment
because on such date, it is already deemed that the amount of damages is already
ascertained.

B. DEPOSIT - Deposit is constituted from the moment a person receives a thing

belonging to another with the obligation of safely keeping it and of returning the
same. Safekeeping must be the principal purpose of the contract otherwise, it is not
deposit.
- It is a real contract, perfected upon delivery of the thing.

 RIGHT OF RETENTION -Depositary has a right to retain the thing in security until
full payment of what may be due him by reason of the deposit This is an example of
pledge created by operation of law (Art. 2121)
- RULE is different in Commodatum, bailee has no right of retention except Art 1951
(bailor knows flaws in the thing and did not advise bailee of such, Art 1944 gives
bailee right to retain the thing until he is compensated for damages suffered.

 NECESSARY DEPOSIT - Deposit is not made by the will of the depositor but
created by force of the law or on occasion of a calamity; KINDS: (i) Made in
compliance with a legal obligation;
(ii) Takes place on the occasion of any calamity, such as fire, storm, flood, pillage,
shipwreck, or other similar events; (iii) Made by passengers with common carriers,
hotels or inns.

 LIABILITY OF HOTEL-KEEPERS - liable for damages arising from the loss or

injury to the personal effects of hotel guests caused by the negligence of its servants
or employees and loss or damage due to strangers. Exceptions: (i) Loss is due to
force majeure; (ii) Loss is due to the acts of the guest, his family, servants, or
visitors; (iii) Loss arises from the character of the thing brought into the hotel.
- The hotel-keeper cannot free himself from responsibility by posting notices to the
effect that he is not liable for the articles brought by the guest. (Art. 2003). Limited
Liability Stipulation is VOID: Any stipulation between the hotel-keeper and the
guest whereby the responsibility of the former (as set forth in Art. 1998-2001) is
suppressed or diminished shall be VOID. (Art. 2003)
- The hotel-keeper has a right to retain the things brought into the hotel by the
guest, as a security for credits on account of: lodging; and supplies usually
furnished to hotel guests.

C. GUARANTY AND SURETYSHIP

 GUARANTY - An accessory contract whereby a person called the guarantor binds

34
 himself to the creditor to fulfil the obligation of the principal debtor in case the latter
should fail to do
 GUARANTY VS. SURETYSHIP
- Guaranty - Liability depends upon an independent agreement to pay the
obligation if the primary debtor fails to do so; Engagement is collateral undertaking.
- Suretyship - Assumes liability as a regular party to the undertaking; Charged as an
original Promisor.
- If a person binds himself solidarily with the principal debtor, the contract is called
suretyship and the guarantor is called a surety.

 GUARANTY COVERED BY THE STATUTE OF FRAUDS (Article 1403 NCC)-

Guaranty must not only be expressed but must so be reduced into writing. It shall be
unenforceable by action, unless the same or some note or memorandum thereof be
in writing, and subscribed by the party charged, or by his agent; evidence, therefore,
of the agreement cannot be received without the writing, or a secondary evidence of
its contents. It does not need to appear in a public document.

 PRIVILEGES GIVEN TO THE GUARANTOR – (i) Benefit of excussion and (ii) Benefit
of division

 EXCUSSION - Right of the guarantor to have the properties of the debtor

exhausted first before the guarantor can be made liable to the creditor

VIII. TORTS AND DAMAGES

A. TORTS
 TORT - an unlawful violation of private right, not created by contract, and which
gives rise to an action for damages.

 KINDS OF ACTIONABLE NEGLIGENCE

(i) Culpa Contractual (contractual negligence) - Governed by Civil Code
provisions on Obligations and Contracts, particularly Arts. 1170 to 1174 of the
Civil Code.
(ii) Culpa Aquiliana (quasi-delict) - Governed mainly by Art. 2176 of the Civil Code
(iii) Culpa Criminal (criminal negligence) - Governed by Art. 365 of the Revised Penal
Code.
(iv) Culpa Aquiliana (quasi-delict) - Whoever by act or omission causes damage to
another, there being fault or negligence is obliged to pay for the damage done.

 ESSENTIAL REQUISITES FOR A QUASI-DELICTUAL ACTION:

(i) Act or omission constituting fault or negligence;
(ii) Damage caused by the said act or omission; and
(iii) Causal relation between the damage and the act or omission.

 VICARIOUS LIABILITY OR DOCTRINE OF IMPUTED NEGLIGENCE - A

person is not only liable for torts committed by himself, but also for torts committed

35
 by others with whom he has a certain relation or for whom he is responsible.
(Article 2180 Civil Code)
 DEFENSE IN VICARIOUS LIABILITY - observance of diligence of a good
father of a family to prevent the damage.

 RES IPSA LOQUITOR - means “The thing or transaction speaks for itself". The
following are the requisites:
(i) The accident does not ordinarily occur unless someone is negligent
(ii) The instrumentality or agency which caused the accident was under the
exclusive control of someone who was negligent
(iii) The injury was not due to the voluntary action of the person injured absence of
explanation by the defendant.

 DAMNUN ABSQUE INJURIA (Damage Without Injury) - In order that a plaintiff

may maintain an action for the injuries of which he complains, he must establish
that such injuries resulted from a breach of duty which the defendant owed to the
plaintiff.

B. PROXIMATE CAUSE is that cause which, in natural and continuous sequence,

unbroken by any efficient and intervening cause, produces the injury without which the
result would not have occurred.

C. NEGLIGENCE is the omission of that degree of diligence which is required by the

nature of the obligation and corresponding to the circumstances of persons, time and place.
(Article 1173 Civil Code)
 STANDARD OF CARE - The diligence of a good father of a family (pater familias)
is the standard of care unless otherwise provided (Article 1173 of the NCC)

D. DAMAGES
 ACTUAL/COMPENSATORY DAMAGES - One is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly proved
except as provided by law or by stipulation.
- Extent and Measure of Damages In Contracts and Quasi Contracts (Art 2201)
(i) Obligor in good faith – Liable for damages that are natural and probable
consequences of the breach, and which the parties have foreseen.
(ii) Obligor in bad faith – Responsible for all damages which may be reasonably
attributed to the non-performance of the obligation.
- Morales v CA – award of attorney’s fees is the exception rather than the rule. The
power of the court to award attorney’s fees under Article 2208 of the Civil Code
demands factual, legal, and equitable justification; its basis cannot be left to
speculation and conjecture. The general rule is that attorney’s fees cannot be
recovered as part of damages because of the policy that no premium should be
placed on the right to litigate.

 MORAL DAMAGES - Moral damages are not punitive in nature but are designed
to compensate and alleviate the physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation,

36
 and similar injury unjustly caused to a person.
- Juridical person is not entitled to moral damages. A corporation, being an
artificial person and having existence only in legal contemplation, cannot
experience physical sufferings, mental anguish, fright, serious anxiety, wounded
feelings, moral shock, or social humiliation which are basis of moral damages.
They can be experienced only by one having a nervous system; a corporation
has “no feelings, no emotions, no senses.
- The only exception to this rule is where the corporation has a good reputation
that is debased, resulting in its social humiliation.

 NOMINAL DAMAGES - Recoverable where a legal right is technically violated

and must be vindicated against an invasion that has produced no actual present loss
of any kind, or where, from the nature of the case, there has been some injury
arising from a breach of contract or legal duty but the amount thereof has not been
or cannot be shown.

 TEMPERATE DAMAGES - Temperate or moderate damages, which are more than

nominal but less than compensatory damages, may be recovered when the court
finds that some pecuniary loss has been suffered but its amount cannot, from the
nature of the case, be proved with certainty.

 LIQUIDATED DAMAGES - Liquidated damages are those agreed upon by the

parties to a contract, to be paid in case of breach thereof.
- Liquidated damages may be equitably reduced: (i) In case of partial and
irregular performance; (ii) In case it is iniquitous or unconscionable.

 EXEMPLARY DAMAGES - Exemplary 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.
 People v. Tolentino, G.R. No. 176385, February 26, 2008 - When death occurs due
to negligent act or crime, the following damages may be recovered:
o Civil indemnity for death
o Actual or compensatory damages
o Moral damages
o Exemplary damages
o Attorney’s fees and expenses of litigation
o Interest
o Temperate damage in lieu of actual damages.

SUCCESSION

30) Conchita was the registered owner of two parcels of land. Upon her death in 1980, she
was survived by her husband, Arturo, and their five children: Remegio, Victoria,
Dionisia, Pacita and Rodrigo. In 1985, Rodrigo also died, survived by his widow,
Josefina, and child, Zenaida. In 1990, Arturo and his four surviving children executed an
extrajudicial partition. After the partition, Dionisia sold her inheritance to the daughters
of Victoria (collectively referred to as the “Navarro siblings”). In 2010, the heirs of
37
 Rodrigo (Josefina and Zenaida) filed a complaint for the annulment of the extrajudicial
partition of Conchita’s estate on the ground that they were left out in the partition of said
estate. Only the Navarro siblings filed their Answer. They sought the dismissal of the
complaint on the ground of prescription and for failure to establish the status of Zenaida
and Josefina as heirs of Conchita in a special proceeding. Will the action prosper despite
the lack of a prior and separate judicial declaration of heirship in relation to the estate of
Conchita? ANS: Yes, the action will still prosper. In Treyes v. Larlar, the Court en banc
ruled that unless there is a pending special proceeding for the settlement of the decedent's
estate or for the determination of heirship, the compulsory or intestate heirs may
commence an ordinary civil action to declare the nullity of a deed or instrument and for
recovery of property, or any other action in the enforcement of their ownership rights
acquired by virtue of succession, without the necessity of a prior and separate judicial
declaration of their status as such. However, the Court further ruled that the ruling of the
trial court shall only be in relation to the cause of action of the ordinary civil action,
i.e., the nullification of a deed or instrument and recovery or reconveyance of
property, which ruling is binding only between and among the parties.

31) In Question No. 30, are the complainants Josefina and Zenaida entitled to a share in the
estate of Conchita? ANS: Yes, because, as legal heirs of Rodrigo, they inherited the share
of Rodrigo in the estate of Conchita. Rodrigo inherited from the estate of Conchita upon
the latter’s death in 1980, together with his 4 siblings and his father. Thus, the estate of
Conchita is to be divided into six equal parts and Rodrigo inherited one-sixth portion of
said estate. Upon Rodrigo’s death in 1985, his pro indiviso share in Conchita’s estate was
automatically inherited by his surviving legal heirs, the herein complainants (Josefina and
Zenaida).

32) In Question No. 30, is the extrajudicial partition of Conchita’s estate made in 1990 valid?
ANS: No, the same is void because it excluded the heirs of Rodrigo. According to
jurisprudence, an extrajudicial settlement executed with the intention to exclude co-heirs
of their rightful share in the estate of the deceased is void and inexistent for having a
purpose or object which is contrary to law. Veritably, a deed of extrajudicial partition
executed without including some of the heirs, who had no knowledge of and consent
thereto, is fraudulent and vicious. It has no force and effect from the beginning as if it had
never been entered into and it cannot be validated either by time or ratification making an
action or defense for the declaration of the inexistence of a contract imprescriptible in
accordance with Article 1410 of the Civil Code.

33) In Question No. 30, is the sale made by Dionisia in favor of the Navarro siblings valid?
ANS: Yes, the sale is valid notwithstanding the fact that the partition of Conchita’s estate
is null and void. This is because Dionisia already acquired her successional right to the
estate of Conchita upon the latter’s death, equivalent to one-sixth undivided portion of the
said estate. Hence, she became a co-owner of Conchita’s estate owning one-sixth
undivided portion thereof. As a co-owner, she can freely sell her undivided share to the
Navarro siblings even prior to the actual partition of the estate.

34) Perpetua, a cripple and illiterate, sought the assistance of Atty. Tiburcio to draft her will.
When the draft was finished, Atty. Tiburcio read the contents of the will, written in the
38
 Tagalog dialect, to Perpetua and to her three witnesses (Juan, Pedro, and Mario). After
reading the will, Atty. Tiburcio explained its effects and consequences to Perpetua while
the three witnesses were also listening. Afterexplaining the contents of the will, Atty.
Tiburcio asked Perpetua if she understood the contents of the will, to which Perpetua
replied in the affirmative. Atty. Tiburcio also asked Perpetua if the contents of the will
read to her were in accordance with her wishes, to which Perpetua replied again in the
affirmative. Thereafter, Perpetua affixed her thumbprint to the will on top of her printed
name, in the presence of the lawyer and the instrumental witnesses. The witnesses also
affixed their signatures in the presence of each other, the testator and the lawyer.

Q: Is Article 808, requiring the reading of the will twice, once by one of the witnesses
and again by the notary public, applicable to an illiterate testator? ANS: Yes,
jurisprudence extended the application of Article 808 to cover not just the blind but also
illiterates. (Guia v. Cosico, Jr., G.R. No. 46997, May 5, 2021)

35) In Question No. 34, is the will valid? ANS: Yes, the will is valid because there was
substantial compliance with the requirements of the law. According to jurisprudence, the
requirements of Article 808 are not required to be complied with literally. Instead, the
law permits of substantial compliance. Article 808 is meant to protect the testator
from all kinds of fraud and trickery but is never intended to be so rigid and
inflexible as to destroy testamentary privilege. In this case, the danger that
Article 808 is designed to prevent is undoubtedly non- existent. Hence, the will is valid.

36) When to apply the rule of substantial compliance under Article 809 of the Civil Code in
case a fact required to be stated in the attestation clause is omitted: (1) If proof of
compliance is supplied anywhere in the instrument and there is no need to resort to
extrinsic evidence, the rule of substantial compliance applies, such as when the total
number of pages is not stated in the attestation clause but stated in the acknowledgment;
(2) But if proof of compliance is NOT supplied by the instrument itself and there is a
need to resort to extrinsic evidence to prove compliance, such as when the attestation
clause failed to state that the testator and the witnesses signed in each other’s presence,
the rule of substantial compliance cannot apply.

37) Scarlett Johansson, an American citizen but temporarily residing in the Philippines,
executed her will in the Philippines. She designated Ruben, a Filipino citizen, as her
executor. Upon her death, the executor filed a petition for the probate of the will before
the RTC of Quezon City. The RTC dismissed the petition for lack of jurisdiction. The
RTC reasoned that being an American citizen, the testator’s national law must govern and
her will must be probated in the United States of America, and not in the Philippines. Is
the court correct? ANS: No, the Philippine law will apply by default. The nationality
principle is not applied when determining the extrinsic validity of an alien's last will and
testament. When it comes to the probate of an alien's will, whether executed here or
abroad, the alien's national law may be pleaded and proved before the probate court.
Otherwise, Philippine lawwill govern by default. Article 817 of the Civil Code provides
an option to the heirs or the executor: to use Philippine law, or plead and prove foreign
law. Thus, it does not remove jurisdiction from the Philippine court. Consequently, if an

39
 alien- decedent duly executes a will in accordance with the forms and solemnities
required by Philippine law, barring any other defect as to the extrinsic validity of the will,
the courts may take cognizance of the petition and allow the probate of the will.

38) Anne Locsin, a former Filipino citizen who became a naturalized American citizen,
executed her will in California where she nominated her Filipino cousin, Victor, as
special independent executor over her assets in the Philippines. The will only had two
witnesses; the testator and her witnesses did not acknowledge the will before the notary
public; the will did not state the total number of its pages; and the witnesses did not sign
on all pages. After her death in California, Victor filed for the probate of the will in the
Philippines and prayed that he be appointed as special administrator of Anne’s estate.
Angel, Anne’s sister, opposed the petition. Victor failed, however, to prove the law of
California on formalities required in the execution of wills. May the will of Anne be
allowed in the Philippines? ANS: No, the will of Anne is void. Since Victor failed to
prove the law of California, the doctrine of processual presumption applies. Pursuant to
said doctrine, the validity of the will as to formalities shall be determined by applying
Philippine laws. Applying Philippine laws, the will is clearly void because it failed to
comply with the mandatory requirement of at least three witnesses. In addition, the
witnesses did not sign on each and every page of the will; the attestation clause failed to
state the total number of pages; and the testator and the witnesses did not acknowledge
the will before a notary public.

39) Important reminders on probate of wills: (1) It becomes mandatory when the will
contains disposition of estate (properties). (2) Generally limited to 4 issues affecting the
extrinsic validity of wills: (i) whether will presented is the last will and testament of the
decedent; (ii) testamentary capacity; (iii) compliance with formalities; and (iv)
genuineness and due execution. (3) As to said 4 issues, the judgement of probate court is
res judicata. (4) Generally, the probate court cannot pass upon issues involving the
intrinsic validity of wills. (5) Exceptions as to when the probate court may resolve issues
affecting intrinsic validity: (i) if the issue of intrinsic validity concerns an invalid
testamentary disposition and such invalidity is patent on the face of the will; (ii) if the
issue of intrinsic validity will determine the necessity of conducting the probate
proceeding. (6) Examples of second exception: (i) if instrument presented for probate is
captioned donation mortis causa but it is claimed by the oppositors to be a donation inter
vivos, such issue even if intrinsic must be resolved first because it will determine the
necessity of conducting the probate proceeding; (ii) if preterition is claimed to exist and
the will consists purely of institution of heirs, the issue of preterition must be resolved
first because it will determine the necessity of conducting probate. BUT: if preterition
isclaimed and there are devises and legacies in the will, the issue of preterition will not
determine the necessity of conducting the probate; hence, the probate court may not
resolve issue of preterition.

40) Important reminders on revocation of wills by physical destruction : (1) As to requisites:

(i) testamentary capacity at the time of revocation; (ii) intent to revoke (animus
revocandi); (iii) intent to revoke must actually be carried out – there must be over act of
physical destruction; (iv) overt act is a completed act insofar as testator is concerned. (2)
Example: testator tore the will into two pieces and as he was about to tear it more, he was
40
 prevailed upon not to continue and he listened. The will is not revoked because the
testator had a change of mind. Act is not completed. But if after tearing the will into two
the testator threw it in the garbage bin, the will is already revoked because the act was
completed, insofar as the testator is concerned. (3) If physical destruction is done thru an
agent: (i) it must be pursuant to express order or instruction of testator; and (ii) physical
destruction must be done in his presence.

41) Important reminders on preterition: (1) there must be a will - because the concept refers
to omission in the will. (2) the one omitted is a compulsory heir in the direct line – hence
omission of surviving spouse in the will is not preterition (but will produce the effect of
invalid disinheritance); (3) omission must be total or complete; hence, (i) omitted
compulsory heir did not receive donation inter vivos; and (ii) entire estate is disposed of
to the exclusion of omitted compulsory heir – if entire estate is not disposed of, there is
no preterition. (4) omission must not be deliberate or intentional; otherwise, it will be a
case of invalid disinheritance. (5) effect of preterition: (i) only the institution of heirs is
annulled entirely; (ii) but the devises and legacies will remain valid if not inofficious. (6)
effect of invalid disinheritance:
(i) institution of heirs is not annulled entirely, even if entire estate is disposed of;
(ii) if entire estate is disposed of, institution of heirs will be annulled only to the extent
that it prejudiced the legitime of invalidly disinherited heir.

42) Important reminders on conditional testamentary disposition: (1) there are only two
impositions that may validly affect the legitime: (i) prohibition against partition of estate,
including legitime, for a period not exceeding 20 years; (ii) to keep family business
intact, it can be given to one of the children in partition inter vivos and order payment of
legitime of other children in cash. (2) prohibition against alienation of inheritance for a
period not exceeding 20 years can only be imposed upon disposable free portion but not
to the legitime. (3) An absolute condition not to marry is an impossible condition,
deemed not imposed. But a relative prohibition (relative as to person, period and place) is
valid condition, but it can be imposed only upon the disposable free portion. If imposed
upon the legitime, it is deemed not made. (4) A prohibition imposed upon the spouse not
to contract remarriage is valid if imposed by the deceased spouse, or by ascendants or
descendants of the deceased spouse. But can be imposed only upon the disposable free
portion. Itcannot be imposed upon the legitime; otherwise, it is deemed not made. (5)
Dispocision captatoria: (i) there is a condition imposed upon the disposition; (ii)
condition is that an heir, devisee or legatee must also make some disposition in his will in
favor of the testator or any other person; (iii) disposition itself is void, not only the
condition.

43) Sample problem on testamentary succession: The testator executed a will where the only
provision is that he wanted a sum of money in the amount of P500,000 to be taken from
his estate and to be used for prayers and pious works for the benefit of his soul. At the
time of his death, he left an estate valued at P1.2 Million. He was survived by his spouse,
4 legitimate children, and 2 illegitimate children.

Q1: Is the disposition valid? ANS: Yes, Art. 1029 allows the institution of the testator’s
soul. The testator can dispose of his estate or a portion of it for prayer and pious works
41
 for the benefit of his soul.

Q2: Is there preterition? ANS: There is none, because the compulsory heirs are not totally
omitted. They are not totally omitted because the testator did not dispose of the entire
estate to their exclusion.

Q3: Distribute the estate. ANS: The legitimes of the compulsory heir cannot be impaired.
Hence, their legitimes must be satisfied first. The legitime of the 4 legitimate children is
½ of the estate, or P600,000. Hence, each legitimate child will be entitled to P150,000 as
his legitime. The legitime of the surviving spouse is the same as the share of each
legitimate child, hence, P150,000. The legitime of each illegitimate child is one-half of
the share of each legitimate child, hence, P75,000 each. Thus, the total of the legitimes of
all compulsory heirs amounted to P900,000. After satisfying the legitimes of all
compulsory heirs, the portion of the estate that can be disposed freely by the testator is
P300,000 only. Consequently, the testamentary disposition of the testator impairs the
legitime of the compulsory heirs up to P200,000. As such, it must be reduced to
P300,000.

44) On the right of the surviving spouse to inherit : (1) If the marriage is void, the surviving
party is not entitled to successional right because the parties are not husband and wife and
the absolute nullity of the marriage can still be raised during the settlement of the estate
of the deceased spouse. (2) If there is a decree of legal separation, there is no need to
disinherit the offending spouse because the latter is already disqualified to inherit by
intestate and compulsory successions. As to the testamentary disposition already made in
favor of the offending spouse, the same is revoked by operation of law. (3) If after legal
separation, the spouses reconciled and obtained a decree of reconciliation: (i) the
testamentary disposition previously revoked by operation of law is automatically revived;
(ii) the right of the offending spouse to legitime and to inherit as legal heir is also
automatically restored; (iii) the disinheritance already made is rendered ineffective; and
(iv) there
is no need for a pardon or condonation in writing. (3) As to whether a condition can be
validly imposed upon the inheritance of the surviving spouse: (i) as to the legitime, no
condition can be validly imposed upon it except prohibition against partition for a period
not exceeding 20 years; (2) as to the share of the spouse as voluntary heir, devisee or
legatee, it can be validly subjected to a condition, and/or prohibition against alienation for
a period not exceeding 20 years. (3) as to the share of the spouse as voluntary heir,
devisee or legatee, he/she can be validly prohibited from contracting another marriage
upon the death of the testator- spouse.

45) Simple problem in intestate succession: The surviving spouse concurring with legitimate
children and illegitimate children. Important rules: (i) share of the spouse is same as share
of each legitimate child; (ii) share of a legitimate child (and surviving spouse) is double
than share of each illegitimate child; (iii) share of each illegitimate child is ½ of the share
of each legitimate child; (iv) but there shall be no impairment of the legitime of the
legitimate children. Example: Estate is P1.2 Million. 2 legitimate children, surviving
spouse and 2 illegitimate children. Distribution shall follow the formula: 2:2:2:1:1.
Hence, divide estate into 8 parts, one part is P150,00. P150,000 is the share of each
42
 illegitimate child. P300,000 is the share of each legitimate child and the surviving spouse.
Here, there is no impairment of the legitime of the legitimate children. Another example:
Estate is P1.2 Million, 2 LC, SS and 4 ILC. If we are to follow the formula: 2:2:2:1:1:1:1,
the estate is to be divided into 10 parts and one part is P120,000. The total shares of 2 LC
is P480,000, which is less than half of the estate. Hence, their legitime is impaired. We
cannot follow this formula. Instead, return their legitimes. That will also be their shares in
intestate succession.

46) Simple problem in intestate succession: Surviving spouse concurring with brother, sister,
nephew or niece of the decedent. Important rules: (i) share of SS is ½ of estate; (ii) share
of group of B/S/N/N is also ½ of estate; (iii) a nephew or niece can represent deceased
parent, if he/she is inheriting together with an uncle or aunt. Example 1: Estate is P1.2
Million. Legal heirs are: SS, 1B, 1S, and 1N (a child of deceased brother). Share of SS is
P600,000. The other half is divided equally among B, S and N (P200,000 each), with the
latter inheriting by right of representation. Example 2: Estate is P1.2 Million. Legal
heirs are: Surviving spouse and 6 nephews and nieces, children of deceased brothers and
sisters. Share of SS is P600,000. The other half is divided equally among the 6 nephews
and nieces (P100,000 each), who will be inheriting in their own right.

47) Sample problem in intestate succession: If the legal heirs are brothers, sisters, nephews
and nieces, important rules: (1) Apply barrier rule: those who can inherit from the
deceased brother or sister are only those with same status. If decedent is legitimate, only
the legitimate brothers, sisters, nephews and nieces can inherit. If decedent is illegitimate,
only those who are also illegitimate can inherit from him
or her. (2) If some full blood, some half blood: Share of full blood is double than share of
half blood. (3) Nephews and nieces are entitled to represent their deceased parent, if they
will be inheriting together with brothers and sisters of the deceased. (4) If only nephews
and nieces are the heirs, they will inherit in their own right. (5) Any brother, sister,
nephew or niece, will exclude the other collateral blood relatives in intestate succession.

Sample problem: Estate is P1.6 Million. Decedent is legitimate, survived by: 2 full blood
brothers, a nephew (who is child of a deceased legitimate full blood brother), 2 half blood
sisters and 1 illegitimate brother. The illegitimate brother cannot inherit because of the
barrier rule. The full blood nephew will inherit by right of representation. The shares of
the full blood brothers and nephew will be double than the share of the half blood sisters.
Hence, formula is: 2:2:2:1:1. Estate is to be divided into 8 equal parts, with one part
equivalent to P200,000. Therefore, share of each half blood sister is P200,000. Share of
each full blood brother and also the full blood nephew is P400,000.

OBLIGATIONS & CONTRACTS, SALE, TORTS AND DAMAGES, and OTHERS….

48) Oral Sale of Parcel of Land : (1) An oral sale of parcel of land is valid. (2) Sale of parcel
of land is covered by Statute of Frauds: (i) if oral sale of parcel of land is still purely
executory (no performance yet), defense of SOF is applicable; hence, the contract is
unenforceable. (ii) but if oral sale of parcel of land is partly or completely executed,

43
 defense of SOF is no longer applicable; hence, sale is already enforceable. (3) If oral sale
of parcel of land is already enforceable, the buyer can compel the seller to reduce the
contract in a public document pursuant to Article 1357.

49) Contract of Sale and Contract to Sell - How to determine : According to Justice Caguioa
in Agustin v. De Vera: (1) Not controlling: While a stipulation or promise to the effect
that a seller shall execute a deed of sale upon the completion of payment of the purchase
price by the buyer may be considered a factor or a sign that a contract might possibly be a
contract to sell, such stipulation in itself, taken in isolation, is by no means determinative
and conclusive as to the contract being a contract to sell. (2) Controlling test: Still
controlling are (1) the lack of any stipulation in the sale contract reserving the title of the
property on the vendors and
(2) the lack of any stipulation giving the sellers the right to unilaterally rescind the
contract upon non-payment of the balance thereof within a fixed period. The absence of
such stipulations in a sale contract makes the said contract a contract of sale. If any of
those stipulation is present, the contract is merely a contract to sell.
50) Distinctions in Contract of Sale and Contract to Sell: (1) In COS, title passes to the buyer
upon delivery of the thing sold; in CTS (or of "exclusive right and privilege to
purchase"), the ownership is reserved in the seller and is not to pass until the full payment
of the purchase price is made. (2) In COS, nonpayment of the price is a negative
resolutory condition; in CTS, full payment is a positive suspensive condition. (3) In COS,
the vendor has lost and cannot recover the ownership of the land sold until and unless the
contract of sale is itself resolved and set aside (or rescinded). In CTS, however, the title
remains in the vendor if the vendee does not comply with the condition precedent of
making payment at the time specified in the contract. Hence, when the seller, because of
noncompliance with the suspensive condition stipulated, seeks to eject the buyer from the
land object of the agreement, said vendor is enforcing the contract and is not resolving
the same. In CTS, upon default by the buyer, there is no need to rescind because such
failure to pay the price is simply an event that prevented the obligation of the vendor to
convey title from acquiring binding force.

51) Effect of Payment of earnest money: (1) Earnest money, under Article 1482 of the Civil
Code, is ordinarily given in a perfected contract of sale. However, earnest money may
also be given in a contract to sell. (2) If there is no reservation of ownership until full
payment of the price, the contract is a contract of sale and payment of earnest money is
proof of its perfection. (3) However, if there is reservation of ownership until full
payment of the price, the contract is a contract to sell. In a contract to sell, earnest money
is generally intended to compensate the seller for the opportunity cost of not looking for
any other buyers.

52) Article 1592 on sale of immovable property: (1) Article 1592 contemplates: (i) a
contract of sale of an immovable property (not applicable to contract to sell); and
(ii) there is a stipulation in the contract that failure to pay the price at the time agreed
upon will cause the rescission of the contract. (2) The vendee or the buyer can still pay
even after the time agreed upon, if the agreement between the parties has these requisites.
In fact, an offer to pay by the buyer will already defeat the seller’s right to rescind the

44
 contract. (3) This right of the vendee to pay ceases when the vendor or the seller demands
the rescission of the contract judicially or extrajudicially. (4) In case of an extrajudicial
demand to rescind the contract, it should be notarized. (5) The notarial act must be
acknowledgement.

Articles 1592 and 1191 are not applicable to a contract to sell because if the price is not
paid within the period agreed upon, such failure is not a breach, casual or serious, but
simply an event that prevented the obligation of the vendor to convey title from acquiring
binding force. Hence, there is no obligation yet that can be rescinded. There is nothing to
rescind.

53) Double Sale: (1) Requisites for double sale to exist: (i) there must be two or more valid
sales – both contracts must be contracts of sale; if one is contract to sell (nosale yet),
there is no double sale; (ii) same thing sold or same subject-matter; (iii) two different
buyers who do not share same interest; and (iv) seller must be same person and at time of
second sale, seller is still owner of thing sold; otherwise, there is no double sale. (2)
Rules on double sale over immovable property registered under Torrens System: (i)
first to register sale in good faith, enjoys preference – second seller must have no
knowledge of first sale prior to registration, otherwise registration is not in good faith; but
knowledge gained by the first buyer of the second sale prior to registration does not
prevent first buyer from registering in good faith; (ii) in the absence of registration, the
first to take possession in good faith; (iii) in the absence of registration and possession,
the one who can present the oldest title. (3) Rule on double sale over movable property:
preference is given to the first to take possession in good faith. (4) Rule on double sale
over unregistered lands: (1) If first sale is recorded, the same is constructive notice to
second buyer. Hence, second buyer cannot claim good faith.
(2) If first sale is unrecorded but buyer already took possession and exercised rights of
ownership, the registration of second sale does not give second buyer preference because
“registration under Act 3344 or Sec. 113 of PD 1529 is without prejudice to better right.”
(3) But if in the unrecorded first sale, the buyer has not yet exercised acts of ownership,
the registration of the second sale will give the second buyer better right.

54) MACEDA Law: (1) Applicability: Applicable to sale of real property on installments,
except: (i) sale of industrial lots; (ii) sale of commercial buildings; and (iii) sale to
tenants. The law does not apply to purchase of land by those engage in real estate
business because it is not for residential purpose, but for commercial or business
purposes. (2) If buyer was able to pay installments for less than 2 years, only right is to
avail of grace period: (i) grace period is minimum of 60 days; (ii) contract may only be
cancelled after grace period and payment is not updated; (iii) notice of cancellation must
be by way of notarial act; and (iv) cancellation takes effect 30 days from receipt of notice
of cancellation by notarial act. (3) If buyer was able to pay installments for at least 2
years: (i) entitled to grace period of 1 month for every year of payment; (ii) contract may
only be cancelled after grace period and payment is not updated; (iii) for cancellation to
be valid, two requisites must be satisfied: notice of cancellation must be by way of
notarial act and payment of cash surrender value; otherwise, contract is still subsisting.
(4) cash surrender value: (i) at least 50% of total payments; (ii) but after 5 years of

45
 installment payments, additional 5% for every year after 5 years, but not to exceed 90%.
(5) meaning of “at least 2 years of payments”: it does not refer only to time without
regard to value, but it refers to time and value. Hence, if installment is paid on monthly
basis, at least 2 years of payments refer to an aggregate of “least 24 monthly
installments.”
(6) meaning of notarial act: it refers to acknowledgment and not a mere jurat.

55) Prescriptive period of action based on solutio indebiti: (1) An action based on quasi-
contract, such as solutio indebiti prescribes within 6 years. (2) An action
based on written contract prescribes within 10 years from accrual of cause of action. (3)
Requisites of solutio indebiti: (i) payment is by reason of mistake of fact or mistake in
doubtful or difficult provision of law; and (ii) there must be no binding relation between
the parties.

56) Problem: Lessor increased the yearly rentals. Lessee paid the increased rents under
protest. Ten years after, the court declared invalid the increase in rent for failure of lessor
to comply with the required procedures upon a petition filed by the other lessees in the
same establishment. Lessee immediately filed an action to recover the overpayments it
made for the past 10 years. The court ruled that the cause of action is based on solutio
indebiti; hence, some amounts may no longer be recovered because the prescriptive
period for recovery is 6 years only. Is the court correct? ANS: No, the court is not correct.
The cause of action for recovery of payment is based on the violation of the written
contract of lease; hence, the prescriptive period is 10 years from overpayment. The cause
of action cannot possibly arise from solutio indebiti because the requisites of solutio
indebiti are the following: (i) payment is by reason of mistake of fact or mistake in
doubtful or difficult provision of law; and (ii) there must be no binding relation between
the parties. Here, the parties are bound by the contract of lease.

57) Effect of Interruption of Prescriptive Period: The prescription of actions is interrupted: (i)
when they are filed before the courts; (ii) when there is a written extrajudicial demand by
the creditors; or (iii) when there is any written acknowledgment of the debt by the debtor.
This interruption wipes out the period that already elapsed and starts a fresh prescriptive
period.

Problem: On September 1, 2003, Dyan executed a Deed of Sale in favor of Alex over a
house and lot. Alex paid 80% of the price and the balance is payable when Dyan vacated
the premises which shall not go beyond December 31,2003. After the sale, a third party
filed an action against Dyan and Alex for recovery of the property. On February 1, 2008,
a compromise agreement was executed between the parties where the complainant
respected the sale between Dyan and Alex. On March 1, 2015, Alex sent a demand letter
upon Dyan for the delivery of the property. When the demand remained unheeded, Alex
filed on April 15, 2017 a complaint for the delivery of the property to him. In her answer,
Dyan claimed that the cause of action of Alex is based on a written contract of sale;
hence, the prescriptive period is 10 years from accrual of the cause of action. Dyan
argued that the cause of action of Alex accrued on January 1, 2004 when Dyan was
supposed to vacate the premises. Since the action was filed more than ten years from

46
January 1, 2004, the action had already prescribed. Is Dyan correct? ANS: No, the action
was filed within the prescriptive period. While it is true that the cause of action of Alex
accrued on January 1, 2004, there was, however, an interruption of the prescriptive period
when the parties executed a compromise agreement on February 1, 2088. Under the law,
the prescription of actions is interrupted, among

47
 others, by a written acknowledgment of the debt by the debtor. This interruption wiped
out the period that already elapsed and started a fresh prescriptive period from February
1, 2008 to to February 1, 2018. Hence, when the action was filed on April 15, 2017, the
same is well within the fresh prescriptive period.

58) On June 3, 2018, Zenaida Estonactoc executed a real estate mortage in favor of Atty.
Bulatao to secure a loan in the amount of P200,000. The mortgage contract provides that
the loan, together with the interest at the rate of five percent (5%) per month, must be
paid within a period of twelve (12) months or one (1) year or before June 4, 2019. When
Zenaida defaulted in her obligation, Atty. Bulatao foreclosed the mortgage by way of
extra-judicial foreclosure. The foreclosure was based on a demand for payment issued
by Atty. Bulatao in the amount of P540,000, representing principal and interest at the
rate of 5% per month.

Q1: Is the rate agreed upon valid? ANS: No, because the rate imposed is unconscionable
and excessive. The imposition of an unconscionable rate of interest on a money debt,
even if knowingly and voluntarily assumed, is void for being contrary to morals and the
law. Given that the agreement on the 5% monthly interest is void for being
unconscionable, the legal rate of interest for loans or forbearances of money will be the
substitute rate not only for the one-year interest period agreed upon but for the entire
period that the loan of Zenaida remains unpaid. However, the invalidity of the 5% per
month interest rate does not affect the obligation of Zenaida to repay her loan of
P200,000.00 from Atty. Bulatao. The applicable interest is the BSP-prescribed rate of 6%
per annum from the execution of the mortgage contract on June 3, 2018 until full
payment.

Q2: Is the foreclosure of the mortgage valid? ANS: No, because the debtor is not yet in
default. Since the interest rate imposed is void, the non-payment of the principal loan
obligation does not place the debtor in a state of default. This is because under Article
1252 of the Civil Code, if a debt produces interest, payment of the principal shall not be
deemed to have been made until the interests have been covered. Necessarily, since the
obligation of making interest payments in the instant case is illegal and thus non-
demandable, the payment of the principal loan obligation was likewise not yet
demandable on the part of the creditor. With Zenaida not being in a state of default, the
foreclosure of the subject property should not have proceeded.

59) Monetary and Compensatory Interest: (1) Kinds of interest: Interest as a compensation
fixed by the parties for the use or forbearance of money is referred to as monetary
interest; while interest that may be imposed by law or by courts as penalty for damages
is referred to as compensatory interest. (2) The interest referred to in Article 1956 of
the Civil Code is monetary interest. In order for the obligation to pay monetary interest to
become a civil obligation, two requisites must be satisfied: (i) (there was an express
stipulation for the payment of interest; and

48
 (ii) the agreement for the payment of interest was reduced in writing. If the agreement to
pay monetary interest is made verbally, it is only a case of natural obligation. (3)
Modification of Eastern Shipping and Nakar ruling: In Eastern Shipping and Nakar, it
was held that from the finality of the judgment until its satisfaction, the legal rate of 6%
p.a. shall apply because such interim period is deemed equivalent to “forbearance of
credit.” But in Lara’s Gift & Decors, Inc. v. Midtown Industrial Sales, the Court ruled
that it is the stipulated rate that should apply (unless the rate agreed upon is excessive or
unconscionable) until full payment of the obligation, including the interim period of
finality of judgment up to its satisfaction. This is because the rate agreed upon is the law
between the parties.

60) Studio 21, owned by Jose, is renting the entire second floor of a two-storey building;
while the first floor is rented by Copylandia. When Jose made renovations in the second
floor on April 1, 2015, including the building’s piping system, a water leaked occurred
and damages Copylandia’s various equipment on the ground floor in the amount of
P2,514,000. As the equipment were insured with UCPB General Insurance Co., Inc.
(UCPB), Copylandia filed a claim with the latter. The negotiations between the two
lasted until December 1, 2018 when finally Copylandia agreed to a settlement in the
amount of P1,600,000. As subrogee of Copylandia, UCPB filed a complaint for damages
against Jose for recovery of P1.6 Million on May 15, 2019. Will the action still prosper?
ANS: No, the action was filed beyond the 4-year prescriptive period allowed for causes
of action based on quasi- delict. The cause of action of Copylandia against Jose is based
on quasi-delict, which has a prescriptive period of 4 years from the accrual of cause of
action. The cause of action of Copylandia accrued on April 1, 2015. Hence, it has until
April 1, 2019 within which to file the action. Considering that UCPB is merely
subrogated to the rights of Copylandia, it inherits only the remaining period within which
the insured may file the action against the wrongdoer. Here, the action was filed by
UCPB after the lapse of the 4-year prescriptive period.

61) Novation: In lease, the assignment of the lease contract involves novation by substitution
of the person of the debtor. In such kind of novation, the consent of the creditor is
necessary.

Problem: In 1997, Food Fest Land, Inc. rented the parcels of land owned by Sapnio. The
term of the lease is for 15 years. There is a clause in the contract which states that “No
waiver by the parties of any of their rights under this Contract of Lease
shall be deemed to have been made unless expressed in writing and
signed by the party concerned.” Pursuant to the contract (FFLI) built and operated
its restaurant on the property. In 1998, FFLI assigned the contract to Tucky Foods, Inc.
(TFI). In 2001, TFI assigned the contract to Joyfoods Corp. (JFC). The annual rental
escalation clause was observed and paid during the first five years. But beginning the 6th
year up to 10th year, the rental escalation clause

49
 was not followed. Hence, on the 11th year, Sapnio called the attention of FFLI and JFC
regarding its intent to enforce the rental escalation clause for the said year. On the 12th
year, JFC pre-terminated the contract allegedly due to business losses. Sapnio filed an
action for collection of unpaid rentals against FFLI and JFC, representing the sum due
from the escalation for the years 2007 and 2008. The trial court held FFLI and JFC liable
to pay the unpaid rentals. FFLI appealed arguing that it is not liable because there was
already novation when it assigned the contract of lease to TFI and the latter assigned the
contract to JFC. Is FFLI correct? ANS: No, there was no novation by substitution of the
person of the debtor because the creditor did not give his consent to the substitution.
Under the contract of lease, the consent of the lessor to the substitution must be made
expressly in writing pursuant to the non-waiver clause of the contract. The lessor’s
consent to the substitution of the lessee falls within the ambit of the foregoing clause,
because a novation by the substitution of the person of the debtor implies a
waiver on the part of the creditor of his right to enforce the obligation as
against the original debtor. In addition, the consent of the lessor to the substitution
of FFLI cannot be deduced or implied from any of the established acts of the former.
The consent of the lessor to the substitution of FFLI by JFC cannot be presumed from the
sole fact that the lessor accepted payments from JFC. It is well settled that mere
acceptance by a creditor of payments from a third person for the benefit of the debtor,
sans any agreement that the original debtor will also be released from his
obligation, does not result in novation but merely the addition of debtors.

62) Tortious interference: Elements of tortious interference: (1) existence of a valid contract;
(2) knowledge on the part of the third person of the existence of contract; and (3)
interference of the third person is without legal justification or excuse. According to
jurisprudence, as long as a proper economic or financial interest exists the third person
cannot be held liable for tortious interference.

Problem: Under the Talent Agreement, GMA agreed to provide Cruz-Valdes shows
where she could work as a talent and pay her talent fees. For her part, Cruz-Valdes had to
work as a talent in GMA’s shows, and was also prohibited from doing certain things
under the Talent Agreement. Paragraph 4 prohibited her from rendering services to any
other production without GMA's prior written consent. Through a letter dated October 15,
2019, Cruz-Valdes tendered her resignation to GMA. Upon receiving the resignation
letter, GMA advised Cruz-Valdes to avail her terminal leave and told her that she no
longer needed to report to work. GMA also replaced her in the programs she hosted and
she was also asked to turn over company properties. GMA also stopped paying her talent
fees. However, on November 8, 2019, Cruz-Valdes received a letter from GMA's counsel
informing her that her resignation breached the Talent Agreement. On November 15,
2019, ABS-CBN hired Cruz-Valdes as its Vice President for News. Thereafter, GMA
sued ABS-CBN for damages on account of tortious interference under Article 1314 of
the Civil Code. Will the action prosper? ANS: No, the action will not prosper.

50
 According to jurisprudence, the elements of tortious interference: (1) existence of a valid
contract; (2) knowledge on the part of the third person of the existence of contract; and
(3) interference of the third person is without legal justification or excuse. In the case at
bar, the first element is lacking. When the supposed interference took place, GMA had
already asked Cruz-Valdes to go on terminal leave, required her to surrender company
properties, cut off her access to her company email, and replaced her with other talents on
her shows. By doing so, it prevented her from complying with her obligations under the
Talent Agreement. In short, GMA had already unilaterally terminated the contract. In
addition, the third element is lacking. According to jurisprudence, as long as a proper
economic or financial interest exists, the third person cannot be held liable for tortious
interference. Here, ABS-CBN had been in need of a news executive who could train
employees and supervise its news department. Thus, engaging Cruz-Valdes as its Vice
President for News was necessary to improve ABS-CBN’s level of competence.

63) Void Contract: The Spouses Teodulo and Dominga Natividad were coerced in 2003 by
their eldest child, Danilo, to sign a Deed of Absolute Sale. They initially refused because
the property was intended for Danilo's siblings for their eventual study in Manila.
Because of their refusal, Danilo angrily shouted and threw a briefcase at his father but
missed. Out of fear, the spouses signed the Deed even without receiving any payment as
consideration. Danilo was able to have the deed notarized even if the spouses did not
personally appear before the notary public. By virtue of the said deed, Danilo was able to
transfer the property into his name and to that of his wife also in 2003. In 2013, the
spouses Natividad filed an action for the or reconveyance of property, nullity of the
supposed sale of real property, and cancellation of the title in the names of Danilo and the
latter’s wife. The RTC dismissed the complaint saying that the plaintiffs’ cause of action
had already prescribed. The RTC explained that when an action for reconveyance is
based on fraud, it must be filed within four (4) years from discovery of the fraud, and
such discovery is deemed to have taken place from the issuance of the original certificate
of title. Is the RTC correct? ANS: No, because the contract is void and inexistent, hence,
the action for declaration of its nullity is imprescriptible. In the given problem, the
contract is absolutely simulated and fictitious because there was no consideration. While
the contract says that the price was paid, in truth and in fact, it was not paid. Hence, the
contract lacks consideration rendering it void or inexistent. Consequently, the action for
the declaration of its nullity is imprescriptible.

64) Voidable contract: Calvin Genotiva, together with his business colleagues, ventured into
the commercial production of hollow blocks and concrete pavers under the registered
name Goldland Equity, Inc. (Goldland). Goldland applied for a "clean loan" with BDO at
its Cagayan de Oro City Branch where Calvin’s wife, Violet, was an employee. BDO
granted the loan in the amount of P2,000,000.00

51
 as evidenced by a Promissory Note. The Spouses Genotiva, together with the other
stockholders of Goldland, executed a Deed of Suretyship in favor of the Bank. When
Violet retired, she requested for the payment of her retirement benefits and for the
release of the owner's copy of the TCT which was retained by BDO in relation to Violet’s
earlier housing loan which loan was already fully paid. However, BDO refused to release
her retirement benefits unless she and her husband would execute a real estate mortgage
over the subject property to secure Goldland's loan. Being pressed for money, they
acceded and signed a real estate mortgage contract. When Goldland defaulted in its
payment of the loan, BDO foreclosed the subject property and scheduled its auction sale.
Subsequently, the spouses Genotiva filed an action for the annulment of the mortgage
contract contending that it was executed under duress in view of BDO's withholding of
Violet’s retirement benefits. If you were the court, will you annul the contract? ANS: No,
the contract is not annullable because there was no intimidation or threat. According to
jurisprudence, for intimidation to vitiate consent the following requisites must be proven:
(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. In this case, BDO's supposed "threat", i.e., its withholding of Violet's
retirement benefits, is not the intimidation referred to by law because the act is not unjust
or unlawful. The bank was unable to release Violet's clearance for the release of her
retirement benefits for the simple reason that she had an existing liability to the bank
arising from the Deed of Suretyship that she executed with her husband and other
stockholders of Goldland. While the Spouses Genotiva may have reluctantly signed the
mortgage contract, there was no vitiation of consent. They simply agreed to accept what
they thought was a better option.

65) Statute of Frauds; Double Sale: The subject property (a parcel of land) was originally
owned by Vicente Balubal. Upon his death in 1944, the property was inherited by his two
children, Tomasa and Jose Balubal. In 1962, Tomasa and Jose sold the property to Juan
Lacambra. The OCT was delivered to Juan and the latter took possession of the property.
But Juan did not register the notarized sale. When Juan died in 1979, the property passed
to the heirs of Juan by intestacy. In 1980, two of the children of Juan sold their portion
(5/14) to Rogelio Tamayao. The spouses Tamayao constructed their house on the said
portion. Thereafter, the heirs of Balubal told the Tamayaos that they owned the subject
property. Fearful that they might lose their house, the Tamayaos purchase the
entire subject property from the heirs of Balubal. The heirs of Balubal declared the OCT
lost and had it replaced. By reason of the sale between the Balubals and Tamayaos, the
OCT was cancelled and a TCT was issued in the name of Spouses Tamayao. The

52
 Heirs of Lacambra filed for the annulment of the sale between the heirs of Balubal and
the Tamayaos and for the declaration of nullity of the reconstituted OCT and TCT issued
to the Spouses Tamayao.

Q1: Is the sale of the land in 1962 to Juan Lacambra by Tomasa and Jose Balubal a valid
sale? ANS: Yes, even a verbal sale of real property is valid subject only to the
requirements of the Statute of Frauds. In this case, the notarized extrajudicial settlement
and sale executed by Tomasa and Jose in 1962 enjoys presumption of regularity.
Therefore, there was constructive delivery of ownership in favor of Juan Lacambra upon
execution of the notarized extrajudicial settlement and sale. In addition, there was also
actual delivery when Tomasa and Jose allowed Juan and his family to take possession
and control of the subject property. The failure to register the extrajudicial settlement and
sale did not affect the validity of the sale because registration is not essential for the
validity of the contract. It is also not a mode of acquiring ownership.

Q2: Are the Spouses Tamayao innocent purchasers for value? ANS: No, because they
knew of the existence of the prior sale in favor of Juan Lacambra. In fact, they purchased
a portion of the subject property from the heirs of Juan Lacambra. Thus, they cannot
acquire a better right because a buyer can acquire no more than what the seller can legally
transfer.

Q3: Can the Spouses Tamayao rely on Article 1544, or the rule on double sale? ANS: No,
there is no double sale in the given problem because the seller was no longer the owner at
the time of the second sale. According to jurisprudence, the rule on double sale does not
apply when the second sale was made when such person was no longer the owner of the
property, because it had been acquired by the first purchaser in full dominion. Besides,
even if the rule on double sales were to be applied, the result would still be the same. The
heirs of Lacambra would still have a better right of ownership over the subject property
as Spouses Tamayao failed to acquire and register the sale in good faith.

Q4: Is the reconstituted OCT valid? ANS: No, because reconstitution can be validly made
only in case of loss of the original certificate. According to jurisprudence, when the
certificate of title was not actually lost or destroyed, but is in fact in the possession of
another person, the reconstituted title is void because the court that rendered the order of
reconstitution had no jurisdiction over the subject matter of the case.

66) Vicarious liability of State: (1) Test of liability: The test of liability depends on whether
or not the employees, acting in behalf of the State, were performing governmental or
proprietary functions. (a) If performing governmental functions, the State is liable only
for the tortuous acts of its “special agents.” (b) If performing proprietary functions, the
State is liable as an ordinary employer. (2) Governmental

53
 functions: (a) The State is liable only for the torts committed by its employee when the
latter acts as a special agent but not when the said employee or official performs his or
her functions that naturally pertain to his or her office. (b) A special agent is defined as
one who receives a definite and fixed order or commission, foreign to the exercise of the
duties of his office.

Problem: BPI was defrauded in the amount of P9 Million because of the fraud
perpetuated by employees of the Central Bank’s clearing house, done by way of
tampering with and pilfering of documents passing through the clearing house. When
Central Bank of the Philippines (now BSP) credited only half of the amount and refused
to credit back the balance, BPI filed a complaint for sum of money against CBP. Is CBP
liable for the tortious acts of its employees? ANS: No, CBP is not liable for the tortious
acts of its employees because they were performing governmental functions when the tort
was committed and they did not act as special agent. The rule is that if the tort is
committed by government employees in the performance of governmental functions, the
State is liable only for the torts committed by its employee when the latter acts as a
special agent but not when the said employee or official performs his or her functions that
naturally pertain to his or her office. In the case at bar, the employees are not considered
as special agents of CBP because they were regular employees performing tasks
pertaining to their offices.

67) Problem: UCPB Leasing and Finance Corp. (ULFC) is the registered owner of an
international trailer harvester truck (truck) and leased to Subic Bay Movers, Inc. (SBMI).
The lease contract was not registered in the LTO. While being operated by SBMI,
through its driver, Almazan, the truck hit the Nissan Sentra car of Leporgo which, at that
time, was in full stop waiting for the traffic to move. The truck also hit other vehicles, but
the car of Leporgo exploded upon impact, causing his death. The widow of Leporgo filed
an action for damages based on quasi-delict against ULFC, SBMI and Almazan. ULFC
denied liability because: (1) it was not the employer of Almazan; and (2) Section 12 of
RA 8556 provides that financing companies are not liable for injuries or losses caused by
a motor vehicle leased to a third person.

Q1: Is ULFC liable for the death of Leporgo? ANS: Yes, because under the law on
compulsory motor vehicle registration, with respect to the public and third persons, the
registered owner of a motor vehicle is directly and primarily responsible for the
consequences of its operation regardless of who the actual vehicle owner might be. In
contemplation of law, the owner/operator of record is the employer of the driver, the
actual operator and employer being considered as merely its agent.

Q2: Is ULFC exempt from liability under the registered owner rule pursuant to Section 12
of RA 8556? ANS: No, because ULFC did not register the lease in the LTO. RA 8556
does not supersede nor repeal the law on compulsory motor vehicle

54
 registration. Under the latter law, the lease contract must be recorded in the LTO to bind
third persons. The non-registration of the lease contract between financing company and
its lessee precludes the former from enjoying the benefits under Section 12 of RA 8556.

Q3: What is the remedy of ULFC? ANS: The remedy of ULFC is to recover from SBMI,
the actual operator. This is because the application of the registered owner rule does not
serve as a shield of the offending vehicle's real owner from any liability. Under the
principle of unjust enrichment, the registered owner who shouldered such liability has a
right to be indemnified by means of a cross-claim as against the actual employer of the
negligent driver.

68) In Question No. 67, Leoporgo was 57 at the time of his death and he was earning
P353,520 annual income. ULFC argued that being a government employee where the
retirement age is 65 years old, 65 years old should be used in computing the life
expectancy and not 80 years old.

Q1: Is the contention of ULFC meritorious? ANS: No, the contention is not
meritorious because The formula for the computation of loss of earning capacity is meant
to be uniformly applied to all, regardless of the industry or sector they work in. Hence,
the court cannot restrict the computation of Leporgo's life expectancy to (2/3 x [65 – age
at death]) simply because the deceased was a government employee whose mandatory
age of retirement is 65 years old. The possibility that the deceased could have chosen to
continue working or making profit through means had he not been prevented by his
sudden death may not be disregarded.

Q2: Compute loss of earning capacity. ANS: Formula is [2/3 x (80-57)] x (50% of
P353,520). Thus:

Life expectancy is: 2/3 x 23 = 15.33 50%

of annual income is: = P176,760
Net earning capacity is: 15.33 x P176,760 Net
earning capacity is P2,709,730.80

69) Moral damages if delict or quasi-delict results into death under Article 2206(3): (1) can
be recovered in addition to indemnity for the death of the victim in the amount of
P50,000 and loss of earning capacity; (2) But only the following are entitled to recover
moral damages: “the spouse, legitimate and illegitimate descendants and ascendants of
the deceased.” (3) Collateral blood relatives, including brothers and sisters are not
entitled. (4) But for the purpose of recovering moral damages under Article 2206(3),
persons exercising substitute parental authority are to be considered “ascendants.”
[Caravan Travel & Tours International, Inc. v. Abejar)

55
 70) Moral damages in breach of contract: (a) General rule: Moral damages may not be
recovered in breach of contract. (b) Exceptions: (1) in breach of contract of carriage
where the mishap results in the death of a passenger, as provided in Article 1764, in
relation to Article 2206(3) of the Civil Code; and (2) if the party from whom it is claimed
acted fraudulently or in bad faith or in wanton disregard of his contractual obligations.
The breach must be wanton, reckless, malicious or in bad faith, and oppressive or
abusive.

71) Moral damages under Article 309:

Problem: Loreta Tabuada died in 1990. She left a parcel of land registered in her name.
She was survived by her son and only heir, Simeon Tabuada. In 1994, Eleonor Tabuada,
the sister-in-law of Simeon, misrepresented herself as the deceased Loreta Tabuada and
mortgaged the property without the knowledge of Simeon and the latter’s wife, Sofia
Tabuada. The mortgage was in favor of the Spouses Certeza. In 1997, Simeon died,
leaving Sofia and their children as his heirs. After the death of her husband, Sofia learned
of what Eleanor did. Hence, she filed an action against Eleanor and the Spouses Certeza
for the nullification of the mortgage. The trial court declared the mortgage void on the
ground that the mortgagor was not the absolute owner of the property. The RTC also
ruled that moral damages were proper under Article 309 of the Civil Code based on the
showing of disrespect to the dead. Is the RTC correct in awarding moral damages to the
complainant pursuant to Article 309 of the Civil Code: ANS: No, the RTC committed an
error in awarding moral damages based on Article 309 of the Civil Code. The Civil Code
provision under Article 309 on showing "disrespect to the dead" as a ground for the
family of the deceased to recover moral and material damages, being under the title of
“Funerals”, obviously envisions the commission of the disrespect during the
period of mourning over the demise of the deceased or on the occasion of
the funeral of the mortal remains of the deceased. Neither was true herein.
Hence, the act of Eleanor Tabuada of fraudulently representing the late Loreta Tabuada
did not amount to disrespect to the dead as basis for the recovery of moral damages.

PM

LTD

1) Regalian Doctrine: (a) All lands not appearing to be clearly under private ownership are
presumed to belong to the State. Also, public lands remain part of the inalienable land of
the public domain unless the State is shown to have reclassified or alienated them to
private persons. (b) Exception to Regalian doctrine: The only exception to the Regalian
Doctrine is native title to land, or ownership of land by Filipinos by virtue of a claim of
ownership since time immemorial and independent of any grant from the Spanish Crown.
Thus, excepted from the scope of public domain are lands subject of a claim of ownership
based on native title.

2) Prohibition against foreigners acquiring or owning lands in the Philippines : (a)

Prohibition: Sec. 7, Art. XIII of the 1987 Constitution prohibits foreigners from acquiring
56
 lands in the Philippines, except by way of hereditary succession. (b) Prohibition includes
ownership in trust: The prohibition against aliens owning lands in the Philippines is
subject only to limited constitutional exceptions, and not even an implied trust can be
permitted on equity considerations. (c) When defect cured: The rule is that if land is
invalidly transferred to an alien who subsequently becomes a Filipino citizen or transfers
it to a Filipino citizen, the flaw in the original transaction is considered cured and the title
of the transferee is rendered valid

Problem:ANS: No, save for the exception provided in cases of hereditary succession, the
foreigner’s disqualification from owning lands in the Philippines is absolute. Not even
ownership of in trust is allowed. William cannot also be allowed to recover his funds
allegedly used in acquiring the land because the property was purchased in violation of
the Constitution. To allow reimbursement would in effect permit the foreigner spouse to
enjoy the fruits of a property which he is not allowed to own. One who loses his money
or property by knowingly engaging in an illegal contract may not maintain an action for
his losses. He may not also rely on the principle of unjust enrichment under Article 22 of
the Civil Code because said provision does not apply if, as in this case, the action is
proscribed by the Constitution or by the application of the pari delicto doctrine.

3) Lands of the public domain: (a) Classification: Section 3, Article XII of the 1987
Constitution classifies lands of the public domain into four (4) categories — agricultural
lands, forest or timber lands, mineral lands, and national parks. Only agricultural lands
are alienable. (b) When lands of public domain converted into patrimonial: To establish
that the land of the public domain has been converted into patrimonial property of the
State, the following must be proven: (1) the subject property has been classified as
agricultural land; (2) the property has been declared alienable and disposable; and (3)
there is an express government declaration or manifestation that the property is already
patrimonial, or is no longer retained for public service or the development of national
wealth.

4) Original registration under Section 14(1), PD 1529 : (a) Requisites: (i) the land is
alienable and disposable property of the public domain; (ii) the applicant and its
predecessors-in-interest have been in open, continuous, exclusive and notorious
possession and occupation of the land under a bona fide claim of ownership; and
(iii) the applicant and its predecessors-in-interest have possessed and occupied the land
since June 12, 1945, or earlier. (b) Proof of alienability: In Republic v.
T.A.N. Properties, Inc., the Court held that there are two documents which must be
presented to prove that the land subject of the application for registration is alienable and
disposable: (i) a copy of the original classification approved by the DENR Secretary and
certified as a true copy by the legal custodian of the official records, and (ii) a certificate
of land classification status issued by the CENRO or the Provincial Environment and
Natural Resources Office (PENRO) based on the land classification approved by the
DENR Secretary. (c) When required to be alienable and disposable: According to
jurisprudence, it is not necessary that the land must have been declared alienable and
disposable as of June 12, 1945, or earlier. It is only the possession and occupation which
is required to date back to June 12, 1945, or earlier. It is sufficient that the land has
already been declared part of the alienable and disposable agricultural public lands at the
57
 time of the application for registration. This means that Section 14(1) should be
interpreted to include possession before the declaration of the land’s alienability as long
as at the time of the application for registration, the land has already been declared part of
the alienable and disposable agricultural public lands.

5) Effect of compliance by applicant of requirements under Section 14(1): The applicant

“shall be conclusively presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title under this section.” In
other words, upon compliance with the requisites of the Section 14(1), the applicant
becomes the owner of the land by virtue of an imperfect or incomplete title. By legal
fiction, the land has already ceased to be part of the public domain and has become
private property. At this point, original registration of the title, via judicial proceedings,
takes place as a matter of course, the registration court does not grant the applicant title
over the property but merely recognizes the applicant’s existing title which had
already vested upon compliance with the requirements of Section 14(1).
Consequences of the land becoming private and no longer part of the land of public
dominion:

 If the land is awarded to someone else by way of free patent (and not to the actual
occupant who already complied with the requirements of Section 14[1]), the free
patent is void. The settled rule is that a free patent issued over a private
land is null and void, and produces no legal effects whatsoever.
Private ownership of land is not affected by the issuance of a free patent over the
same land, because the Public Land Law applies only to lands of the public
domain. The Director of Lands has no authority to grant free patent to lands that
have ceased to be public in character and have passed to private ownership.

 In the foregoing situation, what is the remedy of the actual possessor who already
acquired private ownership by virtue of an imperfect title? His remedy is an
action for the declaration of nullity of the free patent and the certificate of title. A
cause of action for declaration of nullity of free patent and certificate of title
would require allegations of the plaintiff’s ownership of the contested lot prior to
the issuance of such free patent and certificate of title as well as the defendant’s
fraud or mistake; as the case may be, in successfully obtaining these documents of
title over the parcel of land claimed by plaintiff. In such a case, the nullity
arises strictly not from the fraud or deceit but from the fact that the
land is beyond the jurisdiction of the Bureau of Lands to bestow and
whatever patent or certificate of title obtained therefor is
consequently void ab initio. The real party in interest is not the State but the
plaintiff who alleges a pre- existing right of ownership over the parcel of land in
question even before the grant of title to the defendant.

 Since the property is already private land upon compliance with the requirements
of Section 14(1) if the land is sold to a private corporation, the prohibition under
Section 3, Article XII of the 1987 Constitution does not apply because what is
acquired by the corporation is not land of the public domain, but private land. On
the other hand, if the land sold to the private corporation is still part of the land of
58
 the public domain because the seller failed to comply with the requirements of
Section 14(1), the prohibition still applies.

6) Prohibition against private corporation acquiring lands of the public domain: (a)
Prohibition: Section 3, Article XII of the 1987 Constitution provides that: “xxx
Private corporations or associations may not hold such alienable lands of the public
domain except by lease, for a period not exceeding twenty-five years, renewable for
not more than twenty-five years, and not to exceed one thousand hectares in area.” (b)
Applicability of prohibition: The prohibition does not apply if what is sold to a private
corporation is not land of the public domain but private land because the seller already
complied with the requirements of Section 14(1). In such a situation, the objection that
the juridical person is not qualified to apply for judicial confirmation of title under
Section 48(b) of PLA and Sec. 14(1) of PD 1529 is technical, rather than substantial. On
the other hand, if the land sold to the private corporation is still part of the land of the
public domain because the seller failed to comply with the requirements of Section 14(1),
the prohibition still applies.

7) Original registration under Section 14(2), PD 1529 : (a) Requisites: (i) the land is an
alienable and disposable, and patrimonial property of the public domain; (ii) the applicant
and its predecessors-in-interest have been in possession of the land for at least 10 years,
in good faith and with just title, or for at least 30 years, regardless of good faith or just
title; and (iii) the land had already been converted to or declared as patrimonial property
of the State at the beginning of the said 10-year or 30-year period of possession. (b) Only
patrimonial property of the State can be acquired by prescription because a property of
public dominion is outside the commerce of man and cannot be acquired by way of
prescription. (c) How to establish that land is already patrimonial: To establish that the
land subject of the application has been converted into patrimonial property of the State,
an applicant must prove the following: (i) the subject property has been classified as
agricultural land; (ii) the property has been declared alienable and disposable; and (iii)
there is an express government declaration or manifestation that the property is already
patrimonial, or is no longer retained for public service or the development of national
wealth. Without the concurrence of these conditions, the land remains part of public
dominion and thus incapable of acquisition by prescription.

8) Distinctions between Section 14(1) and Section 14(2): (i) Section 14(1) mandates
registration on the basis of possession, while Section 14(2) entitles registration on the
basis of prescription; (ii) In Section 14(1), the land is alienable and disposable
agricultural land which is not yet patrimonial; while in Section 14(2), the land is already
patrimonial property of the State; (iii) In Section 14(1), it is not necessary for the subject
land to be alienable and disposable at the beginning of the possession on or before
June 12, 1945 - Section 14(1) only requires that the property sought to be registered is
alienable and disposable at the time of the filing of the application for registration; on the
other hand, in Section 14(2), the alienable and disposable character of the land, as well
as its declaration as patrimonial
property of the State, must exist at the beginning of the relevant period of possession.

9) Decree of registration: (a) When is property considered registered under Torrens system?
59
 ANS: Upon the finality of the judgment of the court (because there is no appeal)
adjudicating ownership upon the applicant and ordering the LRA to issue a decree of
registration and Original Certificate of Title, the land, for all intents and purposes, had
become, from that time, registered property, which could not be acquired by adverse
possession. (b) Reopening and review of decree of registration: only allowed within one
year from the date of the entry of such decree of registration if a party is deprived of his
interest in the land by reason of actual and extrinsic fraud. However, even if there is
actual fraud, the decree of registration may not be opened or be subjected to review
within said one-year period if the interest of an innocent purchaser for value who
acquired the land or an interest therein may be prejudiced.

10) Effect of expiration of one year period: (a) Indefeasibility of title: Upon the expiration of
said period of one year, the decree of registration and the certificate of title issued shall
become incontrovertible. (b) Remedy of aggrieved party: While the decree of
registration becomes incontrovertible after a year, it does not altogether deprive an
aggrieved party of a remedy in law. The acceptability of the Torrens System would be
impaired, if it is utilized to perpetuate fraud against the real owners. (i) If the property has
not yet passed to an innocent purchaser for value, an action for reconveyance is still
available. (ii) If the property has passed into the hands of an innocent purchaser for value,
the remedy is an action for damages.

11) Action for reconveyance: (a) Concept: In an action for reconveyance, the Torrens or
certificate of title is respected as incontrovertible and what is sought instead is the
transfer of the property which has been wrongfully or erroneously registered in the
defendant's name. All that the plaintiff must allege in the complaint are two facts which,
admitting them to be true, would entitle the plaintiff to recover title to the disputed land,
namely, (1) that the plaintiff was the owner of the land, and (2) that the defendant had
illegally dispossessed him of the same. (b) Prescriptive period: (i) if plaintiff is not in
possession, the prescriptive period is 10 years from issuance of the title because it is
based on implied trust where the defendant acquires the disputed property through
mistake or fraud so that he would be bound to hold the property for the benefit of the
person who is truly entitled to it and reconvey it to him. (ii) on the other hand, if the
plaintiff is in possession, the action is imprescriptible because the action would be in the
nature of a suit for quieting of title.

12) Action for compensation from Assurance Fund: (a) When proper: If the usurper is able to
transfer the land to an innocent purchaser for value and the usurper isunable to
compensate the original title holder for the loss, then the latter can claim compensation
from the Assurance Fund. (b) Prescriptive period for recovery from the AF: Six years
from the time the right to bring such action first occurred. (c) When will 6-year period
commence to run: Two requisites must be satisfied: (i) from the moment the innocent
purchaser for value registers his title; and (ii) upon actual knowledge thereof of the
original title holder (the claimant deprived of the land).

13) Certificate of title not subject to collateral attack: (a) Prohibition: A certificate of title
shall not be subject to collateral attack. It cannot be altered, modified, or canceled except
in a direct proceeding in accordance with law. Thus, the issue of the validity of title (e.g.
60
 whether or not it was issued fraudulently or in breach of trust) can only be assailed in an
action expressly instituted for that purpose.

 A provisional determination of ownership, whether made in an ejectment or

publiciana proceeding, does not pose a "real attack" on the Torrens title in
dispute since courts do not possess the jurisdiction to order the alteration,
modification or cancellation of Torrens titles in such cases. Hence, the issue of
whether the attack on a Torrens title is collateral or direct is immaterial in forcible
entry, unlawful detainer and publiciana cases because the resolution of the issue
of ownership is allowed on a provisional basis only.

 In accion reinvindicatoria, if the plaintiff's claim of ownership (and necessarily,

possession or jus possidendi) is based on his Torrens title and the defendant
disputes the validity of this Torrens title, then the issue of whether there is a direct
or collateral attack on the plaintiff’s title is also irrelevant. This is because the
court where the reivindicatory or reconveyance suit is filed has the requisite
jurisdiction to rule definitively or with finality on the issue of ownership — it can
pass upon the validity of the plaintiff's certificate of title. In other words, in a
reivindicatory suit, where the Torrens title or certificate of title is the basis of the
complaint's cause of action, there is always a direct attack on the certificate of title
the moment the defendant disputes its validity in a counterclaim or a negative
defense.

 An action for annulment of certificate of title is a direct attack on the title because
it challenges the judgment decree of title. Hence, there is no violation of Section
48 of Presidential Decree No. 1529 when the title is declared null and void by the
court.

14) Subsequent dealings: (a) Voluntary instrument: A voluntary instrument is a willful act of
the registered owner of the land to be affected by registration, such as sale, mortgage and
lease. For registration of a voluntary instrument, the mere entry by the register of deeds in
the entry or diary book, without the presentation of the owner’s duplicate certificate of
title for corresponding annotation of the

61
 conveyance, does not have the effect of a conveyance of the property. (b) Involuntary
instrument: An involuntary instrument is one pertaining to a transaction affecting lands in
which the registered owner’s cooperation is not needed and which transaction may even
be done against his will, such as attachment, adverse claim, or notice of lis pendens. In
registration of an involuntary instrument, the law does not require the presentation of the
owner’s duplicate certificate of title and considers the annotation of such instrument upon
the entry book, as sufficient to affect the real estate to which it relates.

Problem: May the registered owner of the land covered by an original copy of the title on
file with the RD be barred by res judicata from filing a second petition to replace its
owner’s duplicate copy of the certificate of title? In Philippine Bank of
Communications v. Register of Deeds for the Province of Benguet, two
successive petitions for replacement of lost owner's duplicate copy of TCT No. 21320
was filed by PBCom before the RTC of La Trinidad, Benguet. The first petition was
dismissed for insufficiency of evidence, i.e., for failure to prove the fact of loss, while the
second petition was on the ground of res judicata. When the case eventually reached the
Supreme Court, it was held that a registered owner who fails to prove the loss or
destruction of his/her owner's duplicate certificate of title may not be barred from refiling
a new petition to replace the same. The Court explained that it is extremely impracticable,
inconvenient, and unjust to perpetually preclude the registered owner from registering
any voluntary transaction, i.e., sale, donation, mortgage, lease, etc., on his/her land
simply because he/she failed to prove, to the satisfaction of the court, that he/she, in fact,
lost his/her title.

15) Adverse Claim and Notice of Lis Pendens, distinguished : (i) an adverse claim protects the
right of a claimant during the pendency of a controversy while a notice of lis
pendens protects the right of the claimant during the pendency of the action or
litigation; and (ii) an adverse claim may only be cancelled upon filing of a petition
before the court which shall conduct a hearing on its validity while a notice of lis
pendens may be cancelled without a court hearing. A notice of lis pendens is a mere
incident of an action which does not create any right nor lien. It may be cancelled without
a court hearing. In contrast, an adverse claim constitutes a lien on a property. As such, the
cancellation of an adverse claim is still necessary to render it ineffective, otherwise, the
inscription will remain annotated and shall continue as a lien upon the property.

Q: Will the institution of an action and the corresponding annotation of a notice of lis
pendens at the back of a certificate of title invalidates a prior notation of an adverse
claim appearing on the same title, where the aforementioned action and the adverse claim
refer to the same right or interest sought to be recovered? ANS: According to
jurisprudence, the outright cancellation of adverse claim on the sole basis of a subsequent
notice of lis pendens on the same title is erroneous. A notice of lis pendens is a mere
incident of an action which does not create any right nor

62
 lien. It may be cancelled without a court hearing. In contrast, an adverse claim constitutes
a lien on a property. As such, the cancellation of an adverse claim is still necessary to
render it ineffective, otherwise, the inscription will remain annotated and shall continue
as a lien upon the property.

16) Non-registrable properties: (i) Properties of public dominion, including lands of the
public domain which are inalienable. Necessarily, as lands of public dominion are
inalienable, they cannot be acquired through prescription and cannot be registered under
the Land Registration Law and be the subject of a Torrens Title. (ii) A land that is already
registered under the Torrens system. It is settled that a land registration court has no
jurisdiction to order the registration of land already decreed in the name of another in an
earlier land registration case. A second decree for the same land would be null and void,
since the principle behind original registration is to register a parcel of land only once.

Q: What is the remedy if a property of public dominion or an inalienable land of the

public domain is erroneously registered in the name of a private individual? ANS: The
remedy is an action for reversion. A reversion proceeding is the manner through which
the State seeks to revert land to the mass of public domain and is the proper remedy when
public land is fraudulently awarded and disposed of in favor of private individuals or
corporations. The objective of an action for reversion of public land is the cancellation of
the certificate of title and the resulting reversion of the land covered by the title to the
State. Such actin cannot be barred by res judicata, estoppel or prescription. Only the
State, as represented by the OSG, has the personality to file an action for reversion.

17) Actions for Reversion, Cancellation of Free Patent and Reconveyance: (a) Concept: A
reversion proceeding is the manner through which the State seeks to revert land to the
mass of public domain and is the proper remedy when public land is fraudulently
awarded and disposed of in favor of private individuals or corporations. (b) Distinguished
from action for nullity of free patent: An ordinary civil action for declaration of nullity of
free patents and certificates of title is not the same as an action for reversion. The
difference between them lies in the allegations as to the character of ownership of the
realty whose title is sought to be nullified. In an action for reversion, the pertinent
allegations in the complaint would admit State ownership of the disputed land. Hence,
where the plaintiff in his complaint admits that he has no right to demand the cancellation
or amendment of the defendants title because even if the title were canceled or amended
the ownership of the land embraced therein or of the portion affected by the amendment
would revert to the public domain, it was ruled that the action was for reversion. (c)
Action for nullity of free patent: On the other hand, a cause of action for declaration of
nullity of free patent and certificate of title would require allegations of the plaintiffs
ownership of the contested lot prior to the issuance of such free patent and certificate of
title as well as the defendants fraud or mistake;

63
 as the case may be, in successfully obtaining these documents of title over the parcel of
land claimed by plaintiff. In such a case, the nullity arises strictly not from the fraud or
deceit but from the fact that the land is beyond the jurisdiction of the Bureau of Lands to
bestow and whatever patent or certificate of title obtained therefor is consequently void
ab initio. The real party in interest is not the State but the plaintiff who alleges a pre-
existing right of ownership over the parcel of land in question even before the grant of
title to the defendant. (Example: the possessor already complied with the requisites of
Section 14(1), in which case the land already becomes private land and no longer part of
the lands of the public domain, but another person was able to apply for a free patent over
said property through fraud, the proper remedy is an action for the for declaration of
nullity of free patent and certificate of title.) (d) Action for reconveyance: In an action for
reconveyance or accion reivindicatoria, the free patent and the Torrens or certificate of
title are respected as incontrovertible and what is sought instead is the transfer of the
property which has been wrongfully or erroneously registered in the defendant's name.
All that the plaintiff must allege in the complaint are two facts which, admitting them to
be true, would entitle the plaintiff to recover title to the disputed land, namely, (1) that the
plaintiff was the owner of the land, and (2) that the defendant had illegally dispossessed
him of the same.

18) Dealings with unregistered land: (a) Rule: The conveyance of unregistered land shall not
be valid against any person unless registered, except (1) the grantor, (2) his heirs and
devisees, and (3) third persons having actual notice or knowledge thereof. (b)
Constructive notice: Although a deed or instrument affecting unregistered lands would be
valid only between the parties thereto, third parties would also be affected by the
registered deed or instrument on the theory of constructive notice once it was further
registered in accordance with Act 3344 or Section 113 of PD 1529 (the law which
replaced Act 3344). Upon the effectivity PD 1529, all unregistered lands may still be
registered pursuant to Section 113 thereof, which essentially replicates Section 194, as
amended by Act 3344, to the effect that a deed or instrument conveying real estate not
registered under the Torrens system should affect only the parties thereto unless the deed
or instrument was registered in accordance with Section 113. (c) Exception to
constructive notice: The only exception to the rule on constructive notice by registration
of the deed or instrument affecting unregistered realty exists in favor of “a third party
with a better right.” In other words, registration under Act 3344 of Section 113 of PD
1529 is without prejudice to a third party with a better right. (d) Meaning of “better
right:” It does not simply refer to a “previous unrecorded sale,” without nothing more.
Hence, if the first buyer under an unrecorded sale did not took possession of the land and
did not exercise any act of ownership but simply relying on the previous unrecorded sale,
he does not acquire a better right compared to the second recorded sale. But even if the
first sale is unrecorded, but the first buyer already took possession and exercised acts of
ownership over the land, he already

64
 acquired a better right and the subsequent registration of the second sale “is without
prejudice to his better right.”

19) Double sale involving unregistered lands: If the same piece of land was sold to two
different purchasers, to whom shall ownership belong? as between two buyers of
unregistered land, is the rightful owner—the first buyer in a prior sale that was
unrecorded, or the second buyer who purchased the land in an execution sale whose
transfer was registered in the Register of Deeds? ANS: (1) In Carumba v. Court of
Appeals and Radiowealth Finance Company v. Court of Appeals, the Court
ruled that under Act 3344 (or Section 113 of PD 1529), registration of instruments
affecting unregistered lands is "without prejudice to a third party with a better right". The
afore-quoted phrase has been held by the Court to mean that the mere registration of a
sale in one's favor does not give him any right over the land if the vendor was not
anymore the owner of the land having previously sold the same to somebody else even if
the earlier sale was unrecorded. This rule will apply if the first buyer under an unrecorded
sale already took possession of the land and exercised acts of ownership. On the other
hand, if the first buyer in an unrecorded sale, is not yet the owner because he has not yet
taken possession of the property and has not yet exercised acts of ownership, the second
buyer in a recorded sale will be preferred. (2) Under the second paragraph of Article 1544
of the Civil Code, the second buyer must act in good faith in registering the deed.
Consequently, the registration by the first buyer under Act 3344 (or Section 113 of PD
1529) can have the effect of constructive notice to the second buyer that can defeat the
latter’s right as such buyer in good faith.

PROPERTY

20) Property of public dominion: Based on Article 420 of the Civil Code, there are three
kinds of property of public dominion: (1) those for public use, which may be used by
anybody, such as roads and canals; (2) those for public service, which may be used only
by certain duly authorized persons, although used for the benefit of the public; and (3)
those used for the development of national wealth, such as our natural resources.

21) Characteristics of property of public dominion vs. patrimonial property: (1) It is

outside the commerce of man and, thus, cannot be leased, donated, sold, or
be the object of any contract, except insofar as they may be the object of repairs or
improvements and other incidental things of similar character. Hence, they cannot be
appropriated or alienated. Inalienability is an inherent characteristic of property
of the public dominion. Any sale, disposition or encumbrance of such property of the
public dominion is void for being contrary to law and public policy. (2) Necessarily, as
lands of public dominion are inalienable, they cannot be acquired through prescription
and cannot be registered under the Land Registration Law and be the subject of a Torrens
Title. (3) Being outside the

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 commerce of man, cannot be the subject of an auction sale, levy, encumbrance or
disposition through public or private sale. Any encumbrance, levy on execution or
auction sale of any property of public dominion is void for being contrary to public
policy. (4) They cannot be burdened by any voluntary easement.

 In Authority of the Free Port Area of Bataan v. F.F. Cruz & Co., Inc. and
City of Lapu-lapu and Province of Bataan v. Philippine Economic Zone
Authority, the Court classified the Bataan Economic Zone (now AFAB) and the
Philippine Economic Zone Authority as government instrumentalities vested with
corporate powers. In these cases, the Court recognized that lands located within the
Bataan Economic Zone (now FAB) form part of a port and necessarily constitute
inalienable lands of the public domain. It explicitly held that these lands remained
under the ownership of the State despite being titled under the name of PEZA (now
AFAB) as its government instrumentality. Hence, in City of Lapu-lapu, it was held
that its properties are not subject to real property taxes. In the AFAB case, the Court
ruled that since the State remains the beneficial owner of the lands owned by AFAB,
it follows that it is the State, not AFAB, who is the real party in interest to institute
the case for the reversion of the lands subject matter of the case.

 Although the property is owned by a State instrumentality, it becomes patrimonial

property if it is devoted to commercial purposes. In PNOC Alternative Fuels
Corp. v. National Grid Corporation of the Philippines, the subject property
owned by PAFC is classified as patrimonial because the same is declared by law i.e.,
P.D. No. 949, as amended by R.A. No. 10516, to be an industrial and commercial
estate that may be transferred or conveyed to private persons so that business
activities may be conducted therein. Thus, it can be subjected to expropriation by the
National Grid Corporation, being private property.

22) Patrimonial Property of State: (a) Concept: All other property of the State, which is not of
the character stated in Article 420 of the NCC, is patrimonial property. It is a property
owned by the State in its private or proprietary capacity. Otherwise stated, patrimonial
property is private property of the government. (b) Sub-classification of patrimonial
property: (i) those which are not property of public dominion or imbued with public
purpose based on the State’s current or intended use, and may thus be classified as
patrimonial property “by nature” pursuant to Article 421, and (ii)

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 those which previously assumed the nature of property of public dominion by virtue of
the State’s use, but which are no longer being used or intended for said purpose, and may
thus be classified as “converted” patrimonial property pursuant to Article 422.

23) Characteristics of patrimonial property: (1) It is within the commerce of man and,
thus, can be leased, donated, sold, or be the object of any contract. Hence,
they can be appropriated or alienated. Alienability is an inherent characteristic of
patrimonial property of the State. (2) They can be acquired through prescription.
(3) They can be the subject of an auction sale, levy, encumbrance or disposition through
public or private sale. (4) They can be burdened by any voluntary easement.

24) Properties of the LGUs: (a) When property of public dominion or public property: If
expressly enumerated in paragraph 1 of Article 424 as intended for public use, such as
provincial roads, city streets, municipal streets, the squares, fountains, public waters,
promenades, and public works for public service paid for by said provinces, cities, or
municipalities; OR, even if not enumerated therein, but devoted to public and
governmental purposes, such as local administration, public education, and public health.
(b) When patrimonial: If not enumerated in paragraph 1 of Article 424 and devoted to
proprietary or commercial purposes. (c) When subject to absolute control by. Congress: If
the property is owned by the local government in its public and governmental capacity, it
is public and Congress has absolute control over it; but if the property is owned in its
private or proprietary capacity, then it is patrimonial and Congress has no absolute
control, in which case, the local government unit cannot be deprived of it without due
process and payment of just compensation.

Problem: Congress enacted RA 8562 creating the Bataan Polytechnic State College
(BPSC), which is an integration of two existing state-run schools in Bataan. The two
schools are situated in parcels of land registered in the name of the Province of Bataan. In
RA 8562, the law ordered the transfer of said parcels of land to BPSC without payment
of compensation to the Province of Bataan. The Province claimed that it was deprived of
its properties without just compensation. Is the Province correct? ANS: No, the province
is not deprived of its properties without just compensation because both properties are
devoted to public education, hence classified as public property within absolute control of
Congress.

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 Although said properties are titled to the local government, they are held by it in trust for
the State. Hence, the local government holds the subject property subject to the
paramount power of the legislature to dispose of the same, for after all it owes its
creation to it as an agent for the performance of a part of its public work, the local
government being but a subdivision or instrumentality thereof for purposes of local
administration. Accordingly, the legal situation is the same as if the State itself holds the
property and puts it to a different use.

25) Actions for recovery of possession: (1) Accion interdictal or a summary ejectment
proceeding, which may be either for forcible entry (detentacion) or unlawful detainer
(desahucio), for the recovery of physical or material possession (possession de facto)
where the dispossession has not lasted for more than one year, and should be brought in
the proper inferior court (MTC). (2) Accion publiciana or the plenary action to recover
the better right of possession (possession de jure), which should be brought in the proper
inferior court or Regional Trial Court (depending upon the value of the property) when
the dispossession has lasted for more than one year (or for less than a year in cases other
than those mentioned in Rule 70 of the Rules of Court). (3) Accion reivindicatoria or
accion de reivindicacion or reivindicatory action, which is an action for recovery of
ownership which must be brought in the proper inferior court or Regional Trial Court
(depending upon the value of the property). In an accion reivindicatoria, the cause of
action of the plaintiff is to recover possession by virtue of his ownership of the
land subject of the dispute.

Problem: Dominic Gutierrez was awarded a patent over a parcel of land located at Delfin
Albano, Isabela on May 10, 1995. On May 17, 1995, OCT No. P-61499 was issued to
Dominic pursuant to said patent. In 1997, Dominic’s father, Dominador Gutierrez,
representing Dominic who was then still a minor, filed before the RTC an action for
recovery of ownership, possession with damages with prayer for preliminary mandatory
injunction and temporary restraining order against Alfredo Cullado. It was claimed that
Cullado had been squatting on the parcel of land covered by OCT No. P-61499 as
early as 1977, and that despite repeated demands, Cullado refused to vacate the said
lot. In his Answer, Cullado interposed the special and affirmative defenses of his actual
possession and cultivation of the subject parcel of land in an open, adverse and
continuous manner. He likewise asked for the reconveyance of the property, considering
that Dominic and his father fraudulently had the subject property titled in Dominic’s
name. During the

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pendency of the action, Cullado died. The RTC rendered a decision in favor of the heirs
of Cullado. The RTC ruled that Cullado had become the owner of the land in controversy
"through the medium of acquisitive prescription" having been in possession by himself
and with his wife for 36 years. On a petition for annulment of judgment before the CA,
the appellate court reversed the decision of the RTC and ruled that Cullado’s defense
constitute a collateral attack against Dominic’s title, which cannot be allowed in an
accion publiciana.

Q1: Is the defense of Cullado a collateral attack upon Dominic’s certificate of Title?
ANS: No, because in an accion publiciana, the defense of ownership (i.e., that the
defendant, and not the plaintiff, is the rightful owner) will not trigger a collateral attack
on the plaintiffs Torrens or certificate of title because the resolution of the issue of
ownership is done only to determine the issue of possession. While the objective of the
plaintiffs in accion publiciana is to recover possession only, not ownership, the court
may, however, pass upon the issue of ownership raised by the parties to determine who
between the parties has the right to possess the property. However, the adjudication on
ownership is merely provisions; it is only for the purpose of resolving the issue of
possession, where the issue of ownership is inseparably linked to the issue of possession.
The adjudication of the issue of ownership, being provisional, is not a bar to an action
between the same parties involving title to the property.

Q2: Will the defense of Cullado that the title of Dominic was procured through fraud
prosper in the accion publiciana filed by Dominic? ANS: No, because the issue as to
whether title was procured by falsification or fraud can only be raised in an action
expressly instituted for the purpose and a Torrens title can be attacked only for fraud
within one year after the date of the issuance of the decree of registration. Since the one-
year period had already lapsed when Cullado questioned the OCT's validity on the
ground of fraud (i.e., counted from the issuance on May 17, 1995 of the OCT in the name
of Dominic), then Dominic's OCT had already become indefeasible and, until cancelled
in an appropriate direct proceeding, remains to be valid.

Q3: Who between Dominic and Cullado is entitled to possession? ANS: Dominic has a
better right of possession because his right is based on ownership recognized by OCT P-
61499 registered and titled under his name. The age-old

69
 rule that the person who has a Torrens title over the land is entitled to possession thereof
squarely applies in his favor.

Q4: Is the RTC correct when it ruled that Cullado had become the owner of the land in
controversy "through the medium of acquisitive prescription" having been in possession
by himself and with his wife for 36 years? ANS: No, the RTC is not correct because: (1)
While the RTC could have resolved the issue of ownership provisionally to determine
the "better right of possession," which is allowed in an accion publiciana, it was
without any power or jurisdiction to order the reconveyance of the land in
dispute because that can be done only upon a definitive ruling on the said issue —
something that cannot be done in an accion publiciana. (2) the RTC's ruling that
Cullado had become owner by acquisitive prescription is likewise without basis since the
evidence adduced by the heirs of Cullado do not show that the land was already private
land at the time Cullado started his possession thereof.

26) Ejectment:

Problem No. 1: XYZ Corp. is constructing a commercial building on its property. As it was
in the process of making deep excavation to construct a one-level parking lot, it discovered
sometime in April 1, 2018 that PLDT placed telephone lines, cables, and manholes
underneath the ground, which prevented the corporation from digging further. When XYZ
demanded from PLDT on June 5, 2018 to remove the underground telephone lines, cables,
and manholes, or to shoulder the parking exemption fee, PLDT ignored such demand. Hence,
XYZ filed an action for forcible entry against PLDT on May 5, 2019.

Q1: Is this a proper subject matter of an ejectment case? ANS: Yes, because under Article
437 of the Civil Code, the owner of a parcel of land has rights not only to the land's surface,
but also to everything underneath and the airspace above it up to a reasonable height. The
existence of PLDT's cables affected the right of the surface owner to make use of its right to
possess. This can be considered a burden, which may be removed by forcible entry or
unlawful detainer actions. (PLDT V. Citi Appliance MC Corp)

Q2: Will the action prosper? ANS: No, because the action for forcible entry had already
prescribed. An action for forcible entry must be filed within one (1) year from the date of
actual entry on the land. However, when the entry was done through stealth, the one-year
time bar is reckoned from the time the entry was discovered. Here, XYZ Corp. discovered
the underground cables and lines on April 1, 2018. However, the action was only filed on
May 5, 2019. Hence, the one-year period had already prescribed.

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Problem No. 2: On July 1, 2021, A filed a complaint for ejectment of extended structures that
partly occupied the portion of his firewall. He alleged that his neighbor, X, built a portion of
the second floor of the latter’s house on top of his firewall. X contended that since the
complaint referred to encroachment, not of a land or building, but of a firewall, the same
cannot be a subject of an ejectment case. X argued that the case is one for specific
performance, which is within the RTC's jurisdiction. Is X correct? ANS: No, X is not correct
because an aggrieved owner/possessor of a property can properly resort to a case for
ejectment in order to remove structures affecting his right to possess the entirety of his
property, including his firewall. A lawful owner has the right to fully enjoy possession over
his entire property, not only over the land's surface but also over the structures built thereon,
including everything underneath and the airspace above it up to a reasonable height. As such,
a landowner has the right to eject those who unlawfully encroach and build upon not only on
the lot itself, but as well as on the structures existing on his property.

27) Article 448; Builder in Good Faith:

Problem No. 1: LMSI purchased a unit constructed on the roof deck of Legaspi Towers
200, called Concession 3 unit. After acquiring said unit, LMSI constructed another unit
on the roof deck of Concession 3. When the condominium corporation learned of the
illegal structure, it demanded for its immediate demolition. LMSI claimed that it is a
builder in good faith entitled to invoke Art. 448 of the Civil Code. Additionally, LMSI
claims that it owns the airspace above Concession 3.

Q1: Is LMSI correct that it owns the airspace above Concession 3? ANS: LMSI does not
own the airspace above Concession 3. The air space wherein the additional unit was built
is not only above Concession 3, but above the entire condominium building. It is part of
the common area. The ownership by a unit owner is limited only to the four walls,
ceilings, windows and doors thereof. It certainly does not include the roof or the areas
above it.

Q2: IS LMSI a builder in good faith? ANS: No, because Article 448 on builders in good
faith does not apply where there is a contractual relation between the parties. Here, the
parties are bound by the Master Deed of Legaspi Towers and the By- laws of Legaspi
Towers, which prohibit the additional structure constructed by LMSI. In addition, Article
448 does not also apply when the situation is already covered by a special legislation,
such as the Condominium Act. Pursuant to said Act, the land belongs to a condominium
corporation, wherein the builder, as a unit owner, is considered a stockholder or member.
Hence, pursuant to the Condominium Act, as well the Master Deed and By-Laws of the
condominium corporation, the illegal structure can be demolished.

Problem No. 2: Elvis is in possession of the parcel of land owned by Conrado. Since they
are close relatives, Conrado allowed Elvis to temporarily occupy the property and to
introduce improvements thereon. In the course of his possession

71
 of the land, Elvis introduced various improvements thereon by planting bamboos, nipa
palms and coconut trees, and by constructing fishponds. Subsequently, Conrado
demanded upon Elvis to vacate the property. Is Elvis entitled to the benefits granted to a
builder in good faith under Article 448? ANS: While Elvis cannot be deemed to be a
builder in good faith, it being undisputed that the land in question is titled land in the
name Conrado, the former is entitled to the benefits granted to a builder in good faith
because he constructed improvements on the subject lot with the knowledge and consent
of the landowner. In exceptional cases, the Court has applied Article 448 to instances
where a builder, planter, or sower introduces improvements on titled land if with the
knowledge and consent of the owner.

28) Accretion; Alluvium: (a) Requisites: ownership over a parcel of land may be acquired by
reason of accretion if the following requisites are satisfied: (1) that the accumulation of
soil or sediment be gradual and imperceptible; (2) that it be the result of the action of the
waters of the river; and (3) that the land where the accretion takes place is adjacent to the
bank of the river, creeks, streams, or on the shore of lakes. If the foregoing requisites are
complied, the alluvial deposits along the banks of a river, creek, stream, or lake, do not
form part of the public domain as the alluvial property automatically belongs to the
owner of the estate to which it may have been added. Accordingly, no free patent
application is necessary for the riparian owner to lay claim over the accreted land, and
any such disposition granted by the pertinent authorities would be beyond their
jurisdiction, hence, null and void. (b) Accretion on sea bank or sea shore: On the other
hand, accretions on a sea bank or seashore shall remain as property of public dominion
pursuant to Article 4 of the Spanish Law of Water of 1866. This is what the Court is
referring to as a case of “littoral accretion.” According to the Court, littoral accretions
are considered inalienable lands of the public domain. (c) Drying up of bed, not
accretion: However, the drying up of the river is not accretion. The process of drying up
of a river to form dry land involved the recession of the water level from the river banks,
and the dried-up land did not equate to accretion, which was the gradual and
imperceptible deposition of soil on the river banks through the effects of the current. In
accretion, the water level did not recede and was more or less maintained. Dried up river
bed remains to be property of public dominion, except when the claimant of the
abandoned bed is able to establish the following requisites of Article 461: (i) the old
course; (ii) the new course: and (iii) the change in the course of river is either nature or
the Government itself.

29) Article 487 on co-ownership:

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 Problem: The children of Bernardo De Vera, Sr. inherited from the latter a house and lot
which Bernardo acquired from the NHA. Two years after the death of Bernardo in 1993,
Virgilio Manzanero, then Barangay Chairman of the said place, forcibly took possession
of the subject property, destroyed the structures and house standing on the property, and
successfully divested the children of Bernardo of possession. When the De Vera siblings
filed an accion reinvindicatoria against Manzanero, the latter claimed that the whole
property was sold to the Manzaneros by the mother of the complainants. The RTC
dismissed the complaint filed by the De Veras, ruling that Manzanero became a co-owner
and that the appropriate course for the complainants is not to file an action for recovery of
possession of the property, but to commence an action for judicial partition. The CA
affirmed the decision of the RTC. Are the decisions of the RTC and CA correct? ANS:
No, because even assuming co-ownership exists the parties, the De Veras were not
precluded from filing an action to recover possession against the Manzaneros. According
to jurisprudence, a co-owner may file an action for recovery of possession against a co-
owner who takes exclusive possession of the entire co- owned property; but the only
effect of such action is a recognition of the co- ownership. This means that the court in
which the action was filed can in fact rule on the existence or non-existence of co-
ownership between the parties. Thus, a separate action for partition to determine the
existence of co-ownership is not necessary. Such action will only be necessary upon a
determination of the court that co-ownership indeed exists. In ruling that the De Veras
should instead file an action for partition, the RTC and the CA effectively denied them a
remedy that is available to them under Article 487 of the Civil Code.

30) Sale of Definite Portion by Co-owner: (a) Rule: A sale of a definite portion of a common
property requires the consent of all co-owners because it operates to partition the land
with respect to the co-owner selling his or her specific share therein. Hence, without the
consent of the other co-owners, a co-owner cannot sell a definite portion of the co-owned
property: (b) Effect of sale of definite portion without consent of other co-owners: The
sale of a specifically identified portion of an unpartitioned parcel of land is not invalid,
but merely ineffective as against the other co-owners. It is subject to ratification in case
the disposing co-owner subsequently acquires the undivided or pro-indiviso interests
of the other co- owners. Thus, the subsequent ratification or acquisition will validate
and make the contract fully effective as of the date the contract was entered into. (c)
Effect of

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 such sale upon the selling co-owner: For purposes of upholding the validity of said
unconsented sale in a limited extent, the principle of estoppel must apply to prevent the
seller from denying the validity of the sale to the extent of his or her pro-indiviso share.
Thus, the sale of a definite portion by a co-owner without the consent of the other co-
owners shall be deemed valid up to the extent of his or her pro-indiviso share. (c) Effect
of such sale upon the buyer: The buyer only acquires the ideal share of the selling co-
owner and not ownership of the specific portion sold to him.
31) Easement; Article 624: (a) Concept: The mode of acquiring an easement under Article
624 is a “legal presumption or apparent sign.” Pursuant to Article 624, when one person
who owns two properties establishes an apparent sign of an easement between them, this
gives rise to a title over an easement when either of the properties is transferred to
another person. The exception is if the contrary is provided in the deed of transfer, or if
before the deed is executed, the apparent sign is removed. (b) Requisites for application
of Article 624: (i) That there exist an apparent sign of servitude between two estates;
(ii) That at the time of the establishment of such sign, the ownership of the two
estates resides in one person; (iii) That the sign of the easement be established by the
owner of both estates
because the article will not apply when the easement is established by a person different
from the owner; (iv) That the ownership over the two estates is later on divided, either by
alienation or partition; and (v) That at the time of division of ownership, nothing is stated
in the document of alienation or partition contrary to the easement nor is the sign of the
easement removed before the execution of the document. (c) Effect of compliance with
requisites: An easement is created by operation of law on the day of the division of
ownership.

Problem No. 1: In 2008, “A” purchased a lot with one-storey residential house erected
thereon from “B,” who also owned the adjacent lot. At the time of the purchase, the
adjacent property was empty. On the residential house purchased by A, there were
windows facing the adjoining lot. In 2019, “B” constructed a two- storey residential
house on the adjacent lot which obstructed A’s light, air, and view. The new structure
was constructed on the adjacent lot at a distance of less than three meters away from the
boundary line. Thus, A filed a complaint against the B praying: (1) that he be declared as
having acquired an easement of light, air, and view against the adjacent lot; (2) that B be
prohibited from constructing any structure on the adjacent taller than A’s one-storey
residential house; and (3) that B be prohibited from building any structure on their lot at a
distance of less than three meters from the boundary line.

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 Q1: Did A acquire an easement of light and view against the adjacent lot? ANS: Yes, A
already acquired upon on the day he purchased the land from B. According to Article
624, when one person who owns two properties establishes an apparent sign of an
easement between them, this gives rise to a title over an easement when either of the
properties is transferred to another person, unless the contrary is provided in the deed of
transfer, or if before the deed is executed, the apparent sign is removed. This is precisely
the situation that has occurred in the instant property and its adjoining lot, were both
owned by a singular owner, B. On the subject property, a one-storey house laden with
several windows and openings was built and the windows and openings remained open.
Then in 2008, the subject property, together with the one-storey structure, was alienated
in favor of A, while B retained the adjoining lot. Since nothing contrary to the easement
is stated in the deed of sale nor did the apparent sign removed at the time of the sale, A
acquired by operation of law an easement of light and view over the adjacent lot.

Q2: Is A correct that the distance to be observed is the three-meter rule under Article 673 and
not the two-meter rule under Article 670? ANS: Yes, A is correct. of law, i.e., Article 624 of
the Civil Code, it is the three-meter rule in Article 673 which is applicable, not the two-meter
requirement under Article 670. Thus, B can be ordered to demolish or renovate portions of
his residential building constructed on the adjacent lot so that the three-meter distance rule as
mandated under Article 673 of the Civil Code is observed.

Problem No. 2: X owned 5 contiguous parcels of land, with 2 parcels located in front
adjoining the public road and providing access to the three other properties. X caused the
annotation of an easement of right of way on the titles of the front properties in favor of
the back properties. In 2015, X mortgaged the front properties in favor of PNB which
foreclosed and sold said properties to A when X defaulted on the loan. A refused to
recognize the easement annotated on the titles of the front properties on the ground that it
was not valid because X was the owner of the 5 parcels of land when the easement was
annotated. A is demanding payment of compensation from X for the grant of an easement
of right of way. X does not want to pay. Thus, he filed an action in court for the
enforcement of the easement carried over to A’s titles. Will the action prosper? ANS:
Yes, because X already acquired an easement of right of way by operation of law
pursuant to Article 624. Clearly,

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 Article 624 is applicable in this case. The front properties and the back properties were all
previously owned by X, who created an apparent sign of an easement on the front
properties when: (1) he used a portion of the front properties to give the back properties
access to the national highway; and (2) he had it annotated on the front properties' titles
as an easement of right of way in favor of the back properties. In addition, when the front
properties were eventually transferred to PNB, the bank did not raise any qualms or
stipulated against the easement of right of way or the annotations. At that point, X already
acquired an easement of right of way pursuant to Article 624. Thus, when the front
properties were sold, the titles of A bore the same annotations as those of X’s.

32) Requisites for compulsory grant of right of way: (i) That the dominant estate is
surrounded by other immovables and has no adequate outlet to a public highway;
(ii) There must be payment of proper indemnity; (iii) That the isolation was not due to
acts of the proprietor of the dominant estate; and (iv) That the right of way claimed is at
the point least prejudicial to the servient estate; and insofar as consistent with this rule,
where the distance from the dominant estate to a public highway may be the shortest.

 However, the mere fact that the purchaser of a parcel of land knew that the
property he was buying was already surrounded by other immovables leaving him
no adequate ingress or egress to a public highway cannot prevent him from
demanding later on a compulsory right of way.

 In one case, the owner of the servient estate opposed the application of the
dominant estate for a compulsory grant of a right of way on the ground that the
isolation of the dominant estate was attributable to the applicant’s own acts. They
pointed out that when the applicant purchased the dominant
estate, he knew that the former owner of the dominant estate was in negotiation
with them for the sale of the dominant estate, thus, he was in bad faith. The Court
ruled that such circumstance cannot be used to defeat the applicant’s claim for a
right of way because the previous owner of the dominant estate had every right to
sell his property to anybody. Further, when the applicant bought the dominant
estate there could have been no existing contract of sale yet considering that the
owner of the servient estate and the previous owner of the dominant estate were
still in negotiation.

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 33) Nuisance per se and nuisance per accidens : (a) Concept: Nuisance per se is recognized as a nuisance
under any and all circumstances, because it constitutes a direct menace to public health or safety, and,
for that reason, may be abated summarily under the undefined law of necessity.
Nuisance per accidens is that which depends upon certain conditions and circumstances, and its
existence being a question of fact, it cannot be abated without due hearing thereon in a tribunal
authorized to decide whether such a thing does in law constitute a nuisance. c) Reminder: Unless a
thing is nuisance per se, it may not be abated via an ordinance, without judicial proceedings. Such
ordinance is null and void because it violates the guarantee of due process under the Constitution.
However, mayors are empowered under existing laws to order the closure and removal of illegally
constructed establishments for failing to secure the necessary building permits.

34) Donation: The Province of Camarines Sur donated a parcel of land to Camarines Sur Teachers'
Association, Inc. (CASTEA).

Q1: What kind of donation is involved? ANS: The donation is both modal and onerous. The donation
is modal if it imposes upon a donee a prestation. In this case, the prestation to construct a building is
undoubtedly modal in nature as it imposed a prestation or obligation on CASTEA. The donation is
onerous if it imposes a burden upon the donee. In this case, the donation may also be classified as an
onerous donation because there is a burden imposed on the donee. As such, the donation is
governed by the law on contracts.

Q2: Is the automatic revocation clause in the donation valid? ANS: Yes, the same is valid following
the principle of autonomy of contracts. However, while the legality of automatic revocation or
rescission clauses in deeds of donation has been upheld, courts are not precluded from determining
whether their application or enforcement by the donors concerned are proper if the donees contest the
revocation or rescission. If the court sustains its propriety, the court's decision is not the act that
revokes the donation but would be merely declaratory of the validity of the revocation.

Q3: May Article 1191 of the Civil Code be applied to determine the propriety of the rescission or
resolution of the donation in case of non-compliance with its conditions? ANS: Yes, Article 1191 is
applicable. While Article 1191 applies to reciprocal obligations and donation essentially involves a
unilateral act and there is an express revocation clause in the Deed of Donation, Article 1191 is
nevertheless relevant in the determination of the nature of the breach or violation of the obligation that
will justify its rescission.

Q4: Applying Article 1191, is the Province justified in treating the donation as already revoked in
view of the alleged violation committed by CESTEA? ANS: No, because the alleged breach
committed by CESTEA is not a substantial and fundamental breach to warrant the resolution of the
donation. The rentals that were being collected were being given to members of CASTEA as mutual
aid and death benefits. This is undoubtedly in keeping with the objective of the Deed of Donation,
which is the improvement and upliftment of education and other matters related thereto. In addition,
CASTEA had already complied with its main prestation, which is the construction of the intended
building. Lastly, the breach by CASTEA should be of a permanent character as to totally and
perpetually deprive CASTEA of the use of the donated lot and the building that it constructed, which
is not the case in the given problem. In fine, the revocation of the Deed of Donation by the Province is
improper and lacks legal basis. However, given that CASTEA disregarded the provision of the Deed
of Donation not to encumber the donated property, it is liable to pay damages to the Province.

Real Estate Mortgage, Antichresis and PPSA:

35) Distinctions between Real estate Mortgage and Antichresis: (1) In antichresis, the creditor is
always entitled to the possession of the immovable; in mortgage, the creditor-mortgagee will
only be entitled to its possession if the same is expressly stipulated. (2) The essence of
antichresis is the existence of an express agreement between the parties that the creditor
acquires a right to the fruits of the immovable but with a corresponding obligation to apply the
same to the payment of interest, if owing, and to the principal. In the absence of such express
agreement, the contract is merely mortgage. (3) In real estate mortgage, there are no formalities
required to make it valid or enforceable. While it is required to be in a public document under
Article 1358, such requirement is only for the convenience of the parties – not for validity nor
for enforceability. A real estate mortgage contract is also not covered by the Statute of Frauds.
On the other hand, the law requires that the amount of the principal and interest in the principal
contract of loan must be specified in writing; otherwise, the contract of antichresis is void.

36) Problem: Q1: Is the trial court correct that the contract of loan was perfected on June 21, 1996,
at the same time with the contract of mortgage was executed? ANS: No, the trial court is not
correct when it ruled that the contract of loan was perfected on June 21, 1996 because a
contract of loan is a real contract which can only be perfected upon the delivery of the
object of the contract. In the problem, the contract of loan was perfected only on June 25,
1996, when the proceeds of the loan were released to the borrower. What may be considered
perfected on June 21, 1996 is the accepted promise to deliver something by way of simple
loan, which is a consensual contract, but not the contract of loan itself.
Q2: Is the contention of the Spouses Villaluz tenable?

37) ANS: No, because Article 1409 (3) of the Civil Code must be interpreted as referring to
contracts whose cause or object is impossible of existing at the time of the transaction and must
not be literally construed as referring to object or consideration which "did not exist at the time
of the transaction;" otherwise, it will defeat the clear intent of Article 1347 of the Civil Code
that all things which are not outside the commerce of men, including future things, may be the
object of a contract."

38) The cause of the contract of mortgage is the loan to be obtained by Milflores Cooperative. Such
consideration is certainly not an impossible one because Land Bank was capable of granting the
loan, as it in fact released one-third of the loan a couple of days later. Although the validity of
the Real Estate Mortgage is dependent upon the validity of the loan, what is essential is that the
loan contract intended to be secured is actually perfected, not at the time of the execution of the
mortgage contract vis-a-vis the loan contract. It may be perfected later. In other words, the
security contract - in this case, the Real Estate Mortgage - is conditioned upon the release of the
loan amount. This suspensive condition was satisfied when Land Bank released the first tranche
of the P3,000,000 loan to Milflores Cooperative on June 25, 1996, which consequently gave
rise to the Spouses Villaluz's obligations under the Real Estate Mortgage.

39) Personal Property Security Act: (a) Not included in coverage: Covers all forms of personal
property as security, whether tangible or intangible, except: (i) interest in aircraft as security,
still governed by Civil Aviation Authority Act and (ii) interest in ships as collateral, still
governed by Ship Mortgage Decree of 1978 (PD No. 1521), registration is still at the Office
of Philippine Coast Guard of port ofdocumentation (b) Repeal of pledge and chattel
mortgage: PPSA repealed the concept of pledge and chattel mortgage. Thus, a collateral
involving personal property as contract of security involving personal property. (c) The law
allows appropriation of the collateral (or retention). (i) if creditor desires to retain the collateral
in full, his proposal to such effect is deemed accepted by the debtor if no objection in writing is
 received by the creditor within 20 days. (ii) if the creditor desires to retain only a part of the
collateral, his proposal to such effect is considered accepted only if the creditor receives an
affirmative consent within 20 days. (d) Right of redemption: the law provides for right of
redemption, unless (i) debtor waives it in writing after default; (ii) collateral is sold or otherwise
dispose of or acquired or collected by secured creditor; or (iii) creditor retained the
collateral.

40) Perfection of contract and perfection of security interest : PPSA talks of perfection of security interest
which must be distinguished from the perfection of the contract. The contract is perfected upon
execution of the security agreement. Upon its perfection, a security interest over the collateral is
created – but the same binds only the contracting parties. It is only upon the perfection of the security
interest that such security interest becomes binding upon third persons. Generally, a security interest is
perfected upon registration of the notice of security interest via the electronic registry provided for
under the law.

THE FIVE ELEMENTS OF EFFECTIVE WRITTEN COMMUNICATION

Counsel for
(Address)
Roll No.
Lifetime IBP No.
PTR No. / City or Province MCLE
Compliance No. ,

------------------------------------------------------------------------------------------

SIGNATURE OF NOTARY PUBLIC

ATTY.
Notary Public for
Appointment No.
Until 31 December 2022
Roll No.
Lifetime IBP No.
PTR No. / City or Province MCLE
Compliance No. ,

Doc. No. ;
Page No. ;
Book No. ;
Series of 2022.

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ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES)
CITY OF )S.S.
x------------------------------------------------x
BEFORE ME, a Notary Public for and in the City this day of
, at City, Philippines, personally appeared with ID
issued on at , known to me to be the same
person who executed the foregoing instrument, and they acknowledged to me that the same is
their own free and voluntary act.
 This instrument refers to a “Deed of Absolute Sale” consisting of two (2)
pages including this page where the acknowledgment is written and has been
signed by the party hereof, and their instrumental witnesses, if any, on each and
every page.
WITNESS MY HAND AND SEAL.
NOTARY PUBLIC
Doc. No. ;
Page No. ;
Book No. ;
Series of 2021.
JURAT

SUBSCRIBED AND SWORN to before me this day of in

, Philippines, affiant exhibiting to me her competent evidence of identity by way of
issued at on .

Notary Public

Doc No. :
Page No.:
Book No.:
Series of 2022.

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ACKNOWLEDGMENT
 Act of one who has executed a deed,
before any notary public or competent
officer or court declaring the said
document to be his act or deed.
 Accompanies any notarized document
that transmits rights or properties.
 EXAMPLE: Deeds, Contracts
JURAT
 A part of a document where a
signatory takes an oath or make an
affirmation.
 Accompanies any notarized document
that is declaratory in nature
 EXAMPLE: Affidavits, Certifications

SAMPLE LEGAL FORMS

CONVEYANCE refers to everything by which any estate or interest in estate is created,
alienated, mortgaged, or assigned. A document of conveyance must duly acknowledged before a
notary public for its registration with the Register of Deeds.

KINDS OF PARTIES OPERATIVE WORDS

DEED/CONTRACT
SALE Vendor & Vendee Sell, Transfer and Convey
ASSIGNMENT Assignor & Assignee Assign, Transfer and
Convey
EXCHANGE Party 1 & Party 2 Cede, Transfer and
Convey
DONATION Donor & Donee For in consideration of

I. DEED OF ABSOLUTE SALE

 DEED OF ABSOLUTE SALE TITLE
KNOW ALL MEN BY THESE PRESENTS: ANNOUNCEMENT

This Deed of Absolute Sale made and entered in the City of on the day
of , by and between:

, legal age, Filipino, and a resident of ,

Philippines, hereinafter referred to as the FIRST PARTY/SELLER;
-and-

, of legal age, married, Filipino and resident of

, , Philippines, hereinafter
referred to as the SECOND PARTY/BUYER;

WITNESSETH:
That the FIRST PARTY/SELLER is the owner of a parcel of land particularly described
as follows:

“Technical Description”

NOW THEREFORE, for and in consideration of the total sum of FIFTY

THOUSAND PESOS (P50,000.00), Philippine Currency, the FIRST PARTY/SELLER
hereby unconditionally and absolutely sell, convey and transfer, free from all liens and
encumbrances unto its successors and assigns, the aforementioned
Square Meters parcel of land and the SECOND PARTY/BUYER
hereby buys the same from the FIRST PARTY/SELLER subject to the following terms and
conditions, to wit:
1. The principal and total consideration in the amount of FIFTY THOUSAND
PESOS (P50,000.00), Philippine Currency, is to be paid in full upon execution of
this agreement, which receipt thereof is hereby acknowledged upon signing of this
deed;
2. The FIRST/PARTY SELLER shall be responsible for the payment of
Acknowledgment and Notarial Fees before a Notary Public; and
3. The SECOND PARTY/BUYER shall be responsible for Capital Gains Taxes,
Documentary Stamp Taxes and all other Transfer Taxes insofar as the subject
parcel of land is concerned.

IN WITNESS WHEREOF, the PARTIES have hereunto set their hands this day of ,
in the City of , Philippines.

FIRST PARTY/SELLER
ID NO. xxxxxxxx

SECOND PARTY/BUYER
ID NO. xxxxxxxxx
 Signed in the presence of:

REPUBLIC OF THE PHILIPPINES)

CITY OF )S.S.
x------------------------------------------------x
ACKNOWLEDGMENT
BEFORE ME, A Notary Public for and in the City this day of
, at City, Philippines, personally appeared the above-mentioned
parties identified through their respective competent evidences of identity written below their
names, known to me to be the same persons who executed the foregoing instrument, and they
acknowledged to me that the same is their own free and voluntary act.
This instrument refers to a “Deed of Absolute Sale” consisting of two (2) pages including
this page where the acknowledgment is written and has been signed by the parties, and their
instrumental witnesses, on each and every page.
WITNESS MY HAND AND SEAL.

II. CONTRACT TO SELL

KNOW ALL MEN BY THESE PRESENTS:
This Contract made and entered in the City of on the day of
, by and between:

, of legal age, Filipino, single, and resident of

City, Philippines and hereinafter referred to as the
FIRST PARTY/SELLER;

-and-

, of legal age, Filipino, single, and resident of

City, Philippines, hereinafter referred to as the SECOND PARTY/BUYER;

WITNESSETH:
That the FIRST PARTY is the heirs entitled to the estate of who owns
a parcel of a house and lot, more particularly known as:

Transfer Certificate of Title No. T-xxxxxxx

“A parcel of land (Lot xx, Block xx, Psd-xxxxxx, being a subdivision

of Lot xxxxx, (LRC) Psd-xxxx, with the improvement, thereon, situated in
the Brgy. , City of , Island of . Containing an area of
SQUARE METERS, more or less.”

The FIRST PARTY is offering to sell, transfer and convey their shares in the above-
described parcel of land as heirs of and/or their rights and interests in the
above-described parcel of house and lot and the SECOND PARTY is willing to buy the shares
and/or the rights and interests of the FIRST PARTY in the above-described parcel of house and
lot and/or their share and interests in the said parcel of house and lot as heirs of ;
NOW THEREFORE, for and in consideration of the sum of the total sum of ONE
MILLION SIX HUNDRED THOUSAND PESOS (P1,600,000.00), Philippine Currency,
payable in the manner as herein provided, and the covenants and agreements herein provided, the
FIRST PARTY/SELLER hereby agrees to sell, transfer, assign and convey to the SECOND
PARTY/BUYER, JANE DELA CRUZ, of legal age, single, Filipino and resident of resident of
City, Philippines, her assigns, successors-in-interests the
shares of the FIRST PARTY equivalent to SQUARE METERS more or less,
portion of the above-described parcel of land and/or whatever or any rights and interests of
which the FIRST PARTY/SELLER is entitled to over the above-mentioned subject parcel of
land as heirs of to the following terms and conditions:

1. The total consideration is in the amount of ONE MILLION SIX HUNDRED

THOUSAND PESOS (P1,600,000.00) Philippine currency, to be paid in the following
manner;
a. That the parties agree that the SECOND PARTY/BUYER shall pay SIX
HUNDRED THOUSAND PESOS (600,000.00) Philippine currency, upon signing
of this document;
b. That the parties agree that the SECOND PARTY/BUYER shall pay the balance
of ONE MILLION PESOS (P1,000,000.00), Philippine Currency, within Four (4)
Months after the signing of this document;
 2. The FIRST PARTY shall deliver and transfer possession in favor of the SECOND
PARTY the above-described parcel of house and land belonging to the FIRST PARTY after the
payment of P600,000.00, and the SECOND PARTY is entitled to posses the same;
3. The FIRST PARTY/SELLER shall as heirs of , be responsible to sign,
execute and deliver any and all kinds of documents, to transact and negotiate with any third party
and government office in the partition and subdivision of the herein described parcel of land and
the issuance of the separate title and tax declaration;
3. That the FIRST PARTY shall execute a deed of absolute sale in favor of the SECOND
PARTY/BUYER upon full payment of the purchase price and upon the approval of the
subdivision plan and the issuance of a separate title, whichever comes first.
IN WITNESS WHEREOF, we have hereunto set our hands this day of
, 2021 in the
City of , Philippines.
First Party/Seller
Second Party/Buyer
Signed in the presence of:

ACKNOWLEDGMENT
III. DEED OF SALE WITH ASSUMPTION OF MORTGAGE

DEED OF SALE WITH ASSUMPTION OF MORTGAGE

KNOW ALL MEN BY THESE PRESENTS:

This DEED, made and executed in , Philippines, by and

between:

married to , of legal age,

Filipino Citizens and with residence and postal address at
, hereinafter
called the VENDOR.

– and –

, of legal age, single, Filipino Citizen, and with

residence and postal address at
, hereinafter called
the VENDEE.,

WITNESSETH:
WHEREAS, the VENDOR is the owner of certain parcels of land with all the
improvements existing thereon, situated at Molino, Bacoor, Cavite, specifically described as
follows:

“Technical Description”

WHEREAS, the above-described properties are presently mortgaged to ABC SAVINGS

BANK to secure the payment of an original obligation in the principal sum of P725,000.00
contracted by the VENDOR from the aforenamed mortgagee under the terms and conditions set
forth in two instruments of mortgage, the first one (Loan No.
) executed on and ratified before
, Notary Public in and for , as per Doc. No. ,
Page No. , Book No. , Series of
of his notarial register.

WHEREAS, the VENDOR has offered to sell and the VENDEE has agreed to buy the
above-described parcels of land with all the improvements thereon for the total price of payable
in the manner and form set forth herein below:

Installment or Cash

NOW, THEREFORE, for and in consideration of the sum of P3,300,000.00,

Philippine currency, the said VENDOR does hereby sell, transfer and convey, in a manner
absolute and irrevocable, unto the VENDEE, her heirs and assigns the real property above
described together with all the improvements existing thereon, free and clear of all liens and
encumbrances excepting the mortgagee as may be subsisting in favor of ABC SAVINGS
BANK; and

The VENDEE does hereby accept this sale and binds herself to assume as she hereby
assumes the payment of the unpaid balance of the mortgage in indebtedness of the VENDOR
amounting to P335,336.26 for the first loan and P517,669.59 for the second loan as of this
date in favor of the aforenamed mortgagee and does hereby further agree to be bound by the
precise terms and conditions therein contained.

The VENDEE shall secure the approval of the Mortgagee to the assumption by the
BUYER of the mortgages over the subject parcels of land.

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands at the
place first above written, on this at
.

Vendor Vendee

With my marital consent:

SIGNED IN THE PRESENCE OF:

ACKNOWLEDGMENT

IV. DEED OF ASSIGNMENT

DEED OF ASSIGNMENT AND TRANSFER OF RIGHTS

KNOW ALL MEN BY THIS PRESENTS:

This deed, made and entered into this 23rd of July 2019 at the City of Cebu,
Philippines, by and between:

(NAME OF ASSIGNOR), Filipino, of legal age, single/married to (Name of Spouse, if any)

and a resident of (Address of Residence), hereinafter referred to as the "ASSIGNOR"-

-in favor of-

(NAME OF ASSIGNEE), Filipino, of legal age, single/married to (Name of Spouse, if any) and
a resident of (Address of Residence), hereinafter referred to as the "ASSIGNEE".

WITNESSETH that -
WHEREAS the ASSIGNOR is the buyer of a (Describe the Property), with an area of
(LAND AREA OF PROPERTY) more or less, covered by (Title Description) of the Register of
Deeds of (Place of Register of Deeds), registered in the name of the (Name of Registrant/Bank);

WHEREAS, the ASSIGNOR has offered to assign all his rights, title and interest over the
above parcel of land, as referred in said Contract to Sell and the ASSIGNEE hereby accepts the
assignment in accordance with the terms herein set forth;

NOW, THEREFORE, for and in consideration of the foregoing premises and the sum of
(AMOUNT IN WORDS) PESOS (AMOUNT IN FIGURES), Philippine Currency, which the
ASSIGNOR hereby acknowledge to have received from the ASSIGNEE, the ASSIGNOR
hereby ASSIGNS, TRANSFER and CONVEYS unto the ASSIGNEE, all his rights, title and
interest to the aforementioned property and and appurtenant interest and civil fruits in the said
property pursuant to this Agreement and the ASSIGNEE by these presents hereby accepts the
assignment and agrees to be bound by the terms and conditions of the Contract to Sell and the
rules and regulations, and restrictions pertaining to the said property.

IN WITNESS WHEREOF, the parties have hereunto set their hands on the date and
place first above written.

(NAME OF ASSIGNOR) (NAME OF ASSIGNEE)

ASSIGNOR ASSIGNEE

With my marital consent: (NAME OF SPOUSE)

SIGNED IN THE PRESENCE OF:

ACKNOWLEDGEMENT

V. DEED OF DONATION

DEED OF DONATION
KNOW ALL MEN BY THESE PRESENTS:

This Deed of Donation, made and executed in the City of Pasay, Philippines, by
of legal age, single, Filipino citizen and with residence and postal address at
hereinafter called the “DONOR.”

- IN FAVOR OF -
, of legal age, single, Filipino citizen and with residence and postal
address at , hereinafter called the “DONEE.”

- WITNESSETH -

That the DONOR is the owner of that certain real property with the buildings and
improvements thereon, situated in and more particularly described in
Transfer Certificate of Title No. 123456 of the land registry of Makati City as follows:

(Copy description of property in title)

That for and in consideration of the love and affection which the DONOR has for the
DONEE, the said DONOR, by these presents, transfers and conveys, by way of donation, unto
said DONEE, her heirs and assigns, the above-described real property with all the buildings and
improvements thereon, free from all liens and encumbrances;

That the DONOR does hereby state, for the purpose of giving full effect to this donation,
that he has reserved for himself in full ownership sufficient property to support him in a manner
appropriate to his needs;

That the DONEE does hereby accept this donation of the above-described property and
does hereby express gratitude for the kindness and liberality of the DONOR.

IN WITNESS WHEREOF, the DONOR and the DONEE have signed this deed on
at , Philippines.

Donor Donee

SIGNED IN THE PRESENCE OF:

ACKNOWLEDGMENT

VI. DEMAND LETTER

1 April 2019

JUAN DEBTOR
[Address]

Dear Mr. Debtor:

We write in behalf of our client Jose Creditor regarding the check you issued to him dated 15
March 2019 in the amount of ₱700,000, drawn against Bank of the Philippine Islands,
Zapote, Las Piñas City Branch. Upon presentment for payment, the same was dishonored for
reason of “account closed.”

Demand is hereby made upon you to pay to our client the amount of the check within 5 days
from receipt of this letter. Otherwise we shall file against you the criminal complaint for
violation of the Bouncing Checks Law without further notice and demand.

Please give this matter your immediate attention.

Yours truly,

ATTY. ANDRES MAGDAMIT

Counsel for Jose Creditor
[Address of Counsel]

VII. AUTHORIZATION LETTER

BANK OF THE PHILIPPINE ISLANDS

[Address]

Ladies and Gentlemen:

This serves to authorize the bearer SUSAN AGENTE to pick up the deed of cancellation of real
estate mortgage over my property covered by TCT No. 123456, located in Imus, Cavite.

Please find attached a copy of my Driver’s License No. 7890123.

Thank you for your attention in this matter.

Yours truly,

JOSEPH PRINCIPALI
[Address]

VIII. SIMPLE SALE OF REALTY

DEED OF SALE

I, , Filipino, single/married to
, of legal age, with residence at
, for and in consideration of the sum of
P to me in hand paid by (full name of vendee), Filipino, of legal age,
with residence at , do hereby SELL, TRANSFER
AND CONVEY, absolutely and unconditionally, in favor of the said , that
certain parcel of land, particularly described as follows to wit:

(Technical description)

of which I am the registered owner as evidenced by Transfer Certificate of Title No.

issued by the Registry of Deeds of , free from all liens and
encumbrances.

IN WITNESS WHEREOF, I have signed this Deed of Sale, on at

.
Vendor

TIN
 SIGNED IN PRESENCE OF:

(ACKNOWLEDGMENT)

IX. SIMPLE SALE OF PERSONAL PROPERTY (CAR)

DEED OF ABSOLUTE SALE

I, JUAN A. DELA CRUZ, of legal age, single, Filipino, with residence at 123 Northville
Homes, Molino, Bacoor City, Cavite, in consideration of the sum of P400,000 which I have
received from the Buyer, PEDRO A. SANTOS, do hereby sell and transfer to him the motor
vehicle particularly described as follows:

MAKE: MITSUBISHI
TYPE: AUV
MODEL: ADVENTURE 2008
ENGINE NO.: 12345
SERIAL NO.: 67890

IN WITNESS WHEREOF, I hereby sign this Deed of Sale on 1 April 2017 at Bacoor
City, Cavite.

JUAN A. DELA CRUZ

(Acknowledgment)

X. SIMPLE LEASE CONTRACT

CONTRACT OF LEASE

I, (full name of lessor), of legal age, single, with residence at

, do hereby LEASE unto (full name of lessee) of legal age, single,
with residence and postal address at that certain
building, together with the lot on which it stands, situated at , and more
particularly described as follows, to wit:

(Technical Description of
Building and Lot)

of which lot and building I am the registered owner, my title thereto being evidenced by Transfer
Certificate of Title No. , of the Registry of Deeds of .

That the term of this lease is for years from and after the execution of
this contract of lease.
And I, (full name of lessee), do hereby bind myself and promise to pay the said lessor at
the latter’s residence a monthly rental of P during the first five days
of each and every month.

IN WITNESS WHEREOF, the parties have signed this agreement on

at .

LESSOR LESSEE
 SIGNED IN THE PRESENCE OF:

(ACKNOWLEDGMENT)

XI. SPECIAL POWER OF ATTORNEY

SPECIAL POWER OF ATTORNEY

I, JOSEPH PRINCIPALI, Filipino, of legal age, and a resident of No. 7 M. Fernandez St.,
BF Resort Village, Las Piñas City, do hereby name, constitute and appoint SUSAN AGENTE
of the Agente & Agente Law Office, Filipino, of legal age and with office address at 2/F
Azucena Arcade, 255 Alabang-Zapote Road, Las Piñas City to be my true and lawful
attorney-in-fact, for me and in my name, place and stead and to do the following:

Sell and/or encumber my shares of stock in Manila Water Corporation, whether in my

name or held in the name of my broker, BPI Securities, Inc., for my benefit, under such terms as
he may deem suitable and proper.

HEREBY GIVING AND GRANTING unto my said attorney-in-fact full power and
authority whatsoever requisite or necessary or proper to be done in and about the premises as full
to all intents and purposes as I might and could lawfully do if personally present, with power of
substitution and revocation, and hereby, ratifying and confirming all that my said attorney or her
substitute shall lawfully do or cause to be done under and by virtue of these presents.

IN WITNESS WHEREOF, I have hereunto set my hand this August 2018 at Las Piñas
City.

JOSEPH PRINCIPALI

SIGNED IN THE PRESENCE OF:

REPUBLIC OF THE PHILIPPINES)

LAS PINAS CITY ) S.S.
 ACKNOWLEDGMENT

BEFORE ME, a notary public, on August 2018 at Las Pinas City, personally
appeared JOSEPH PRINCIPALI and exhibited to me his SSS No. 06-0958807-5
issued by Social Security System. Known to me and to me known to be the same
person who executed the foregoing Special Power of Attorney and he acknowledged
before me that the same is his own free and voluntary act and deed.

WITNESS MY HAND AND SEAL, on the date and place above-written.

Doc. No. ;
Page No. ;
Book No. ;
Series of 2021.

XII. PROMISSORY NOTE.

I, JUAN A. DELA CRUZ, promise to pay to the order of PEDRO A.

SANTOS, the amount of ₱350,000 on 1 April 2022.

(Sgd.) JUAN A. DELA CRUZ