2023

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CIVIL LAW
AUSL BAR OPERATIONS COMMISSION
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 ARELLANO UNIVERSITY SCHOOL OF LAW

ATTY. DOMINGO M. NAVARRO

Dean, AUSL

ATTY. ERIK LAZO

Assistant Dean, AUSL

CENTER FOR LEGAL EDUCATION AND RESEARCH

ATTY. RODERICK M. VILLOSTAS

Director

ATTY. RICKSON M. BUENVIAJE

ATTY. LESTER NAZARENE V. OPLE
ATTY. ANTONY J. PARREÑO
Research Fellows

BRANDO F. DE TORRES
MARICAR S. ASUNCION
Research Staff
 BAR OPERATIONS COMMISSION EXECUTIVE COMMITTEE

TRISHA ALEXIS R. MAINGAT

Chairperson

HAZEL ELIZA L. MENDOZA IRISH ANA A. SALINAS

Vice Chairperson for Academics Vice Chairperson for Administration

MA. PATRICIA NICOLE G. REYES

Secretary

GRACE PEREZ - SONIDO

Treasurer

LANIE GRACE S. LIM

Auditor

JED NICU DANIELLE V. MADRIAGA

Operations Head

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ARTHUR JAY DELA CRUZ

Ways and Means Officer
 CIVIL LAW

KENNETH A. DIANO
Commissioner

ALBERT JOHN RANOCO DIANE ROYO

Deputy Commissioner Deputy Commissioner

SUBJECT HEADS

KRISTEL ANNE T. LIWAG PRECIOUS CLAIRE F. FORMAREJO

Preliminary Title, and Persons and Succession
Family Relations

ROWELL MANUEL ROSETE GEE MARIE G. GALANG

Obligations and Contracts Sales

ROMALYN E. SERVANEZ ETHEL JOI MENDOZA

Lease, Partnership, Agency Credit Transactions I and II

MADELEINE LUKBAN NANCY C. DIMALALUAN

Torts and Damages Property

MAUREEN N. RAMOS
Land Titles and Deeds

MEMBERS

SHARMAINE F. CABANTING AILEEN JOYCE B. PACIS

CLAIRE CHELCEE R. CALADIAO BIEN LOUIS M. MANGACU
SHAYRIE WYNNE A. CAMBRONERO ZIA DANICA C. MARCOS
ANA SALERA C. CRUZ TOM F. MENDIGUARIN
SHERISH JOYCE G. CRUZ SHIELA MAY M. NOCEDA
LOREN MARCIANA B. DIWA ANN BERNADETTER MARIE A. OCENAR
CHRISTINE MAE DULAY ISMAEL D. OLIMPAIN
CLARISSE ELAURIA ELLEN JANE L. ORMITA
JOYMICA G. FERRER JOHN ROBERT M. ORTEGA
LOUISE GALE JOYCE B. PAN-OY
ALLAN R. GANAT MA. CRIZENA M. REMO
PATRISHIA NICOLE GUIBONE MARY ANTONETTE C. ROSARIO
PAULINE KAROL G. GUIYAB IRISH ANA A. SALINAS
IBLI BERNADETTE L. INDUCTIVO KAZELWIN SAMIN
SHELINE JASMINE B. LEGASPI SAMIRAH JANINE R. TAMAYO
GLADYS LOJO
 PERSONS AND FAMILY RELATIONS

I. PERSONS

A. When Law Takes Effect Doctrine

1. When does a law take effect?

Three possible scenarios:

a) If the law is silent as to its date of effectivity. It takes effect after fifteen (15) days
following the completion of its publication in the Official Gazette or in a newspaper of general
circulation (Article 2, as amended by E.O. No. 200).

b) If the law provides for its own date of effectivity. It takes effect on such date, provided
there is publication. Publication is indispensable (Tañada v. Tuvera, G.R. No. L-63915, April 24, 1985).

c) If the law provides that it shall take effect immediately upon its approval. It takes
effect immediately after its publication. There is nothing in E.O. No. 200 that prevents a law
from taking effect on a date other than – even before – the 15-day period after its publication.
Where a law provides for its own date of effectivity, such date prevails over that prescribed
by E.O. No. 200 (La Bugal-B’laan Tribal Association, Inc. v. Ramos, G.R. No. 127882, 27 January 2004).

B. Ignorance of the Law

2. What is the presumption of knowledge of laws?

The general rule is that everyone is presumed to know the law. Art. 3 of the NCC provides that
ignorance of the law excuses no one from compliance therewith.
This doctrine applies to all kinds of domestic laws, whether civil or penal, substantive or remedial,
but is limited to mandatory and prohibitory laws. (Rabuya, The Law on Persons and Family Relations, 2017
Ed.)

C. Retroactivity of Laws

3. What are the exceptions to the general rule that laws shall have no retroactive effect?

a. Expressly provided by the law;

b. Curative statutes;
c. Procedural or remedial statutes;
d. Laws creating new substantive rights;
e. Emergency laws;
f. Tax laws when expressly declared so;
g. Interpretative statutes; and
h. Penal laws favorable to the accused who is not a recidivist or a habitual delinquent (Rabuya,
The Law on Persons and Family Relations, 2021 Ed., p. 17)

D. Mandatory or Prohibitory Laws

4. When may acts executed against the provisions of mandatory or prohibitory laws be
considered valid?

a. When the law itself authorizes its validity although generally, it would
b. have been void;

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 c. When the law declares the act void, but recognizes legal effects arising from it;
d. When the law merely makes the act voidable and not void (i.e. if consent is vitiated, the
contract is voidable and not void); or
e. When the law makes the act valid but punishes the violator (Rabuya, The Law on Persons and
Family Relations, 2021 Ed., p. 21-22)

E. Waiver of Rights

5. Harvey, a minor, died after being hit by a reckless jeepney driver along the route of
the marathon he joined sponsored by the organization of Vikings. Harvey’s parents
sued Vikings for the accident. Vikings raised the defense that Harvey waived all his
rights and causes of actions arising from his participation in the marathon and that
the doctrine of assumption of risk was applicable. Is the defense of Vikings tenable?

No. Harvey could not have assumed the risk of death when he participated in the race because
death was neither a known nor normal risk incident to running a race. Neither was the waiver by
Harvey, then a minor, an effective form of express or implied consent in the context of the
doctrine of assumption of risk. The doctrine requires the concurrence of three elements, namely:
(1) the plaintiff must know that the risk is present; (2) he must further understand its nature;
and (3) his choice to incur it must be free and voluntary . (Abrogar vs. Cosmos Battling Company and
Intergames Inc., G.R. No. 164749, March 15, 2017)

Waivers are not presumed, but must be clearly and convincingly shown, either by express
stipulation or acts admitting no other reasonable explanation. (Arrieta v. National Rice and Corn Corp.,
G.R. No. L-15645, January 31, 1964)

F. Presumption and Applicability of Custom

6. What are the requisites before a custom be considered as a source of right?

a. Plurality of acts;
b. Uniformity or identity of acts;
c. General practice by the great mass of the social group;
d. Continued performance of these acts for a long period of time;
e. General conviction that the practice corresponds to a juridical necessity or that it is obligatory;
and
f. The practice must not be contrary to law, morals, or public order. (Rabuya, The Law on Persons
and Family Relations, 2021 Ed, p.40)

G. Legal Periods

7. How are legal periods computed?

In computing a period, the first day shall be excluded and the last day included. ( Art. 13, NCC)
If the last day falls on a Sunday or a legal holiday, whether the act is due that day or the following
day will depend on the following:
1) In an Ordinary Contract – the agreement of the parties prevails. (Art. 1159, NCC)[1] [2]
2) Under the Rules of Court – when the time refers to a period prescribed or allowed by the
Rules of Court, or by order of the court, or by any applicable statute, if the last day of the
period falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits, the
time shall not run until the next working day. (Sec. 1, Rule 22, 1997 Revised Rules of Civil
Procedure)

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H. Territoriality Principle

8. What are the exceptions to the territoriality principle?

1. Treaty Stipulations (e.g., Visiting Forces Agreement), except:

a) When the offense is committed by a foreign sovereign while in Philippine territory;
b) When the offense is committed by diplomatic representatives;
c) When the offense is committed in a public or armed vessel of a foreign country.
2. Laws of Preferential Application
3. Principles of Public International Law (e.g., immunity of diplomatic representatives) (Rabuya,
The Law on Persons and Family Relations, 2021 Ed, p. 45).

H. Conflict of Laws
1. Lex Nationalii
2. Lex Rei Sitae
3. Lex Loci Celebrationis
4. Doctrince of Renvoi

9. Briefly explain the following rules on conflict of laws:

a. Lex Nationalii or Nationality principle.

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. 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. (Art. 15
and 17, New Civil Code)
b. Lex rei sitae.
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 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. (Art. 16, Civil Code)
c. Lex loci celebrationis.
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. (Art. 17, New Civil Code)
d. Doctrine of renvoi.
The court of the forum, in determining the question before it, must take into account the
whole law of the other jurisdiction, and also its rules as to conflict of laws, and then apply
the law to the actual question which the rules of the other jurisdiction prescribe, e.g., the
English law directs its judge to distribute the personal estate of an Englishman who has died
domiciled in Belgium in accordance with the law of his domicile, he must first inquire whether
the law of Belgium would distribute personal property upon death in accordance with the law
of domicile, and if he finds that the Belgian law would make the distribution in accordance
with the law of nationality — that is the English law — he must accept this reference back to
his own law. (In the Matter of the Testate Estate of Christensen vs. Garcia, G.R. No. L-16749, January 31, 1963)

● Renvoi/ Remission - Renvoi takes place when the conflicts rule of the forum makes a
reference to a foreign law, but the foreign law is found to contain a conflict rule that returns
or refers the matter back to the law of the forum (Remission) (Paras, Conflict of Laws, 1996, p. 211).
● Transmission - This provides that when the conflicts rule of the forum makes a reference
to a foreign law, but the foreign law is found to contain a conflict rule that refers it to a third
country, the law of the third country shall apply. It is the process of applying the law of a

3
 foreign state (third state) thru the law of a second foreign state (Paras, Conflict of Laws, 1996, p.
215)

● Double Renvoi - occurs when the local court, in adopting the foreign court theory, discovers
that the foreign court accepts the renvoi (Paras, supra, p. 214).

RENVOI TRANSMISSION
Deals with two countries Deals with three or more countries
Deals with “referring back” Deals with “referring across” or “transmitting”

J. Human Relations in Relation to Persons

10. Briefly explain the following rules on human relations:

(a) Principle of abuse of rights.

A person must, in the exercise of legal right or duty, act in good faith (Art. 19, NCC). He
would be liable if he instead acted in bad faith, with intent to prejudice another. The elements
of abuse of are as follows:
(1) there is a legal right or duty;
(2) which is exercised in bad faith;
(3) for the sole intent of prejudicing or injuring another. (California Clothing, Inc. vs. Quiñones, G.R.
No. 175822, October 23, 2013)
(b) Damnum absque injuria.
The damage resulting from the legitimate exercise of a person’s rights is a loss without
injury for which the law gives no remedy. (Amonoy vs. Gutierrez, G.R. No. 140420, February 15, 2001)
(c) Acts contra bonos mores.
Any person who willfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage (Art. 21,
NCC).

11. A person wants to file a complaint for damages against another person with whom it
does not have a contract with. What will be the basis of your cause of action: Arts.
19, 20 and 21, or Art. 2176 of the Civil Code?

An action for damages due to the negligence of another may be instituted on the basis of Art.
2176 of the Civil Code which defines a quasi-delict. Art. 2176 applies when the negligent act
causing damage to another does not constitute “a breach of an existing law or a pre-existing
contractual obligation.” (St. Martin Polyclinic, Inc., vs. LWV Construction Corporation, G.R. No. 217426, December
4, 2017)

12. Distinguish accion in rem verso from solutio indebiti.

Accion in rem verso Solutio indebiti

Type of action Is an action for recovery of what has Considered merely an auxiliary
been paid without just cause action, available only when there is
no other remedy on contract, quasi-
contract, crime, and quasi-delict.
Element of mistake It is not necessary that there should Mistake is an essential element
have been a mistake in the payment
Basis of action Law Quasi-contract
(UP vs. Philab Industries, Inc., G.R. No. 152411, September 29, 2004; Rabuya, supra.)

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13. When does the principle of unjust enrichment as enshrined in Article 22 of the Civil
Code apply?

Art. 22 of the New Civil Code provides that Every person who through an act of performance by
another, or any other means, acquires or comes into possession of something at the expense of
the latter without just or legal ground, shall return the same to him. For the principle to apply,
the following requisites must concur: (i) a person is unjustly benefited; and (ii) such benefit is
derived at the expense of or with damages to another. (Yon Mitori International Industries vs. Union Bank
of The Philippines, G.R. No. 225538, October 14, 2020, J. Caguioa)

J. Capacity to Act

14. Distinguish juridical capacity from capacity to act

Basis Juridical Capacity Capacity to Act

(Art. 37, Civil Code) (Art. 37, Civil Code)
Definition Fitness to be subject of legal Power to do acts with legal effect
relations
Acquisition Inherent Through fulfillment of specific legal
activities
Extinguishment Only through death Through death and other causes
In relation to the other Can exist without capacity to act Cannot exist without juridical
capacity
Limitation None Minority, insanity or imbecility, state
of being deaf-mute, prodigality, and
civil interdiction (restriction) (Art. 38,
Civil Code)

Age, insanity, imbecility, state of

being deaf-mute, penalty,
prodigality, family relations,
alienage, absence, insolvency, and
trusteeship, among others.
(modification/limitation) (Art. 39,
Civil Code)

1. Restrictions on Capacity to Act

15. What are the restrictions on capacity to act?

a) Minority (below 18 years old)

b) Insanity
c) Deaf-mute
d) Prodigality
e) Civil interdiction (Art. 39, NCC)

2. Birth and Death of Natural Persons

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

As a general rule, the fetus is considered born if it is alive at the time, it is completely delivered
from the mother’s womb. However, if the fetus had an intrauterine life of less than seven (7)
months, it is not deemed born if it dies within 24 hours after its complete delivery from the
maternal womb. (Art. 41, New Civil Code)

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3. Presumption of Survivorship

17. What are the rules on the presumption of survivorship?

Art. 43, Civil Code
Applicabi When the question of survivorship involves
lity persons “who are called upon to succeed
each other” and when there is question of
succession
Requisit 1. There is no proof as to which of two
es persons died first; and
2. They are called to succeed each
other.
Rules ● Whoever alleges the death of one
prior to the other, shall prove the
same;
● In the absence of proof, they shall
be presumed to have died at the
same time and there is no
transmission of rights from one to
the other.
Rule 131, Sec. 3(jj), Rules of Court
When there is no question of succession or
when the persons involved are not called to
succeed each other.
1. There is no proof as to which of
two persons died first; and
2. They perish in the same calamity,
such as wreck, battle, or
conflagration.
● If bother under 15, older is deemed
the survivor;
● If both above 60, younger is
deemed the survivor;
● If one is under 15 and the other is
above 60, the former is deemed
survivor;
● If bother over 15 but under 60 and
sex is different, the male is deemed
the survivor; and
● If one is under 15 or over 60 and
the other between those ages, the
latter is deemed the survivor.

L. Surnames

18. What are the rules on the use of surnames?

Generally, no person shall use different names and surnames ( Art. 380, NCC). The given name
may be freely selected by the parents for the child, but the surname to which the child is entitled
is fixed by law. (Rabuya, The Law on Persons and Family Relations, 2017 Ed., Pg. 1028) The
exception to this rule is when the employment of pen names or stage names is permitted,
provided it is done in good faith and there is no injury to third persons (Art. 379, NCC).

19. What are the grounds to change the first name of a person?

a. The petitioner finds that the first name or nickname to be ridiculous, tainted with dishonor
or extremely difficult to pronounce;
b. The new first name or nickname has been habitually and continuously used by the petitioner
and he has been publicly known by that first name or nickname in the community; and,
c. The change will avoid confusion. (Sec. 4, R.A. No. 9048)

M. Rules Governing Persons Who are Absent

20. When can a person be declared absent?

Without administrator - Two years having elapsed without any news about the absentee or since
the receipt of the last news.

With administrator – Five years have elapsed without any news about the absentee or since the
receipt of the last news in case the absentee left a person in charge of the administration of his
property. (Art. 384, New Civil Code)

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21. Is mere allegation or knowledge about the absence of the spouse enough for a
petition for a declaration of presumptive death to prosper?

No. It has been held by the Supreme Court that mere passive efforts would not qualify such
efforts as diligent. Hence, mere inquiry or knowledge about the absence cannot have been said
to firmly serve as a concrete basis of a "well-founded belief" of the absent spouse.
The Civil Code is clear in its requirements that a declaration of presumptive death must be
predicated upon a "well-founded" fact of death. Hence, the fact that the spouse is merely missing,
no matter how certain and undisputed, will never yield a judicial presumption of the absent
spouse's death. (Republic v. Ponce-Pilapil, G.R. No. 219185, November 25, 2020, J. Hernando)

22. AA, the present spouse, sought for the declaration of presumptive death of his
husband who had been absent for more than six (6) years in order to remarry. To
inquire of his whereabouts, letters were sent to the known friends and relatives of
his husband, but all yielded negative results. AA claims that her absent spouse had a
cyst in his right jaw and with his absence, AA believes that his absent spouse was
already dead.

Was AA able to establish that his absent spouse is already dead based on a well-
founded belief and in turn will her petition prosper?

No. AA’s efforts to search for her absent spouse only consisted of inquiries which were not even
done personally but by mere letter-correspondence.

It has been held that the “well-founded belief” requirement under Art. 41 of the Family Code
requires that the absence of the spouse was the result of diligent and reasonable efforts to locate
the absent spouse. The premise of Art. 41 of the Family Code places upon the present spouse
the burden of complying with the stringent requirement of well-founded belief which can only be
discharged upon a showing of proper and honest-to-goodness inquiries and efforts. (Republic v.
Ponce-Pilapil, G.R. No. 219185, November 25, 2020, J. Hernando)

II. Marriage
A. General Principles
1. Essential Requisites

23. What are the essential requisites of marriage?

1) Legal capacity
a) Parties must be a male and a female
b) 18 years old and above; and
c) Not subject to any legal impediments in Arts. 37 and 38 of Family Code. (Art. 5, FC)

2) Consent of the contracting parties

a) Freely given
b) Made in the presence of a solemnizing officer; and
c) Parties must have the necessary consent of parents if contracted marriage at the age of
18 years old but below 21 years old. (Art. 14, FC)

2. Formal Requisites

24. What are the formal requisites of marriage?

1) Authority of Solemnizing Officer;

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 a) Valid marriage license (not a marriage certificate), except in a marriage of exceptional
character; and
b) Marriage ceremony – which takes place with the:
▪ Personal appearance of the contracting parties before solemnizing officer;
▪ Their personal declaration that they take each other as husband and wife; and
▪ In the presence of not less than two witnesses of legal age. (Art. 3, FC)

25. What are the instances when marriage license may be dispensed with?

The requirement of marriage license may be dispensed with in the following instances:

(1) Marriage in articulo mortis (at the point of death) even if the ailing party subsequently
survives;
(2) If the residence of either party is so located that there is no means of transportation to enable
such party to personally appear before the local civil registrar;
(3) Marriage among Muslims or among members of the ethnic cultural communities, provided
they are solemnized in accordance with their customs, rites or practices;
(4) Marriage of a man and a woman who have lived together and exclusively with each other as
husband and wife for a continuous and unbroken period of at least five years before the
marriage. (Arts. 27, 28, 33, and 34, Family Code, Ninal vs. Bayadog, G.R. No. 133778 dated March 14, 2000)
(5) Marriages celebrated abroad and in accordance with the laws of the place of celebration
which do not require a valid marriage license (Arts. 26 and 35, Family Code)

26. When can cohabitation for at least five (5) years be a substitute to the marriage
license requirement?

a. The man and woman must have been living as husband and wife for at least five (5) years
before the marriage;
b. The parties must have no legal impediment to marry each other;
c. The fact of absence of legal impediment between the parties must be present at the time of
marriage;
d. The parties must execute an affidavit stating that they have lived together for at least five
(5) years (and are without legal impediment to marry each other); and
e. The solemnizing officer must execute a sworn statement that he had ascertained the
qualifications of the parties and that he had found no legal impediment to their marriage
(Borja-Manzano vs. Sanchez, A.M. No. MTJ–00–1329, March 08, 2001).

27. What is the effect of absence, defect or irregularity in the essential and formal
requisites of marriage?

Absence, defect or Effect

irregularity
Absence
Of legal capacity, GR: Marriage is void
authority of the
solemnizer or marriage XPN: Even if the solemnizing officer has no authority, the marriage is valid
license if either or both parties believed in good faith that the solemnizing officer
had the legal authority to do so.
Of consent There is in fact no marriage
Of marriage ceremony There is in fact no marriage
Defect
In consent Marriage is voidable
Irregularity
In any of the formal Does not affect the validity of the marriage but the party responsible for the
requisites irregularity shall be civilly, criminally and administratively liable

8
(Rabuya, Civil Law Reviewer, Vol. 1, 2021, p.61-62)

B. Mixed Marriages and Foreign Divorce

28. May consul-generals, consuls, or vice-consuls solemnize a marriage abroad between

a Filipino and an Alien?

No, consul-generals, consults, or vice-consuls cannot solemnize mixed marriages. Only marriages
between Filipino citizens abroad may be solemnized by a consul-general, consul or vice-consul of
the Republic of the Philippines. With this, their authority is limited to marriages of both Filipinos
residing abroad. (Art. 10, Family Code)

29. May a divorce decree obtained abroad by a Filipino married to a foreigner be

recognized as valid in the Philippines pursuant to Par. 2, Art. 26 of the Family Code?

Yes, Par. 2, Art. 26 of the Family Code still applies even if it is the Filipino spouse who obtained
a divorce decree, thus, it will still capacitate him or her to remarry. The purpose of Par. 2 of
Article 26 is to avoid the absurd situation where the Filipino spouse remains married to the alien
spouse who, after a foreign divorce decree that is effective in the country where it was rendered,
is no longer married to the Filipino spouse. Whether the Filipino spouse initiated the foreign
divorce proceeding or not, a favorable decree dissolving the marriage bond and capacitating his
or her alien spouse to remarry will have the same result: the Filipino spouse will effectively be
without a husband or wife. (Republic vs. Manalo, G.R. No. 221029, April 24, 2018)

30. Can a foreign law on divorce be proved by a photocopy of the English Translation of
such law?

No. The court ruled that the Acceptance Certificate, accompanied by an Authentication from the
Philippine Embassy in Tokyo, suffices as proof of the fact of divorce. However, a photocopy of
the English translation of the Civil Code of Japan is devoid of any probative value. In Nullada v.
Civil Registrar of Manila and Arreza v. Toyo, the Court held that the submission of the same
document does not constitute sufficient compliance with the rules on proof of Japan’s law on
divorce and that the translations by the publisher of that document are not advertised as a source
of official translations of Japanese laws. Not being an official translation, the document submitted
does not prove the existing law on divorce in Japan. Without such, there is nothing in the record
to establish that the divorce was validly obtained and is consistent with the Japanese law on
divorce. (Republic of the Philippines vs. Jocelyn Asusano Kikuchi, G.R. No. 243646, June 22, 2022, J. Hernando)

C. Void Marriages

31. What is the status of the following marriages?

(a) A marriage between a stepbrother and a stepsister.

If the marriage was celebrated during the effectivity of the Civil Code but prior to the effectivity
of the Family Code, said marriage is expressly prohibited, therefore, void. However, if the
marriage was celebrated from the time the Family Code took effect, or on or after 3 August 1988,
said marriage is no longer prohibited. (Art. 80, New Civil Code)

(b) A marriage which took place five (5) months after the issuance of a marriage
license.

9
 Void for absence of an essential requisite. A marriage license shall be valid in any part of the
Philippines for a period of 120 days from the date of issue and shall be deemed automatically
cancelled at the expiration of the said period if the contracting parties have not made use of it.
(Art. 20, FC)

(c) A marriage contracted by an 18-year-old illegitimate child who obtained the

parental consent only of her putative father.

Voidable for lack of parental consent. Since illegitimate children are under the exclusive parental
authority of their mother, it is the consent of the mother that is required. (Art. 176, FC)

32. What are the rules on sex determination vis-a-vis (a) sex reassignment and (b)
persons who are biologically intersex?

Sex reassignment. Considering that there is no law legally recognizing sex reassignment, the
determination of a person’s sex made at the time of his or her birth, if not attended by error, is
immutable. The sex of a person is determined at birth, visually done by the birth attendant (the
physician or midwife) by examining the genitals of the infant. (Silverio vs. Republic, G.R. No. 174689,
October 22, 2007)

Intersex. However, where the person is biologically or naturally intersex (or diagnosed with
Congenital Adrenal Hyperplasia), the determining factor in his gender classification would be what
the individual, having reached the age of majority, with good reason thinks of his/her sex. Sexual
development in cases of intersex persons makes the gender classification at birth inconclusive. It
is at maturity that the gender of such persons is fixed. (Republic vs. Cagandahan, G.R. No. 166676,
September 12, 2008)

33. Aside from the husband or the wife in a void marriage, who else may file a petition
for declaration of nullity of marriage?

The aggrieved spouse in the prior marriage may file the petition of absolute nullity of a
subsequent marriage on the ground of bigamy. AM No. 02-11-10-SC does not preclude a spouse
of a subsisting marriage to question the validity of a subsequent marriage. On the contrary, the
rule refers to the husband or wife of the subsisting marriage because the parties to the
subsequent bigamous marriage are neither the husband or the wife under the law. (Juliano-Llave
vs. Republic, G.R. No. 169766, March 30, 2011)

34. Is judicial declaration of Nullity of Marriage necessary to establish the invalidity of a

void ab initio marriage in a bigamy case?

No. The court in this case abandons its earlier rulings and hold that a judicial declaration of
absolute nullity is not necessary to prove a void ab initio prior prior and subsequent marriages in
a bigamy case. Consequently, a judicial declaration of absolute nullity of the first and/or second
second marriages presented by the accused in the prosecution for bigamy is a valid defense,
irrespective of the time within which they are secured. (Pulido vs. People, G.R. No. 220149, July 27, 2021,
J. Hernando)

35. Is an expert opinion required in an action for nullity of marriage on the ground of
psychological incapacity under Art. 36 of the Family Code, as amended?

No. Psychological incapacity is neither a mental incapacity nor a personality disorder that must
be proven through expert opinion. There must be proof, however, of the durable or enduring
aspects of a person's personality, called "personality structure," which manifests itself through
clear acts of dysfunctionality that undermines the family. The spouse's personality structure must

10
 make it impossible for him or her to understand and, more important, to comply with his or her
essential marital obligations.

Proof of these aspects of personality need not be given by an expert. Ordinary witnesses who
have been present in the life of the spouses before the latter contracted marriage may testify on
behaviors that they have consistently observed from the supposedly incapacitated spouse. From
there, the judge will decide if these behaviors are indicative of a true and serious incapacity to
assume the essential marital obligations. (Rosanna L. Tan-Andal v. Mario Victor M. Andal, G.R. No. 196359,
May 11, 2021)

36. When is declaration of nullity of marriage on the ground of psychological incapacity

warranted?

To warrant the declaration of nullity of marriage, the psychological incapacity must be

characterized by:
(1) Gravity, i.e., it must be grave and serious such that the party would be incapable of carrying
out the ordinary duties required in a marriage;
(2) Juridical antecedence i.e., it must be rooted in the history of the party antedating the
marriage, although the overt manifestations may emerge only after the marriage; and
(3) Incurability i.e., it must be incurable, or even if it were otherwise, the cure would be beyond
the means of the party involved. (Santos vs. CA, G.R. No. 112019, January 4, 1995)

37. Discuss the difference between void marriages under Art. 40 and Art. 35 (4) of the
Family Code.

Distinction Art. 40 Art. 35 (4)

As to status of prior Prior marriage is itself void.. but a Prior marriage is perfectly valid or
marriage party thereto did not secure a at least voidable.
judicial declaration of nullity of the
prior marriage before contracting a
subsequent marriage.
As to effect to the second The subsequent marriage is also The subsequent marriage is void
marriage void because of failure to comply for being bigamous pursuant to
with Art. 40 of the Family Code. Article 35(4) of the Family Code.
As to property relations ACP, CPG, or CSP Governed by Art. 148
of the subsequent
marriage

38. What is the effect of re-appearance of a presumptively dead spouse to the

subsequent marriage?

It will have no effect on the validity of the subsequent marriage, unless the re-appearing spouse
files an Affidavit of Reappearance. The second marriage shall automatically be terminated by
recording the affidavit of reappearance, unless there is a judgment annulling the previous
marriage or declaring it void ab initio. (Arts. 41 and 42, Family Code)

39. Is filing of an affidavit of reappearance the exclusive remedy for a presumptively

declared deceased spouse?

No. The provision on reappearance in the Family Code as a remedy to effect the termination of
the subsequent marriage does not preclude the spouse who was declared presumptively dead
from availing other remedies existing in law. A subsequent marriage may also be terminated by
filing an action in court to prove the reappearance of the absentee and obtain a declaration of
dissolution or termination of the subsequent marriage. (Santos vs. Santos, G.R. No. 187061, October 08,
2014)

11
D. Voidable Marriages

40. What are the actions for annulment of voidable marriages?

Persons Who May

Grounds Prescription Period Ratification
File
(Art. 45, FC) (Art. 47, FC) (Art. 45, FC)
(Art. 47, FC)
Parent/ legal guardian
Any time before such party has
having charge of the
Absence of reached the age of 21
minor Free cohabitation after
Parental
attaining the age of 21
Consent
Parties to the Within 5 years after attaining
marriage the age of 21

Sane spouse who has

no knowledge of the
insanity Any time before the death of
either party Free cohabitation after
Unsound mind Relative guardian or the insane spouse
persons having legal regains sanity
charge of the insane
During lucid interval or after
Insane spouse
regaining sanity
Free cohabitation with
Within 5 years after the full knowledge of the
Fraud
discovery of fraud facts constituting the
fraud

Force, Within 5 years from the time Free cohabitation after

intimidation, or the force, intimidation, or disappearance of force,
undue Injured party undue influence disappeared or intimidation / undue
influence ceased influence, respectively

Impotency
Serious and Within 5 years after the No ratification since the
incurable Sexually marriage defect is permanent
Transmissible
Disease

E. Effect of Defective Marriages

41. What is the status of children born under void marriages?

Children conceived and born outside a valid marriage are illegitimate. Hence, children born of
void marriages are considered illegitimate (Art. 50, FC).

XPNs:

a) Children conceived or born before the judgment of annulment or absolute nullity of the
marriage under Article 36 has become final and executory shall be considered legitimate (Art.
54, FC).
b) Children conceived or born of the subsequent marriage under Article 53 shall likewise be
legitimate (Art. 54; Art. 53, FC).

12
F. Foreign Marriages

42. What are the exceptions to the rule that all marriages solemnized outside the
Philippines, in accordance with the laws in force in the country where they were
solemnized, and valid there as such, shall also be valid in the Philippines?

(1) Marriages contracted by any party below 18 years of age even with the consent of parents
or guardians (Art. 35 [1], Family Code);
(2) Bigamous or polygamous marriages not failing under Art. 41, which provides that where
before the celebration of a subsequent marriage, the prior spouse had been absent for four
consecutive years (or two years in case of disappearance where there is danger of death)
and the spouse present has a well-founded belief that the absent spouse was already dead
(Art. 35 [4], Family Code);
(3) Marriages contracted through mistake of one contracting party as to the identity of the other
(Art. 35 [5], Family Code);
(4) Subsequent marriages that are void under Art. 53, i.e., when there is non-compliance with
the requirement of recording in the appropriate civil registry and registries of property the
judgment of annulment or of absolute nullity of the marriage, the partition and distribution
of the properties of the spouses and the delivery of the children’s presumptive legitimes, and
where either of the former spouses marry again (Art. 35 [6], Family Code);
(5) A marriage contracted by any party who, at the time of the celebration, was psychologically
incapacitated to comply with the essential marital obligations of marriage, even if such
incapacity becomes manifest only after its solemnization (Art. 36, Family Code);
(6) Incestuous marriages (Art. 37, Family Code); or
(7) Void marriages by reasons of public policy. (Art. 38, Family Code)

G. Legal Separation

43. What are the effects if the action of Absolute Divorce is brought in a foreign country?

Between Filipinos – will not be recognized here even if allowed in the foreign country, and
even if the ground be either adultery on the part of the wife or concubinage on the part of the
husband;

Between foreigners – recognized as valid by the personal law of the parties involved, that is,
if valid according to the national law or the law of their domicile depending upon the theory
adopted by their countries (Recto vs. Harden, G.R. No. L-6897, November 29, 1956).

Between a Filipino and a foreigner – if obtained by either the foreigner or the Filipino and
valid according to his personal law or the Filipino, it is valid for both the foreigner and Filipino
(Republic vs. Manalo, G.R. No. 221029, April 24, 2018).

44. What are the effects of the decree of legal separation?

a. Spouses are entitled to live separately (Art. 63, FC).

b. Marriage bond shall not be severed;
c. Dissolution and liquidation of the property regime (Art. 63, FC) which shall be automatic upon
issuance of the decree of legal separation; (Laperal v. Republic, G.R. No. L-18008, October 30, 1962)
d. The offending spouse shall have no right to the net profits and such will be forfeited according
to Art. 43(2), FC; (Macadangdang v. CA, G.R. No. L-49542, September 12, 1980)

e. Custody of the minor children shall be awarded to the innocent spouse, subject to the
provisions of Art. 213, FC (Tonog v. Daguimol, G.R. No. 122906, February 7, 2002)
f. Sec. 29 of R.A. 9262 prohibits the awarding of custody of minor children to the perpetrator
of a woman who is suffering from battered woman syndrome.

13
 g. Disqualification of the offending spouse to inherit from the innocent spouse by intestate
succession. The provisions in favor of the offending spouse made in the will of the innocent
spouse shall be revoked by operation of law; (Art. 63 FC)
h. Innocent spouse may revoke the donations (within five years from the time the decree of
legal separation has become final) made by him in favor of the offending spouse. However,
alienations, liens and encumbrances registered in good faith before the recording of the
complaint for revocation in the registries of property shall be respected; (Art. 64, FC)
i. Innocent spouse may revoke the designation of the offending spouse as the beneficiary in
any insurance policy, even if the designation be irrevocable (Art. 64, FC).
j. Pursuant to Art. 198, FC, obligation for mutual support ceases but guilty spouse may be
ordered to give support to the innocent one; and
k. Wife continues to use her name and surname before the legal separation.

H. Property Relations Between Spouses

45. What is the law governing property relations of Filipino spouses?

GR: Philippine laws shall govern their property relations, regardless of place of celebration of
marriage and their residence. (Art. 80, Family Code)
XPN: For properties located outside of the Philippines, what shall govern is the law of the country
where the property is situated, whether the issue is the extrinsic or intrinsic validity of contracts
affecting said property. (Art. 80[2], Family Code in relation to Art. 16, New Civil Code)

1. Donation Propter Nuptias

46. What are the requisites of Donations Propter Nuptias?

The following are the requisites of donations propter nuptias:

(a) Must be made before the celebration of the marriage;

(b) Must be made in consideration of the marriage;
(c) Must be in favor of one of both of the future spouses. (Art. 82, Family Code)

Otherwise, the GRs on donation shall govern.

2. Void Donations by the Spouses

47. When are donations by the spouses considered as void?

a. Those made between persons who were guilty of adultery or concubinage at the time of the
donation;
b. When the marriage takes place without the consent of the parents or guardian, as required
by law;
c. When the marriage is annulled, and the donee acted in bad faith;
d. If it is with a resolutory condition and the condition is complied with;
e. When the donee has committed an act of ingratitude as specified by the provision of the Civil
Code on donations in general (Art. 86, FC).

14
3. Absolute Community of Property Regime

48. What are the properties included and excluded in the absolute community of
property?

Properties Acquired Prior Properties Acquired During

to the Marriage the Marriage
GENERAL RULE
Included in the absolute community of property Included in the ACP.
(ACP).
EXCEPTIONS
a. Those excluded in the marriage a. Those acquired through gratuitous title,
settlement; including fruits and income unless expressly
b. Those for personal and exclusive use; provided by the grantor that they shall form
and part of the ACP; and
c. Those acquired by either spouse who b. Those for personal and exclusive use.
has legitimate descendants by a former (Arts. 91-92, Family Code; Rabuya, supra.)
marriage, including fruits and income.

49. What is the property regime of a second marriage celebrated in 1990 without a
marriage settlement but one of the parties thereto had a prior void marriage which
has not yet been judicially declared void?

Absolute community of property. The said property regime applies by default in the absence of
a marriage settlement for marriages celebrated during the effectivity of the Family Code. Even
though the second marriage is void for failure to comply with the requirements of Article 40 of
the Family Code, the latter kind of void marriage is also governed by the same rules applicable
to valid marriages for purposes of determining its property regime. (Art. 50, in relation to Art. 43[2],
Family Code; Diño vs. Diño, supra.)

4. Conjugal Partnership of Gains Regime

50. What are the properties included and excluded in the conjugal partnership of gains?

Properties Acquired Prior Properties Acquired During

to the Marriage
GENERAL RULE
Not included in the conjugal partnership of
gains (CPG), but fruits and income accruing
during the marriage are included.
EXCEPTIONS
When included in the marriage settlement
subject to the following limitations:
a. May not exceed more than 1/5 of
present property; and
b. May not include properties acquired
prior to marriage if either of the future
spouses has legitimate descendants in
a former marriage.
the Marriage
Included in the CPG.
a. If acquired through gratuitous title, but the
fruits and income of said properties are
included in the CPG.
b. If acquired through onerous title and:
i. Using exclusive money or funds; or
ii. Using conjugal funds but the acquisition is by
way of exercise of right of redemption, subject
to reimbursement.
(Arts. 109, and 116-117, Family Code; Rabuya, supra.)

51. May a bank, being unable to foreclose a mortgage due to lack of marital consent from
the spouses, still recover the amount of a loan from the said spouses?

Yes. While the real estate mortgage was an encumbrance attached to a conjugal property without
the consent of the other spouse is void and legally inexistent, the law presumes that when the

15
 family benefited from the loan, the conjugal partnership should be held liable. Although the bank
cannot foreclose the mortgage over the conjugal property in question, it can still recover the loan
amount from the conjugal partnership. (PNB vs. Reyes, Jr., supra.)

52. In a petition for dissolution of conjugal partnership, may a foreigner spouse seek
reimbursement from the Filipino spouse for half of the value of the properties, on the
ground that the funds used to purchase the parcels of land titled under the name of
the Filipino spouse and subject of the dispute are were his?

No, the foreign spouse cannot seek reimbursement on the ground of equity where it is clear that
he willingly and knowingly bought the property despite the prohibition against foreign ownership
of Philippine land enshrined under Sec. 7, Art. XII of the 1987 Philippine Constitution. (Beumer vs.
Mores, G.R. No. 195670, December 03, 2012)

5. Separation of Property Regime

53. When may a complete separation of property govern the property relations of the
spouses?

(a) By express declaration in the marriage settlement; (Arts. 134 and 74[1], FC)
(b) By judicial order; (Art. 134)
(c) 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. (Arts. 103 and 130, FC)

54. Explain the property regime governing the following situations.

(a) A second marriage contracted by the surviving spouse during the effectivity of the
Family Code and without a marriage settlement after the prior marriage was
terminated by reason of death, but the surviving spouse failed to liquidate the
conjugal partnership of said prior marriage.

Complete separation of property. Under the Family Code, if the conjugal partnership or the
absolute community of the prior marriage was terminated by reason of death and the surviving
spouse failed to liquidate the property regime within one year from the death of the deceased
spouse, the subsequent marriage shall be mandatorily governed by complete separation. (Art.
130, Family Code)

(b) When after the issuance of the decree of legal separation, the spouses reconciled
and obtained a decree of reconciliation from the court.

Complete separation of property. After the issuance of the decree of legal separation, the
property regime of the spouses shall be complete separation. While a decree of reconciliation
sets aside the decree of legal separation, the separation of property subsists, however, unless
the spouses have agreed to revive their former property regime. (Art. 66[2], Family Code; Sec. 23[d],
Rule on Legal Separation)

(c) When after the issuance of the decree of reconciliation, the spouses executed an
agreement for the adoption of conjugal partnership of gains as their new property
regime and such agreement is approved by the court.

Complete separation of property. After the issuance of the decree of legal separation, the
property regime of the spouses shall be complete separation. Even when the spouses executed
an agreement for the adoption of conjugal partnership as their new property regime and the
same is approved by the court, the agreement is void because the law mandates that such

16
 property regime can only commence at the precise moment of the celebration of the marriage.
Any agreement to the contrary, whether express or implied, is declared by law to be void. (Art.
107, in relation to Art. 88, Family Code)

6. Property Regime of Unions Without Marriage

55. Discuss the property regimes of the two kinds of unions without marriage under the
Family Code.

ART. 147 ART. 148

Applicability
1. No legal impediment to marry but Presence of legal impediment:
living as husband and wife;
1. Adulterous relationships
2. Void marriage on the ground of 2. Bigamous/polygamous marriages
psychological incapacity. 3. Incestuous void marriages under Art 37
4. Void marriages by reason of public policy (Art.
38, FC)
Salaries & wages
Owned in equal shares Separately owned by the parties. If any party is married,
his/her salary pertains to the ACP or CPG of the legitimate
marriage.
Property exclusively acquired
Belongs to party Belongs to such party
upon proof of acquisition through exclusive
funds
Acquired by both through their work or industry
Governed by rules of co‐ownership Owned in common in proportion to their respective
contributions
Presumption
Property acquired while living together No presumption of joint acquisition.
presumed to have been obtained by their
joint efforts, work or industry and owned by Actual joint contribution of money, property or industry
them in equal shares. shall be owned by them in common proportion.
However, their contributions are presumed equal, in the
If one party did not participate in absence of proof to the contrary .
acquisition:
presumed to have contributed through care
and maintenance of family and household
(Buenaventura vs. Buenaventura, G.R. No.
127358, Mar. 31, 2005)
Forfeiture
When only one is in GF, share of party in BF If one of the parties is validly married to another, his/her
in the co‐ownership be forfeited in favor of: share in the co‐ownership shall accrue to the ACP or CPG
1. their common children; existing in the marriage.
2. in default of / waiver by any/all
common children, or by their descendants, If the party who acted in BF is not validly married to
to the surviving descendants; another or if both parties are in BF, such share be forfeited
3. in their absence, to the innocent in manner provided in last paragraph of Art. 147
party
Proof of actual contribution
Not necessary Necessary

17
7. Judicial Separation of Property

56. What are the effects of Judicial Separation of Property?

a.) The absolute community or the judicial partnership of gains shall be liquidated in conformity
with this Code. (Art. 137, FC)
b.) After the dissolution of the absolute community or the conjugal partnership, complete
separation of property shall apply. (Art. 138, FC)
c.) The decree of final judgment will be recorded in the proper local civil registries and registries
of property. (Art. 139, FC)

I. The Family

1. General Principles

57. Why are families afforded state protection?

Family is considered as a basic social institution which, by reason of public policy, deserved State‘s
protection. The Philippine Constitution emphatically declares the Filipino family as― foundation
of the nation. As such, our Constitution is committed to the policy of strengthening the family as
a basic autonomous social institution (Rabuya, The Law on Persons and Family Relations, 2007, p. 512-513).

58. What is the requirement before family members may file a case against each other?

Earnest efforts toward a compromise be first exerted before action or suit between or among the
members of the same family may be given due course. The requirement is mandatory that
earnest efforts have been made but that the same failed, so that if it is shown that no such effort
were in fact made, the case must be dismissed. Hence, it is a condition precedent to the filing of
a suit between members of the same family. Failure to allege that earnest efforts to compromise
were undertaken is assailable at any stage of the proceeding, even on appeal, for lack of cause
of action (O‘ Laco v. Co Cho Chit, G.R. No. 58010, March 31, 1993).

J. The Family Home

1. General Principles

59. How is a family home constituted?

The family home, constituted jointly by the husband and the wife or by an unmarried head of a
family, is the dwelling house where they and their family reside, and the land on which it is
situated (Arts. 152, FC). After the effectivity of the Family Code, a family home is deemed
constituted upon actual occupation of the family. There is no need to constitute it judicially or
extra-judicially (Rabuya, The Law on Persons and Family Relations, 2006, p. 518).

60. What is not considered a family home?

1. An apartment unit or a house that is being rented

2. A house erected by a person on the property of another (Sta. Maria, Persons and Family Relations,
2019)

18
K. Paternity and Filiation

1. Concepts of Paternity, Filiation and Legitimacy

61. How is the legitimacy of a child established?

Legitimacy/illegitimacy is fixed by law & cannot be left to the will of the parties or the
declaration of a physician or midwife:

a. By nature – legitimate if they are conceived or born during the valid marriage of the parents

NOTE: Presumption of legitimacy can only arise upon convincing proof that the parents of
the child were legally married & that the child’s conception/birth occurred during the
subsistence of such marriage

b. By adoption

2. Legitimate children

a) Who are legitimate Children

62. Who are considered as legitimate children?

1. Children conceived or born during the marriage of the parents are legitimate. (Art. 164, FC)
2. Children who are born outside of wedlock but are considered LEGITIMATE:
a. Children of void marriages on the ground of psychological incapacity (Art. 36, FC);
b. Children born in a subsequent void marriage due to non-compliance of the registration
requirements (Art. 53, FC); and
c. Born of a voidable marriage before the decree of annulment (Art. 54, FC).

3. Children by artificial insemination: A child conceived by artificial insemination (AI) is

considered legitimate (Art. 164, FC).

Requisites:

a. Artificial Insemination (AI) is made on the wife, not on another woman;

b. AI on the wife is done with sperm of the husband or that of a donor, or a combination of
the husband and the donor;
c. AI has been authorized or ratified by the husband and wife in a written instrument;
d. Executed and signed by them before the birth of the child; and
e. The written instrument is recorded in civil registry together with the birth certificate
of the child (Art. 164, FC).

b) Proof of Filiation of Legitimate Children

63. When may a child bring an action to claim filiation/legitimacy?

The action to claim legitimacy 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.

The action already commenced by the child shall survive notwithstanding the death of either or
both of the parties. (Art. 173, Family Code)

19
 b) Rights of Legitimate Children

64. What are the rights of legitimate children?

1. To bear the surnames of the father and the mother, in conformity with the provisions of the
Civil Code on Surnames;
2. To receive support from their parents, their ascendants, and in proper cases, their brothers
and sisters, in conformity with the provisions of this Code on Support; and
3. To be entitled to the legitimate and other successional rights granted to them by the Civil
Code (Art. 174, FC).
65. Does the requirement of electing Filipino citizenship when a child reached the age of
majority under Article IV, Section 1 of the 1935 Constitution, the governing law when
such child was born and Section 1 of Commonwealth Act No. 625, apply only to
legitimate children?

Yes. This would not apply in the case an illegitimate child, who is born out of wedlock of a Filipino
and foreign parents. As such, such child is not required to comply with said constitutional and
statutory requirements to become a Filipino citizen. By being an illegitimate child of a Filipino
such child automatically became a Filipino upon birth. Stated differently, such child is a Filipino
since birth without having to elect Filipino citizenship when she reached the age of majority. (Uy-
Belleza v The Civil Regsitrar of Tacloban City, G.R. No. 218354. September 15, 2021, J. Hernando)

d) Grounds to Impugn Legitimacy

66. When may the husband bring an action to impugn the legitimacy of a child?

The action to impugn the legitimacy of the child shall be brought within one year from the
knowledge of the birth or its recording in the civil register, if the husband or, in a proper case,
any of his heirs, should reside in the city or municipality where the birth took place or was
recorded.

If the husband or, in his default all of his heirs do not reside at the place of birth or where it was
recorded, the period shall be two years if they should reside in the Philippines. If the husband or
all heirs live abroad, the period shall be three years. (Art. 170, Family Code)

3. Illegitimate children

a) Who are illegitimate Children

67. Who are considered as illegitimate children?

Those who are conceived and born outside a valid marriage, except those children born during
void marriages under Articles 36 and 53, FC are considered as illegitimate children.

b) Proof of Filiation of illegitimate Children

68. May an illegitimate child prove filiation through open and continuous possession of
the status as illegitimate child?

No. The Family Code provides that illegitimate children may establish their filiation the same way
and on the same evidence as legitimate children, but such action must be brought during the
lifetime of the alleged parent. (Ara vs. Pizzaro, G.R. No. 187273, February 15, 2017)

20
69. How may filiation of illegitimate children be established?
Yes. The filiation of illegitimate children, like legitimate children, is established by (1) the record
of birth appearing in the civil register or a final judgment; or (2) an admission of legitimate
filiation in a public document or a private handwritten instrument and signed by the parent
concerned. (Aguilar vs. Siasat, G.R. No. 200169, January 28, 2015)

70. May a birth certificate be registered by the biological father of an illegitimate child
without the knowledge and consent of the child’s biological mother?

No. Par. 5, Sec. 5 of Act No. 3753 (Civil Registry Law) states that in case of an illegitimate child,
the birth certificate shall be signed and sworn to jointly by the parents of the infant or only the
mother if the father refuses. Thus, it is mandatory that the mother of an illegitimate child signs
the birth certificate of her child in all cases, irrespective of whether the father recognizes the child
as his or not. (In the Matter of Petition for Cancellation of Certificates of Live Birth of Barcelote Tinitigan vs. Republic,
G.R. No. 222095, August 7, 2017)

c) Rights of illegitimate Children

71. When can illegitimate children use the surname of their biological fathers?

Illegitimate children may use the surname of their father if their filiation has been expressly
recognized by the father, either through:
1. Record of birth in civil register;
2. Father’s admission in public document;
3. Father’s admission in private handwritten document.

d) Grounds to Impugn Filiation

72. What are the grounds to impugn filiation?

1. Physical impossibility for the husband to have sexual intercourse with his wife within the first
120 days of the 300 days immediately preceding the birth of the child due to:
a. Physical incapacity of the husband (Impotent); It is only impotency which the law
considers as sufficient ground to impugn the child’s legitimacy, and not sterility.
(Macadangdang vs. CA, G.R. No. L-49542, September 12, 1980)
b. The spouses are living separately in such a way that sexual intercourse was not possible;
Where the husband and wife continued to live together in the same province after their
alleged separation, the Court did not discount the possibility of physical access to each
other considering their proximity to each other (Concepcion vs. CA, G.R. No. 123450, August 31,
2005).
c. Serious illness of the husband which absolutely prevented intercourse.

2. Biological or scientific proof that the child could not have been that of the husband;

4. Legitimated children

73. What is legitimation?

Legitimation is the process provided under our law where the status of a child conceived and
born out of wedlock is improved, by operation of law, from illegitimacy to that of legitimacy by
the mere subsequent marriage of the parents. (Arts. 177-179, FC)

21
a) Who may be legitimated

74. Who are entitled to legitimation?

Only children conceived and born outside of wedlock of parents who, at the time of conception
of the former, were not disqualified by any impediment to marry each other, or were so
disqualified only because either or both of them were below eighteen (18) years of age. (Art. 177,
FC as amended by R.A. 9858)

b) How Legitimation Takes Place

75. How does legitimation take place?

1. At the time of conception of the child, his/her parents were not disqualified by any
impediment to marry each other;
2. The child is conceived and born outside of wedlock;
3. After the birth of the child, his/her parents subsequently got married; and
4. Such marriage is not void ab initio. (Art. 178 and 177, FC).

5. Adopted Children

a) Domestic Administrative Adoption and Alternative Child

Care Act (RA 11642)

76. What is the effect of the enactment of Republic Act No. 11642 or the Domestic
Administrative Adoption and Alternative Child Care Act?

It repealed the Domestic Adoption Act (RA 8552) and amended the Inter-country Adoption Act
(RA 8043). It took effect on January 21, 2022. Under RA 11642, the Inter-Country Adoption
Board is reorganized into the National Authority for Child Care. The duties, functions and
responsibilities of the ICAB, the DSWD and other government agencies relating to alternative
child care and adoption are transferred to the NACC.

a. Who May Adopt

77. Who may adopt under RA 11642?

1) Filipino Citizens [Sec. 21(a), RA 11642]

1. Of at least 25 years of age;
2. With full civil capacity and legal rights;
3. With good moral character;
4. Has not been convicted of any crime involving moral turpitude;
5. Emotionally and psychological capable of caring for children;
6. In a position to support and care for his/her children in keeping with the means of the family;
and
7. At least 16 years older than the adoptee, except:
a. When the adopter is the biological parent of the adoptee; or
b. the spouse of the adoptee’s parent or
c. The sibling of the adopted
8. Has undergone pre-adoption services

22
 2) Foreign Nationals
1. Must possess the same qualifications as stated for Filipino nationals prior to the filing of the
petition;
2. Permanent or habitual residents of the Philippines for at least 5 years;
3. Must come from a country with diplomatic relations with the Philippines and that the laws of
the adopter’s country will:
a. acknowledge the Certificate of Adoption as valid
b. acknowledge the child as a legal child of the adopters
c. allow entry of the child into such country as an adoptee

3) Guardians [Sec. 21(b), RA 11642]: With respect to their wards, after the termination of the
guardianship and clearance of his/her accountabilities

4) Foster parent [Sec. 21(c), RA 11642]: With respect to the foster child

5) Philippine government officials and employees [Sec. 21(d), RA 11642]

1. Deployed abroad, and
2. Are able to bring the child with them

c. Who May be Adopted

78. Who may be Adopted?

Under, Sec. 22, RA 11642, the following may be adopted:

a. Any child who has been issued by a CDCLAA.
b. Legitimate child of one spouse by another.
c. Illegitimate child by a qualified adopter to improve the child’s status to that of legitimacy.
d. A Filipino of legal age if, prior to the adoption, said person has been consistently considered
and treated, for a period of at least 3 years, by the adopter(s) as his/her child since minority.
e. A child whose previous adoption has been rescinded.
f. A child whose biological or adoptive parent(s) has died, provided that no proceedings shall
be initiated within 6 months from the time of death of said parent(s).
g. A foster child
i. Provided, no proceedings shall be initiated within 6 months from the time of death of
said parents.
ii. Merely permitting the child to remain for a time undisturbed in the care of others is not
the same as abandonment. To dispense with the requirement of consent, the
abandonment must be shown to have existed at the time of adoption (Landingin vs. Republic,
G.R. No. 164948, June 27, 2006).

d. Effects of a Decree of Adoption

79. What are the effects of Adoption?

Except in cases where the biological parent is the adopter’s spouse, all legal ties between
biological parent and adoptee shall be severed, and the same shall then be vested on the
adopters.

1. Legitimacy: The adoptee shall be considered the legitimate son/daughter of the adopters
for all intents and purposes, and as such is entitled to all rights and obligations provided by
law to legitimate children born to them without discrimination of any kind. The adoptee is
entitled to love, guidance, and support in keeping with the means of the family. (Sec. 41, RA
11642)

23
 2. Succession: In legal and intestate succession, the adopter and the adoptee shall have
reciprocal rights of succession without distinction from legitimate filiation. However, if the
adoptee and his/her biological parents had left a will, the law on testamentary succession
shall govern. (Sec. 41, RA 11642);
3. Name: Under RA 11642, the adopter has the right to choose the name by which the child is
to be known, consistent with the best interest of the child.
4. Nationality: Adoption does not confer citizenship of the adopter to the adopted. Under Sec.
3, Art. IV of the Constitution, Philippine citizenship may be lost/acquired [only] in the manner
provided by law. The adoption of an alien is not a means of acquiring Philippine citizenship.
A Filipino adopted by an alien does not lose his Philippine citizenship. (Sec. 41-43, RA 11642)

80. Can citizenship be conferred through adoption?

The right to confer citizenship belongs to the State (political) and cannot be granted by a citizen
through adoption. Adoption creates a relationship between the adopter and adoptee, not between
the State and the adoptee (Tolentino, Persons and Family Relations, 1990).

L. Support
1. What Comprises Support

81. What comprises support?

Support comprises everything indispensable for the following, in keeping with the financial
capacity of the family:
a) Food or sustenance;
b) Dwelling or shelter;
c) Clothing;
d) Medical attendance;
e) Education;
f) Transportation (Art. 194, FC)

Education shall include the schooling or training for some profession, trade or vocation of the
persion entitled to be supported, even beyond the age of majority.

Transportation shall include expenses going to and from school, or to and from place of work.
(Art. 194, 2nd par., FC)

2. Who are Obliged to Give Support

82. Who are obliged to give support?

Persons obliged to support each other

a) Spouses – he/she must be the legitimate spouse
b) Legitimate ascendants and descendants;
c) Parents and their children (whether or illegitimate) and the latter’s children (whether
legitimate or illegitimate);
d) Legitimate brothers and sisters (whether full or half-blood); (Art. 195, FC)
e) Brothers and sisters not legitimately related (whether full or half-blood). (Art. 196, FC)

Exception: When the need for support of the brother/sister, being of age, is due to cause
imputable to the claimant’s fault of negligence. (Art. 196, FC)

24
3. Source of Support

83. When is support chargeable to the absolute community or the conjugal partnership?

Support to the following is chargeable to the absolute community or the conjugal partnership:
a) Spouses;
b) Common Children of the Spouses; and
c) Legitimate Children of Either Spouse

Note: If the community property or the conjugal partnership is insufficient to cover this liability,
the spouses shall be solidarily for the unpaid balance with their separate properties (Arts. 94 and
121, FC).

84. When is support chargeable to the the separate property of the person obliged to give
support?

Support to the following is chargeable to the separate property of the person obliged to give
support:
a) Illegitimate Children;
b) Legitimate Ascendants;
c) Descendants, whether legitimate or illegitimate; and
d) Brothers and sisters, whether legitimately or illegitimately related. (Art. 197, FC)

Note: In case the person obliged to give support has no separate property, such support shall
be advanced by the absolute community or the conjugal partnership.

Such support shall be deducted from the share of the spouse obliged upon the liquidation of the
absolute community or the conjugal partnership (Art. 197, FC).

4. Order of Support

85. What is the order of support when two or more persons are obliged to give support?

When two or more persons are obliged to give support, the following order should be followed:
a) The spouse;
b) The descendants in the nearest degree;
c) The ascendants in the nearest degree; and
d) The brothers and sisters (Art. 199, FC).

When the obligation to give support falls upon two or more persons, the payment of the same
shall be divided between them in proportion to the resources of each. In case of urgent need and
by special circumstances, the judge may order only one of them to furnish the support
provisionally, without prejudice to his right to claim from the other obligors the share due from
them (Art. 200, FC).

J. Parental Authority

1. Concept of Parental Authority

86. What is parental authority?

Parental authority is a mass of rights and obligations which the law grants to parents for the
purpose of the children’s physical preservation and development, as well as the cultivation of

25
 their intellect and the education of their heart and senses. (Masbate vs. Relucio, G.R. No. 235498,
July 30, 2018).

87. What constitutes parental authority?

Pursuant to the natural right and duty of parents over the person and property of their
unemancipated children, parental authority and responsibility shall include:
a) Taking care of their children;
b) Rearing them for civic consciousness and efficiency; and
c) Development of their moral, mental and physical character and well-being (Art. 209, FC).

2. Substitute Parental Authority

3. Special Parental Authority

88. Distinguish substitute and special parental authority.

Substitute Parental Authority Special Parental Authority

As to Surviving grandparent The school, its administrators and teachers, or the
who In case several survive, the one individual, entity or institution engaged in childcare
exercis designated by the court. (Art. 214, (Art. 218, Family Code)
es Family Code)
As to In case of death, absence, or While under their supervision, instruction, or
how unsuitability of the parents (Art. 214, custody (Art. 218, Family Code)
exercis Family Code)
ed
As to Subsidiary liability (Art. 219, Family Principally and solidarily liable for damages caused
liabilit Code) by the acts or omissions of the unemancipated
y minor. (Art. 219, Family Code)

89. May the court grant “limited and temporary custody” to a parent who is deprived of
the care and custody of his/her minor child ahead of trial relating to custody of a child
under seven (7) years of age?

No. Sec. 15 of A.M. No. 03-04-04-SC (Rule on Custody of Minors and Writ of Habeas Corpus in
Relation to Custody of Minors) provides for temporary visitation rights, not temporary custody. It
is only after trial, when the court renders its judgment awarding the custody of the minor to the
proper party, that the court may likewise issue “any order that is just and reasonable permitting
the parent who is deprived of the care and custody of the minor to visit or have temporary
custody.” By granting temporary albeit limited custody ahead of trial, the trial court will overturn
the tender-age presumption with nothing but bare allegations, to which the Court cannot give its
imprimatur. (Masbate, vs. Relucio, G.R. No. 235498, July 30, 2018)

4. Effects of Parental Authority

90. What are the rights and duties of persons exercising parental authority?

a) To keep them in their company, to support, educate and instruct them by right precept and
good example, and to provide for their upbringing in keeping with their means;
b) To give them love and affection, advice and counsel, companionship and understanding;
c) To provide them with moral and spiritual guidance, inculcate in them honesty, integrity, self-
discipline, self-reliance, industry and thrift, stimulate their interest in civic affairs, and inspire
in them compliance with the duties of citizenship;

26
 d) To furnish them with good and wholesome educational materials, supervise their activities,
recreation and association with others, protect them from bad company, and prevent them
from acquiring habits detrimental to their health, studies and morals;
e) To represent them in all matters affecting their interests;
f) To demand from them respect and obedience;
g) To impose discipline on them as may be required under the circumstances; and
h) To perform such other duties as are imposed by law upon parents and guardians (Art. 220,
FC).

91. Who shall exercise legal guardianship over the property of an unemancipated child?

The father and the mother shall jointly exercise legal guardianship over the property of the
unemancipated common child without the necessity of a court appointment.

In case of disagreement, the father’s decision shall prevail, unless there is a judicial order to the
contrary (Art. 225, FC).

92. Do parents have rights of ownership over the income of an unemancipated child?

Yes. However, the right of the parents over the fruits and income of the child’s property shall be
limited to (a) primarily to the child’s support and (b) secondarily to the collective daily needs of
the family (Art. 226, FC).

The property of the unemancipated child earned or acquired with his work or industry or by
onerous or gratuitous title shall belong to the child in ownership. The child’s property shall be
devoted exclusively to the latter’s support and education, unless the title or transfer provides
otherwise.

PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS

I. CLASSIFICATION OF PROPERTY

A. IMMOVABLES

93. What properties are considered immovable?

Article 415 of the NCC provides the enumeration of properties considered immovable. They are
the following:
(a) Land, buildings, roads and constructions of all kinds adhered to the soil;
(b) Trees, plants, and growing fruits, while they are attached to the land or form an integral part
of an immovable;
(c) Everything attached to an immovable in a fixed manner, in such a way that it cannot be
separated therefrom without breaking the material or deterioration of the object;
(d) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or
on lands by the owner of the immovable in such a manner that it reveals the intention to
attach them permanently to the tenements;
(e) Machinery, receptacles, instruments or implements intended by the owner of the tenement
for an industry or works which may be carried on in a building or on a piece of land, and
which tend directly to meet the needs of the said industry or works;
(f) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in
case their owner has placed them or preserves them with the intention to have them
permanently attached to the land, and forming a permanent part of it; the animals in these
places are included;
(g) Fertilizer actually used on a piece of land;
(h) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters
either running or stagnant;

27
 (i) Docks and structures which, though floating, are intended by their nature and object to
remain at a fixed place on a river, lake, or coast; and
(j) Contracts for public works, and servitudes and other real rights over immovable property.

94. What are the different kinds of immovable property?

Immovable by nature Those which by their essence and nature are immovable or cannot be
moved from one place to another, such as lands, roads, mines, quarries,
and slag dumps.

Immovable by incorporation Those which become immovable by reason of their attachment or

Immovable by destination
Immovable by analogy
incorporation to an immovable in such manner as to be an integral part
thereof, such as buildings and constructions of all kinds adhered to the
soil; trees, plants, and growing fruits attached to the land or forming
an integral part of an immovable; and those that are attached to an
immovable in the manner provided for in paragraph 3 of Article 415.
Those which are essentially movable, but by the purpose for which they
have been placed in an immovable, partake of the nature of the latter
because of the added utility derived therefrom, such as those
mentioned in pars. 4, 5, 6, 7, and 9 of Article 415.
Those that are mentioned in par. 10 of Article 415. (Rabuya, Pre-bar
Reviewer Civil Law, 2021, p. 156)

95. Can a land that has been declared as alienable and disposable be still considered as
a land of public domain?

Yes. It only becomes patrimonial upon express declaration of the State that it is no longer needed
for public use, public service, or the development of the national wealth. (Republic vs. City of Paranaque,
G.R. No. 191109, July 18, 2012)

96. Lots “A” and “B” were registered in the name of the Province of Bataan. The Bataan
Colleges (BC) and the Bataan School of Arts and Trades (BSAT), both State-run
schools, occupied both lots. The Congress passed a law, converting the BSAT into
Bataan Polytechnic State College (BPSC). The law provides that “all parcels of land
belonging to the government occupied by BSAT and BC are declared to be the
property of the BPSC.” Congressman Garcia wrote to the Governor of Bataan,
requesting the transfer of the title of the aforesaid lots to BPSC. The Governor refused
contending that the subject lots were patrimonial properties of the Province of
Bataan. Is the Governor’s contention correct?

No, the contention is incorrect. In the case of Sangguniang Panlalawigan of Bataan v Cong.
Garcia, G.R. No. 174964, October 5, 2016, the Court ruled that if the property is owned by the
municipal corporation 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 municipality cannot be
deprived of it without due process and payment of just compensation. Here, the subject lots were
not patrimonial properties of the Province of Bataan. In the absence of proof that the Province
of Bataan acquired them with its own private or corporate funds, the lots must be presumed to
belong to the State.

28
97. As between the Civil Code, a general law governing property and property relations,
and the Local Government Code, a special law granting local government units (LGUs)
the power to impose real property tax, which one prevails for the purpose of
determining which property is subject to real property tax?

The Local Government Code prevails. In Manila Electric Company v City Assessor," it was ruled
that the transformers, electric posts, transmission lines, insulators, and electric meters of
MERALCO may qualify as "machinery" under the Local Government Code subject to real property
tax. Also, in Capitol Wireless, Inc. v. Provincial Treasurer of Batangas, the Court likewise ruled
that submarine or undersea communications cables entering the territorial jurisdiction of the
Philippines are akin to electric transmission lines and may qualify as "machinery" subject to real
property tax under the Local Government Code. (Rabuya, Pre-bar Reviewer Civil Law, 2021, p.
159-160)

B. MOVABLES

98. What properties are considered movable?

Under Article 416 of the NCC, the following things are deemed to be personal property:
a) Those movables susceptible of appropriation which are not included in the preceding article;
b) Real property which by any special provision of law is considered as personalty;
c) Forces of nature which are brought under control by science; and
d) In general, all things which can be transported from place to place without impairment of the
real property to which they are fixed. (335a)
The following are also considered as personal property under Article 417, NCC:
(1) Obligations and actions which have for their object movables or demandable sums; and
(2) Shares of stock of agricultural, commercial and industrial entities, although they may have
real estate. (336a)

99. How are movable properties classified?

Movable property is either consumable or nonconsumable. To the first class belong those
movables which cannot be used in a manner appropriate to their nature without their being
consumed; to the second class belong all the others. (Art. 418, NCC)

II. BUNDLE OF RIGHTS

A. OWNERSHIP

100. What is ownership and what are the rights included therein?

Ownership is an independent right of exclusive enjoyment and control of the thing for the purpose
of deriving therefrom all advantages required by the reasonable needs of the owner and the
promotion of the general welfare but subject to the restrictions imposed by law and the right of
others. (Rabuya, Civil Law Reviewer Vol. 1, 2021, p. 461)

The following are the rights included in ownership:

a. Right to enjoy
b. Right to dispose (jus disponendi)
c. Right to vindicate (jus vindicandi)
d. Right to exclude
e. Right to demand indemnity for damages suffered due to lawful interference by a third person
to avert an imminent danger;
f. Right to just compensation in eminent domain cases;

29
 g. Right to construct any works or make any plantations and excavations on the surface or
subsurface of the land;
h. Right to hidden treasure found in the owner’s property; and
i. Right to accessions. (Rabuya, Civil Law Reviewer Vol. 1, 2021, p. 461-462)

B. RIGHTS OF ACCESSION

1. General Principles

101. What are the rights of Accession with respect to Immovable Property?

Industrial Accession Natural Accession

May take form of building, planting or sowing. Four forms: Alluvion; Avulsion; Natural change of
course of river; and Formation of island

2. Accession Industrial

102. In industrial accession, what are the rights, liabilities and remedies available to a
landowner, builder, planter, sower, and owner of the materials?

Landowner (LO); Builder, Planter, Sower (B, P, S); Owner of the Materials (OM)
BUILDING, PLANTING, OR SOWING ON ONE’S OWN LAND WITH
MATERIALS BELONGING TO ANOTHER
If both the LO If both the LO and the If LO acted in bad faith and If LO acted in good faith
and the OM acted OM acted in bad faith OM acted in good faith and OM acted in bad faith
in good faith
(1) LO may The bad faith of one (1) LO is liable for OM loses his materials
appropr neutralizes the bad faith damages. without any right
iate of the other. Hence, they (2) OM may: whatsoever and is liable
what he must be treated as if a. Demand the to the LO for damages.
has both of them acted in value of his (Arts. 447, 449, and 455,
built, good faith. materials plus Civil Code)
planted damages; OR
or b. Demand the
sown, return of the
but materials, even
must if injury is
pay the caused to the
value of land, plus
the damages.
material
s; OR
(2) LO may
return
the
material
s to the
OM, if it
can be
made
without
damage
to the
material
s.

30
BUILDING, PLANTING, OR SOWING
WITH ONE’S OWN MATERIALS ON THE LAND BELONGING TO ANOTHER
If both the LO and If both the LO and the If the LO acted in good If the LO acted in bad
the BPS-OM acted BPS-OM acted in bad faith faith and the BPS-OM faith and the BPS-OM
in good faith acted in bad faith acted in good faith
(1) LO may The bad faith of one (1) LO may (1) BPS-OM may:
appropri neutralizes the bad faith appropriate as a. Demand the
ate as of the other. Hence, they his own the value of his
his own must be treated as if both works, sowing, materials plus
the of them acted in good or planting, damages; OR
works, faith. without need of b. Demand the
sowing, paying return of the
or indemnity, plus materials, even if
planting, damages; OR injury is caused
but must (2) LO may demand to the land, plus
pay the the demolition of damages. (Arts.
BPS-OM whatever has 448-454, Civil
the been built, Code)
necessar planted, or sown
y and even if injury is
useful caused to the
expense land, plus
s, and in damages; OR
proper (3) LO may compel
cases, the BP to pay the
expense price of the land,
s for even if the land
pure is considerably
luxury; more than that
OR of the building or
(2) LO may trees, plus
oblige damages.
the BP to
pay the (4) BPS-OM is
price of entitled to
the land, reimbursement
if the of necessary
value of expenses for the
the land preservation of
is not the land.
consider
ably
more
than that
of the
building
or trees;
and the
S, the
proper
rent.

(3) LO is
entitled
to
remove
the
works,

31
 sowing,
or
planting
when,
after
having
chosen
to sell
his land,
the BPS-
OM fails
to pay
for the
same;
and
(4) Pending
reimburs
ement,
the BPS-
OM has
the right
of
retention
.

BUILDING, PLANTING, OR SOWING

ON THE LAND OF ANOTHER WITH MATERIALS BELONGING TO A THIRD PERSON
OM acted in good faith OM acted in bad faith
(1) OM must be paid the value of the (1) OM loses his materials without any right
materials; whatsoever and is liable for damages;
(2) BPS is primarily liable to make such (2) LO can claim what has been built, planted, or
payment to the OM (with damages if sown on his land without any obligation to
BPS acted in bad faith); indemnify the OM;
(3) If BPS pays, he becomes the OM and (3) BPS who acted in good faith may claim from
the case would be the same as that the LO a reasonable compensation for his
of building, planting, or sowing with labor;
one’s own materials on the land of (4) BPS who acted in bad faith is not entitled to
another (refer to the table above); anything; he is instead liable for damages.
(4) LO is subsidiarily for the payment of (Arts. 447-454, Civil Code)
the value of the materials. It will
attach only when: the BPS is
insolvent; and the LO chooses to
appropriate the building, planting, or
sowing. However, if the LO pays for
the value of the materials, he
becomes the OM, who may: demand
damages from the BPS; or pay the
BPS a reasonable compensation if
the latter acted in good faith.

3. Accession Natural

103. Differentiate avulsion from avulsion.

ALLUVIUM AVULSION
The deposit of the soil here is gradual and Sudden or abrupt; may be seen.
imprescriptible.
Soil cannot be identified. Soil is identifiable or verifiable.

32
 Belongs to owner of the property to which Belongs to the owner from whose property it was detached
it is attached. within the two-year prescriptive period.
Merely an attachment. Detachment followed by attachment.

104. With whom the formed island belongs?

Rules of Ownership:
1. It shall belong to the owner of the margins or banks nearest to the island;
2. If the island is in the middle of the river, the same shall be owned by the owners of both
margins, in which case it shall be divided longitudinally in halves; or
3. If the island be more distant from one margin than from the other, the owner of the nearer
margin shall be the sole owner thereof. (Art. 465, NCC)

C. ACTIONS TO RECOVER OWNERSHIP AND POSSESSION OF PROPERTY

1. Accion Reivindicatoria
2. Accion Publiciana
3. Accion Interdictal

105. What are the actions for recovery of possession of real property?

Action Interdictal Accion Publiciana Accion Reinvindicatoria

It is a summary action that It is a plenary action to recover the It is an action whereby the plaintiff
seeks the recovery of right of possession and the issue is alleges ownership over a parcel of
physical possession where which party has the better right of land and seeks recovery of its full
the dispossession has not possession. (Id.) possession. (Heirs of Yusingco vs.
lasted for more than a year, Busilak, G.R. No. 210504, January
and is to be exclusively 24, 2018)
brought in the proper
inferior court. (Martinez vs.
Heirs of Lim, G.R. No.
234655, September 11,
2019)

4.Quieting of Title

106. What are the requisites of an action for quieting of title?

In order that an action for quieting of title may prosper, two requisites must concur:
(1) The plaintiff or complainant has a legal or equitable title or interest in the real property
subject of the action; and
(2) The deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must
be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or
legal efficacy. (Rabuya, Property, Property, 2008, p. 264)

107. In an action for quieting of title, who has the burden of proof as to legal and equitable
title?

The plaintiff has the burden to show by preponderance of evidence that they have a legal and
equitable title to or interest in the real property subject of the action. Legal title denotes registered
ownership, while equitable title means beneficial ownership. In the absence of such legal or
equitable title, or interest, there is no cloud to be prevented or removed . (Josefina Viloria et. al vs Heirs
of Pablo Gaetos, G.R. No. 206240, May 12, 2021)

D. CO-OWNERSHIP

33
108. What are the characteristics of co-ownership?

The following are the characteristics of co-ownership:

a. There are two or more co-owners (Art. 484, NCC);
b. There is a single object which is not materially or physically divided and over which his ideal
share of the whole, each of the co-owner exercises ownership, together with the other co-
owners (Rabuya, Civil Law Reviewer Vol. 1, 2021, p. 548);
c. There is no mutual representation by the co-owners (Art. 485, NCC);
d. It exists for the common enjoyment of the co-owners (Art. 486, NCC);
e. It has no distinct legal personality (Art. 484, NCC);
f. It is governed first of all by the contract of the parties; otherwise, by special legal provisions,
and in default of such provisions, by the provisions of Title III on Co-ownership (Id.).

1. Distinctions Between Right to Property Owned in Common and Full Ownership Over
the Ideal Share

109. What is the dual nature of ownership in co-ownership?

1. Ownership Each co-owner shall have the full ownership of his part and of the fruits and
over the ideal benefits pertaining thereto and he may therefore alienate, assign or mortgage
share it, and even substitute another person in its enjoyment, except when personal
rights are involved (Art. 493, NCC).

2. Joint Each co-owner may use the thing owned in common, provided he does so in
Ownership accordance with the purpose for which it is intended and in such a way as
over the not to injure the interest of the co-ownership or prevent the other co-owners
whole from using it according to their rights (Art. 486, NCC).

110. May co-owner alienate his share in the property without the consent of others?

Yes. A co-owner has the right to alienate his pro indiviso share in the co-owned property even
without the consent of the other co-heirs. However, as mere part owner, he cannot alienate the
shares of the other co-owners. Nemo dat quod non habet. No one can give what he does not
have. Hence, a sale of the remaining half of the subject property will only affect his own share
but not those of the other co-owners who did not consent to the sale. The buyer will only get a
co-owner's undivided share in the subject property. [Reynaldo Reyes v. Sps. Wilfredo and Melita Garcia,
G.R. No. 225159, March 21, 2022]

2. Contributions for Expenses

111. May a co-owner seek reimbursement for repair expenses from his co-owners?

Yes, Under Article 488 of the NCC , each co-owner has the right to compel the other co-owners
to contribute to the expenses of preservation of the thing or right owned in common and to the
taxes, even without the consent of the other co-owners.

112. Is a co-owner required to secure consent if necessary repairs is to be undertaken?

No. A co-owner is not required to secure the consent of all the co-owners. What the law requires
is that he must, if practicable, notify the other co-owners of the necessity of such repair prior to
undertaking the same. Consequently, any opposition on the part of the other co-owners for the
making of such necessary repairs does not deprive the co-owner who made the advances from

34
 demanding contributions from the other co-owners. Repairs for preservation may be made at the
will of only one of the co-owners.

3. Redemption

113. What are the rules whenever the different stories of a house belong to different
owners and the titles of ownership do not specify the terms under which they should
contribute to the necessary expenses and there exists no agreement on the subject?

The rules that should be observed are provided under Article 490 of the NCC as follows:
(1) The main and party walls, the roof and the other things used in common, shall be preserved
at the expense of all the owners in proportion to the value of the story belonging to each;
(2) Each owner shall bear the cost of maintaining the floor of his story; the floor of the entrance,
front door, common yard and sanitary works common to all, shall be maintained at the expense
of all the owners pro rata;
(3) The stairs from the entrance to the first story shall be maintained at the expense of all the
owners pro rata, with the exception of the owner of the ground floor; the stairs from the first to
the second story shall be preserved at the expense of all, except the owner of the ground floor
and the owner of the first story; and so on successively.

4. Partition

114. May co-owner demand partition of the property?

Yes, to demand a partition or division of the common property is in accord with Article 494 of the
Civil Code, that is, no co-owner shall be obliged to remain in the co-ownership and that each co-
owner may demand at any time partition of the thing owned in common insofar as his or her
share is concerned. [Reynaldo Reyes v. Sps. Wilfredo and Melita Garcia, G.R. No. 225159, March 21, 2022]

115. A, representing herself and the other heirs, executed an agreement with the tenants
of the property they inherited from the deceased, X. It covered the partition of the
subject property and the transfer of ownership of half thereof to the eight tenants
while the other half remained with the heirs of X. The RTC approved the New
Agreement and Subdivision Plan (“Kasunduan”) but the CA invalidated it because it
lacked the signature of all the heirs. The appellate court ruled that the “Kasunduan”
did not conform with the procedure laid down in Rule 69 of the Rules of Court on
Partition. It concluded that a void agreement could not have validly partitioned the
subject property nor could it have validly transferred subsequent title over half of the
land to the tenants. Is the CA correct in annulling the entire partition and sale of the
subject property?
No. The CA mistakenly annulled the entire partition, and sale of half, of the subject property to the
tenants contrary to Articles 493-495 and 498 of the Civil Code which, in sum, allow for alienation by a
co-owner of his or her share in the co-owned property, termination of the co-ownership, and partition
of the property. The basic principle in the law of co-ownership, both under the present Civil Code as in
the Code of 1889, that no individual co-owner can claim title to any definite portion of the land or thing
owned in common until the partition thereof. Prior to that time, all that the co-owner has is an ideal,
or abstract, quota or proportionate share in the entire thing owned in common by all the co-owners.
Clearly, in this case the partition and alienation of half of the subject property, through the Kasunduan,
is not completely void and cannot be annulled as to the share of A and the other heirs. (GUILLERMA S.
SILVA v. CONCHITA S. LO, G.R. No. 206667, June 23, 2021, Hernando J.)

E. POSSESSION

116. What are the requisites of possession?

35
 In order that there be possession, the following must be present:
a) There must be occupancy, apprehension or taking; and
b) There must be intent to possess (animus possidendi). (Yu v. Pacleb, G.R. No. 130316 January
24, 2007)

1. Possession in the Concept of a Holder

2. Possession in the Concept of an Owner

117. What are the kinds of possession?

Possession in one’s own name and Possession in the name of another

Possession in one’s own name – the possession Possession in another’s name – the possession by a
which embraces all kinds of possession person without any right of his own and one which is
anchored on a juridical title or right. strictly of an agent or merely an instrument in the
exercise of such possession.
Possession in the concept of owner and Possession in the concept of holder
Possession in the concept of owner – it refers Possession in the concept of holder – one who
to the opinion or belief of the neighbors and the possesses as a mere holder acknowledges in another
rest of the world and not that of the possessor. a superior right which he believes to be ownership,
whether his belief be right or wrong.
Possession in good faith and Possession in bad faith
Possessor in good faith – he is not aware that Possessor in bad faith – he is aware that there exists
there exists in his title or mode of acquisition in his title or mode of acquisition any flaw which
any flaw which invalidates it. invalidates it. (Rabuya, Civil Law Reviewer Vol. 1,
2021, p. 594-597)

3. Relevance of Good Faith and Bad Faith

118. What are the effects of possession?

A. Over the Fruits

If Possessor is in Good Faith

Fruits have already been received
The possessor in good faith is entitled to the
fruits received by him before his possession is
legally interrupted.
If Possessor is in Bad Faith
Fruits have already been received
A possessor in bad faith has a specific obligation
to reimburse the legitimate possessor for
everything that the former received, and that
the latter could have received had its
possession not been interrupted.
Fruits are still pending
If at the time the good faith ceases, there should be
pending natural or industrial fruits, the possessor and
the owner shall have a right to a part of the net harvest
and each shall divide the expenses of cultivation, both
in proportion to the time of their respective
possessions.
Fruits are still pending
He will lose the fruits in favor of the legitimate
possessor and he will not be entitled to the
reimbursement of the expenses he incurred in relation
to the fruits, including the expenses he incurred for its
production, and preservation.

He has the right to recover from the legitimate

possessor for the expenses from production,
gathering and preservation of the fruits, upon
the latter’s receipt of the reimbursement.
He is entitled to recover the necessary expenses incurred by him for the preservation of the land or the
thing which bore the fruit.

B. Over Expenses

36
 Possessor in Good Faith Possessor in Bad Faith
Necessary Expenses
As to A possessor is entitled to the refund of necessary expenses incurred by him.
reimburseme
nt
As to right of Entitled to retain the thing until he has Has no right of retention
retention been reimbursed therefor – in relation to
necessary expenses
Useful Expenses
As to Entitled to the refund of useful expenses Not entitled to the refund of useful
reimburseme expenses
nt
As to right of Until the possessor in good faith is Has no right of retention
retention reimbursed the useful expenses, he also
enjoys the right to retain the property
As to right of He may, in lieu of reimbursement for the Has no right to remove the useful
removal useful expenses, remove the useful improvements
improvement
Ornamental Expenses
As to Not entitled to a refund of the expenses incurred by him for pure luxury or mere pleasure
reimburseme
nt
As to right of Entitled to a right of removal of the ornaments with which they embellished the principal
removal thing provided that such principal will suffer no injury

C. Upon Loss of Property

If Possessor is in Good Faith If Possessor is in Bad Faith

He is not liable at all for the deterioration or He is liable for any deterioration or loss of the thing
loss of the thing possessed. even when the same is caused by fortuitous event.

Note: The possessor who was originally in

good faith but becomes in bad faith upon the
service of the judicial summons on him shall
be liable for any deterioration or loss of the
thing possessed only if the same is caused by
his negligence or fraudulent acts after the
judicial summons.
(Rabuya, Civil Law Reviewer Vol. 1, 2021, p. 600-607)

4. Rules for Movables

119. What are the rules regarding the right of a possessor who acquires a movable claimed
by another?
If the possessor is in bad faith, he has no right. If the possessor is in good faith, possession is
equivalent to title.

Possession of movables acquired in good faith does not only create a presumption of ownership
but it is already equivalent to title. It establishes not only a mere presumption in favor of the
possessor of the chattel, but an actual right, valid even against the true owner except upon proof
of loss or illegal deprivation. (Rabuya, Property, 2008 Ed., p. 454-455)

120. For possession of movables to be considered equivalent to title, what requisites must
be present?
a) The movable property must be acquired in good faith; and
b) The possession must be in the concept of owner.

37
121. What is the Doctrine of Irrevindicability?

GR: The possession of movable property acquired in good faith is equivalent to a title.
Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may
recover it from the person in possession of the same. (Article 559 [1], NCC)

XPNs:
(1) When the owner has lost the thing; or
(2) Has been unlawfully deprived thereof. (Article 559 [2], NCC)

In these two cases, the possessor cannot retain the thing as against the owner, who may recover
it without paying any indemnity.

XPNs to XPNs:
If the movable has been acquired by the possessor in good faith at a public sale, the owner can
recover it only upon reimbursement of the price paid by the possessor.

122. What is the duty of a finder of a lost movable?

Whoever finds a movable, which is not treasure, must return it to its previous possessor. If the
latter is unknown, the finder shall immediately deposit it with the mayor of the city or municipality
where the finding has taken place.

The mayor is then required to make a public announcement of such finding for two consecutive
weeks in a manner he deems fit.

123. Can the lost movable be awarded to the finder?

Yes. If after six months, the owner does not appear, the thing found, or its value, shall be
awarded to the finder. (Art. 719, NCC) But if the owner appears on time, he shall be obliged to
pay, as a reward to the finder, one-tenth of the sum or of the price of the thing found. (Art. 720,
NCC)

124. Can the lost movable be auctioned in public?

Yes. If the movable cannot be kept without deterioration, or without expenses which considerably
diminish its value, it shall be sold at public auction eight days after the publication. (Art. 719 [3],
NCC)

F. USUFRUCT

In general

125. Magnolia owns a 1-hectare land. He informed his best friend Jolly that the latter could
use his land for agricultural production for 5 years. Because of the quality of the soil
and the land’s proximity to clean water, the Department of Agriculture expropriated
the land, paying Magnolia just compensation. Jolly now is asking for compensation
since the usufructuary agreement that he had with Magnolia is not yet finished and
it prejudiced her plans for the remaining duration. Magnolia said that he will not give
compensation because their usufructuary contract had already ceased when the

38
 Department of Agriculture expropriated the land. May Jolly exercise remedies to
protect her interests?

Yes, Jolly may exercise remedies to protect her interests. Article 609 of the NCC provides that if
the property held in usufruct was expropriated for public use, the usufruct is not extinguished.
The owner has the options of either replacing it with another thing of the same value and similar
condition or paying the usufructuary the legal interest on the amount of the indemnity for the
whole period of the usufruct, giving security for such payment. Here, Jolly may ask for Magnolia
to either provide her with another land so that he may continue his agricultural endeavors or pay
Jolly the legal interest amounting to the indemnity for the whole period of the usufruct.

1. Rights and obligations of the usufructuary

126. May a usufructuary claim reimbursement from the land-owner for real property tax
payments made during the term of the usufruct, and in case the land owner refuses,
may the usufructuary refuse return of the subject property?

Yes, the usufructuary may refuse the return of the land due to the right of retention. Under Article
602 of the NCC, the usufructuary enjoys a right of retention until payment of the sum that may
have been advanced by the usufructuary for payment of taxes which are imposed directly on the
capital is reimbursed to him.

2. Classes of Usufruct

127. What are the different kinds of usufruct?

Classification of a. Legal Usufruct - created by law, i.e., usufruct of parents over the
Usufruct as to Origin property of their unemancipated children
b. Voluntary or Conventional - created by will of the parties inter vivos
(as by contract or donation)

c. Mixed or Prescriptive - created by law and will of the parties, i.e.,

usufruct acquired by prescription

Other classifications a. Total and Partial. Usufruct may be constituted on the whole (total) or
part of a thing (partial).

b. Simple and Multiple. It may be constituted in favor of one person

(simple) or it may be constituted in favor of two or more persons
(multiple).

c. Pure, with a condition or with a period. It may be constituted from

or to a certain day (with a period), purely or conditionally.

d. Proper (normal) and improper (abnormal). It is proper or normal

when it is improper or abnormal when it is constituted over a consumable
thing. (Rabuya, Property, 2021, p. 23)

3. Extinguishment

128. X created a usufruct over his land in favor of Y, to last until the child of Y turns 18
years old. The child of Y died when he was 10 years old. Would the usufruct continue?

Yes, the usufruct would continue. Under Article 606 of the NCC, a usufruct granted for the time that
may elapse before a third person attains a certain age, shall subsist for the number of years specified,

39
even if the third person should die before the period expires. Here, the child of Y is the third person in
which the effectivity of the contract was tied to. Being a third person to the contract, even if he died
early, the usufruct would still persist since the law provides that the same will subsist, not for the
lifespan of the third person but for the subsisting number of years agreed upon in the contract.

G. EASEMENTS

1. Characteristics

129. What are the characteristics of easement?

1) Intransmissible;
2) Indivisible;
3) The right consists of a limited use and enjoyment of the thing without possession and gives
rise to an action in rem in favor of the owner of the tenement of the easement and against
any possessor of the servient estate;
4) Easement is a real right which falls over the property itself. The easement is inseparable from
the estate which it actively or passively belongs; and
5) Enjoyed over another immovable, never on one’s own property (jura in re aliena).

2. Kinds of Easements

130. Distinguish legal easements from voluntary easements

Legal Easements Voluntary Easements

Are those imposed by law have for their object
either public use or the interest of private
persons (Art. 634, NCC).
Are those which may be established by the owner of a
tenement of piece of land as he may deem suitable,
and in the manner and form which he may deem best,
provided that he does not contravene the laws, public
policy or public order (Art. 688, NCC).

131. What are the requisites for a compulsory easement to be granted?

Under Article 649 of the NCC, easement is not compulsory if the isolation of the immovable is
due to the proprietor's acts. Furthermore,, to be entitled to a legal easement of right of way, the
following requisites must concur: (a) the dominant estate is surrounded by other immovable and
has no adequate outlet to a public highway; (b) payment of proper indemnity; (c) the isolation
was not due to acts of the proprietor of the dominant estate; and (d) 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 of the dominant estate to a public highway may be the shortest. (Woodridge School, Inc.
vs. ARB Construction, G.R. No. 157285, February 16, 2007

3. Modes of acquiring easements

132. What are the modes of acquiring easements?

There are two modes of acquiring easements: (a) by title; and (b) by prescription.
If the easement is both continuous and apparent, it may be acquired by virtue of prescription within a
period of 10 years. (Art. 620, NCC)

4. Effects of Easements

133. What are the rights of the dominant estate owner?

40
 a) To use the easement and exercise all rights necessary for it; (Art. 625, NCC)
b) To make, at his own expense, on the servient estate, any works necessary for the use and
preservation of the servitude, but without altering it or rendering it more burdensome;
(Art. 627(1) NCC);
c) To renounce totally the easement, if he desires to be exempt from contributing to the
expenses. (Art. 628, NCC)

134. What are the rights of the servient estate owner?

a) To retain the ownership of the portion of the estate on which the easement is established
(Art. 630, NCC);
b) To use the easement, provided he shall also be obliged to pay the expenses necessary for
the preservation and use of the servitude. (Art. 628(2), NCC)
(Note: Exception to paying expenses: There is an agreement to the contrary).
c) To change the place or manner of the use of the easement, provided it be equally convenient
[Art. 629(2), NCC].

5. Extinguishment of Easements

135. What are the different modes of extinguishing easement?

The following are the modes of extinguishing easement:

(a) Redemption agreed upon between the parties;
(b) Expiration of the term;
(c) Merger of ownership of the dominant and servient estate;
(d) Annulment or rescission of title constituting the easement;
(e) Permanent impossibility to use the easement;
(f) Non-use for 10 years;
(g) Renunciation;
(h) Termination of the right of the grantor;
(i) Abandonment of the servient estate;
(j) Eminent domain;
(k) Fulfillment of the resolutory condition. (Art. 631, NCC)

III. DIFFERENT MODES OF ACQUIRING OWNERSHIP

A. OCCUPATION

136. What are the requisites for occupation to apply as a mode of acquiring ownership?

1. Thing must be res nullius – a thing which never had an owner or has no owner at the time of
occupation;
2. Must be appropriable by nature or one that can be seized or apprehended;
3. Must be brought into the actual possession or control of the one professing to acquire it;
4. Person must acquire it with the intention of acquiring ownership . (Rabuya, Civil Law Reviewer, 2017,
p. 627)

B. TRADITION

137. What are the different modes of constructive delivery?

Traditio Simbolica The transfer of ownership is effected by the delivery of symbols of things which
represent those to be delivered.

With regard to movable property, its delivery may also be made by the delivery
of the keys of the place or depository where it is stored or kept

41
 Traditio Longa The transfer of ownership is effected by the grantor by simply pointing out to
Manu the grantee the things which are being transferred and which at the time must
be within their sight
Traditio Brevi The grantee has already acquired actual control or possession of the thing, as
Manu when the thing is leased to him. A mere declaration on the part of the grantor
that the grantee shall now hold the thing, which is already in his control and
possession, as owner, operates as a form of delivery.

The delivery of movable property may likewise be made by the mere consent or
agreement of the contracting parties, if the thing sold cannot be transferred to
the possession of the vendee at the time of the sale, or if the latter already had
it in his possession for any other reason.

Traditio The reverse of traditio brevi manu. It is effected by a mere declaration on the
Constitutum part of the transferor that he will hold the thing for the transferee. This may take
Possessorium place when the owner of the thing alienates it but continues possessing it under
another contract or capacity, e.g. lessee.
Execution of Public Recognized by law as equivalent to the delivery of the thing, which is the object
Instrument of the contract.

C. DONATION

1. Features

138. What are the essential elements of donation?

The following are the essential elements of donation:

1. The essential reduction of the patrimony of the donor;
2. The increase in the patrimony of the done; and
3. The intent to do an act of liberality or animus donandi. (Heirs of Florencio vs. Heirs of De Leon, G.R.
No. 149570, March 12, 2004)

2. Classifications

139. What are the different types of donation?

Donation Inter Vivos Those which take effect independently of the donor’s death
Donation Mortis Causa When the donation takes effect only upon the donor’s death or when the
full or naked ownership of the donated properties will pass to the donee
only because of the donor’s death.
Donation by Reason of Those made in consideration of the marriage in favor of one or both of
Marriage the prospective spouses and executed before the marriage
Onerous Donation imposes the donee a reciprocal obligation or a donation made for a
valuable consideration, the cost of which is equal to or more than the
thing donated
Simple/Modal/Condition i. Simple – the underlying cause is plain gratuity or liberality (Lagazo vs.
al CA, G.R. No. 112796, March 5, 1998)
ii. Remuneratory or Compensatory – made for the donee’s past
services, which services do not amount to a demandable debt (Art.
726, NCC).
iii. Modal – is one which imposes on one a prestation imposed on the
donee may either be a burden or charge inferior in value to the
property donated or service to be performed in the future (Art. 726,
NCC).

42
3. Distinctions Between Mortis Causa and Inter Vivos Donations

140. What are the distinctions between Mortis Causa and Inter Vivos Donation?

Inter Vivos Mortis Causa

As to time of takes effect during the donor’s lifetime or
effectivity independently of the donor’s death or when
the full or naked ownership (nuda
proprietas) of the donated properties passes
to the donee during the donor’s lifetime, not
by reason of his death but because of the
deed of donation.
Takes effect upon donor’s death or when
the full or naked ownership of the
donated properties will pass to the
donee only because of the donor’s
death.

As to cause or Cause is donor’s pure generosity. In contemplation if donor’s death

consideration without intention to dispose of the thing
in case of survival.
As to Valid if donor survives the donee. Void if donor survives.
predecease
As to Generally irrevocable except for grounds Always revocable at any time and for any
revocability provided for by the law. reason before the donor’s death.
Once accepted, becomes irrevocable.
May be made revocable upon the fulfillment
of resolutory conditions.
As to Must be executed and accepted with the Must be in the form of a will, otherwise
formalities formalities prescribed in Articles 748 and it is void and cannot transfer ownership.
749 of the Civil Code, except when it is
onerous, in which case the rules on
contracts will apply.
As to when Acceptance during donor’s lifetime. After donor’s death
acceptance is
made
(Rabuya, Property, 2008 Ed., p. 634-648)

4. Form

141. How donation is made and accepted

Movable/personal property
With simultaneous a. If value is more than P5,000.00, donation and acceptance must be
delivery in writing (Art. 748 [3], NCC).
b. If value is P5,000.00 or less:
i. Can be made orally – but requires simultaneous delivery of the thing.
Acceptance may be oral or written.
ii. Can be made in writing – acceptance may be oral or written (Art. 748,
NCC).

Without simultaneous The donation and acceptance must be in public or private instrument (Art.
delivery 748, NCC).
Immovable Property
1. Made in public instrument
2. Must be accepted, which acceptance may be made either in the same Deed of Donation or in a
separate public instrument.
3. If the acceptance is made in a separate instrument, the donor must be notified in an authentic form,
and the same must be noted in both instruments (Rabuya, Property 2021, p. 237).

43
142. How donation of movable/personal property is made and accepted

With simultaneous c. If value is more than P5,000.00, donation and acceptance must be
delivery in writing (Art. 748 [3], NCC).
d. If value is P5,000.00 or less:
i. Can be made orally – but requires simultaneous delivery of the thing.
Acceptance may be oral or written.
iii. Can be made in writing – acceptance may be oral or written (Art. 748,
NCC).

Without simultaneous The donation and acceptance must be in public or private instrument (Art.
delivery 748, NCC).

5. Limitations of donation

143. What are the effects and limitations of donation?

In general, the following are the effects and limitations of donation:

a. Donee may demand the delivery of the thing donated

b. Donee is subrogated to the rights of the donor in the property (Art. 754, NCC).
c. In donations propter nuptias, the donor must release the property from encumbrances, except
servitudes (Art. 85, FC)
d. Donor’s warranty exists if:
i. Expressed
ii. Donation is propter nuptias
iii. Donation is onerous
iv. Donor is in bad faith (Art. 754, NCC)
e. When the donation is made to several donees jointly, they are entitled to equal portions,
without accretion, unless the contrary is stipulated (Art. 753, NCC).

6. Reduction and Revocation

144. What are the rules in the revocation of donation?

GR: Once the donation is accepted, it is irrevocable (Gestopa vs. CA, G.R. No. 111904, October
5, 2000).

XPNs: 1. Birth, Adoption or Reappearance (Art. 760, NCC); 2. Inofficious donations (Art. 771,
NCC); and 3. Made in fraud of creditors (Art. 1381[3], NCC).

D. PRESCRIPTION

1. Distinctions Between Acquisitive and Extinctive Prescription

145. Differentiate acquisitive prescription from extinctive prescription

Distinction Acquisitive Prescription Extinctive Prescription

As to required Requires action possessor claimant) who Requires inaction of the owner out of
actions/inactio is not the owner. possession or neglect of one with a right to
ns bring his action.
As to Applicable to ownership and other real Applicable to all kinds of rights, whether
applicability to rights. real or personal.
ownership and
other rights

44
 As to vesting of Vests the property Vests the property
title and raise a new title in the occupant.
As to Results in the acquisition ownership or
effects/results other real rights in a person as well as
the loss of said ownership or real rights
in another.
As to pleadings Can be proven under the general issue
without its being affirmatively pleaded.
Vests the property and raise a new title in
the occupation
Merely results in the loss of a real or
personal right, or bars the cause of action
to enforce said right.
Should be affirmatively pleaded and
proved to bar the action or claim of the
adverse party.

2. Distinctions Between Extinctive Prescription and Laches

LACHES
Concerned with the effect of delay
Question of inequity of permitting a claim to be
enforced, this inequity being founded on some
subsequent change in the condition or the
relation of the parties
Equity; Not statutory
Need not specifically pleaded
PRESCRIPTION
Concerned with the fact of delay
A question or matter of time
Statutory
Cannot be availed of unless it is specifically pleaded as
an affirmative allegation

IV. LAND TITLES AND DEEDS

A. Torrens System; general principles

146. What are the two types of Torrens certificate of title?

1. Original Certificate of Title -The first title issued in the name of the registered owner by the
Register of Deeds covering a parcel of land which had been registered by virtue of a judicial or
administrative proceeding.

2. Transfer Certificate of Title - the title issued by the ROD in favor of the transferee to whom
the ownership of the already registered land had been transferred by virtue of a sale or other
modes of conveyance. (Sec. 43, P.D. No. 1529)

B. Regalian Doctrine

147. What are the exceptions to the Regalian doctrine?

The following are the exceptions:

1. The Regalian Doctrine does not negate native title to lands held in private ownership since
time immemorial. (Cruz vs. Secretary of Environment and Natural Resources, G.R. No. 135385, December 6,
2000)

2. The Indigenous Peoples’ Rights Act of 1997 or the IPRA Law categorically declares ancestral
lands and domains held by native title as never to have been public land –domains and lands

45
 held under native title are, therefore, indisputably presumed to have never been public lands
and are private.

C. Nationality Restrictions on Land Ownership

148. What are the exceptions to the rule that private lands can only be transferred to
Filipino citizens or to corporations/associations incorporated in the Philippines with
at least 60% of whose capital is owned by Filipino citizens?

The following are the exceptions:

1. In intestate succession, where an alien heir of a Filipino is the transferee of private land. (Sec.
7, Art. XII, 1987 Constitution)
2. A natural born citizen of the Philippines who has lost his Philippine citizenship may be a
transferee of private land, subject to limitation provided by law. (Sec. 8, Art. XII, 1987
Constitution) Hence, land can be used only for residential purposes. In this case, he only
acquires a derivative title.
3. Foreign states may acquire land but only for embassy and staff residence purposes.
4. Filipino citizenship is only required at the time the land is acquired. Thus, loss of citizenship
after acquiring the land does not deprive ownership.

Add source please, per item or as a whole.

D. Original Registration

149. When does original registration take place?

It takes place when the title to land is made of public record for the first time in the name of its
lawful owner. It refers to the registration procedure from the filing of the application to issuance
of the original certificate of title based on the decree of registration, patent, award, or grant. (Sec.
14, P.D. 1529)

Ordinary registration

150. What is the nature of proceeding in ordinary registration?

Land registration or judicial titling is an action in rem or property (subject matter of registration)
and seeks judgment with respect to as against the whole world. (Sec. 2, P.D. No. 1529)

1. Who may apply

151. Who may apply for registration?

Section 14 of P.D. No. 1529 as amended by R.A. 11573 provides that the following persons may
file in the proper Regional Trial Court in the province where the land is located, an application for
registration of title to land, not exceeding twelve (12) hectares, whether personally or through
their duly authorized representatives:

1) Those who by themselves or through their predecessors-in-interest have been in open,

continuous, exclusive and notorious possession and occupation of alienable and disposable

46
 lands of the public domain not covered by existing certificates of title or patents under a bona
fide claim of ownership for at least twenty (20) years immediately preceding the filing of the
application for confirmation of title except when prevented by war or force majeure. They
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.
2) Those who have acquired ownership of private lands or abandoned riverbeds by right of
accession or accretion under the provisions of existing laws.
3) Those who have acquired ownership of land in any other manner provided for by law.

Where the land is owned in common, all the co-owners shall file the application jointly.

Where the land has been sold under pacto de retro, the vendor a retro may file an application for the
original registration of the land: Provided, however, That should the period for redemption expire during
the pendency of the registration proceedings and ownership to the property consolidated in the vendee
a retro, the latter shall be substituted for the applicant and may continue the proceedings.

A trustee on behalf of the principal may apply for original registration of any land held in trust by the
trustee, unless prohibited by the instrument creating the trust.

2. Decree of registration

152. What are the effects of the decree of registration?

1) It binds the land, quiets title, subject only to such XPNs or liens as may be provided by law.
2) It is conclusive upon all persons including the national government and all branches thereof.
Such conclusiveness does not cease to exist when the title is transferred to a successor. (Sec.
31, P.D. 1529)

3. Review of decree of registration; innocent purchaser for value

153. Provide the rules on the review of decree of registration.

GR: The decree of registration shall not be reopened or revised by reason of absence, minority,
or other disability of any person adversely affected thereby, nor by any proceeding in any court
for reversing judgments.

XPN: Courts may reopen proceedings already closed by final decision or decree when application
for review is filed not later than one year from and after the date of the entry of such decree of
registration by the party aggrieved or deprived of land or of any estate or interest therein by such
adjudication or confirmation of title obtained by actual fraud.

XPN to XPN: In no case shall such petition be entertained by the court where an innocent
purchaser for value has acquired the land or an interest therein, whose rights may be prejudiced.
(Sec. 32, P.D. 1529)

E. An Act Improving the Confirmation Process of Imperfect Land Titles (RA 11573),
amending CA 141 and PD 1529 [See Republic v. Pasig Rizal Co. Inc., G.R. No. 213207,
February 15, 2022]

154. What is the effect of classifying a land as alienable and disposable?

The final proviso of the new Sec. 14 (1) that, “they shall be conclusively presumed to have
performed all the conditions essential to a Government grant and shall be entitled to a certificate

47
 of title under this section” unequivocally confirms that the classification of land as alienable and
disposable immediately places it within the commerce of man, and renders it susceptible to
private acquisition through adverse possession. (Republic v. Pasig Rizal Co., GR No. 213207, February 15,
2022)

155. How many years of possession are required for purposes of judicial confirmation of
title?

Beginning September 1, 2021, proof of “open, continuous, exclusive, and notorious possession
and occupation of alienable and disposable lands of the public domain not covered by existing
certificates of title or patents under a bona fide claim of ownership for at least 20 years
immediately preceding the filing of the application for confirmation” shall be sufficient for
purposes of judicial confirmation of title, and shall entitle the applicant to a decree of registration.
(Republic v. Pasig Rizal Co.)

F. Certificate of Title

156. What is a certificate of title?

It is the true copy of the decree of registration or the transcription thereof and, similar to the
decree, shall also be signed by LRA Administrator. (Sec. 39, P.D. No. 1529) It is an absolute and
indefeasible evidence of ownership of the property in favor of the person whose name appears
therein. It takes effect upon date of entry thereof, and the land covered thereby becomes a
registered land on that date. (Sec. 40, P.D. No. 1529)

G. Subsequent Registration

157. What is subsequent registration?

It refers to any transaction affecting an originally registered land and which, if in order, is
registered in the Office of the Registry of Deeds concerned. (Sec. 51, P.D. 1529)

1. Voluntary dealings; general provisions

2. Involuntary dealings

158. What are voluntary and involuntary dealings?

Voluntary Dealings Involuntary Dealings

It refers to deeds, instruments or
documents, which are the results of the free
and voluntary acts of the parties thereto.
Kinds
It refers to an attachment, or a copy of any writ, order or
process issued by a court of record, intended to create or
preserve any lien, status, right, or attachment upon
registered land. It shall be filed and registered in the
Registry of Deeds for the province or city in which the
land lies, and, in addition to the particulars required in
such papers for registration, shall contain a reference to
the number of the certificate of title to be affected and
the registered owner or owners thereof, and also if the
attachment, order, process or lien is not claimed on all
the land in any certificate of title a description sufficiently
accurate for identification of the land or interest intended
to be affected. A restraining order, injunction or
mandamus issued by the court shall be entered and
registered on the certificate of title affected, free of
charge. (Sec. 69, P.D. No. 1529)

48
 1. Sales, 1. Attachment (Sec. 69, P.D. 1529)
conveyan 2. Mandamus (Sec. 73, P.D. 1529)
ces or 3. Sale on execution of judgment or
transfer sales for taxes (Sec. 74, P.D. 1529)
of 4. Adverse claims (Sec. 70, P.D.
ownershi 1529)
p over the 5. Notice of lis pendens (Sec. 76, P.D.
titled 1529)
property; 6. Expropriation (Sec. 85, P.D. 1529)
2. Real 7. Forfeiture (Sec. 75, P.D. 1529)
property 8. Auction sale on foreclosure of
mortgage mortgage (Sec. 74, P.D. 1529)
s;
3. Lease;
4. Pacto de
retro sale;
5. Extra-
judicial
settlemen
t;
6. Free
patent/ho
mestead;
7. Powers of
attorney;
and
8. Trusts.
(Aquino,
Land
Registrati
on and
Related
Proceedin
gs, 2007,
p. 184)
Effect of Registration
An innocent purchaser for value of registered Entry thereof in the day book of the Register of Deeds is
land becomes the registered owner the sufficient notice to all persons even if the owner’s
moment he presents and files a duly duplicate certificate of title is not presented to the
notarized and valid deed of sale, and the Register of Deeds. (Sec. 31, P.D. 1529)
same day is entered in the book and at the
same time he surrenders or presents the
owner’s duplicate certificate of title covering
the land sold. (Durawood vs. Bona, G.R. No.
179884, January 25, 2012)
Presentment of Title
Presentment of Certificate of Title is required Presentment of Certificate of Title is not required,
to record the deed in the registry and to annotation in entry book is sufficient.
make memorandum on title.

a. Adverse claim

159. What are the formal requisites of an adverse claim for purposes of registration?

1. Adverse claimant must state the following in writing:

a. His alleged right or interest
b. How and under whom such alleged right or interest is acquired
c. The description of the land in which the right or interest is claimed

49
 d. The certificate of the title number;
2. Such statement must be signed and sworn to before a Notary public; and
3. Claimant shall state his Residence or place to which all notices may be served upon him.
(Sec. 70, P.D. No. 1529)

b. Notice of lis pendens

160. When is a notice of lis pendens proper?

A notice of lis pendens is proper in actions:

1. To recover possession of real estate;

2. To quiet title thereto;
3. To remove clouds upon the title thereof;
4. For partition; and
5. Any other proceeding of any kind in court directly affecting the title to the land or the use or
occupation thereof or the building thereon. (Sec. 76, P.D. No. 1529, Sec. 14, Rule 13, Rules of Court)

H. Non- Registrable Properties

161. What are non-registrable properties? What is its constitutional basis?

These are properties of public dominion which, under existing legislation, are not the subject of
private ownership and are reserved for public purposes.

All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces
of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the XPN of agricultural lands, all other natural resources
shall not be alienated. (Art. XII, Sec. 2, 1987 Constitution).

162. What are the different kinds of non-registrable lands?

1. Property of public domain or those intended for public use, public service or development of
the national wealth;
2. Forest or timber lands;
3. Water sheds;
4. Mangrove swamps;
5. Mineral lands;
6. National parks and plazas;
7. Military or naval reservations;
8. Foreshore lands;
9. Reclaimed lands;
10. Submerged areas;
11. River banks;
12. Lakes, rivers, creeks and lagoons;
13. Reservations for public and semi-public purposes;
14. Protected areas;
15. Resources within ancestral domains; and
16. Others of similar character. (Agcaoili, Property Registration Decree and Related Laws: Land Titles and Deeds,
2006)

50
I. Dealings with Unregistered Land

163. What are untitled lands?

These are private lands that are not registered in the Register of Deeds and not covered by the
Torrens System. It refers to bare ownership of land or ownership that has not been adjudicated
either judicially or administratively and registered as Torrens title under P.D. 1529. (Noblejas,
Registration of Land Titles and Deeds, 2007)

J. Assurance Fund

1. Nature of assurance fund

164. What is an assurance fund?

A fund that is created for the purpose of paying any damages which may result from an improper
or illegal registration. All the people of the Philippine Archipelago may be taxed for the purpose
of paying these damages if the "assurance fund" is not sufficient. (Loewenstein vs. Page, G.R. No. L-
5599, March 22, 1910)

165. What is the nature of an assurance fund?

The Assurance Fund is a long-standing feature of our property registration system which is
intended “to relieve innocent persons from the harshness of the doctrine that a certificate is
conclusive evidence of an indefeasible title to land.” (Stilianopoulos vs. Register of Deeds for Legazpi City,
G.R. No. 224678 July 3, 2018)

2. Conditions for Compensation from Assurance Fund

166. What are the requisites for recovery from the Assurance Fund?
(1) A person sustains loss or damage, or is deprived of land of any estate or interest in land;
(2) In consequence of the bringing of the land under the operation of the Torrens system of
arising after original registration of land;
(3) Through fraud or in consequence of any error, omission, mistake or misdescription in any
certificate of title or in any entry or memorandum in the registration book;
(4) Without negligence on his part (Register of Deeds vs. Anglo, G.R. No. 171804, August 5,
2015);
(5) Is barred or otherwise precluded under the provision of any law from bringing an action for
the recovery of such land or the estate or interest therein. (Sec. 95, P.D. No. 1529)

3. Prescriptive Period

167. What is the prescriptive period in filing an action for compensation against the
Assurance Fund?

Sec. 102 of PD 1529 sets a six (6)-year prescriptive period “from the time the right to bring such
action first occurred” within which one may proceed to file an action for compensation against
the Assurance Fund. In actions for compensation against the Assurance Fund grounded on fraud,
prescriptive period should be reckoned from the moment the innocent purchaser for value
registers his or her title and upon actual knowledge thereof of the original title holder/claimant.
The registration of the innocent purchaser for value’s title is a prerequisite for a claim against the
Assurance Fund on the ground of fraud to proceed, while actual knowledge of the registration is
tantamount to the discovery of the fraud. (Sps. Stilianopoulos vs. Register of Deeds for Legazpi City, supra.)

51
K. Reconstitution of Titles

168. What is the purpose of reconstitution of title?

The reconstitution of a certificate of title denotes restoration in the original form and condition of
a lost or destroyed instrument attesting the title of a person to a piece of land. The purpose of
the reconstitution of title is to have, after observing the procedures prescribed by law, the title
reproduced in exactly the same way it has been when the loss or destruction occurred. (Gaoiran
vs. Court of Appeals, G.R. No. 215925, March 7, 2022, J. Hernando)

Reconstitution presupposes the existence of an original certificate of title which was lost or
destroyed. If there was no loss or destruction, there is nothing to reconstitute . (Gaoiran vs. Court of
Appeals, supra.)

169. What are the requisites for the issuance of an order of reconstitution?

(a) that the certificate of title had been lost or destroyed;

(b) that the documents presented by petitioner are sufficient and proper to warrant
reconstitution of the lost or destroyed certificate of title;
(c) that the petitioner is the registered owner of the property or had an interest therein;
(d) that the certificate of title was in force at the time it was lost or destroyed; and
(e) that the description, area and boundaries of the property are substantially the same as those
contained in the lost or destroyed certificate of title. (Sec. 12 of R.A. 26; Republic vs. Catarroja, G.R.
No. 171774, February 12, 2010)

170. What are the jurisdictional requirements in petitions for reconstitution of titles?

Notice of Hearing shall be:

a) Published twice in successive issues of the Official Gazette;
b) Posted on the main entrance of the provincial building and of the municipal building of the
municipality or city, where the land is situated; and
c) Sent by registered mail to every person named in said notice. (Sec. 13 of R.A. 26)

The requirements under Sec. 12, on the contents of the petition, and Sec. 13, on the publication
of the notice of petition, are mandatory and jurisdictional in nature. Hence, non-observance
thereof fatally affects the whole proceedings in all its aspects and renders the same void . (Republic
vs. Heirs of Booc, et al., G.R. No. 207159, February 28, 2022, J. Hernando)

171. What are the two kinds of reconstitution of a lost or destroyed certificate of title?

Reconstitution may be done judicially or administratively.

Judicial Reconstitution distinguished from Administrative Reconstitution

Judicial Reconstitution Administrative Reconstitution

It partakes of the nature of a land registration proceeding It is a summary procedure that may be
in rem. availed of only in case of:

1. Substantial loss or destruction of land

titles due to fire, flood or other force
majeure as determined by the

52
 Administrator of the Land Registration
Authority;
2. The number of certificates of titles lost
or damaged should be at least ten
percent (10%) of the total number in the
possession of the Office of the Register
of Deeds;
3. In no case shall the number of
certificates of titles lost or damaged be
less than five hundred (500);
4. Petitioner must have the duplicate copy
of the certificate of title. (Sec. 1, R.A. No.
6732, amending Sec. 110 of P.D. No.
1529)

Sources for Reconstitution of Title

The petition must be supported by the following sources a. Owner’s duplicate certificate of title; and
as may be available, in the following order: if absent
b. Co-owners’, mortgagee’s, or lessee’s
A. For Original Certificate of Transfer (OCT) duplicate of said certificate. (Sec. 2, R.A.
No. 6732)
a. The Owner's duplicate of the certificate of title;
b. The Co-owners’, mortgagee's, or lessee's duplicate of
the certificate of title;
c. A Certified copy of the certificate of title, previously
issued by the register of deeds or by a legal custodian
thereof;
d. An Authenticated copy of the decree of registration or
patent, as the case may be, pursuant to which the
original certificate of title was issued;
e. A Document, on file in the registry of deeds, by which
the property, the description of which is given in said
document, is mortgaged, leased or encumbered, or
an authenticated copy of said document showing that
its original had been registered; and
f. Any other document which, in the judgment of the
court, is sufficient and proper basis for reconstituting
the lost or destroyed certificate of title. (Sec. 2, R.A.
26)

B. For Transfer Certificate of Title (TCT):

a. The Owner's duplicate of the certificate of title;

b. The Co-owners’, mortgagee's, or lessee's duplicate of
the certificate of title;
c. A Certified copy of the certificate of title, previously
issued by the register of deeds or by a legal custodian
thereof;
d. The Deed of transfer or other document, on file in the
registry of deeds, containing the description of the
property, or an authenticated copy thereof, showing
that its original had been registered, and pursuant to
which the lost or destroyed transfer certificate of title
was issued;

53
 e. A Document, on file in the registry of deeds, by which
the property, the description of which is given in said
document, is mortgaged, leased or encumbered, or
an authenticated copy of said document showing that
its original had been registered; and
f. Any other document which, in the judgment of the
court, is sufficient and proper basis for reconstituting
the lost or destroyed certificate of title. (Sec. 3, R.A.
26)

Where to file

With the RTC where property is located. With the Office of the Registry of Deeds
where the property is located.

V. WILLS AND SUCCESSION

A. General provisions

172. What is succession?

Succession is a mode of acquisition by virtue of which the property, rights and obligations to the
extent of the value of the inheritance, of a person are transmitted through his death to another
or others either by his will or by operation of law. (Art. 774, NCC)

B. Testamentary Succession

Wills

173. What is a will?

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. (Art. 783, NCC)

174. What are the formalities of a will?

Common Formalities
1. It must be in writing;
2. It must be executed in a language or dialect known to the testator. (Art. 804, NCC)
Notarial Will Holographic Will Special Cases
1. Subscribed at the end thereof by 1. Entirely written by the hand of 1. If the testator be deaf, or a
the testator himself or by the testator himself deaf-mute, he must
testator’s name written by some 2. Entirely dated by the hand of personally read the will, if
other person in his presence and the testator himself able; otherwise, he shall
by his express direction. 3. Signed by the hand of the designate two persons to
2. Attested and subscribed by 3 or testator himself. (Art. 810, read it and communicate to
more credible witnesses in the NCC) him, in some practicable
presence of the testator and of manner, the contents
one another. thereof. (Art. 807, NCC)
3. All of the pages are signed, except 2. If the testator is blind, the will
the last, on the left margin by the shall be read to him twice;
testator or the person requested once, by one of the
by him to write his name and the subscribing witnesses, and
instrumental witnesses. again, by the notary public
before whom the will is

54
 4. All pages are numbered acknowledged. (Arts. 797,
correlatively in letters placed on 798, 808, NCC)
the upper part of each page.
5. Attestation clause executed by the
witnesses showing the number of
pages used, the fact that the
testator signed the will and every
page thereof, and that the
instrumental witnesses witnessed
and signed the will and all the
pages in the presence of the
testator and of one another (Art.
805, NCC)
6. Properly acknowledged before a
notary public by the testator and
the witnesses (Art. 806, NCC)

175. May a joint will executed in a foreign country, where a joint will is allowed, by two
(2) former Filipino testators who became naturalized foreign citizens, be given legal
effect in the Philippines?

YES. As provided under Article 816 of the New Civil Code, the will of an alien who is abroad
produces effect in the Philippines if made with the formalities prescribed by the law of the place
in which he resides, or according to the formalities observed in his country, or in conformity with
those which the New Civil Code prescribes.

3. Non-Delegability of a Testamentary Power

176. Explain the concept of the Non-Delegability of a Testamentary Power.

As provided under Article 784 of the New Civil Code, the making of a will is a strictly personal
act; it cannot be left in whole or in part to the discretion of a third person, or accomplished
through the instrumentality of an agent or attorney.

4. Applicable Law as to Form and Substance of a Will

177. What is the rule where the will admits of different interpretations?

Under Article 788 of the New Civil Code, if a testamentary disposition admits of different
interpretations, in case of doubt, that interpretation by which the disposition is to be operative
shall be preferred. Further, the will must be interpreted liberally in favor of validity. The intention
and desires of the testator if clearly expressed in the will, constitute the fixed law of its
interpretation. (Vda. de Villanueva vs. Juico, L-16737, Feb. 28, 1962)

178. What is the rule as to the interpretation of words?

The words of a will are to be taken in their ordinary and grammatical sense, unless a clear
intention to use them in another sense can be gathered, and that other can be ascertained.
Technical words in a will are to be taken in their technical sense, unless the context clearly
indicates a contrary intention, or unless it satisfactorily appears that the will was drawn solely by
the testator, and that he was unacquainted with such technical sense. (Art. 790, NCC)

55
 5. Testamentary Capacity

179. What are the exceptions to the rule that all natural persons are qualified to make a
will?

1. He is expressly prohibited by law - All persons who are not expressly prohibited by law
may make a will. (Art. 796, NCC)
2. He is below 18 years of age at the time of its execution - Persons of either sex under
eighteen years of age cannot make a will. (Art. 797, NCC)
3. He is of unsound mind at the time of execution - In order to make a will it is essential
that the testator be of sound mind at the time of its execution. (Art. 798, NCC).

180. What is the test of soundness of mind?

To be considered as of sound mind, the testator must have the ability to know:

a. The nature of the estate to be disposed of (Art. 799, NCC) – the testator must have a
fairly accurate knowledge of what he owns. (Rabuya, Civil Law Review Vol. I, 2021, p. 872)
b. The proper objects of his bounty (Art. 799, NCC) – the testator should know under
ordinary circumstances, his relatives in the most proximate degrees. (Rabuya, supra, at 872)
c. The character of the testamentary act (Art. 799, NCC) - the testator must be aware that
the instrument he is executing is an act mortis causa which will dispose of his property upon
his death. (Rabuya, supra, at 872)

6. Form of Notarial and Holographic Wills

181. What are the Requirements for a Notarial or Ordinary Will?

Aside from the fundamental requisites that the testator be at least 18 years old, and possessed
of a sound mind:
a. The will must be in writing;
b. The will must be executed in a language or dialect known to the testator; and
c. The will must be subscribed (signed) at the end thereof by the testator himself or by the
testator’s name written by another person in his presence, and by his express direction.

7. Witnesses to a Notarial Will (Qualification and Disqualifications)

182. Who may be witnesses and who are disqualified to be witnesses to a will?
Witnesses to Wills

Any person of sound mind and of the age of eighteen years or more, and not blind, deaf or dumb,
and able to read and write, may be a witness to the execution of a will mentioned in Article 805
of the New Civil Code. (Art. 820, NCC)

The following are disqualified from being witnesses to a will:

1. Any person not domiciled in the Philippines;
2. Those who have been convicted of falsification of a document, perjury or false testimony. (Art.
821, NCC); and

56
 3. A blind person, under Art. 808, can be a testator, but he cannot be a witness.

8. Conflict Rules

183. What is the rule where there is a conflict as to the revocation of a will?
A revocation done outside the Philippines, by a person who does not have his domicile in this
country, is valid when it is done according to the law of the place where the will was made, or
according to the law of the place in which the testator had his domicile at the time; and if the
revocation takes place in this country, when it is in accordance with the provisions of this Code.
(Art. 829, NCC)

Basis Domicile Applicable Law

Revocation OUTSIDE the If not domiciled in the Philippines a) follow law of place where will was MADE
Philippines
b) or follow law of place where testator
was DOMICILED at the time.

If domiciled in the Philippines (not a) follow law of the Philippines (since his
provided for in the law) domicile is here) —

b) or follow the general rule of lex loci

celebrationis of the REVOCATION. (Article
17, NCC)

Revocation IN the Whether or not the domicile is in Follow Philippine law (NCC)
Philippines the Philippines.

9. Modes of Revocation of Wills and Testamentary Dispositions

184. What are the modes of revocation of wills?

No will shall be revoked except in the following cases:

1. By implication of law; or
2. By some will, codicil, or other writing executed as provided in case of wills; or
3. By burning, tearing, cancelling, or obliterating the will with the intention of revoking it, by the
testator himself, or by some other person in his presence, and by his express direction. If
burned, torn, cancelled, or obliterated by some other person, without the express direction of
the testator, the will may still be established, and the estate distributed in accordance
therewith, if its contents, and due execution, and the fact of its unauthorized destruction,
cancellation, or obliteration are established according to the Rules of Court. (Art. 830, NCC)

57
 a) What is the effect of revocation on the recognition of a non-marital child?

Under Article 834 of the New Civil Code, the recognition of an illegitimate child does not lose
its legal effect, even though the will wherein it was made should be revoked.

b) Theory of Dependent Relative Revocation.

This theory refers to where the act of physical destruction is connected with the making of
another will so as fairly to raise the interference that the testator meant the revocation of
the old to depend upon the efficacy of a new disposition; and if, for any reason, the new will
intended to be made as a substitute is inoperative, the revocation fails and the original will
remains in full force. (Molo vs. Molo, GR No. L-2538, September 21, 1951)

c) What is the effect of revocation based on false cause?

The revocation of a will based on a false clause or illegal clause is null and void. (Art. 833,
NCC) Further, for the rule to apply it is necessary that the fact or cause, with regards to
which the mistake was made, must appear upon the face of the instrument . (Rabuya, Pre Bar
Reviewer in Civil Law, 2021 Ed, p. 266)

10.Heirs

a. Compulsory Heir
185. Compulsory heirs - those for whom the law has reserved a portion of the testator’s estate which
is known as the legitime. (Art. 887, NCC)

Kinds of Compulsory Heirs

1. Primary Compulsory Heirs – Those who have precedence and exclude eother compulsory heirs.
2. Secondary Compulsory Heirs – Those who succeed only in the absence of the primary
compulsory heirs.
3. Concurring Compulsory Heirs – Those who succeed together with the primary or the secondary
compulsory heirs.

b. Institution of heirs

(1) Limitations on the Institution of Heirs

A will shall be valid even though it should not contain an institution of an heir, or such institution
should not comprise the entire estate, and even though the person so instituted should not accept
the inheritance or should be incapacitated to succeed.

In such cases the testamentary dispositions made in accordance with law shall be complied with
and the remainder of the estate shall pass to the legal heirs. (Art. 841, NCC)

One who has no compulsory heirs may dispose by will of all his estate or any part of it in favor
of any person having capacity to succeed.

One who has compulsory heirs may dispose of his estate provided he does not contravene the
provisions of this Code with regard to the legitime of said heirs. (Art. 842, NCC)

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 The testator shall designate the heir by his name and surname, and when there are two persons
having the same names, he shall indicate some circumstance by which the instituted heir may be
known. Even though the testator may have omitted the name of the heir, should he designate
him in such manner that there can be no doubt as to who has been instituted, the institution
shall be valid. (Art. 843, NCC)

(2) Collective Institution

If some are individually designated and others collectively, those collectively designated are
considered as individually instituted unless it clearly appears that the intention of the testator
was otherwise. (Art. 847, NCC)

(3) Proscription against successive institution

When the testator calls to the succession a person and his children they are all deemed to have
been instituted simultaneously and not successively. (Art. 849, NCC)

(4) Institution based on a false cause

GR: The statement of a false cause for the institution of an heir shall not vitiate the institution.
The false cause shall always be considered as not written. The law presumes that in giving a
legacy or devise or inheritance, the real motivation or the real cause is the liberality or generosity
of the testator not the false cause.

XPN: Unless it appears from the will that the testator would not have made such institution if he
had known the falsity of such cause. (Art. 850, NCC)

Is a prior determination of the status as a legal or compulsory heir in a separate

special proceeding a prerequisite to an ordinary civil action for recovery of ownership
and possession of property?

No. The new rule provides 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.” This rule is more consistent with the clear dictates of Article 777 of the Civil Code
that the rights of succession are immediately vested at the precise moment of the decedent’s
death. From that point, the heirs are legally deemed to have acquired ownership of their share
in the inheritance and not at the time of declaration of heirs, or partition, or distribution (Treyes v.
Larlar, G.R. No. 232579, September 08, 2020, J. Caguioa)

c. Substitution of heirs

186. Explain the concept of substitution of heirs.

Under Art. 857 of the NCC, substitution is the appointment of another heir so that he may enter
into the inheritance in default of the heir originally instituted. Further, under Art. 859 of the NCC,
the testator may designate one or more persons to substitute the heir or heirs instituted in case
such heir or heirs should die before him, or should not wish, or should be incapacitated to accept
the inheritance. (Rabadilla vs. CA, G.R. No. 113725, June 29, 2000)

(1) Causes for the substitution of heirs?

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 As a general rule, if the simple substitution is without a statement of the cases to which it refers,
the same shall comprise incapacity, predeceases or renunciation. However, if the testator
provides that substitution shall take place only in case of only one (e.g., predecease), it cannot
take place by reason of repudiation or incapacity.

(2) Fideicommissary Substitution (Compared with Testamentary Trusts)

When the testator leaves his property to one person with the express charge that it be transmitted
to another or others. (Art. 863, NCC)

Requisites:
i. A first heir called primarily to the enjoyment of the estate (called fiduciary);
ii. A second heir to whom the property is transmitted by the first heir (called the
fideicommissary).
iii. An obligation clearly imposed upon the first heir to preserve and transmit the whole or part
of the estate

11. Legitime

187. What is legitime?

It is that part of the testator’s property which he cannot dispose of because the law has reserved
it for certain heirs, who are therefore called compulsory heirs. (Art. 886, NCC).
GR: The testator cannot deprive his compulsory heirs of their legitime. Neither can he impose
upon the same burden, encumbrance, condition, or substitution of any kind whatsoever. (Art. 904,
NCC)

XPNs:
1. Valid and effective disinheritance (Art. 915, NCC);
2. The testator may forbid the partition of the inheritance including the legitime for not more
than 20 years (Art. 1083, NCC);
3. Reserva Troncal (Art. 891, NCC); and
4. Family Home

Every renunciation or compromise as regards a future legitime between the person owning it and
his compulsory heirs is void. (Art. 905, NCC)

Rationale: The heir does not acquire any right over the same until the death of the testator .
(Tolentino, Civil Code of the Philippines Vol. III, Succession, p. 323)

Incomplete Legitime
Any compulsory heir to whom the testator has left by any title less than the legitime belonging
to him may demand the same be fully satisfied. (Art. 906, NCC)

Testamentary dispositions that impair or diminish the legitime of the compulsory heirs shall be
reduced on petition of the same, insofar as they may be inofficious or excessive. (Art. 907, NCC)

12. Preterition (Requisites and Governing Law)

Preterition is the omission in the testator's will 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 (Art. 854, NCC), either because they are not mentioned therein, or, though mentioned,
they are neither instituted as heir nor expressly disinherited. Preterition happens when the
following requisites concur: (a) the heir omitted must be a compulsory heir in the direct line (Art.

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 854, par. 1, NCC); b. (b) the omission must be complete and total in character in such a way that
the omitted heir does not and has not received anything at all from the testator by any title
whatsoever (Morales vs. Olondriz, G.R. No. 198994, February 3, 2016); and (c) the compulsory heir omitted
should survive the testator. (Art. 854, par. 2, NCC)

188. What are the effects of preterition?

1. It annuls entirely the institution of heirs;

2. Legacies and devises shall remain valid insofar as they are not inofficious. (Art. 854, NCC) If it
impairs the legitime, they are merely reduced; and
3. If a will does not institute any devisee or legatees, the preterition will result in total intestacy.
(Rabuya, Pre-Bar Reviewer Civil Law , 2021, p. 288 citing Morales vs. Olondriz)

189. May an heir claim preterition if his name is omitted in a "Confirmation Affidavit of
Distribution of Real Property"?

NO. Article 854 of the New Civil Code partly provides that 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 insofar as they are not inofficious. There is no preterition in
such instance because a) there is no will, which is required for Art. 854 to apply; and b) if there
are properties other than those stated in the "Confirmation Affidavit" that may be the source of
the said heir's share. (Mayuga vs. Atienza, G.R. No. 208197, January 10, 2018, J. Caguioa)

13. Conditional Testamentary Dispositions and Those With a Term

190. What are the effects of suspensive conditions in a will?

In testamentary dispositions subject to a suspensive condition, successional rights are

transmitted only upon the happening of the condition, although the effects thereof retroact to
the moment of the testator’s death. (Arts. 1181 and 1187, in relation to Art. 884, NCC). In other
words, if it becomes certain that the condition cannot be fulfilled, the property must be delivered
either to a substitute (if one is provided), or to a co-heir with a right of accretion or the legal
heirs, as the case maybe. (Rabuya, Civil Law Reviewer, Vol. 1, 2021, p. 1003)

191. What are the rules on the amount of legitime of compulsory heirs?

Legend: Surviving spouse (SS); Legitimate child or descendant/s (LC); Illegitimate child (ILC);
Legitimate parent/s or ascendant/s (LP); Illegitimate parent/s (ILP); Free portion (FP)

When compulsory heir/s of the same kind survive alone

1 LC ½ of the hereditary estate of the father and mother (Art. 888, NCC)
2 or ½ of the hereditary estate of the father and mother to be divided equally (Art. 888, NCC)
more
LCs
LPA ½ of the hereditary estate of their children and descendants to be divided equally (Art. 889,
NCC)
IP ½ of the hereditary estate
Parents of illegitimate children are compulsory heirs of the latter only in the case, when such
child leaves neither LC, nor a SS, nor IC (Art. 903, NCC)

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 SS ½ of hereditary estate
⅓ if marriage was solemnized in articulo mortis and the testator died within 3 months from the
time of the marriage
½ if the surviving spouse and the testator have been living as husband and wife for more than
5 years (Art. 900, NCC)

IC ½ of hereditary estate divided equally among the IC

When Primary concurs with compulsory heirs

1LC; LC - ½ of the hereditary estate of the father and mother (Art. 888, NCC)
SS SS - ¼ of the hereditary estate to be taken from the FP (Art. 892, NCC)
In case of legal separation, the SS may inherit if it was the deceased who had given cause for
the same. (Art. 892, NCC)

2 or LC - ½ of the hereditary estate divided in equal portions (Art. 888, NCC);

more SS - share of that equal to a child to be taken from the FP (Art. 892, NCC)
LC;
SS
LC; LC - ½, in equal portions (Art. 888, NCC);
IC IC - ½ share of each LC (Art. 176, FC)
1 LC; LC - ½ of the hereditary estate of the father and mother (Art. 888, NCC)
SS; SS - ¼ of the hereditary estate to be taken from the FP (Art. 892, NCC)
IC IC - ½ share of each LC (Art. 176, FC)
The legitime of the concurring CH are from the free portion.
The share of the SS has preference over that of the IC, whose share may suffer reduction pro
rata in case of insufficiency. (Art. 895, NCC)
2 or LC - ½ of the hereditary estate divided in equal portions (Art. 888, NCC);
more IC - ½ share of each LC (Art. 176, FC)
LC; SS - share of that equal to a child to be taken from the FP (Arts. 892, 897, NCC)
IC;
SS
When secondary concurs with concurring compulsory heirs
LPA; LPA - ½ of the hereditary estate of their children and descendants to be divided equally (Art.
IC 890, NCC)
IC - ¼ of the hereditary estate to be taken from the FP (Art. 896, NCC)
LPA; LPA - ½ of the hereditary estate of their children and descendants to be divided equally (Art.
SS 889, NCC)
SS - ¼ of the hereditary estate (Art. 893, NCC)
LPA LPA - ½ of the hereditary estate of their children and descendants to be divided equally (Art.
SS 889, NCC)
IC SS ⅛ of the hereditary estate from the FP (Art. 899, NCC)
IC - ¼ of the estate from the FP (Art. 899, NCC)
IP; IP - ¼ of the hereditary estate
SS SS - ¼ of the hereditary estate (Art. 903, NCC)
Concurrence among concurring compulsory heirs

SS; SS - ⅓ of the hereditary estate

IC ⅓ of the hereditary estate (Art. 894, NCC)

a) Condition not to marry?

As a general rule, an absolute prohibition not to contract a first or subsequent marriage is
not a valid condition and shall be considered as not written. (Art. 874, NCC) However, if the
prohibition is not absolute and is relative as to persons, time, or place, such condition is valid
and must be complied with, unless the testator practically renders it impossible for the heir
to marry at all. (Rabuya, Civil Law Reviewer I, 2021 Ed. p. 1006)

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 b) Disposicion Captatoria

Disposition captatoria is one which imposes as condition that the heir shall make some
provision in his will in favor of the testator or of any other person. (Art. 875, NCC) Such
disposition is void, without affecting the other provisions of the will.

c) Modal institution?

Modal institution is the institution of an heir made for a certain purpose or cause. (Arts. 881
and 882, NCC) While a condition suspends, but does not obligate, a mode obligates, but
does not suspend.

14. Void Testamentary Disposition

Under Art. 845 of the New Civil Code, every disposition in favor of an unknown person shall be
void, unless by some event or circumstance his identity becomes certain. However, a disposition
in favor of a definite class or group of persons shall be valid.

15. Disinheritance

192. Provide the rules on deprivation of legitime.

As a general rule, the testator cannot deprive his compulsory heirs of their legitime. (Art. 904,
par. 1, NCC). However, a compulsory heir may, in consequence of a valid disinheritance, be
deprived of his legitime. (Art. 915, NCC) Disinheritance can be effected only through a will
wherein the legal cause therefor shall be specified. (Art. 916, NCC)

193. What is the difference between preterition and disinheritance?

Distinction Preterition Disinheritance

As to nature of Omission in the testator’s will of any of Deprivation of a compulsory heir of his
the act the compulsory heirs in the direct line legitime through a testamentary
disposition
As to Presumed by law to be involuntary Always voluntary
voluntariness of
omission
As to cause There was merely oversight or mistake It is for some legal cause
in the omission
As to effect Results to the annulment of the Results to the annulment of the
institution of heirs in toto but devises institution of heirs but only in so far as
and legacies remain valid in so far as it may prejudice the person inherited.
they are not in officious
(Rabuya, Civil Law Reviewer, Vol. 1, 2021, p. 1027-1028)

194. Grounds/Legal causes for valid disinheritance and its requisites

Causes common to all compulsory heirs

1. Conviction of final judgment of an attempt against life of the testator, his or her spouse,
descendant or ascendant.
2. Accusing the testator of a crime for which the law prescribes imprisonment for six years or more,
if the accusation has been found groundless or false.
3. When the heir causes the testator o make a will or to change one already made by fraud,
violence, intimidation or undue influence.
4. Unjustifiable refusal to give support.
Other grounds to disinherit children or descendants

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 1. When a child or descendant has been convicted of adultery or concubinage with the spouse of the
testator.
2. Maltreatment of the testator by word or deed, by the child or descendant.
3. When a child or descendant leads a dishonorable or disgraceful life.
4. Conviction of a crime which carries with it the penalty of civil interdiction.
Other grounds to disinherit parents or ascendants
1. When the parents have abandoned their children or induced their daughters to live a corrupt or
immoral life, or attempted against their virtue.
2. When the parent or ascendant has been convicted of adultery or concubinage with the spouse of the
testator.
3. The loss of parental authority for causes specified in the Family Code
4. An attempt by one of the parents against the life of the other, unless there has been a reconciliation
between them.
Other grounds to disinherit spouse
1. When the spouse has given cause for legal separation.
2. When the spouse has given grounds for the loss of parental authority.

Effects of Reconciliation

A subsequent reconciliation between the offender and the offended person deprives the latter of
the right to disinherit and renders ineffectual any disinheritance that may have been made.

If there is no will, it deprives the offended person of right to disinherit the offending person.

If already disinherited, disinheritance already made is rendered ineffectual.

There is no required form. It may be express or tacit (Rabuya, Civil Law Reviewer Vol. 1, p. 906-907).

16. Legacies and Devises

A legacy is a gift of personal property given by virtue of a will, while a devise is a gift of real
property given by virtue of a will (Jurado, Comments & Jurisprudence on Succession, p. 926). All
things and rights which are within the commerce of man may be bequeathed or devised (Art. 924,
NCC).

195. Grounds for revocation of legacies and devises:

1. Testator transforms the thing bequeathed in such a manner that it does not retain either the
form or the denomination it had (Art. 957[1], NCC).
2. Testator by any title or for any cause alienates the thing bequeathed, or any part thereof, it
being understood that in the latter case the legacy or devise shall be without effect only with
respect to the part alienated (Art. 957[2], NCC).
3. Thing bequeathed is totally lost during the lifetime of the testator, or after his death without
the heirs fault.
4. Other causes: Nullity of the will, non-compliance with suspensive conditions affecting the
bequests, sale of the thing to pay debts of the deaths during the settlement of his estates
Art. 957[3], NCC).

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C. Legal or Intestate Succession

1. General provisions; relationship

196. May illegitimate children inherit ab intestato from the legitimate relatives of their
father or mother?

Under Art. 992 of the New Civil Code, an illegitimate child has no right to inherit ab intestato from
the legitimate children and relatives of his father or mother; nor shall such children or relatives
inherit in the same manner from the illegitimate child. This is otherwise known as the “Iron
Curtain Rule.” The right of representation is not available to illegitimate descendants of legitimate
children in the inheritance of a legitimate grandparent. (Arado vs. Alcoran, G.R. No. 163362, July 8, 2015)

197. Discuss the rules in intestate succession.

Surviving spouse (SS); Legitimate child or descendant/s (LC); Illegitimate child (ILC); Legitimate
parent/s or ascendant/s (LP); Legitimate ascendant/s (LA); Brothers and sisters (BS); and
Nephews and nieces (NN)

Intestate succession in the direct descending line

LC survive with ILC LC: double that of the ILC

LC survive with SS SS: same share as that of each LC

LC survive with ILC SS: same share as that of each LC

and SS ILC: ½ of the share of an LC
(Art. 983, Civil Code; Art. 176, Family Code)

Intestate succession in the direct ascending line

LA survive with ILC LA: ½

ILC: ½

SS survives with LP SS: ½

LP: ½

LA survive with SS LA: ½

and ILC SS: ¼
ILC: ¼
(Arts. 983 and 999, Civil Code; Art. 176, Family Code)

Illegitimate children

SS survives SS: ½
with ILC ILC: ½
(Art. 998, NCC)

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 Collateral blood relatives

BS survive BS: ½
with SS SS: ½
(Art. 1001, NCC)

2. Causes of Intestacy

198. When Legal Succession takes place:

1. When a person dies:

a. Without a will
b. With a void will
c. With a will that subsequently lost its efficacy (Art. 960 [1], NCC)

3. Order of intestate succession

199. What is the Order of Intestate Succession?

The order is based on the presumed will of the decedent. Hence, in default of testamentary heirs,
it is presumed that the deceased would have provided in the following order: (Legitimate
relatives; Illegitimate relatives; Surviving spouse; and State)

Regular Order of intestate succession (if the decedent is a legitimate person)

a. Legitimate children or descendants (LCD) (Art. 979, NCC);
b. In default of LCD, Legitimate parents and ascendants (LPA) (Art. 986, NCC);
c. Illegitimate children and descendants (ILC) (Arts. 988, 990 and 992, NCC);
d. Surviving spouse (SS) (Art. 995, NCC);
e. Brothers and sisters (B/S), nephews, nieces (Ne/Ni) (Art. 995, NCC);
f. Other collateral relatives within 5th degree (Art. 1011, NCC);
g. The State (Art. 1011, NCC).

Irregular Order of intestate succession (if the decedent is an illegitimate person)

a. Legitimate children and descendants (Art. 979, NCC);
b. Illegitimate children and descendants (Arts. 988, 989, 990, NCC);
c. Illegitimate parents (Art. 993, NCC);
d. Surviving spouse (Art. 994, NCC);
e. Illegitimate brothers and sisters, nephews and nieces (Art. 994, NCC); and
f. The State (Art. 1011, NCC).

200. When does legal or intestate succession takes place?

Legal or intestate succession takes place:

1. If a person dies without a will, or with a void will, or one which has subsequently lost its
validity;
2. When the will does not institute an heir to, or dispose of all the property belonging to the
testator. In such case, legal succession shall take place only with respect to the property
of which the testator has not disposed;
3. If the suspensive condition attached to the institution of heirs does not happen or is not
fulfilled, or if the heir dies before the testator, or repudiates the inheritance, there being no
substitution, and no right of accretion takes place;
4. When the heir instituted is incapable of succeeding, except in cases provided in the Code

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4. Rule of Proximity and Rule of Equality

201. What is the Rule of Proximity?

The Rule of Proximity provides that, among the descendants, the relative nearest in the degree
excludes the more distant ones. An exception to this rule is when the right of representation
properly takes place (Art. 962, par. 1, NCC)

202. What is the Rule of Equal Division?

The Rule of Equal Division provides that, he children of the deceased shall always inherit from
him in their own right, dividing the inheritance in equal shares, even if they should come from
different marriages. (Arts. 980 and 979, par. 1, NCC) An adopted child is counted as one of the
legitimate children and he inherits in the same manner as them. ( Art. 979, par. 2, NCC and Secs. 17 and
18, Domestic Adoption Act)

a) The exceptions to this rule are

1. Rule of preference between lines
2. Distinction between legitimate and illegitimate filiation. The ratio under the present law is 2:1
(Art. 983, in relation to Art. 895 as amended by Art. 176, FC)
3. Rule of division by line in the ascending line (Art. 987 (2), NCC)
4. Distinction between full-blood and half- blood relationship among brothers and sisters, as
well as nephews and nieces (Art. 1006 and 1008, NCC)
5. Right of representation

Determination of Heirs

203. How are heirs determined?

Jurisprudence dictates that the determination of who are the legal heirs of the deceased must be
made in the proper special proceedings in court, and not in an ordinary suit for recovery of
ownership and possession of property. This must take precedence over the action for recovery
of possession and ownership. The Court has consistently ruled that the trial court cannot make a
declaration of heirship in the civil action for the reason that such a declaration can only be made
in a special proceeding. Under Section 3, Rule 1 of the 1997 Revised Rules of Court, a civil action
is defined as one by which a party sues another for the enforcement or protection of a right, or
the prevention or redress of a wrong while a special proceeding is a remedy by which a party
seeks to establish a status, a right, or a particular fact. It is then decisively clear that the
declaration of heirship can be made only in a special proceeding inasmuch as the petitioners here
are seeking the establishment of a status or right. (Treyes v. Larlar, GR No. 232579, September 8, 2020)

6. Successional Barrier (the “Iron Curtain Rule”)

204. Discuss the “Iron Curtain Rule”

The illegitimate family cannot inherit by intestate succession from the legitimate family and vice-
versa (Art. 922, NCC)

In Aquino v. Aquino, the Supreme Court ruled that children, regardless of their parents’ marital
status, can now inherit from their grandparents and other direct ascendants by right of
representation.

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Right of Representation in Testacy and Intestacy

205. What is right of representation?

A right created by fiction of law by virtue of which the representative is raised to the place and
the degree of the person represented, and acquires the rights which the latter would have if he
were living or if he could have inherited. (Art. 970, NCC)

206. What are the requisites and limitations in representation?

1. Representation takes place only with respect to inheritance conferred by law (legal succession
and compulsory succession) (Tolentino, Civil Code of the Philippines Vil. III, 1992, p 447). Hence, a
voluntary heir may not be represented.

2. The representative inherits not from the person represented but from the one whom the
latter would have succeeded (Art. 971, NCC) Hence -

a. Their capacity to succeed must be determined in relation to the decedent and not the
person represented.
b. An adopted child, who is not related by blood to the adopter, may not represent the
adopter because the adopted child is not related to the deceased.

3. Representation takes place in the direct descending line, but never in the ascending line. In
the collateral line, it exists only in favor of nephews and nieces if they survive with their
uncles and aunts. (Art. 972, NCC)

4. An illegitimate child can represent their parents, if the latter are also of illegitimate filiation
to the decedent-ascendant. But if the parent of the illegitimate child is legitimately filiated to
the decedent-ascendant, an illegitimate child may not represent his parent by virtue of the
iron barrier curtain rule. (Art. 992, NCC)

5. Representation takes place only in case of predecease ( Art. 992, NCC), incapacity (Art. 1035,
NCC), and disinheritance. (Art. 923, NCC) It does not take place in case of repudiation or
renunciation.

7. Successional Rights of Adopted Children

207. What are the successional rights of adopted children?

1. An adopted child succeeds to the property of the adopting parents in the same manner as a
legitimate child. (Art. 979, NCC)
2. The adopted shall remain an intestate heir of his natural parents and other blood relatives .
(Art. 189, FC)
3. The adopters and the adoptee shall have reciprocal rights of succession without disticinction from
legitimate filiation. (Art. 18 or R.A. 8552)

8. Successional Rights of Adopting Parents

208. What are the successional rights of adopting parents?

The adopters and the adoptee shall have reciprocal rights of succession without distinction from
legitimate filiation. (Art. 18 or R.A. 8552)

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209. What are the rules as to the successional rights of adopting parents?

1. When the parents, legitimate or illegitimate, or the legitimate ascendants of the adopted
concur with the adopter, they shall divide the entire estate, one-half to be inherited by the
parents or ascendants and the other half, by the adopters;
2. When the surviving spouse or the illegitimate children of the adopted concur with the adopters,
they shall divide the entire estate in equal shares, one-half to be inherited by the spouse or
the illegitimate children of the adopted and the other half, by the adopters;
3. When the adopters concur with the illegitimate children and the surviving spouse of the
adopted, they shall divide the entire estate in equal shares, one-third to be inherited by the
illegitimate children, one-third by the surviving spouse, and one-third by the adopters;
4. When only the adopters survive, they shall inherit the entire estate. (Art. 190, FC)

10. Successional Rights of Marital and Non-Marital Children

210. What are the rules in the successional rights of marital and non-marital children?

1. The legitime of each of the acknowledged natural children and each of the natural children
by legal fiction shall consist of one-half of the legitime of each of the legitimate children or
descendants.
2. The legitime of an illegitimate child who is neither an acknowledged natural, nor a natural
child by legal fiction, shall be equal in every case to four-fifths of the legitime of an
acknowledged natural child.
3. The legitime of the illegitimate children shall be taken from the portion of the estate at the
free disposal of the testator, provided that in no case shall the total legitime of such
illegitimate children exceed that free portion, and that the legitime of the surviving spouse
must first be fully satisfied. (Art. 895, NCC)
4. Illegitimate children who may survive with legitimate parents or ascendants of the deceased
shall be entitled to one-fourth of the hereditary estate to be taken from the portion at the
free disposal of the testator. (Art. 896, NCC)
5. When the testator dies leaving illegitimate children and no other compulsory heirs, such
illegitimate children shall have a right to one-half of the hereditary estate of the deceased.
The other half shall be at the free disposal of the testator. (Art. 901, NCC)
6. The rights of illegitimate children are transmitted upon their death to their descendants,
whether legitimate or illegitimate. (Art. 902, NCC)

10. Successional Rights of the Surviving Spouse

211. What are the rules in the successional rights of the surviving spouse?

1. When the widow or widower survives with legitimate children or descendants, and
acknowledged natural children, or natural children by legal fiction, such surviving spouse shall
be entitled to a portion equal to the legitime of each of the legitimate children which must
be taken from that part of the estate which the testator can freely dispose of. (Art. 897, NCC)
2. If the widow or widower survives with legitimate children or descendants, and with illegitimate
children other than acknowledged natural, or natural children by legal fiction, the share of
the surviving spouse shall be the same as that provided in the preceding article. (Art. 897, NCC)

3. When the widow or widower survives with legitimate parents or ascendants and with
illegitimate children, such surviving spouse shall be entitled to one-eighth of the hereditary
estate of the deceased which must be taken from the free portion, and the illegitimate
children shall be entitled to one-fourth of the estate which shall be taken also from the
disposable portion. The testator may freely dispose of the remaining one-eighth of the estate.
(Art. 899, NCC)

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 4. If the only survivor is the widow or widower, she or he shall be entitled to one-half of the
hereditary estate of the deceased spouse, and the testator may freely dispose of the other
half. If the marriage between the surviving spouse and the testator was solemnized in articulo
mortis, and the testator died within three months from the time of the marriage, the legitime
of the surviving spouse as the sole heir shall be one-third of the hereditary estate, except
when they have been living as husband and wife for more than five years. In the latter case,
the legitime of the surviving spouse shall be that specified in the preceding paragraph. (Art.
900, NCC)

11. Successional Rights of Collateral Relatives

212. What are the rules in the successional rights of collateral relatives?

1. If there are no descendants, ascendants, illegitimate children, or a surviving spouse, the

collateral relatives shall succeed to the entire estate of the deceased in accordance with the
following articles. (Art. 1003, NCC)
2. Should the only survivors be brothers and sisters of the full blood, they shall inherit in equal
shares. (Art. 1004, NCC)
3. Should brothers and sisters survive together with nephews and nieces, who are the children of
the descendant's brothers and sisters of the full blood, the former shall inherit per capita, and
the latter per stirpes. (Art. 1005, NCC)
4. Should brother and sisters of the full blood survive together with brothers and sisters of the
half blood, the former shall be entitled to a share double that of the latter . (Art. 1006, NCC)
5. In case brothers and sisters of the half blood, some on the father's and some on the mother's
side, are the only survivors, all shall inherit in equal shares without distinction as to the origin
of the property. (Art. 1007, NCC)
6. Children of brothers and sisters of the half blood shall succeed per capita or per stirpes, in
accordance with the rules laid down for brothers and sisters of the full blood. (Art. 1008, NCC)
7. Should there be neither brothers nor sisters nor children of brothers or sisters, the other
collateral relatives shall succeed to the estate. The latter shall succeed without distinction of
lines or preference among them by reason of relationship by the whole blood. (Art. 1009, NCC)
8. The right to inherit ab intestato shall not extend beyond the fifth degree of relationship in the
collateral line. (Art. 1010, NCC)

D. Provisions Common to Testate and Intestate Succession

4. Capacity to succeed by will or by intestacy

a) Incapacity by Reason of Unworthiness

Fundamental Characteristics:
1. They are based on offenses committed by the disqualified person against the decedent
which render him unworthy to succeed;
2. They are applicable not only in testamentary succession, but also in intestate succession;
3. Although they are relative in character, they are also total in a sense that if the heir
disqualified is a compulsory heir, incapacity shall apply not only to the free portion, but
ALSO TO THE LEGITIME. (Jurado, Comments and Cases in Wills and Succession, 2009, p. 491).

b) Incapacity by Reason of Morality

The capacity based on this Article is not only relative but also partial in a sense that if the heir
disqualified is also a compulsory heir, the incapacity shall apply only to the free portion given
to him, but NOT THE LEGITIME.

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 1. Those made in favor of a person with whom the testator was guilty of adultery or concubinage
at the time of the making of the will;
2. Those made in consideration of a crime of which both the testator and the beneficiary have
been found guilty;
3. Those made in favor of a public officer or his spouse, descendants and ascendants, by reason
of his public office.

c) Incapacity by Reason of Possible Undue Influence

Fundamental Characteristics:
1. These incapacities or disqualification are based either on possibility of undue influence or
of interest.
2. They are not only in testamentary succession; and
3. They are not only relative in character but they are also partial in the sense that if the
incapacitated or disqualified heir is a compulsory heir, only the free portion given to him is
affected, but not his legitime. (Jurado, supra, p. 483)

207. Arturito, a citizen of Argentina and domiciled in the Philippines, died testate. He gave
his property located in Australia to his illegitimate son, Bogart. During probate, his
legitimate son, Coco, also a citizen of Argentina opposed the probate, contending that
the law of Argentina prohibits an illegitimate child to succeed. Decide.

Bogart will not succeed because the national law of the decedent prohibits an illegitimate child
from succeeding. Intestate and testamentary successions, both with respect to the order of
succession, the amount of successional rights, and intrinsic validity of testamentary provisions,
shall be regulated by the national law of the decedent, regardless of whatever the nature of the
property and wherever the property may be found. (Art. 16(2), NCC)

5. Right of Representation in Testacy and Intestacy

a) Requisites and Limitations

a. In testamentary succession, in case some, but not all, of the compulsory heir in the
direct descending line (a) dies before the testator; (b) becomes incapacitated to
succeed from the testator; or (c) is disinherited, and he is survived by his children or
descendants. But not when the compulsory heir repudiates his share. (Art. 856, 923, and
1035, NCC)
b. In intestate succession, in case some, but not all, of the legal heir in the direct
descending line (a) dies before; or (b) becomes incapacitated to succeed from, the
decedent, and he is survived by his children or descendant, or in the absence of other
heirs which can exclude them from the succession, a brother or sister dies before the
decedent survived by his or her own children. (Arts. 972, 975, 981, 982, and 1035 NCC; Jurado,
Civil Law Reviewer, 2009.)

6. Right of accretion in Testamentary Succession and in Intestacy

a) Requisites and Limitations

Under Article 1015 of the NCC, the right of accretion occurs when two or more persons are
called to the same inheritance, legacy, or devise, but by reason of (RIP) (1)
REPUDIATION, or (2) INCAPACITY, or (3) PREDECEASE, a vacancy is created in the
inheritance. Therefore, in the absence of any expressed will of the decedent, the law
presumes that had he been able to express his will, he would have given such vacant portion
to the co-heirs, co-legatees, or co-devisees.

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 7. Acceptance and repudiation of inheritance

a) Forms of Repudiation

To be effective, the renunciation of an inheritance must either be: (a) by way of a notarial
document; (b) by way of an authentic document; or (c) by way of a petition presented to
the court having jurisdiction over the testamentary proceedings. (Art. 1051, NCC)

b) Effects of repudiation compared to predecease and incapacity and

disinheritance?

In case of predecease or inheritance of an ascendant (example, the father), the other

ascendant entitled to inherit (the mother) shall inherit in her own right and by the right of
accretion. The rule is different in case of incapacity of repudiation. In the event that one of
the parents is incapacitated or repudiates his or her share, the vacant portion shall accrue in
favor of the co-heirs, who shall be entitled to the said share in the same proportion that they
inherit. (Arts. 968, 1018 and 1019, NCC)

OBLIGATIONS AND CONTRACTS

I. Obligations
A. General Provisions
1. Definition

207. What is an obligation?

An Obligation is a juridical necessity to give, to do or not to do. (Art.1156, NCC)

2. Essential Elements

208. What are the essential elements of an obligation?

1. Active Subject (Obligee or creditor) - the person who is entitled to demand the
fulfillment of the obligation.
2. Passive Subject (obligor/debtor) - the person who is bound to the fulfillment of the
obligation.
3. Juridical/legal tie (vinculum juris) - which binds or connects the parties to the
obligation, and which may arise from either bilateral or unilateral acts of persons.
4. Prestation or service (object) - conduct required to be observed by the debtor/obligor.
(to give, to do, or not to do). For it to be valid, it must be:
a. Licit;
b. Real or possible
c. Determinate or determinable
d. Must be within the commerce of men (Ang Yu Asuncion vs. CA, G.R. No. 109125, December 2, 1994)
3. Sources of Obligations

209. What are the sources of obligations?

A. Law - Obligations derived from law are not presumed. (Art. 1158, NCC)
B. Contracts - Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith. (Art. 1159, NCC)
C. Quasi-contracts - A juridical relation arising from lawful, voluntary, and unilateral act based
on the principle that no one shall be unjustly enriched or benefited at the expense of another
(Art. 2142, NCC)

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 D. Delict -

GR: Every person criminally liable for a felony is also civilly liable (Art. 100, RPC)
XPN: Crimes of treason, rebellion, illegal possession of firearm and gambling.

E. Quasi-delict - act or omission causes damage to another, there being fault or negligence,
with no pre-existing contractual relations between the parties, is obliged to pay for the
damage done (Art. 2176, NCC)

B. Nature and Effects of Obligations

210. What are the types of real obligation?

a. Determinate/specific - particularly designated or physically segregated from all others of

the same class
b. Indeterminate/Generic - is designated merely by its class or genus
c. Delimited generic - confined to a particular class.

211. What are the duties of a debtor in an obligation to give?

a. To give a determinate thing (Arts. 1163, 1164 & 1166, NCC)

b. To give a generic thing (Arts. 1246 and 1170, NCC)

212. What are the rights of a creditor in an obligation to do or not to do?

1. To do (Positive Personal)
i. The obligee is entitled to have the thing done in a proper manner, by himself or by a third
person, at the expense of the obligor;
ii. To demand what has been poorly done be undone;
iii. To recover damages because of breach of the obligation. (Art. 1167, NCC)

2. Not to do (Negative Personal)

i. To have the thing undone at the expense of the obligor; and/or
ii. To ask for damages.

1. Breaches of Obligations

213. What are the sources of breach of obligations?

Voluntary - Debtor is liable for damage if he is guilty of those who in the performance of their
obligations are guilty of the following: (a) Fraud (dolo) - the deliberate and intentional evasion
of the normal fulfillment of obligations; (b) Negligence (culpa)- fault or negligence of the
debtor as an incident in the fulfillment of an existing obligation; (c) Default (mora) - Delay in
the fulfillment of the obligation; (d) And those who in any manner contravene the tenor
thereof. Covers any illicit act which impairs the strict and faithful fulfillment of the obligation. (Art.
1170, NCC)

Involuntary - Debtor is not liable for damages if he is unable to perform the obligation due to
a fortuitous event (Rabuya, Pre-bar Reviewer Civil Law, 2021 Ed., p. 346).

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214. What are the kinds of default?

1. Mora Solvendi - delay of the obligor/debtor to perform his obligation.

2. Mora Accipiendi - delay of the obligee/creditor to accept the delivery of the thing which is
the object of the obligation
3. Compensatio morae - delay of the parties or obligors in reciprocal obligations. (Paras, Civil
Code of the Philippines Annotated, 2016, p.124-125).

2. Remedies for Breaches of Obligations

215. What are the effects of breach of obligation?

1.1 If a person obliged to do something fails to do it, the same shall be executed at his cost. This
same rule shall be observed if he does it in contravention of the tenor of the obligation.
Furthermore, it may be decreed that what has been poorly done be undone. (Art. 1167, NCC).
However, if the obligation is personal only to the debtor, the only remedy is to recover
damages. The debtor may not be compelled to execute the act against his will because the
same is tantamount to involuntary servitude, which is prohibited by the Constitution. (Sec.
18(2), Art. III, 1987 Philippine Constitution)

1.2 When the obligation consists in not doing, and the obligor does what has been forbidden
him, it shall also be undone at his expense. (Art. 1168, NCC)

216. What are the remedies available to the creditors in case of breach?

1. Specific performance –
1. When what is to be delivered is a determinate thing, the creditor, in addition to the right
granted him by article 1170, may compel the debtor to make the delivery. (Art. 1165. Par
1, NCC)
2. If the thing is indeterminate or generic, he may ask that the obligation be complied with
at the expense of the debtor. (Art. 1165. Par 2, NCC)
2. Rescission - power to rescind obligations is implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent upon him. (Art. 1191, NCC)
3. Damages - 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.
(Art. 1170, NCC)

C. Different Kinds of Obligation

217. What are the classifications of the obligation as to the existence of a burden or
condition?

Pure Obligation Conditional Obligation Obligation with a term

It is an obligation whose
performance does not
depend upon a future or
uncertain event, or upon
a past event unknown to
the parties. Pure
obligations are
demandable at once (Art.
1179 [1], NCC).
It refers to one where the acquisition
of rights, as well as the
extinguishment or loss of those
already acquired, shall depend upon
the happening of the event which
constitutes the condition (Art. 1181,
NCC).
That kind of obligation which is
subject to the happening of the
event which will surely happen,
although the date may not be known
as of the moment. (Art. 1184, NCC)

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218. What are the rights of the parties before the fulfillment of the condition?

Creditor Debtor
May bring the appropriate actions for the May recover what, during the same time, he has paid by
preservation of his right (Art. 1188, NCC) mistake in case of a suspensive condition. (Art. 1188,
such as: NCC)
a) Action for prohibition/restraining the
alienation of the thing pending the
happening of the suspensive
condition;
b) Petition for the annotation of the
creditor’s right with the proper
registry;
c) Action to demand security if the
debtor has become insolvent;
d) Action to set aside alienations made
by the debtor in fraud of creditors; or
e) Action against adverse possessors to
interrupt the running of the
prescriptive period.

219. What are the classifications of the obligation as to number of prestations (object)?

Alternative obligation – When there are several prestations which are due but the debtor is
required to perform only one prestation in order for the obligation to be extinguished . (Rabuya, Pre-
bar Reviewer Civil Law, 2021 Ed., p. 357). A person alternatively bound by different prestations shall
completely perform one of them. (Art. 1199, NCC)

Facultative obligation – When only one prestation has been agreed upon, but the obligor may
render another in substitution. (Art. 1206, NCC)

220. What are the classifications of the obligation as to number of subjects?

Joint obligation – one in which each debtor is liable only for a proportionate part of the debt,
and each creditor is entitled to demand only a proportionate part of the credit from each debtor.

Solidary obligation – one in which each of the debtors is liable for the entire obligation, and
each of the creditors is entitled to demand the satisfaction of the whole obligation from any or
all of the debtors. (PH Credit Corp. v CA, G.R. No 109648, Nov. 22, 2001)

221. What are the classifications of the obligation as to susceptibility of partial

performance?

Divisible obligation – the obligation is susceptible of division and partial performance.

Indivisible obligation – the obligation is not susceptible of partial performance.

D. Extinguishment of Obligations

1. Payment

a. Concept of Payment
Concept of payment: Payment means not only the delivery of money but includes the performance,
in any other manner, of an obligation (Art. 1232, NCC).

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222. Explain the requisites for dation in payment to extinguish an obligation.

(1) There must be the performance of the prestation in lieu of payment (animo solvendi) which
may consist in the delivery of a corporeal thing or a real right or a credit against the third
person;
(2) There must be some difference between the prestation due and that which is given in
substitution (aliud pro alio); (3) There must be an agreement between the creditor and debtor
that the obligation is immediately extinguished by reason of the performance of a prestation
different from that due. (Lo vs. KJS ECO-FORMWORK System Phil., Inc., G.R. No. 149420, October 8, 2003).

b) Payment by Cession vs. Dation in Payment

Dation in Payment Payment in Cessions

As to number of creditors

Maybe one creditor Plurality of creditors

As to object of the contract

The thing delivered is considered as Universality or property of debtor is what is ceded

equivalent of performance

As to the extent of extinguishment

Payment extinguishes obligation to the Merely releases debtor for net proceeds of things ceded or
extent of the value of the thing delivered assigned, unless there is contrary intention.
as agreed upon, proved or implied from the
conduct of the creditor

As to ownership

Ownership is transferred to creditor upon Ownership is not transferred

deliver

As to presumption of insolvency

Does not presuppose insolvency Presupposes insolvency

(Jurado, Obligations and Contracts, 2010, p.275-276).

c) Tender of payment and Consignation

Tender of payment is the definitive act of offering the creditor what is due him or her, together
with the demand that the creditor accept the same (Cinco v. CA, G. R. No. 151903, Oct. 9, 2009).

Consignation is the act of depositing the thing due with the court or judicial authorities whenever
the creditor cannot accept or refuses to accept payment, and it generally requires a prior tender
of payment. (Rabuya, Obligations and Contracts, 2019 ed., p. 292).

223.What is the effect of tender of payment?

Tender of payment even if valid, does not by itself produce legal payment, unless it is completed
by consignation. The effect of a valid tender of payment is merely to exempt the debtor from
payment of interest and/or damages. (PNB vs. Relativo, G. R. No. L-5298, Oct. 29, 1952).

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2. Loss of the Thing Due

a) Concept of Loss
It is understood that the thing is lost when it perishes, or goes out of commerce, or disappears
in such a way that its existence is unknown or it cannot be recovered (Art. 189 (2), NCC)
b) Requisites
a. The loss occurs without the fault of the debtor
b. The loss occurs prior to the debtor incurring delay
c. There is no law or stipulation holding the debtor liable even in case of fortuitous event, or
that the nature of the obligation does not require the assumption of risk (Art. 1262, NCC).

c) Force Majeure

GR: If the determinate thing is loss due to a fortuitous event, the debtor is not liable.
XPNs:

1. When by law, the debtor is liable even for fortuitous event;

2. When by stipulation, the debtor is liable even for fortuitous event, or
3. When the nature of the obligation requires the assumption of risk (Art. 1262[2], NCC).
4. When the loss of the thing is due partly to the fault of the debtor;
5. When the loss of the thing occurs after the debtor has incurred in delay (Art. 1262[1] and Art.
1165[3], NCC);
6. When the debtor promised to deliver the same thing to two or more persons who do not have
the same interest (Art. 1165[3], NCC);
7. When the obligation to deliver arises from a criminal offense (Art. 1268, NCC); and
8. When the obligation is generic (Art. 1263, NCC). (Jurado, Comments and Jurisprudence on Obligations
and Contracts, 2010 ed., p. 289-290)

3. Condonation

224. Define condonation.

An act of liberality by virtue of which the obligee, without receiving any price or equivalent,
renounces the enforcement of the obligation, as a result of which it is extinguished in its entirety
or in that part or aspect of the same to which the remission refers. It is the gratuitous
abandonment by the creditor of his right; a form of donation (Jurado, Ibid., p. 298)

225. X is indebted to Y in the amount of P100,000 secured by a real estate mortgage. Y

renounced his right over the mortgage. Can he still demand the payment of the
obligation? Why?

Yes, because the renunciation of the accessory does not extinguish the principal obligation. The
NCC provides that the renunciation of the principal debt shall extinguish the accessory obligations;
but the waiver of the latter shall leave the former in force. Here, what was renounced was the
accessory. Hence, the principal remains. (Art. 1296, NCC)

4. Confusion

226. Define confusion.

It is a mode of extinguishing to the concurrent amounts the obligations of persons who, in their
own right and as principals, are reciprocally creditors and debtors of each other. (Art. 1278, NCC)

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5. Compensation

a) Requisites of Legal Compensation

In order that legal compensation may be proper, the following requisites must be present –

1. The parties must be creditors and debtors of each other in their own right (Art. 1278, NCC);
2. They must be bound principally (Art. 1279 [1], NCC);
3. Both debts consist in a sum of money, or if the things due are consumable, they be of the
same kind, and also of the same quality if the latter has been stated (Art. 1279[2], NCC);
4. The two debts are due, liquidated and demandable (Art. 1279 [3] and [4], NCC); and
5. Over neither of them there be any retention or controversy, commenced in due time to the
debtor (Art. 1279 [5], NCC)

b) Compensation of Rescissible and Voidable Debts

This is an exception to the rule of demandability in order that compensation shall take place.
This exception is justified by the fact that rescissible or voidable obligations are considered
demandable while the vices with which they are tainted are not yet judicially declared.
Consequently, if the action for rescission or annulment is not exercised, or is renounced, or if
the debt or debts are ratified the obligation or obligations are susceptible of compensation. (8
Manresa, 5th Ed., Bk. 1 p. 725, Jurado, Comments and Jurisprudence on Obligations and Contracts, 2010
Ed, p. 320)

c) What are non-compensable debts

a. When one of the debts arises from a contract of deposit/depositum or from the obligations
of a depositary (Art. 1287, NCC);
b. When one of the debts arises from the obligations of a bailee in commodatum (Art. 1287,
NCC);
c. Over a claim for support due by gratuitous title (Art. 1287, NCC)
d. If one of the debts consists in civil liability arising from a penal offense (Art. 1288, NCC);
e. Over claims of the Government for taxes. (Philex Mining Corp. vs. Commissioner of Internal Revenue,
G. R. No. 125704, August 28, 1998)

6. Novation

a) Concept of Novation
Novation is the substitution or change of an obligation by another, resulting in its
extinguishment or modification, either by changing its object or principal conditions or by
substituting another in place of the debtor, or by subrogating a third person in the rights of the
creditor (8 Manresa, 5th Ed. Bk. 1, p. 751)

b) Expressed and Implied Novation

Express - The contracting parties incontrovertibly disclose that their object in executing the
new contract is to extinguish the old one (Sueno vs. Land Bank of the Phil, G.R. No. G.R. No. 174711, Sep.
17, 2008)

Implied - There is no express novation but there is irreconcilable incompatibility between the
old and the new obligations (Sueno vs. Land Bank of the Phil;, supra.) or that the new obligations is on every
point incompatible with the old one (Ajax Marketing & Development Corp. vs. CA, G. R. No. 118585, Sep. 14, 1995).

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(1) Requisites:

1. Previous valid obligation;

2. Agreement of all parties to the new obligation;
3. Extinguishment of old obligation; and
4. Validity of the new obligation (Tiu Siuco vs. Habana, G.R. No. 21106, February 21, 1924)

c) Expromission and Delegacion Distinguished

Delegacion Expromission
Person who Initiated the Substitution
Old debtor Third Person
Consent of the Creditor
It may be express or implied from his acts but not from his mere acceptance of payment by a third
party.
Consent of the Old debtor
With the consent of the old debtor (since he With or without the knowledge of the debtor or
initiated the substitution). against the will of the old debtor.
Consent of Third Person
Consent is needed but it need not be given Consent is needed.
simultaneously
Intention of Substitution
Released from the obligation with the consent of the creditor.
Rights of the New debtor
With the debtor’s consent – right of With the debtor’s consent – right of
reimbursement and subrogation reimbursement and subrogation.

Without the consent ofthe old debtor or

against his will – right to beneficial reimbursement.
Insolvency or Nonfulfillment of the obligation of the New debtor
Shall not revive the action of the latter With the debtor’s consent - If the old debtor gave his
against the original obligor. consent and the new
debtor could not fulfill the obligation; the old debtor
Original debtor shall be held liable. should be liable for the payment of his original
obligation.
Insolvency of the new debtor was already
existing and of public knowledge or known to Without the consent of the old debtor or
the original debtor at the time of the delegation against his will – the new debtor’s insolvency or non-
of the debt to the new debtor. fulfillment of the obligation shall not
give rise to any liability on the part of the original
debtor.

d) Legal and Conventional Subrogation

Legal Subrogation - It takes place by operation of law and is not to be presumed outside of
the following cases: (a) When a creditor pays another creditor who is preferred, even if the
payment is without the debtor’s knowledge; (b) When a third person interested in the fulfillment
of the obligation pays the obligation, even if such payment is without the knowledge of the
debtor without prejudice to the effects of confusion as to the latter’s share; (c) When a third
person, not interested in the obligation, pays the obligation but only if such payment is with
the consent of the debtor, whether express or implied (Arts. 1300 and 1302, NCC).

Conventional Subrogation - It takes place by the agreement of and requires the consent of
the original parties (the debtor and original creditor) and of the third person (the new creditor)
(Art. 1301, NCC).

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II. Contracts

A. General provisions

1. Definition

227. Define contract.

A contract is a meeting of minds between two persons whereby one binds himself, with respect
to the other, to give something or to render some service (Art. 1305, NCC).

2. Elements of a Contract

a) Essential elements
1. Consent of the contracting parties;
2. Object certain which is the subject matter of the contract;
3. Cause of the obligation which is established (Rabuya, Pre-bar Reviewer Civil Law, 2021, p. 400)

b) Natural elements - those derived from the nature of the contract and ordinarily accompany
the same such as right to resolve and warranties in sales contracts, among others. They are
presumed by law, although they can be excluded by the contracting parties if they so desire.
(3 Castan, 7th Ed., p. 324)

B. Basic Principles of Contracts

1. Obligatory Force of a Contract

228. What is the concept of obligatory force of a contract?

Obligations arising from contracts have the force of law between the contracting parties and
should be complied with in good faith. (Art. 1159, NCC)

2. Freedom to Stipulate and its Limitations

229. What is the concept of autonomy of contracts?

The contracting parties may establish such stipulations, clauses, terms and conditions as they
may deem convenient, provided they are not contrary to law, morals, good customs, public order,
or public policy. (Art. 1306, NCC)

3. Binding Effect of a Contract

230. What is the concept of mutuality of contracts?

The contract must bind both contracting parties; its validity or compliance cannot be left to the
will of one of them. (Art. 1308, NCC)

4. Privity of Contract

a) What is the concept of relativity of contracts?

Contracts take effect only between the parties, their assigns and heirs, except in case where
the rights and obligations arising from the contract are not transmissible by their nature, or by
stipulation or by provision of law. (Art. 1311, NCC)

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 b) What are the exceptions to relativity of contracts?

a. Stipulation Pour Atrui - tt is a stipulation in favor of a third person conferring a clear and
deliberate favor upon him, and which stipulation is merely a part of a contract into by the
parties, neither of whom acted as agent of the third person, and such third person may
demand its fulfillment provided that he communicates his acceptance to the obligor before
it is revoked. (Florentino v. Encarnacion Sr, 79 SCRA 193, 1977)
b. Third persons may be affected by contracts creating real rights when they come into
possession of the object of the contract. (Art. 1312, NCC)
c. Creditors acquire the right to rescind the contract entered into by the debtor with a third
person if that contract is intended to defraud him. (Art. 1313 and 1381 (3), NCC)
d. Tort interference – any third person who induces another to violate his contract shall be
liable for damages to the other contracting party. (Art. 1314, NCC)

5. Consensuality of Contracts

a) Concept and Coverage

It is perfected by mere consent of the parties. The essence of consent is the agreement of
the parties on the terms of the contract, the acceptance by one and the offer made by the
other (Vda. De Ape vs. CA, G.R. No. 133638, April 15, 2005; Torcuator vs. Bernabe, G.R. No. 134219, June 8,
2005). Contracts shall be obligatory, in whatever form they may have been entered into,
provided all the essential requisites for their validity are present.

b) Exceptions
When the law requires that a contract be in some form in order that it may be valid or
enforceable, or that a contract be proved in a certain way, that requirement is absolute
and indispensable. (Art. 1356, NCC).

c) Reformation of instruments

231. What are the requisites of reformation?

1. There must have been a meeting of the minds of the parties to the contract;
2. The instrument does not express the true intention of the parties;
3. Failure of the instrument to express the true intention of the parties is due to mistake, fraud,
inequitable conduct, or accident. (Rabuya, Ibid, p. 417)

232. What are the requisites of reformation if there is a mistake?

1. the mistake should be of fact;
2. the same should be proved by clear and convincing evidence; and
3. The mistake should be common to both parties to the instrument. (Rabuya, Ibid.)

233. What are the instances where an instrument may not be reformed?
1. If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of
the parties— remedy should be annulment of the contract and not reformation;
2. In simple donations inter vivos wherein no condition is imposed;
3. In wills;
4. When the real agreement is void;
5. When one of the parties has brought an action to enforce the instrument, he cannot
subsequently ask for its reformation;
6. When the contract is unenforceable because of failure to comply with the Statute of Frauds.
(Rabuya, Ibid, p. 417-418)

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C. Essential Requisites of a Contract

1. Consent

234. What are the requisites for mistake of fact to result in vitiation consent?

1. The error must be substantial regarding:

a. The object of the contract (error in re):
i. When the thing constitutes the object of the contract is confused with another thing
(Mistake as to Identity of the thing – error in corpore)
ii. Mistake as to the substance of the thing (error in substantia)
iii. Mistake regarding the quantity of the thing (error in quantitate); if mistake refers only
to accidental or secondary qualities, the contract is not rendered voidable (error in
qualitate)
b. The conditions which principally moved or induced one of the parties
c. Identity or qualifications (error in personae), but only if such was the principal cause of the
contract.
d. The error must be excusable (not caused by negligence).
2. The error must be a mistake of fact, and not of law. (Jurado, Comments and Jurisprudence on obligations
and Contracts, 2010 ed., pp. 430-432)
3. A simple mistake of account, however, shall only give rise to its correction. (Art. 1331, NCC)
4. An error so patent and obvious that nobody could have made it, or one which could have been
avoided by ordinary prudence, cannot be invoked by the one who made it in order to annul his
contract. (Alcasid vs. CA, G.R. No. 104751, October 7, 1994)

235. What is the effect of fraud by third persons on the validity of a contract?

Misrepresentation by a third person does not vitiate consent, unless such misrepresentation has
created substantial mistake and the same is mutual. (Art. 1342, NCC). Misrepresentation
made in good faith is not fraudulent but may constitute error (Art. 1343, NCC)

2. Object

236. What are the requisites for an object of a contract?

a. The thing must be within the commerce of men; or the right must not be intransmissible (Art.
1347 [1], NCC); It should be susceptible of appropriation and transmissible from one person to
another;
b. The thing or services must not be impossible (Art. 1348, NCC); in other words, it should exist at
the moment of the celebration of the contract, or, at least, it can exist subsequently or in the
future.
c. It must be licit, in other words, it should not be contrary to law, morals, good customs, public
order or public policy or it must be capable of coming into existence; (Art. 1347 [3], NCC); and
d. It must be determinate, or at least, possible of determination, as to its kind. (Art. 1349, NCC) 3
Castan 7th Ed., pp. 342-343; 8 Manresa, 5th Ed., Bk. 2, pp. 431-432)

3. Cause or consideration

237. What are the requisites for a cause of a contract?

e. It must exist – caused is presumed to exist in a contract although not stated, unless the
contrary is proved. (Art. 1354, NCC)

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 f. It must be true – the statement of a false cause in contracts shall render them void. (Art. 1353,
NCC)
g. It must be licit – a contact where the cause is contract to law, morals, good customs, public
order, or public policy is void (Art. 1409 [1], NCC) and produces no effect whatever (Art. 1352, NCC)

D. Defective Contracts

1. Rescissible contracts

238. What are rescissible contracts?

Rescissible contracts are contracts which are considered valid, binding, and effective until it is
rescinded and contains all the requisites of a valid contract and are considered legally binding,
but by reason of injury or damage (lesion) to either of the contracting parties or to third persons,
such as creditors, it is susceptible to rescission at the instance of the party who may be prejudiced
thereby. (Art. 1380, NCC)

2. Voidable contracts

239. What is a voidable contract?

It is one in which the essential requisites for validity under Article 1318 are present, “but may be
annulled because of want of capacity or the vitiated consent of one of the parties; however,
before such annulment, the contract is existent, valid, and binding, hence, considered effective
and obligatory between parties, but it may be rendered perfectly valid by ratification, which can
be express or implied. (Francisco vs. Herrera, G.R. No. 139982, November 21, 2002)

240. What contracts are voidable or annullable even though there may have been no
damage to the contracting parties?
1. Those where one of the parties is incapable of giving consent to a contract;
2. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or
fraud. (Art. 1390, NCC)

3. Unenforceable contracts

241. What are unenforceable contracts?

These are contracts which cannot be enforced by a proper action in court, unless they are ratified,
because either they are entered into without or in excess of authority or they do not comply with
the Statute of Frauds or both the contracting parties do not possess the required legal capacity.
Mercado vs. Allied Banking Corporation, G.R. No. 171460, July 24, 2007)

The following contracts are unenforceable unless ratified:

1. Those entered into in the name of another person by 1 who has been given no authority or
legal representation, or who has acted beyond his powers;
2. Those that do not comply with the Statute of Frauds;
3. Those where both parties are incapable of giving consent to a contract. (Art. 1403, NCC)

242. What are the two principles in the statute of frauds?

1. Parol evidence is not admissible. However, there are 2 ways of bringing it out:
a. Failure to object by the opposing lawyer when parol evidence is used;
b. Acceptance of benefits (Art. 1405, NCC)

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 2. The Statute of Frauds applies only to executory contracts and not to those which have
been executed in whole or in part.

4. Void or inexistent contracts

243. What are void or inexistent contracts?

Void contracts are absolute nullity and produce no effect, as if it had never been executed or
entered into. (Francisco vs. Herrera, Ibid).

244. What are the characteristics of void and inexistent contracts?

1. The contract produces no effect whatsoever either against or in favor of anyone (Heirs of
Policarpio Ureta vs. Heirs of Liberato Ureta, G.R. 165748, September 14, 2011);
2. It cannot be confirmed, ratified or cured (Id.);
3. If it has been performed, the restoration of what has been given is in order, except if pari
delicto will apply;
4. The right to set the contract’s nullity cannot be waived;
5. The action for nullity is imprescriptible (Art. 1410, NCC);
6. Any person can invoke the contract’s nullity if its juridical effects are felt as to him.

245. What are the kinds of void or inexistent contracts?

The following contracts are inexistent and void from the beginning:
1. Those whose cause, object or purpose is contrary to law, morals. Good customs, public order
or public policy;
2. Those which are absolutely simulated or fictitious;
3. Those whose cause or object did not exist at the time of the transaction;
4. Those whose object is outside the commerce of men;
5. Those which contemplate an impossible service-no object;
6. Those where the intention of the parties relative to the principal object of the contract cannot
be ascertained;
7. Those expressly prohibited or declared void by law. (Art. 1409, NCC)

III. Natural Obligations

246. Distinguish between civil and natural obligations.

There are two essential distinctions between natural and civil obligations. They are:
1. Natural obligations are based on equity and natural law, whereas civil obligations are based
on positive law;
2. Natural obligations are not enforceable by court action, whereas civil obligations are
enforceable by court action. (Rabuya, Prebar Reviewer, 2021, p. 341)

SPECIAL CONTRACTS

I. SALES

A. Definition and Essential Requisites

247. What is a sale?

In a contract of sale, the seller transfers the property sold to the buyer for a consideration called
the price, which means ownership is transferred to the buyer upon its execution through any of

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 the modes of delivery or tradition. (Heirs of Corazon Villeza v. Aliangan, G.R. No. 244667-69, December 2, 2020,
J. Caguioa)

248. What are the essential requisites of a valid contract of sale?

a. Consent or meeting of the minds to transfer ownership in exchange for the price
b. Determinate or determinable subject matter – which refers to the determinate thing which is
the object of the contract.
c. Price certain in money or its equivalent.

249. May a minor enter into a contract of sale?

As a general rule, contracts entered into by minors and other incapacitated persons are voidable
(Arts. 1327 & 1390, NCC). However, where necessaries are sold and delivered to a minor, he must
pay a reasonable price therefor even if it was entered without the intervention of the parent or
guardian (Art. 1489[2]). The sale of real estate, made by minors who pretend to be of legal age,
when in fact they are not, is valid, and they will not be permitted to excuse themselves from the
fulfilment of the obligations contracted by them, or to have them annulled (Mercado and Mercado vs.
Espiritu, G.R. No. L-11872, December 1, 1917)

250. Does gross inadequacy of the price invalidate a contract of sale?

No. First, a contract enjoys the presumption that it is supported by an existing and lawful cause
or consideration. This presumption is disputable and may be overthrown by preponderance of
evidence to the contrary. Preponderance of evidence is the weight, credit, and value of the
aggregate evidence on either side and is usually considered to be synonymous with the term
"greater weight of evidence" or "greater weight of credible evidence." Second, notarized
documents, being public in nature, require no further proof of their authenticity and due
execution. They are entitled to full faith and credit on its face and are prima facie evidence of the
facts stated therein. To overturn this presumption of regularity, clear and convincing proof is
required. (Aquilino O. Pulino v. Heirs of Sps. Polino and Corazon Rom, G.R. No. 200608, February 10, 2021, J.
Hernando)

251. Is a Contract of Sale perfected by delivery?

No, contract of sale is perfected by mere consent and not by delivery. The contract of sale is
perfected at the moment there is a meeting of minds upon the thing which is the object of the
contract and upon the price (Art. 1475, NCC). However, there can be no ownership without delivery
and delivery need not be actual.

B. Contract of Sale

1.Contract to Sell

252. What is a contract to sell?

A contract to sell is a bilateral contract whereby the prospective seller, while expressly reserving
the ownership of the subject property despite delivery thereof to the prospective buyer, binds
himself to sell the said property exclusively to the prospective buyer upon fulfillment of the
condition agreed upon, that is, full payment of the purchase price. (Nabus v Pacson, GR No. 161318,
November 25, 2009, J. Peralta)

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253. What is the difference between contract to sell and contract of sale with regards to
the ownership of the thing?

In a contract to sell, title remains with the vendor and does not pass on to the vendee until the
purchase price is paid in full. Thus, in a contract to sell, the payment of the purchase price is a
positive suspensive condition. Failure to pay the price agreed upon is not a mere breach, casual
or serious, but a situation that prevents the obligation of the vendor to convey title from acquiring
an obligatory force. This is entirely different from the situation in a contract of sale, where non-
payment of the price is a negative resolutory condition. The effects in law are not identical. In a
contract of sale, the vendor has lost ownership of the thing sold and cannot recover it, unless
the contract of sale is rescinded and set aside. In a contract to sell, however, the vendor remains
the owner for as long as the vendee has not complied fully with the condition of paying the
purchase price. (Heirs of Gonzales v. Sps. Dominador, et al. G.R. No. 206847, June 15, 2022, J. Hernando)

2.Option Contract

254. What is the nature of an option contract?

It is a preparatory contract, separate and distinct from the main contract itself (subject matter of
the option) which the parties may enter into upon the consummation of the option. An option
must be supported by a consideration distinct from the price (De Leon, Comments and Cases on Sales
and Lease, 2005, p. 82).

255. What is the effect when an option contract is without a separate condition?

Option contract would be void, as a contract, but would still constitute a valid offer; so that if the
option is exercised prior to its withdrawal, that is equivalent to an offer being accepted prior to
withdrawal and would give rise to a valid and binding sale (De Leon, Comments and Cases on Sales and
Lease, 2005, p. 83).

3.Right of First Refusal

256. In a 20-year lease contract over a building, the lessee is expressly granted a right of
first refusal should the lessor decide to sell both the land and building. However, the
lessor sold the property to a third person who knew about the lease and in fact agreed
to respect it. Consequently, the lessee brings an action against both the lessor-seller
and the buyer (a) to rescind the sale and (b) to compel specific performance of his
right of first refusal in the sense that the lessor should be ordered to execute a deed
of absolute sale in favor of the lessee at the same price. The defendants contend that
the plaintiff can neither seek rescission of the sale nor compel specific performance
of a "mere" right of first refusal. Decide the case. (1998 Bar)

Yes, the action for rescission of the offending sale and specific performance of the right of first
refusal will prosper. In a case with similar facts (Equatorial Realty Dev., Inc. v. Mayfair Theater,
Inc., supra), the Court ruled to sustain both action to rescind the offending sale and the specific
performance because the buyer in the subsequent sale knew the existence of right of first refusal,
hence in bad faith.

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C. Earnest Money

257. What is earnest money?

Earnest money, called “arras,” is something of value to show that the buyer was really in earnest,
and given to the seller to bind the bargain. (See 14 Words and Phrases, p. 23). It is part of the purchase
price, hence, is a proof of the perfection of the contract (Art. 1482, NCC).

D. Double Sales

258. In double sale of property, does prior registration by the second buyer confer
ownership or better right over the property?

No. The prior registration of the disputed property by the second buyer does not by itself confer
ownership or a better right over the property. Article 1544 of the Civil Code requires that such
registration must be coupled with good faith. Jurisprudence teaches us that "the governing
principle is primus tempore, potior jure (first in time, stronger in right). Knowledge gained by the
first buyer of the second sale cannot defeat the first buyer's rights except where the second buyer
registers in good faith the second sale ahead of the first, as provided by the Civil Code. Such
knowledge of the first buyer does not bar her [or him] from availing of her [or his] rights under
the law, among them, to register first her [or his] purchase as against the second buyer. But in
converso, knowledge gained by the second buyer of the first sale defeats his [or her] rights even
if he [or she] is first to register the second sale, since such knowledge taints his [or her] prior
registration with bad faith. This is the price exacted by Article 1544 of the Civil Code for the
second buyer being able to displace the first buyer; that before the second buyer can obtain
priority over the first, he or she must show that he or she acted in good faith throughout (i.e., in
ignorance of the first sale and of the first buyer's rights) — from the time of acquisition until the
title is transferred to him or her by registration or failing registration, by delivery of possession "
(Heirs of Gonzales v. Sps. Dominador, et al. G.R. No. 206847, June 15, 2022, J. Hernando)

E. Risk of Loss

259. What is the effect of loss of thing at the time of sale?

When the thing which is the object of the contract has been entirely lost at the time the contract
of sale is perfected, the contract shall be without any effect. (Art. 1493[1], NCC). On the other hand,
when there is partial loss or when only a portion of the thing is lost or destroyed, the vendee
may elect between withdrawing from the contract and demanding the remaining part, paying its
proportionate price. (Art. 1493[2], NCC)

F. Breach of Contract of Sale

260. Kim sold a parcel of land to Red on 12 July 2015, payment and delivery to be made on
12 August 2015. It was stipulated that if payment were not to be made by Red on 12
August 2015, title would not pass and the sale between the parties would
automatically be rescinded. Red failed to pay on 12 August 2015, but offered to pay
three days later, which payment, Kim refused to accept, claiming that their contract
of sale had already been rescinded. Red contended that he should still be allowed to
pay as there has been no demand for rescission either judicially or by notarial act. Is
Red’s contention correct? Why?

No, Red is not correct. Article 1592 of the Civil Code, which provides that the vendee may pay
even after the expiration of the period as long as no demand for rescission has been made either
judicially or by notarial act, applies only to contracts of sale and not to contracts to sell or

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 conditional sales where title passes to the vendee only upon full payment of the purchase price
(Valarao v. CA, G.R No. 130347, March 3, 1999). Here, the contract executed by Kim and Red is not a
contract of sale but a conditional sale, where title would pass only after the full payment of the
price on the agreed date. Hence, Red is not correct in his basis to pay the price, three days after
the stipulated date.

1.Recto Law

261. Brick ‘n Tile (BNT) purchased several heavy machineries from Single Equipment
Philippines (SEP) for Php10 Million, payable in 36 monthly instalments. A chattel
mortgage was constituted on the same machineries as security for the amount. As
additional security, the President of BNT, Stan Smirk, mortgaged his personal house
and lot. BNT failed to pay the 16th and succeeding monthly instalments. SEP then
commenced a collection suit against BNT, and in the course of the proceedings, a writ
of attachment was issued against BNT’s properties, including the mortgaged
machinery. The attached properties were subsequently sold at public auction, but the
proceeds thereof were insufficient to satisfy the judgment credit.

a) Can SEP legally recover the deficiency?

b) Instead of collecting the deficiency, can SEP commence extrajudicial proceedings
to foreclose the mortgage on Stan’s house and lot in order to recover the
deficiency?

a) Yes, SEP can legally recover the deficiency. Under jurisprudence, if there has been no
foreclosure of the chattel mortgage nor a foreclosure sale, the prohibition against further
collection under the Recto Law does not apply. Here, there has been no foreclosure of
the chattel mortgage nor a foreclosure sale and instead, SEP instituted a collection suit.
Hence, should the proceeds resulting from public auction be insufficient, SEP can legally
recover the deficiency. (Sps. Rosario vs. PCI, G.R. No. 139233, November 11, 2005)

b) No, SEP cannot foreclose the mortgage in lieu of collection of deficiency. Foreclosure of
mortgage and collection of deficiency under the Recto Law, are alternative, and not
cumulative. The exercise of one would bar the exercise of others. Here, SEP already
chose to institute a collection suit. This barred the remedy of extrajudicial foreclosure.
Thus, SEP cannot commence extrajudicial proceedings to foreclose the mortgage on
Stan’s house and lot in order to recover the deficiency. (Ibid.)

2. Maceda Law

262. Dean entered into a purchase agreement with Filinvest over a lot in Morong, Rizal.
The total contract price was P2,000,000, payable on monthly instalment for four
years. From January 12, 2003 to February 15, 2005, Orbe paid a total of P750,030.20,
mainly through several Metrobank checks. Dean was unable to make further
payments allegedly on account of financial difficulties. Filinvest sent a notice of
cancellation. Noting that efforts to seek for a reconsideration of said cancellation
proved futile, and that the parcel had since been sold by Filinvest in evident bad faith,
Dean filed against Filinvest a complaint for refund with damages. Can Dean avail the
benefits under Section 3 of Maceda Law?

No, Dean cannot avail of the benefits under Section 3 of the Maceda Law. When the Maceda
Law speaks of paying "at least two years of installments", it refers to the proportionate value of
the instalments made, as well as the payments having been made for at least 2 years. It does
not only refer to the period when the buyer has been making payments, with total disregard for
the value that the buyer has actually conveyed. When the buyer's payments fall short of the

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 equivalent of two (2) years' worth of instalments, the buyer may not avail of the benefits under
Section 3 (Orbe vs. FilInvest, G.R. No. 208185, September 06, 2017 ). Here, Dean’s total
payments from January 12, 2003 to February 15, 2005, did not amount to the aggregate value
of 24 monthly installments, or at least Php1,000,000.00 for the same period. Hence, Dean cannot
avail of the benefits under Section 3 of the Maceda Law.

G. Extinguishment of Sale

263. What are the modes of extinguishment in a Contract of Sale?

Sales are extinguished by the following (Art. 1600, NCC):

1. The same causes as all other obligations as enumerated in Article 1231:
a. Payment/performance
b. Prescription
b. Loss of thing due
c. Annulment
d. Novation
e. Condonation/remission
f. Confusion/merger
g. Compensation
h. Rescission
i. Resolutory condition fulfilled
j. Redemption (Conventional or Legal)
2. By Conventional Redemption;
3. By Legal redemption.

264. Does payment or performance extinguish the contract of sale itself?

No, payment or performance only extinguishes the obligations to which they pertain to in a
contract of sale, but not necessarily the contract itself since the relationship between buyer and
seller remains after the performance or payment, such as the continuing enforceability of
warranties of the seller. (Villanueva, Law on Sales, 2009, p. 515)

1. Conventional Redemption

265. How to determine the period in conventional redemption?

a. When no period is fixed, if the right of redemption was agreed upon but there was no
stipulation as to the period within which the right shall be exercised, the period of redemption
shall be four years from the date of the contract (Art. 1606, NCC).

b. When a period is fixed by the parties:

i. If the period does not exceed ten years- such as when the right to repurchase shall be
exercised within five years, then the period shall be five years from the date of the contract.
If the period exceeds ten years, then the period shall be ten years from the date of the
contract, the stipulation as to the excess being null and void (Montiero vs. Salgado, G.R. Nos.
7287, 7288, March 29, 1914).

ii. When the period agreed upon is indefinite, such as when the repurchase may be made “at
any time”, the repurchase may be exercised within ten years from the date of the contract.

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 iii. In case there was a civil action between the parties the vendor may still exercise the right
to repurchase within thirty days from the time final judgment was rendered in a civil action
on that basis that the contract was a true sale with a right to repurchase (Art. 1606, NCC).

2.Legal Redemption

266. What is the period of legal redemption?

The right of legal redemption shall not be exercised except within 30 days from the notice in
writing by the prospective seller, or seller, as the case may be. The deed of sale shall not be
recorded in the Registry of Property unless accompanied by an affidavit of the seller that he has
given written notice thereof to all possible redemptioners (Art. 1623, NCC).

H. Equitable Mortgage

267. On July 14, 2004, Pedro executed in favor of Juan a Deed of Absolute Sale over a
parcel of land covered by TCT No. 6245. It appears in the Deed of Sale that Pedro
received payment from Juan of P120,000.00 as purchase price. However, Pedro
retained the owner's duplicate of said title. Thereafter, Juan, as lessor, and Pedro, as
lessee, executed a contract of lease over the property for a period of one (1) year
with a monthly rental of P1,000.00. Pedro, as lessee, was also obligated to pay the
realty taxes on the property during the period of lease. Subsequently, Pedro filed a
complaint against Juan for the reformation of the Deed of Absolute Sale, alleging that
the transaction covered by the deed was an equitable mortgage. Juan alleged that
the property was sold to him under the Deed of Absolute Sale, and interposed
counterclaims to recover possession of the property and to compel Pedro to turn over
to him the owner's duplicate of title. Resolve the case with reasons.

The complaint of Pedro against Juan should be dismissed. The instances when a contract may be
presumed to be an equitable mortgage are enumerated in Article 1602 of the Civil Code:

1. When the price of a sale with right to repurchase is unusually inadequate

2. When the vendor remains in possession as lessee or otherwise
3. When upon or after the expiration of the right to repurchase, another instrument extending the
period of redemption or granting a new period is executed
4. When the purchaser retains for himself a part of the purchase price
5. When the vendor binds himself to pay the taxes on the thing sold
6. In any other case where it may be fairly inferred that the real intention of the parties is that the
transaction shall secure the payment of a debt or the performance of any other obligation.

I. Pacto de Retro Sale

268. What is a Conventional Redemption (Pacto de Retro)?

Conventional Redemption exists when the vendor reserves the right to repurchase the thing sold with
the obligation to reimburse to the vendee the price of the sale, the expenses of the contract, other
legitimate payments made by reason of the sale, as well as necessary and useful expenses made on
the thing sold (Arts. 1601 and 1616, NCC).

II. LEASE

A. Kinds of Lease
1. Contract of Lease (proper) – it is a lease of things, or when the subject matter is a thing.

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2. Contract for Piece of Work – it is a lease of service, or when the subject matter is a service. (Art. 1642,
NCC)

B. Rights and obligations of the lessor

269. In the event that improvements are introduced to the land subject of a lease
agreement, and the lease is terminated without fault of the parties, what are the
rights of the landowner-lessor and the lessee who caused the improvements?

The Lessee has the right to remove the building and other improvements unless the landowner
decides to retain the building at the time of the termination of the lease and pay the lessee one-
half of the value of the improvements at that time. The lessee may remove the building even
though the principal thing may suffer damage but should not cause any more impairment upon
the property leased than is necessary. The lessee is not a builder in good faith because as lessee
he does not claim ownership over the property leased. The landowner/lessor may refuse to
reimburse 1/2 of the value of the improvements and require the lessee to remove the
improvements. (Art. 1678, NCC)

C. Rights and obligations of the lessee

270. State the rule on the assignment of lease to a third person and the subleasing of the
premises to a third person.

The lessee of real property may not assign the lease to a third person without the lessor’s consent,
unless there is a stipulation in the contract of lease to the contrary. On the other hand, the lessee
may sublease the premises to a third person without the consent of the lessor, unless there is an
express prohibition in the contract of lease. (Arts. 1649-1650, NCC)

III. AGENCY

A. Nature, form and kinds

271. What are the nature and characteristics of a contract of agency?

It is a principal, preparatory, bilateral, onerous, consensual, nominate and commutative contract.
This means that it is a contract that can stand by itself; a means by which other contracts may
be entered into; parties are bound reciprocally to each other; presumed to be for a compensation,
unless there is proof to the contrary. (Art. 1875, NCC); perfected by mere consent; has a name given
to it by law. (Art. 1868, NCC); and it is commutative as parties give and receive almost equivalent
values hence, there is real fulfillment (De Leon, Comments and Cases on Partnership, Agency, and Trusts, 2010,
p. 325).

B. Obligations of the Agent

272. What are the obligations of the agent to the principal?

The following are the obligations of the agent to the principal:

1. To carry out the agency which he has accepted (Art. 1884, NCC);
2. To be liable for damages, which, through his non-performance, the principal may suffer ( Art.
1884, NCC);
3. To finish business already begun, on the death of the principal, should delay entail any danger
(Art. 1884, NCC);
4. If he declines the agency, to observe diligence of a good father of a family in custody and
preservation of goods forwarded to him by the owner until the latter appoints an agent (Art.
1885, NCC);

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 5. To advance necessary funds should there be a stipulation to do so, except when the principal
is insolvent (Art. 1886, NCC);
6. To act in accordance with the instructions of the principal. In default thereof, to do all that a
good father of a family would do, as required by the nature of the business (Art. 1887, NCC);
7. Not carry out an agency if its execution would manifestly result in loss or damage to the
principal (Art. 1888, NCC);
8. To be liable for damages if, there being a conflict between his interests and those of the
principal, he should prefer his own (Art. 1889, NCC);
9. If he has been authorized to lend money at interest, he cannot borrow it without the consent
of the principal (Art. 1890, NCC);
10. To render an account of his transactions 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 (Art.
1891, NCC);
11. To be responsible for the interest on the sums he has applied to his own use from the day
on which he did so, and on those which he still owes after the extinguishment of the agency
(Art. 1896, NCC); and
12. To be responsible not only for fraud, but also for negligence, which shall be judged with more
or less rigor by the courts, according to whether the agency was or was not for compensation
(Art. 1909, NCC).

273. What is the liability of the principal if the agent has exceeded his authority but was
allowed by the former?

The agent and principal are solidary liable. An agent is deemed to have acted within the scope
of his authority as to third persons if the contract is beyond the scope of agent’s authority and
the principal allowed the agent to act as though the latter had full powers, in which case, the
principal is solidarily liable with the agent (Art. 1911, NCC).

C. Obligations of the Principal

274. What are the obligations of the principal?

In the absence of agreement, the primary obligations of a principal are: to comply with all the
obligations which the agent may have contracted within the scope of his authority (Art. 1910, NCC);
to advance to the agent, should the latter so request, the sums necessary for the execution of
the agency (Art. 1912 (1), NCC); to reimburse the agent therefore, even if the business or undertaking
was not successful, provided the agent is free from all fault (Art. 1912 (2), NCC); to indemnify the
agent for all the damages which the execution of the agency may have caused the latter, without
fault or negligence on his part (Art. 1913, NCC); and to pay the agent compensation agreed upon
or the reasonable value of the latter’s services.

D. Modes of extinguishment

275. What are the modes of extinguishment of an Agency?

To following are some modes of extinguishment of an agency:

a. By its revocation;
b. By the withdrawal of the agent;
c. By the death, civil interdiction, insanity or insolvency of the principal or of the agent;
d. By the dissolution of the firm or corporation which entrusted or accepted the agency;
e. By the accomplishment of the object or purpose of the agency;
f. By the expiration of the period for which the agency was constituted. (Art. 1919, NCC)

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276. What are the instances when an agency continues even after the death of a principal?

1. In cases when an agency is coupled with a common interest.

2. If it’s coupled with the interest of a third person who has accepted the stipulation in his favor.
It is a well-settled general rule that if the authority of an agent is coupled with an interest, it
is not revocable by the death, act, or condition of the principal, unless there is some
agreement to the contrary between the parties. (Art. 1930, NCC)

277. If the agent dies, what will be the legal consequences by virtue of his/her death?

If the heirs of the dead agent are unable to give notice, one good measure for them to do is to
consign the object or property of the agency in court. In this way, they can still protect the
interests of the principal, who trusted their predecessor in interest. The heir’s duty arises from
what may be termed as a presumed agency or tacit agency or an agency by operation of law.
(Art. 1932, NCC)

IV. Credit Transactions

A. Loan

It is a contract where 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 is called a
commodatum; or money or other consumable things, 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
(NCC, Art. 1933)

1. Kinds of Loan
1. Commodatum – where the bailor (lender) delivers to the bailee (borrower) a non-
consumable thing so that the latter may use it for a given time and return the same thing
(i.e. identical thing).
An essential feature of the commodatum that the use of the thing belonging to another
shall for a certain period. (Mina vs. Pascual, G.R. No. L-8321, October 14, 1913); and

2. Mutuum or Simple Loan – where the lender delivers to the borrower money or other
consumable thing upon the condition that the latter shall pay same amount of the same
kind and quality.
It involves the return of the equivalent amount only and not the identical thing because
the borrower acquires ownership of the money or the consumable thing loaned (Art. 1978,
NCC)

278. Differentiate mutuum from commodatum.

COMMODATUM MUTUUM

As to the type Loan of Use (Art. 1935, NCC) Loan of Consumption

As to purpose Use of the thing borrowed and the obligation to
return the very same thing. (Arts. 1933, NCC)
NOTE: Use of the fruits is not included, unless
expressly provided for in the contract. (Arts. 1935
and 1940, NCC)
To consume the thing borrowed and with the
obligation to repay its equivalent in kind, quality
and quantity. (Arts. 1953, NCC)

As to object May either be Movable or Immovable, and if it is
movable property, it is ordinarily consumable. (Art.
1937, NCC)
GR: The object of the contract non-fungible or non-
consumable.
Object is always movable property and it is
always money or the other consumable
property.

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 XPN: The object may be consumable, provided that
the purpose is not for consumption but for
exhibition. (Art. 1936, NCC)

As to Essentially gratuitous May be gratuitous or onerous.

consideration NOTE: If onerous or compensation is paid, then the (Example: if interest is payable)
contract may be Lease. (Art. 1935, NCC)

As to ownership Bailor/Lender retains ownership of the thing Bailee/borrower becomes the owner of the
of the thing delivered. (Art. 1933, NCC) thing delivered.

The bailor/lender need not be the owner of the The lender must be the owner or at least
thing loaned. (Art. 1938, NCC) capable of transferring ownership.

As to duty of There is an obligation to return the very same / The bailee or the borrower becomes the owner;
borrower specific thing loaned. hence, there is no obligation to return the very
same thing loaned, but only to pay its
equivalent in kind, quality and quantity

As to the effect of Death of the lender or the borrower extinguishes Death of the lender does not extinguish the
the death of the commodatum because it is purely personal in loan. It is not purely personal.
lender character. (Art. 1939[1], NCC)

As to who bears Generally, the bailor bears the loss of the thing due The bailee-borrower bears the loss of the thing
the loss to fortuitous event. delivered. (Res Perit Domino)

As to when it is GR: For the return of the thing, the lender must The lender-bailor must wait for the expiration of
extinguished wait for the expiration of the period agreed upon or the period agreed upon for the payment of the
the accomplishment of the use for which the loan.
commodatum has been constituted. (Art. 1946,
NCC)
XPNs:
(1) In case of Urgent Need;
(2) In Precarium;
(3) In case of acts of ingratitude by the bailee.
(Rabuya, Pre-bar Reviewer in Civil Law, 2021, p. 515; Paras, Comments and Cases on Credit Transactions)

2. Interest
It is the compensation to be paid by the borrower for the use of the money lent to him by the
lender. It is paid either as compensation for the use of money (monetary interest) or as
damages (compensatory interest). (Andreas vs. Bank of the Philippine Islands, G.R. No. 23836, September 9,
1925; Asian Terminals, Inc., vs. Padoson Stainless Steel Corporation, G.R. No. 211876, June 25, 2018)

Kinds of Interest:
1. Simple interest – that which is paid for the principal at a certain rate fixed or stipulated
by the parties (Art. 2209, Civil Code);
2. Compound interest – that which is imposed interest due and unpaid. The accrued
interest is added to the principal sum and the whole is treated as a new principal upon
which the interest for the next period is calculated (Arts. 1959, 2212);
3. Legal interest – that which the law directs to be charged in the absence of any agreement
as to the rate between the parties (Art. 2209);

Rate of Legal Interest: The legal rate of interest is now 6% per annum even for
loans/forbearance of money, goods, or credit under BSP Circular No. 799, Series of 2013 dated
June 21, 2013 that took effect on July 1, 2013. (Nacar vs. Gallery Frames, Inc., G.R. No. 189871, August
13, 2013; Sps. Andal v. PNB, G.R. No. 19420, November 27, 2013)

4. Lawful interest – that which the laws allow or do not prohibit.

5. Unlawful or usurious interest - any amount of interest paid or stipulated to be paid in
excess of that fixed by law is considered usurious, therefore, unlawful. (Art. 1413, NCC)

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 6. Monetary or conventional interest - compensation set by the parties for use or
forbearance of money. (Lara's Gifts & Decors, Inc. vs. Midtown Industrial Sales, Inc., G.R. No. 225433.
August 28, 2019)

Unconscionable Interest Rates

Although the parties are "free to stipulate their preferred rate," the courts are "allowed to equitably
temper interest rates that are found to be excessive, iniquitous, unconscionable, and/or exorbitant."
Thus, stipulated interest rates of "3% per month or higher is considered as excessive or
unconscionable." Alternatively, as per settled jurisprudence, a 24% per annum (or 2% per month) rate
is not unconscionable. Taking these into account, the interest rate of 14.25% per annum (or 1.1875%
per month) upon the principal obligation in the case at bench should is considered as a fair rate. (Goldwell
Properties Tagaytay, Inc. V. Metropolitan Bank and Trust Company G.R. No. 209837, May 12, 2021, Third Division, Hernando,
J.)

7. Compensatory/Penalty/Indemnity interest - interest that may be imposed by law or by courts

as penalty for damages (Hun Hyung Park vs. Eung Won Choi, G.R. No. 220826, March 27, 2019). This refers to
damages paid arising from delay in paying a fixed sum of money or delay in assessing and paying
damages. (Sps. Abella vs. Sps. Abella, G.R. No. 195166, July 9, 2015)

Penal/compensatory interest, it is characterized as "an undertaking attached to a principal obligation"

and has two purposes: "firstly, to provide for liquidated damages; and, secondly, to strengthen the
coercive force of the obligation by the threat of greater responsibility in the event of breach of
obligation." Moreover, "a penal clause is a substitute indemnity for damages and the payment of
interests in case of noncompliance, unless there is a stipulation to the contrary," pursuant to Article
1226 of the Civil Code. If the parties stipulate that there is a penalty interest separate from monetary
interest, these two kinds of interest should be treated different and distinct from each other and may
be demanded separately. A penalty interest is sanctioned by Article 2229 of the Civil Code which states:
If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the
indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest
agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per annum.
(Goldwell Properties Tagaytay, Inc. V. Metropolitan Bank And Trust Company G.R. No. 209837, May 12, 2021, Third Division,
Hernando, J.)

B. Deposit
A contract constituted from the moment a person receives a thing belonging to another with
the obligation of safely keeping it and returning the same. If the safekeeping of the thing
delivered is not the principal purpose of the contract, there is no deposit but some other
contract (Art. 1962, NCC)

Judicial or Sequestration Deposit

Judicial Deposit or sequestration takes place when an attachment or seizure of property in litigation
is ordered (Art. 2005, NCC).

JUDICIAL EXTRA-JUDICIAL
Creation By order of the court. By the will of the parties or by contract.
Purpose For security or to insure the right of a party For custody and safekeeping
to a property or to recover in case of
favorable judgment
Subject Matter Movables or immovable, but generally Movables only.
immovable
Cause Always onerous Maybe onerous or gratuitous
When must the Upon order of the court or when litigation Upon demand of the depositor
thing be returned is ended.

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279. When is a depositary liable for the loss of thing through fortuitous event?

The depositary is liable for the loss of the thing through a fortuitous event:
1. If it is so stipulated;
2. If he uses the thing without the depositor’s permission;
3. If he delays its return;
4. If he allows others to use it, even though he himself may have been authorized to use the
same. (Art. 1979, NCC)

280. What contract, if any, was perfected between a car owner and a hotel when the car
owner surrendered the key to his car to the hotel’s parking attendant?

The contract is a necessary deposit. Under Art. 1998 of the NCC, a deposit of effects made by
travelers or guests in hotels or inns is considered a necessary deposit. Under Art. 1999 of the
NCC, the necessary deposit includes not only the personal effects brought inside the hotel
premises but also vehicles, animals, and articles which have been introduced or placed in the
annexes of the hotel.

281. What is the liability, if any, of the hotel for the loss of such car?

Under Art. 1999, the hotel-keeper is liable for the vehicles, animals, and articles which have been
introduced or placed in the annexes of the hotel. The contract of deposit was perfected when the
guest surrendered the keys to his vehicle to the parking attendant and the hotel is under the
obligation of safely keeping and returning it. Accordingly, the hotel is liable for the loss of the
vehicle.

282. When hotel-keeper not liable

When the loss or injury is caused by:

1. Force majeure, theft or robbery by a stranger with the use of irresistible force;
2. The acts of guests, his family, servants or visitors; or
3. Arises from the character of the things brought into the hotel. (Art. 2000, NCC)

C. Guaranty and Suretyship

Guaranty
By guaranty, a person, called the guarantor, binds himself to the creditor to fulfill the obligation
of the principal debtor in case the latter should fail to do so. (Art. 2047, NCC)

Surety
A contract of surety is an agreement where a party called the surety guarantees the
performance by another party called the principal or obligor of an obligation or undertaking in
favor of a third party called the obligee. Specifically, suretyship is a contractual relation resulting
from an agreement whereby one person, the surety, engages to be answerable for the debt,
default or miscarriage of another, known as the principal. (Visayan Surety & Insurance Corp.
vs. Court of Appeals, G.R. No. 127261, September 7, 2001)

Suretyship is deemed to be an insurance contract only if made by a surety who or which, as

such, is doing an insurance business, i.e., making or proposing to make, as surety, any contract
of suretyship as a vocation and not merely incidental to any other legitimate business or activity
of the surety. (De Leon, The Insurance Code of the Philippines, 2010, p. 42)

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283. Surety Distinguished from Guaranty

GUARANTY SURETYSHIP

As to existence Liability depends upon an independent Surety assumes liability as regular party
of liability agreement to pay the obligation if the to the undertaking.
primary debtor fails to do so.

As to collateral Collateral undertaking Original promisor

As to order of Guarantor is secondarily liable. Surety primarily liable.

liability

As to what is Insurer of the insolvency of debtor. Insurer of the debt.

protected

As to availment Guarantor can avail of benefit of Surety cannot avail of such benefit.
of the benefit of excussion and division in case the creditor
excussion proceeds against him.

As to when liable Guarantor binds himself to pay if the Surety undertakes to pay if the principal
to pay principal CANNOT PAY. does not pay.

As to notice Not bound to take notice of the non- Held to know every default of his principal
requirement performance of his principal

As to when Often discharged by the mere indulgence Not discharged by mere indulgence of the
discharged of the creditor or want of notice of creditor or want of notice of default.
default.

As to the right to Has the right to have all the property of Not entitled to the benefit of exhaustion
the the debtor and legal remedies against the of the debtor’s assets.
property/assets debtor first exhausted before he can be
of the debtor compelled to pay the creditor.

Guaranty and surety are nearly related for there is a promise to answer for the debt or default of
another. Surety is usually bound with his principal by the same instrument executed at the same time
and on the same consideration. The guarantor’s own separate undertaking is often supported by a
consideration separate from that supporting the contract of the principal; the original contract of his
principal is not his contract. (Phil. Export & Foreign Loan Guarantee Corp. vs. V.P. Usebio Construction, Inc., G.R. No.
140047, July 13, 2004)

284. Can a creditor proceed against anyone who is solidarily liable under the Deed of
Suretyship?

Under Article 1216, the creditor may proceed against any one of the solidary debtors or some or
all of them simultaneously. The demand made against one of them shall not be an obstacle to
those which may subsequently be directed against the others, so long as the debt has not been
fully collected. (Spouses Calvin Luther R. Genotiva and Violet S. Genotiva V. Equitable-PCI Bank (Now Banco De Oro
Unibank, Inc.), G.R. No. 213796, June 28, 2021, Third Division, Hernando, J.)

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285. What is meant by the “benefit of excussion”?

It means that the guarantor cannot be compelled to pay the creditor unless the latter has
exhausted all the property of the principal debtor, and has resorted to all of the legal remedies
against debtor. (Art. 2058, NCC)

286. What is the benefit of division?

Should there be several guarantors of only one debtor and for the same debt, the obligation to
answer for the same is divided among all. The creditor cannot claim from the guarantors except
the shares which they are respectively bound to pay, unless solidarity has been expressly
stipulated. (Art. 2065, NCC)

287. What is the extent of the “right to indemnification” of the guarantor against the
principal debtor?

General Rule: A guarantor who pays for a debtor shall be indemnified by the latter and shall be
legally subrogated to the rights which the creditor has against the debtor.

Exception: A person who pays without the knowledge or against the will of the debtor has the
right to recover only insofar as the payment has been beneficial to the debtor. If the obligation
was subject to defenses on the part of the debtor, the same defenses which could have been set
up against the creditor can be set up against the paying guarantor. (Philippine Export and Foreign Loan
Guarantee Corporation vs. V.P. Eusebio Construction, Inc., G.R. No. 140047, July 13, 2004)

288. What is a letter of credit?

A letter of credit is a written instrument whereby the writer requests or authorizes the addressee
to pay money or deliver goods to a third person and assumes responsibility for payment of debt
therefore to the addressee. (Transfield Philippines, Inc. vs. Luzon Hydro Corp, G.R. No. 146717, November 22,
2004)

289. Surety Distinguished from Standby Letter of Credit

STANDBY LETTER OF CREDIT SURETYSHIP

As to the effect of The beneficiary reasonably expects that he
nonperformance will receive cash in the event of
of the obligation nonperformance. The Standby letter of credit
has this opposite effect of the surety
contract: it reverses the financial burden of
parties during litigation.
Upon obligor’s default, the surety undertakes to
complete the obligor’s performance, which often
involves costs of determining whether the obligor
defaulted (a matter over which surety and the
beneficiary often litigate) plus the cost of
performance.

As to litigation In standby credit, the beneficiary avoids the In the surety contract setting, there is no duty to
requirement burden of litigation and receives his money indemnify the beneficiary until the beneficiary
promptly upon presentation of the required establishes the face of the obligor’s performance.
documents. It may be that the applicant has, The beneficiary may have to establish the fact in
performed his obligation and that the litigation.
beneficiary’s presentation of those
documents is not rightful.

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 As to who holds During litigation to determine whether the During the litigation, the surety holds the money
the money applicant has in fact breached the obligation and the beneficiary bears most of the cost of
to perform, the beneficiary, not the applicant, delay in performance.
holds the money.

Parties that use a standby credit and courts construing such a credit should understand this
allocation of burdens. There is a tendency in some quarters to overlook this distinction between
surety contracts and standby credit and to reallocate burdens by permitting the obligor or the
issuer to litigate the performance question before payment to the beneficiary. (Transfield Philippines,
Inc. vs. Luzon Hydro Corporation, et al., G.R. No. 146717, November 22, 2004, citing J. Dolan, The Law on Letters of
Credit, Revised Ed. 2000)

290. Distinguish Suretyship from Guaranty

SURETYSHIP GUARANTY

What is insured A surety is an insurer of debt. A guarantor is an insurer of the solvency

of the debtor.

Undertaking An undertaking that the debts shall be An undertaking that the debtor shall pay.
involved paid. Guarantor agrees that the creditor, after
Surety promises to pay the principal’s debt proceeding against the principal, may
if the principal will not pay. proceed against the guarantor if the
principal is unable to pay.

Nature of A surety is primarily liable to the creditor. A guarantor is secondarily or subsidiarily

liability liable to the creditor.

D. Real Estate Mortgage

A real estate mortgage is a contract in which the debtor guarantees to the creditor the
fulfillment of a principal obligation, subjecting for the faithful compliance therewith a real
property in case of non-fulfillment of said obligation at the time stipulated. (Manresa) It is a
lien on specific or identified immovable property. It directly and immediately subjects the
property upon which it is imposed, whoever the possessor may be, to the fulfillment of the
obligation for whose security it was constituted. It creates a real right enforceable against the
whole world. (DBP v. NLRC, 183 SCRA 328 [1990])

291. What is foreclosure of mortgage?

It is a remedy available to the mortgagee by which he subjects the mortgaged property to the
satisfaction of the obligation.

When the mortgagee chooses the foreclosure of the mortgage as a remedy, he enforces his lien
by the sale on foreclosure of the mortgaged property. The proceeds of the sale will be applied to
the satisfaction of the debt. With this remedy, he has a prior lien on the property. In case of a
deficiency, the mortgagee has the right to claim for the deficiency resulting from the price
obtained in the sale of the real property at public auction and the outstanding obligation at the
time of the foreclosure proceedings. (Soriano v. Enriquez, 24 Phil. 584; Banco de Islas Filipinas v. Concepcion
Hijos, 53 Phil. 86; Banco Nacional v. Barreto, 53 Phil. 101) On the other hand, if the mortgagee resorts to

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 an action to collect the debt, he thereby waives his mortgage lien. He will have no more priority
over the mortgaged property. (Caltex Philippines, Inc., Petitioner, vs. The Intermediate Appellate Court and
Herbert Manzana, G.R. No. 74730. August 25, 1989)

292. What constitutes a null and void extra judicial foreclosure of mortgage?

Well-settled is the rule that personal notice to the mortgagor in extrajudicial foreclosure
proceedings is not necessary. Section 3 of Act No. 3135, as amended by Act No. 4118, requires
only the posting of the notice of sale in three public places and the publication of that notice in
a newspaper of general circulation. An exception to this rule is when the parties stipulate that
personal notice is additionally required to be given to the mortgagor. Failure to abide by the
general rule or its exception renders the foreclosure proceedings null and void. (Panacan Lumber Co.,
Antonio B. Go, Ma. Teresa C. Go And Dorotea B. Go Vs. Solidbank Corp. G.R. No. 226272, September 16, 2020, Second
Division (Hernando, J.)

293. May a mortgagor in a mortgage contract be liable for other loan obligations?

No. As a general rule, a mortgage liability is usually limited to the amount mentioned in the
contract. However, the amounts named as consideration in a contract of mortgage do not limit
the amount for which the mortgage may stand as security if from the four corners of the
instrument the intent to secure future and other indebtedness can be gathered.

A mortgage that provides for a dragnet clause is in the nature of a continuing guaranty and
constitutes an exception to the rule that an action to foreclose a mortgage must be limited to the
amount mentioned in the mortgage contract. Although a blanket mortgage or a dragnet clause
is generally recognized as valid, these other obligations, past or future, secured by the REM must
be specifically described within the terms of the mortgage contract. (Panacan Lumber Co., Antonio B.
Go, Ma. Teresa C. Go And Dorotea B. Go Vs. Solidbank Corp. G.R. No. 226272, September 16, 2020, Second Division
(Hernando, J.)

294. Can partial release of the collaterals be allowed?

No. Article 2089 of the Civil Code states that, a pledge or mortgage is indivisible, even though
the debt may be divided among the successors in interest of the debtor or of the creditor.
Therefore, the debtor's heir who has paid a part of the debt cannot ask for the proportionate
extinguishment of the pledge or mortgage as long as the debt is not completely satisfied.

295. What is pactum commissorium?

A stipulation whereby the thing pledged or mortgaged or under antichresis shall automatically
become the property of the creditor in the event of nonpayment of the debt within the term fixed.
It is forbidden by law and declared null and void. (Art. 2088; Vda. de Reyes vs. De Leon, 20 SCRA 369
[1967]; Hechanova vs. Adil, 144 SCRA 450 [1986]) By such a stipulation, the creditor would be able to
acquire ownership of the property given as security without need of public sale or foreclosure
required by law.

296. What is the effect of pactum commissorium?

Article 2088 of the Civil Code provides that the creditor cannot appropriate the things given by
way of pledge or mortgage, or dispose of them. Any stipulation to the contrary is null and void.
The mortgagor's default does not operate to automatically vest on the mortgagee the ownership
of the encumbered property. (Dacquel V. Spouses Sotelo G.R. No. 203946, August 4, 2021, Second Division
(Hernando, J.)

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297. What is the remedy of the mortgage-creditor?

A mortgage-creditor has single cause of action against a mortgage-debtor, which is to recover

the debt, but he has the option of either filing a personal action for collection of sum of money
or instituting a real action to foreclose on the mortgage security. Nevertheless, a creditor who
elects to foreclose may yet fi le an independent civil action for recovery whatever deficiency may
remain. (Tanchan vs. Allied Banking Corp., 571 SCRA 512 [2008])

He may institute two alternative remedies against mortgage debtor, either a personal action for
the collection of debt or a real action to foreclose the mortgage, but not both, simultaneously or
successively. Although we recognize that the right of the mortgage creditor to recover the
deficiency when the mortgaged properties are not enough to satisfy the entire obligation, the
action is only instituted after the termination of the foreclosure proceedings and not during its
pendency, so as not to violate the prohibition against splitting of cause of action. (Asset Pool A
(Spv-Amc), Inc. V. Spouses Buenafrido and Felisa Berris G.R. No. 203194, April 26, 2021, Third Division, (Hernando, J.)

Redemption of Mortgage

Redemption is a transaction by which the mortgagor reacquires or buys back the property which
may have passed under the mortgage or divests the property of the lien which the mortgage
may have created.

The debtor (natural person) has the right to redeem the property sold within the term of one
year from and after the date of the sale. (Sec. 6, Act No. 3135)

E. Antichresis

Antichresis is a contract whereby the creditor acquires the right to receive the fruits of an immovable
of the debtor, with the obligation to apply them to the payment of interest, if owing, and thereafter
to the principal of his credit (Art. 2132, NCC; 1995, 1996, 2007 BAR)

Characteristics of an Antichresis Contract.

1) an accessory contract because it secures the performance of a principal obligation. Manresa,

however, believes that it is an independent contract (Manresa); and
2) a formal contract because it must be in a specified form to be valid, i.e., “in writing.” (Art. 2134,
NCC)

298. Is the delivery of property required in a contract of antichresis?

Yes. Antichresis requires delivery of the property to the antichretic creditor. But such delivery is
required only in order that the creditor may receive the fruits and not that the contract shall be
binding. The contract does not cover the immovable but only its fruits. (De Leon, Comments on Credit
Transactions, 2016 Ed p. 474)

The latter cannot ordinarily acquire this immovable property in his or her possession by
prescription. An antichretic creditor also cannot appropriate the real property in his or her favor
upon the non-payment of the debt. (Amada Cotoner-Zacarias Vs Spouses Alfredo and The Heirs Revilla of Paz
Revilla G.R. No. 190901, November 12, 2014)

299. Is the obligation to pay interest essential in a contract of antichresis?

No. The obligation to pay interest is not of the essence of the contract of antichresis, any more
than it is indispensable in a contract of loan.

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 The words “if owing” (interest) reveal that it is not essential that the loan should earn interest in
order that it can be guaranteed with a contract of antichresis, there being nothing in the Code to
show that antichresis is only applicable to securing the payment of interest-bearing loans. On the
contrary, antichresis is susceptible of guaranteeing all kinds of obligations, pure or conditional.
(Javier vs. Valliser, [CA] No. 2648-R, April 29, 1950; Sta. Rosa vs. Noble, 35 O.G. 27241)

Determination of the Amount Paid in Antichresis

The amount of payment in antichresis is determined the actual market value of the fruits at the
time of the application thereof to the interest and the principal shall be the measure of such
application (Art. 2133, NCC).

V. Compromise

A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a

litigation or put an end to one already commended (Art. 2028, NCC).

300. Instances where civil action or proceeding shall be suspended:

a. If willingness to discuss a possible compromise is expressed by one or both parties; and

b. If it appears that one of the parties, before the commencement of the action or proceeding,
offered to discuss a possible compromise but the other party refused the offer (Art. 2030, NCC).

301. Compromise agreement between the creditor and the principal debtor

A compromise between the creditor and the principal debtor is valid if the compromise is
beneficial to the guarantor; otherwise, it is not binding upon him (Art. 2063, NCC).

In a compromise between the creditor and the guarantor to the principal debtor, if compromise
is beneficial to the principal debtor, it is valid; otherwise, it is not binding upon him (Art. 2063, NCC).
To be binding, it must benefit both the guarantor and the debtor.

VI Quasi-contracts

302. What are the requisites of negotiorum gestio?

The following must be present before an obligation may arise from negotiorum gestio:
a) An officious manager or gestor voluntarily assumes the management or agency of the
business or property of another;
b) Property or business must be neglected or abandoned; otherwise what results is a case of
unenforceable contract and not negotiorum gestio.
c) No authorization from the owner, whether express or implied, otherwise what results is a
contract of agency and not negotiorum gestio; and
d) Assumption of agency or management must be done in good faith. (Art. 2144, NCC)

303. Solutio Indebiti

The following must be present:

a) Payment is made when there exists no binding relation between the payor, who has no duty
to pay, and the person who received the payment; and
b) Payment is made through mistake and not through liberality or some other cause.
(Commissioner of Internal Revenue v. MERALCO, G.R. 181459, June 9, 2014).

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304. Solutio Indebiti Distinguished from Accion In Rem Verso

Accion in rem verso is an action for recovery for what has been paid or delivered without just
cause or legal ground. It is an auxiliary action available only when there is no other remedy based
on contract, quasi contract, crime or quasi delict. (Rabuya, Civil Law Reviewer I, 2017, p. 24-25) In solutio
indebiti, mistake is an essential element while in accion in rem verso, it is not necessary that
there should be mistake in the payment. (I Tolentino, Civil Code of the Phil., 1992, p. 76)

Solutio indebiti arises whenever a person unduly delivers a thing through the mistake to another
who has no right to demand it (Jurado, Civil Law Reviewer, 2009, p. 1151).

VII. TORTS AND DAMAGES

A. General Principles

305. How is "tort" defined?

"Tort" consists in the violation of a right given or the omission of a duty imposed by law. Simply
stated, tort is a breach of legal duty (Naguiat vs. NLRC, G.R. No. 116123, March 13, 1997).

306. What are the elements of tort?

The elements of tort are duty, breach, injury, and proximate causation (Garcia vs. Salvador, G.R. No.
168512, March 20, 2007).

1. Abuse of Rights

307. What is the general principle regarding the exercise of rights and duties?

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 (Art. 19, New Civil Code).

308. What are the elements of abuse of rights?

The elements of an abuse of right under Article 19 are the following: (1) There is a legal right or
duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another.
(Albenson vs. Court of Appeals, G.R. No. 88694, January 11, 1993)

309. What is the fundamental element in abuse of right?

The existence of malice or bad faith is the fundamental element in abuse of right. In an action
to recover damages based on malicious prosecution, it must be established that the prosecution
was impelled by legal malice (Magbanua v. Junsay, G.R. No. 132659, February 12, 2007).

2. Unjust Enrichment

310. What is the principle of unjust enrichment according to Article 22 of the New Civil
Code?

Every person who acquires or comes into possession of something at the expense of another,
without just or legal ground, shall return the same to the latter (Art. 22, New Civil Code).

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311. Under what circumstances is a person liable for indemnity even if the damage caused
was not due to their fault or negligence?

Even when an act or event causing damage to another's property was not due to the fault or
negligence of the defendant, the latter shall be liable for indemnity if they were benefited through
the act or event (Art. 23, New Civil Code).

312. How should claims for unjust enrichment be satisfied?

Unjust enrichment claims must be shown that a party was unjustly enriched in the sense that the
term unjustly could mean illegally or unlawfully. The claimant must be able unequivocally prove
it. Unjust enrichment is a term used to depict the result or effect of failure to make remuneration
of or for property or benefits received under circumstances To be entitled to remuneration, one
must confer benefit by mistake, fraud, coercion, or request. It is not itself a theory of
reconveyance but rather, it is a pre-requisite for the enforcement of the doctrine of restitution.
(Aquino, Torts and Damages, 2021)

3. Liability without Fault

313. When can there be liability without fault?

There cannot be any civil liability if the following circumstances are present (1) The crime was
committed by any person who, while performing a lawful act with due care, causes an injury by
mere accident without fault or intention causing it; and (2) the crime was committed by any
person who fails to perform an act required by law when presented by some lawful or insuperable
cause. (Aquino, Torts and Damages, 2021)

314. What are the obligations of employers regarding compensation for death or injuries
to their employees?

Owners of enterprises and other employers are obliged to pay compensation for the death of or
injuries to their laborers, workmen, mechanics, or other employees, even if the event was
accidental or due to a fortuitous cause, provided it arose out of and in the course of employment.
The employer is also liable for compensation if the employee contracts any illness or disease
caused by the employment or the nature of the employment. However, the employer is not liable
if the mishap was due to the employee's own notorious negligence, voluntary act, or
drunkenness. If the employee's lack of due care contributed to their death or injury, the
compensation will be equitably reduced (Art. 1171, New Civil Code).

315. When can an employer and a fellow-worker be held solidarily liable for compensation
in case of death or injury?
If the death or injury is due to the negligence of a fellow-worker, both the fellow-worker and the
employer are solidarily liable for compensation (Art. 1172, New Civil Code). However, if the death or
injury is solely caused by the intentional or malicious act of a fellow-worker, the employer is not
answerable unless it is shown that the employer did not exercise due diligence in the selection or
supervision of the plaintiff's fellow-worker.

4. Acts Contrary to Law

316. What is the provision regarding acts contrary to law and the obligation to indemnify
for damages caused to another?

According to Article 20 of the New Civil Code, every person who, contrary to law, willfully or
negligently causes damage to another shall indemnify the latter for the same.

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317. How does Article 20 differ from Articles 19 and 21?

While Articles 19 and 21 require the act to be intentional, Article 20 does not make such a
distinction. The act may be done either "willfully" or "negligently" under Article 20 (Albenson
Enterprises Corp. v. CA G.R. No. 88694, January 11, 1993).

318. Should there be an injured person to avail on damages?

There is no requirement that the act must be directed at a specific person, but it suffices that a
person suffers damage as a consequence of a wrongful act of another in order that indemnity
could be demanded from the wrongdoer (Petrophil Corporation vs. Court of Appeals, G.R. No. 122796,
December 10, 2001).

5. Acts Contrary to Morals

319. What is the provision regarding acts contrary to morals and the obligation to
compensate for damages caused?

According to Article 21 of the New Civil Code, any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs, or public policy shall compensate
the latter for the damage.

320. Is it necessary for a positive law to be violated in order for damages to be recoverable
under Article 21?

No, damages are recoverable even if no positive law was violated. (Aquino, Torts and Damages, 2021)

321. Is contra bonos mores equivalent to bad faith?

Bad faith does not simply connote bad judgment or negligence. It imports a dishonest purpose
or some moral obliquity and conscious doing of a wrong, a breach of known duty through some
motive or interest or ill will that partakes of the nature of fraud. It is, therefore, a question of
intention, which can be inferred from one’s conduct and/or contemporaneous statements.

When a party reneges on his or her obligations arising from contracts in bad faith, the act is not
only contrary to morals, good customs, and public policy; it is also a violation of Article 1159.
Breaches of contract become the basis of moral damages, not only under Article 2220, but also
under Articles 19 and 20 in relation to Article 1159. (Arco Pulp and Paper Co., Inc., G.R. No. 206806, June
25, 2014)

B. CLASSIFICATION OF TORTS

1. Intentional

322. What is the provision regarding compensation for wilfully causing loss or injury in a
manner contrary to morals, good customs, or public policy?

Article 21 of the New Civil Code states that any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good customs, or public policy shall compensate
the latter for the damage.

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323. How is intent manifested in torts?

Intent in torts is manifested through malice, bad faith, or fraud (Aquino, Torts and Damages, 2021).

324. How is bad faith defined in relation to intentional torts?

Bad faith is the deliberate commission of a wrong and requires the concurrence of two necessary
elements: (1) the actor knew or should have known that a particular course of action is wrong
or illegal, and (2) despite such knowledge, the actor voluntarily and consciously proceeds with
such course of action (National Power Corp. v. Ibrahim, G.R. No. 168732, June 29, 2007).

325. What is the concept of fraud in intentional torts?

Fraud is the deliberate intention to cause damage or prejudice through the voluntary execution
of a wrongful act or willful omission, with knowledge and intent of the resulting effects (International
Corporate Bank v. Gueco, G.R. No. 141968, February 12, 2001).

2. Negligent

326. How are negligent torts defined?

Negligent torts refer to voluntary acts or omissions that result in injury to others, without
intending to cause harm. The actor fails to exercise due care in performing such acts or omissions.

327. What are the different types of actionable negligence?

Actionable negligence can be categorized as culpa contractual, culpa aquiliana, and criminal
negligence. This means that an action for damages for a negligent act can be based on contract,
quasi-delict, or delict. The bases of liability are separate and distinct from each other, even if only
one act or omission is involved (Aquino, Torts and Damages, 2019).

3. Strict Liability

328. How is strict liability defined in tort law?

Strict liability refers to a legal principle where a person may be held responsible for harm caused
to another, even in the absence of fault. In other words, liability is imposed solely based on the
person's actions, regardless of their intention or negligence (De Leon, Comments and Cases on Torts and
Damages, 2004).

329. Who is responsible for damages caused by animals?

The possessor of an animal or anyone using the animal is responsible for any damage it may
cause, even if the animal escapes or gets lost. This responsibility ceases only if the damage is
caused by force majeure or the fault of the person who suffered the damage (Art. 2183, New Civil
Code).

330. Should the owner or possessor of property be liable where a nuisance is found?

There is strict liability on the part of the owner or possessor of the property where a nuisance is
found because he is obliged to abate the same irrespective of the presence or absence of fault
or negligence. Every successive owner or possessor of property who fails or refuses to abate a
nuisance in that property started by a former owner or possessor is liable therefore in the same
manner as the one who created it. (Art. 696, New Civil Code).

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C. THE TORTFEASOR

1. Joint

331. How are joint tortfeasors defined?

Joint Tortfeasors are individuals who command, instigate, promote, encourage, advise,
countenance, cooperate in, aid, or abet the commission of a tort, or approve of it after it is done,
if done for their benefit. They can also be described as those who act together in committing a
wrong or whose independent acts combine to cause a single injury (Ruks Konsult and Construction v.
Adworld Sign and Advertising Corp., G.R. No. 204866, January 21, 2015).

332. What is the principle of solidary liability?

The principle of solidary liability states that when two or more persons are held liable for a quasi-
delict (a wrongful act), their responsibility is solidary. This means that each person is equally
liable as if they had personally performed the wrongful act themselves (Art. 2194, New Civil Code)
(Ruks Konsult and Construction v. Adworld Sign and Advertising Corp., G.R. No. 204866, January 21, 2015).

333. Should there be a contribution of liability for joint tortfeasors?

There is no contribution between joint tortfeasors whose liability is solidary since both of them
are liable for the total damage. Where the concurrent or successive negligent acts or omissions
of two or more persons, although acting independently, are in combination the direct and
proximate cause of a single injury to a third person, it is impossible to determine in what
proportion each contributed to the injury and either of them is responsible for the whole injury.
(RUKS Konsult and Construction vs. Adworld Sign, G.R. 204866, January 21, 2015)

2. Direct

334. What is the obligation of a direct tortfeasor?

A direct tortfeasor is someone who, through an act or omission involving fault or negligence,
causes damage to another person. In such cases, the direct tortfeasor is legally obligated to
compensate for the resulting damage. This type of fault or negligence, when there is no pre-
existing contractual relationship between the parties, is known as a quasi-delict and is governed
by the provisions of the relevant chapter in the New Civil Code (Art. 2176, New Civil Code).

335. Is a person liable for a tort if it is the proximate cause of injury to another?

Yes, every person who is legally responsible is liable for a tort they have committed, provided
that the tort is the proximate cause of an injury to another person. Proximate cause refers to the
direct or natural link between the wrongful act and the resulting injury.

336. Can a corporation be held directly liable for the tortious acts of its officers or
employees?

Yes, according to the principle of vicarious liability, a corporation can be held directly and primarily
liable for tortious acts committed by its officers or employees. This means that the corporation
itself can be held responsible for the actions and wrongdoing of its agents or representatives
(Philippine National Bank v. CA, G.R. No. L-2715, 1978).

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D. QUASI-DELICT vs. CULPA CONTRACTUAL vs. CULPA CRIMINAL

337. What is a quasi-delict or culpa aquiliana?

A quasi-delict or culpa aquiliana refers to a situation where a person, through an act or omission
involving fault or negligence, causes damage to another person. This concept is defined in Article
2176 of the New Civil Code. If there is no pre-existing contractual relationship between the parties
involved, the fault or negligence that results in damage is categorized as a quasi-delict.

338. Does the concept of quasi-delict include both injuries to persons and damage to
property?

Yes, the concept of quasi-delict as stated in Article 2176 of the New Civil Code is broad. It
encompasses not only injuries to persons but also damage to property. This means that a person
can be held liable for both bodily harm and damage to someone else's property as a result of
their fault or negligence (Cinco vs. Canonoy, G.R. No. L-33171, May 31, 1979).

339. Is a quasi-delict a separate legal institution from a delict or crime?

Yes, a quasi-delict or culpa aquiliana is a separate legal institution under the Civil Code. It has its
own substantive rules and stands as an independent concept distinct from a delict or crime. This
means that there is a clear distinction between civil liability arising from a crime and the
responsibility for quasi-delicts or culpa extra contractual (Barredo v. Garcia, G.R. No. 48006, July 8, 1942).

340. What are the elements of a quasi-delict or culpa aquiliana?

The elements of a quasi-delict or culpa aquiliana are as follows:

1. An act or omission by the responsible party;
2. The presence of fault or negligence in the performance or non-performance of the act;
3. Injury caused by the act or omission;
4. A causal connection between the negligent act and the resulting injury; and
5. The absence of a pre-existing contractual relationship between the parties involved (St. Martin
Polyclinic, Inc. vs. LWU Construction Corporation, GR No. 217426, Dec. 4, 2017).

1. Nature of Liability

342. Distinguish quasi-delict, culpa contractual vs. culpa criminal.

Quasi-Delict Culpa Contractual Culpa Criminal

As to the Basis of Liability
Fault or negligence
resulting in damage or
injury to another (Art.
2176, NCC).
As to the Nature of Negligence
Direct, substantive and
independent (Huang vs.
Philippine Hoteliers, Inc.
GR No. 180440, December
5, 2012).
As to the Proof Needed
Obligation arises from the breach of the
Existence of a law clearly
contract because of defendant’s failure
punishing the act (Nullum crimen
to exercise due care in its performance
sine lege).
(Art. 1173, NCC).
Negligence is merely incident to the
performance of an obligation already
Direct, substantive and
existing because of a contract (Huang
independent
vs. Philippine Hoteliers Inc., GR No.
180440, Dec. 5, 2012).

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Preponderance of
evidence (Rule 133,
Preponderance of evidence (Rule 133,
Section 1, Rules of Court; Proof beyond reasonable doubt
Section 1, Rules of Court; Barredo vs.
Casupanan vs. Laroya, GR (Ibid.).
Garcia, GR No. L-48006, July 8, 1942).
No. 145391, August 26,
2002).
As to the Existence of Pre-Existing Contractual Obligation
No pre-existing obligation
(except the duty to be
careful in all human There is pre-existing obligation (a
actuations (Huang vs. contract, either express or implied) None.
Philippine Hoteliers, Inc. (Ibid.)
GR No. 180440, December
5, 2012).
As to the Employer’s Defense of Exercising the Diligence of “Good Father of a Family” in the
Selection and Supervision of his Employees
As a GR, a complete
proper defense. However,
even if the employer can
prove the diligence in the
selection and supervision
(the latter aspect has not
been established herein)
of the employee, still if he Not a proper defense (Albano,
Not a complete and proper defense.
ratifies the wrongful acts Torts and Damages, supra at 7).
or take no step to avert
further damage, the
employer would still be
liable. (Spouses Fontanilla
vs. Hon. Maliaman, GR No.
L-55963, December 1,
1989).
As to the Presumption of Negligence
The presumption of negligence in culpa
contractual immediately attaches by a
failure of the covenant or its tenor (FGU
Insurance Corporation vs. G.P.
No presumption of
Sarmiento Trucking Corporation, GR
negligence. Injured party
No. 141910, Aug. 6, 2002)
must prove the negligence The innocence of the accused is
of the defendant (Cangco presumed until the contrary is
In culpa contractual, the plaintiff only
vs. Manila Railroad proven.
needs to establish the existence of the
Company, GR No. L-
contract and the obligor’s failure to to
12191, October 14, 1918).
perform his obligation (Torres-Madrid
Brokerage, Inc. vs. FEB Mitsui Marine
Insurance Co. Inc., GR No. 194121, July
11, 2016).
As to the Nature of the Right Violated
Private Right Private Right Public Right
As to the Governing Law
Governed by Article 2176;
Articles 1172-1174 are Governed by Arts. 1170-1174 of the Governed by Article 365 of the
also applicable (Art. 2178, Civil Code. Revised Penal Code.
NCC).

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E. PROXIMATE CAUSE

1. Concept

343. What is proximate causation? When it is applied?

Proximate cause is that which, in natural and continuous sequence, unbroken by an efficient
intervening cause, produces injury, and without which, the result would not have occurred.

“The underlying basis for the award of tort damages is the premise that an individual was injured
in contemplation of law; thus there must first be a breach before damages may be awarded and
the breach of such duty should be the proximate cause of the injury." (Rex Rico v. Union Bank of the
Philippines, G.R. No. 210928)

344. What is efficient intervening cause?

An efficient intervening cause is one that destroys the causal connection between the negligent
act and injury and thereby negates liability (Novus actus interviens). (Morril v. Morril, 60 ALR 102, 104
NJL 557)

345. What is a remote cause?

A remote cause refers to a cause that, although connected to the event, is not the natural and
direct effect of it. It is a cause that merely provides an opportunity for another independent force
to accomplish something, and it cannot be considered the legal cause of the damage (Aquino, Torts
and Damages, p. 318, 2013).

346. How is proximate cause determined?

Proximate cause is determined based on a combination of logic, common sense, policy, and
precedent. There is no exact mathematical formula to establish proximate cause. The plaintiff
must establish a sufficient link between the act or omission and the resulting damage or injury.
The connection must not be remote or far-fetched, and the damage or injury must be a natural
and probable result of the act or omission (Dy Teban v. Jose Ching, G.R. No. 161803, February 4, 2008).

2. Doctrine of Last Clear Chance

347. What is the doctrine of last clear chance? When is it applied?

The doctrine of last clear chance provides that where both parties are negligent but the negligent
act of one is appreciably later in point of time than that of the other, or where it is impossible to
determine whose fault or negligence brought about the occurrence of the incident, the one who
had the last clear opportunity to avoid the impending harm but failed to do so, is chargeable with
the consequences arising therefrom. Stated differently, the rule is that the antecedent negligence
of a person does not preclude recovery of damages caused by the supervening negligence of the
latter, who had the last fair chance to prevent the impending harm by the exercise of due
diligence. (Philippine National Railways vs. Vizcara, G.R. No. 190022, February 15, 2012)

348. What are the requisites of the doctrine of last clear chance?

The following requisites must concur: (1) The plaintiff placed themselves in the situation of
danger because of their own negligence, became unable to escape from such position by the use
of ordinary care, either because it became physically impossible for him to do so or because he
was totally unaware of the danger; (2) the defendant knew that the plaintiff was in a position of
danger and further knew, or in the exercise of ordinary care, should have known, that the plaintiff

110
 was unable to escape therefrom; and (3) that thereafter, the defendant had the last clear chance
to avoid the accident by the exercise of ordinary care but failed to exercise such last clear chance,
and the accident occurred as a proximate result of such failure. (De Leon, Comments and Cases on Torts
and Damages, 2004, p. 250)

349. When is the doctrine of last clear chance not applicable?

The doctrine of last clear chance is not applicable in the following situations:
(a) Cases involving joint tortfeasors.
(b) Cases where both defendants are concurrently negligent.
(c) Cases involving third parties (Philippine Rabbit Bus Lines, Inc. vs. Intermediate Appellate Court, et al., G.R.
Nos. 66102-04, August 30, 1990).

350. Who may invoke the doctrine of last clear chance?

The plaintiff is the one who may invoke the doctrine of last clear chance. It allows the plaintiff to
recover despite their own negligence if the defendant, by exercising reasonable care and
prudence, could have avoided the injury caused by the plaintiff's negligence (Rabuya, Pre-bar Reviewer
in Civil Law, 2021, p. 569).

F. VICARIOUS LIABILITY

351. What is the doctrine of vicarious liability?

It is also known as the doctrine of imputed negligence.

A person is not only liable for one’s own quasi-delictual acts, but also for those persons for whom
one is responsible for. (Art. 2180, NCC)

“Under the doctrine of vicarious liability, an employer may be held liable for the wrongful acts
committed by its employees in the course of their employment. As such, Maitim may be held
solidarily liable for the damages caused by the accident, even if he was not personally present at
the scene of the accident.” (Maitim v. Garcia, G.R. No. 218344, March 21, 2022)

352. Who are the persons vicariously liable under Article 2180 of the Civil Code?

Under Article 2180 of the Civil Code, the following persons are vicariously liable for the acts or
omissions of others:

(a) Parents for damages caused by their children below 21 years old who live in their company.
(b) Guardians for damages caused by their wards below 21 years old or incapacitated persons
under their authority who live in their company.
(c) Owners and managers of establishments or enterprises for damages caused by their
employees in the service of the branches where they are employed or on the occasion of
their functions.
(d) Employers for damages caused by their employees and household helpers acting within the
scope of their assigned tasks, even if the employers are not engaged in any business or
industry.
(e) The State, when it acts through a special agent, except when the damage is caused by an
official to whom the task properly pertains.
(f) Teachers or heads of establishments of arts and trades for damages caused by their students,
pupils, or apprentices as long as they remain in their custody.

111
 It should be noted that the liability of these individuals may cease if they can prove that they
exercised all the diligence of a good father of a family to prevent the damage (Art. 2180, NCC).

353. What is the liability of parents for the acts or omissions of their minor children?

The liability of parents for the acts or omissions of their minor children is based on the parental
authority they exercise over them. Parents and other persons exercising parental authority shall
be civilly liable for injuries and damages caused by their unemancipated children living in their
company and under their parental authority (Art. 221, Family Code).

If the child is at least 18 but below 21 years old and living in their company, the vicarious liability
of parents or guardians exercising parental authority continues to apply (Art. 2180, NCC).
However, this liability only arises when both parents are dead, absent, or otherwise incapacitated
to perform their duty.

354. What is the liability of employers for the acts or omissions of their employees?

Employers are liable for damages caused by their employees acting within the scope of their
assigned tasks, even if the employers are not engaged in any business or industry (Art. 2180,
NCC). The employer's liability is presumed when the employee causes damage due to their own
negligence while performing their assigned duties.

To avoid liability, the employer must present convincing proof that they exercised the care and
diligence of a good father of a family in the selection and supervision of their employees. They
are required to examine the qualifications, experience, and service records of prospective
employees and establish standard operating procedures, monitor their implementation, and
impose disciplinary measures for breaches (Aquino, Torts and Damages, 2005, p. 701-702).

The liability of the employer for the negligent conduct of their employee is direct and primary
(Aquino, Torts and Damages, 2005, p. 688). The burden of proving that the employee was acting
within the scope of their assigned tasks rests with the plaintiff, not the employer (Rabuya, Pre-bar
Reviewer in Civil Law, 2021, p. 575).

355. How should the Registered-Owner Rule and the rule on Employer’s Vicarious Liability
under Article 2180 of the Civil Code be harmonized in cases where both rules apply?

In cases where both the registered-owner rule and Article 2180 apply, the plaintiff may first prove
the employer’s ownership of the vehicle involved in a mishap by presenting the vehicle’s
registration in evidence. Thereafter, a disputable presumption that the requirements for an
employer’s liability under Article 2180 of the Civil Code have been satisfied will arise. The burden
of evidence then shifts to the defendant to show that no liability under Article 2180 has ensued.
(Caravan Travel and Tours International, Inc. vs. Abejar, G.R. No. 170631, February 10, 2016)

356. May the principal employer be held liable over damages caused by its labor-only
Contractor’s employees?

In labor-only contracting, an employer-employee relationship between the principal employer and

the employees of the "labor-only" contractor is created. The principal employer is responsible to
the employees of the "labor-only" contractor as if such employees had been directly employed
by the principal employer. It is axiomatic that any person (the principal employer) who enters
into an agreement with a job contractor, either for the performance of a specified work or for the
supply of manpower, assumes responsibility over the employees of the latter. (NPC v. CA, G.R. No.
119121, August 14, 1998)

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357. What is the rationale behind the liability of teachers for damages caused by students?

Teachers stand, to a certain extent, in loco parentis as to the student and are called upon to
exercise reasonable supervision over the conduct of the student. They exercise protective and
supervisory custody over the pupils and students for as long as they are in attendance in the
school, including recess time.

358. What are the two aspects of the State's liability?

The liability of the State has two aspects:

(a) Its public or governmental aspect where it is liable for the tortious acts of special agents only.
(b) Its private or business aspect where it becomes liable as an ordinary employer.

359. What is the test of liability for the State?

If the injury is caused in the course of the performance of a governmental function or duty, the
principle of non-suability of the State applies, and the State is not liable. However, the State is
liable for torts caused by its special agents commissioned to carry out acts outside their regular
duties.

360. Can a governmental entity be held liable for the acts of its employees in performing
proprietary functions?

No, a governmental entity is not liable for the acts of its employees when performing proprietary
functions. The State is only liable for the tortious acts of its special agents in the performance of
governmental functions. Regular employees cannot be considered as special agents. Even if the
governmental entity were performing proprietary functions, it still cannot be held liable if the
employees acted beyond the scope of their duties. The remedy, in such cases, lies against the
individuals responsible for the wrongful acts. (Bank of the Philippine Islands v. Central Bank of the Philippines
(now Bangko Sentral ng Pilipinas), G.R. No. 197593, October 12, 2020)

G. RES IPSA LOQUITUR

361. What is the doctrine of res ipsa loquitur?

The doctrine res ipsa loquitur means that "where the thing which causes injury is shown to be
under the management of the defendant, and the accident is such as in the ordinary course of
things does not happen if those who have the management use proper care, it affords reasonable
evidence, in the absence of an explanation by the defendant, that the accident arose from want
of care." (Maitim v. Garcia, G.R. No. 218344, March 21, 2022 citing Solidum vs. People)

362. What are the requisites of doctrine of res ipsa loquitur?

The following requisites must concur: (a) the accident is of a kind which does not ordinarily occur
unless someone is negligent; (b) the cause of the injury was under the exclusive control of the
person in charge and (c) the injury suffered must not have been due to any voluntary action or
contribution on the part of the person injured. (Perla Compania de Seguros, Inc. and Pascual vs. Sps.
Sarangaya III, G.R. No. 147746, October 25, 2005)

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H. DAMNUM ABSQUE INJURIA

363. What is the doctrine of damnum absque injuria?

“Damnum absque injuria, or damage without injury, arises when the loss or harm was not the
result of a violation of a legal duty. Plaintiff must establish that such injuries resulted from a
breach of duty which the defendant owed to the plaintiff — a concurrence of injury to the plaintiff
and legal responsibility by the person causing it.” (Pacalna Sanggacala vs. National Power Corporation, G.R.
No. 209538, July 7, 2021)

364. Can there be recovery of damages in damages without injuries?

No, there must be both a right of action for a legal wrong and damage must occur. Wrong without
damage, or damage without wrong, does not constitute a cause of action. As a general rule,
there is no cause of action for acts done by one person upon his own property in a lawful and
proper manner, although such acts incidentally cause damage or an unavoidable loss to another,
as such damage or loss is damnum absque injuria. The courts can give no redress for hardship
to an individual resulting from action reasonably calculated to achieve a lawful means. (Custodio
vs. Court of Appeals, G.R. No. 116100, February 9, 1996)

I. DEFENSES

365. What are the complete defenses?

The complete defenses in a legal case are as follows:

a. Plaintiff's negligence: If the injury or damage is caused by the plaintiff's own negligence,
the defendant cannot be held liable.
b. Due diligence: Exercising reasonable care and caution to prevent harm or damage.
c. Fortuitous event: An unforeseen and uncontrollable event that causes harm or damage.
d. Damnum absque injuria: No legal injury or damage is suffered by the plaintiff.
e. Authority of law: Acting in accordance with the law or legal authority.
f. Assumption of risk: When the plaintiff willingly accepts the risks involved in a certain
activity and cannot hold the defendant responsible for resulting harm.
g. Doctrine of last clear chance: The person who had the final opportunity to prevent harm
but failed to do so may be held liable, regardless of prior negligence by the other party.
h. Prescription: The claim or right to take legal action is barred by the lapse of a specified
period of time.
i. Waiver: The voluntary relinquishment of a right or claim

366. What are the partial defenses?

The partial defenses in a legal case are as follows:

(a) Contributory negligence: When the injured party's own conduct contributes to the harm
they suffered, falling below the standard of care required for their own protection.
(b) Fortuitous event: An unforeseen and uncontrollable event that causes harm or damage.

J. NEGLIGENCE

367. Define negligence.

Negligence is defined as the omission to do something that a reasonable person, guided by the
considerations that typically regulate human conduct, would do, or the doing of something that
a prudent and reasonable person would not do. (Layugan vs. IAC, G.R. No. 73998, November 14,
1998).

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368. What is the standard of diligence required under the Civil Code?

The standard of diligence provided for under the Civil Code is that of a "Bonus Pater Familias" or
that of a good father of a family. This means that an individual is expected to exercise the level
of care and prudence that a reasonable and responsible person would exercise in similar
circumstances. (Article 1163, Civil Code).

1. Standard of Care

369. What is the required standard of conduct?

The diligence with which the law requires the individual at all times to govern his conduct varies
with the nature of the situation in which he is placed and the importance of the act which he is
to perform. (Sicam vs. Jorge, G.R. 159617, August 8, 2007)

370. What is the principle regarding the standard of care when someone is suddenly in a
place of danger?

According to the case of DELSAN Transport Lines vs. C&A Construction, Inc. (G.R. No. 156034,
October 1, 2003), if a person finds themselves in a place of danger without sufficient time to
consider the best means to avoid it, they are not considered negligent if they fail to adopt a
better method in hindsight, unless the danger is caused by their own negligence.

371. How does the standard of care differ between motorists and bicyclists?

As stated in the case of Heirs of Completo vs. Albayda (G.R. No. 172200, July 6, 2010), although both
motorists and bicyclists have a duty to exercise reasonable care, more care is required from
motorists due to the inherent differences in the two vehicles. The physical advantages that motor
vehicles have over bicycles make them more dangerous to bicyclists.

372. What is the standard of care expected from physicians?

The duty of a physician to their patient involves exercising the degree of care, skill, and diligence
that physicians in the same general neighborhood, and in the same general line of practice,
ordinarily possess and exercise in similar cases. (Dela Torre vs. Imbuido, G.R. No. 192973, September 29,
2014).

2. Presumptions of Negligence

373. What is the presumption regarding negligence in motor vehicle mishaps?

According to Article 2185 of the Civil Code, unless there is evidence to the contrary, it is presumed
that a person driving a motor vehicle has been negligent if, at the time of the mishap, they were
violating any traffic regulation.

374. Is there a presumption of negligence in cases involving the possession of dangerous

weapons or substances?

Yes, there is a prima facie presumption of negligence if death or injury results from the possession
of dangerous weapons or substances, such as firearms and poison, unless their possession or
use is indispensable in the defendant's occupation or business. (Article 2188, Civil Code).

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375. Is there a presumption of negligence in cases involving common carriers?

Yes, there is a presumption of negligence when there is a breach of contract by a common carrier.
(Article 1733 of the Civil Code).

376. What is contributory negligence, and how does it affect the plaintiff's ability to recover
damages?

Contributory negligence refers to the failure of an individual to exercise due care for their own
safety, which contributes to their own injury. It occurs when the plaintiff's actions or behavior fall
below the standard of care expected from a reasonable person in similar circumstances.
Contributory negligence on the part of the plaintiff may impact the amount of damages they are
entitled to receive. (Maitim v. Garcia, G.R. No. 218344, March 21, 2022).

According to Article 2179 of the Civil Code, the plaintiff may still recover damages, but the courts
will mitigate the damages to be awarded based on the degree of the plaintiff's fault.

K. DAMAGES

377. How are damages defined in legal terms?

Damages are defined as a sum of money awarded or imposed by the law as pecuniary
compensation, recompense, or satisfaction for an injury or wrong caused by the breach of a duty
or violation of a right. (PNB vs. RBL Enterprise, G.R. No. 149569, May 28, 2004; and People vs. Ballesteros, G.R.
No. 120921, January 29, 1998).

378. What is the distinction between injury, damage and damages?

Injury refers to the illegal invasion of a legal right, while damage refers to the loss, hurt, or harm
that results from the injury. Damages, on the other hand, refers to the recompense or
compensation awarded for the suffered damage. (Custodio vs. CA, G.R. No. 116100, February 9,
1996).

379. Can damages be claimed in cases of gross negligence, bad faith, and willful
misconduct?

Yes, damages can be claimed in cases of gross negligence, bad faith, and willful misconduct. The
nature of certain businesses, such as transportation of persons or goods, gives rise to contracts
imbued with public interest. In such cases, the party responsible for providing the service is
required to exercise not just the diligence of a good father of a family, but also "extraordinary"
care as mandated by the Civil Code. In an action based on a breach of contract, it is
sufficient to prove the existence of the contract and its non-performance, without the need to
establish fault or negligence on the part of the responsible party. (KLM Royal Dutch Airlines v. Dr.
Tiongco, G.R. No. 212136, October 4, 2021)

1. Kinds of damages

380. What are the classifications of damages?

The classifications of damages under Art. 2197 of the New Civil Code are as follows:
(a) Moral damages
(b) Exemplary or corrective damages
(c) Nominal damages
(d) Temperate or moderate damages
(e) Actual or compensatory damages

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 (f) Liquidated damages

(a) Actual and Compensatory Damages

381. What are actual or compensatory damages?

Actual or compensatory damages are awarded to compensate for loss or injury sustained by a
person. They are intended to repair the wrong that has been done and compensate for the
inflicted injury, rather than impose a penalty. In tort or quasi-delict cases, actual damages
include the natural and probable consequences of the act or omission complained of.

382. What is the purpose of awarding actual damages?

The purpose of awarding actual damages is to repair the wrong, compensate for the injury
inflicted, and not impose a penalty.

383. How are actual damages determined?

To justify an award for actual damages, there must be competent proof of the actual amount of
loss. Claims for damages should be supported by receipts or other documentary evidence. Actual
or compensatory damages cannot be presumed but must be proved with reasonable certainty.

384. What are the requisites to award actual damages?

The requisites to award actual damages are as follows:

(a) The loss must be alleged and proven.
(b) The loss must not be speculative.

385. What are the component elements of actual damages?

The component elements of actual damages, which may be recovered, include:

(a) Loss or impairment of earning capacity in case of temporary or permanent physical injury.
(b) Injury to the plaintiff's business standing or commercial credit.
(c) Attorney's fees and expenses of litigation.
(d) Interest.
(e) Value of the loss suffered.
(f) Unrealized profits.
(g) Indemnity for death and loss of earning capacity of the deceased.
(h) Support for compulsory heirs.

386. When can attorney's fees and expenses of litigation be recovered?

In the absence of a stipulation, attorney's fees and expenses of litigation, other than judicial
costs, can be recovered under certain circumstances, including when exemplary damages are
awarded, when the defendant's act or omission compelled the plaintiff to litigate, or when it is
stipulated in a written agreement.

387. What are the two concepts of Attorney's fees?

(a) Ordinary Concept: These are reasonable compensation paid by the client to the lawyer for
the legal services rendered. The basis for these fees is the fact that the lawyer has been
employed by the client. The fees are payable to the lawyer.

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 (b) Extraordinary Concept: These are indemnity for damages ordered by the court to be paid
by the losing party in litigation to the prevailing party. They are considered actual damages
due to the plaintiff. The basis for these fees is any cases authorized by law. These fees are
payable to the client, but they can be awarded to the lawyer if agreed upon or as additional
compensation.

388. How are damages measured in contracts and quasi-contracts?

In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is
liable are those that are the natural and probable consequences of the breach of the obligation
and could have been reasonably foreseen at the time the obligation was constituted. If fraud,
bad faith, malice, or wanton attitude is involved, the obligor is responsible for all damages that
may be reasonably attributed to the non-performance of the obligation.

389. How are damages measured in crimes and quasi-delicts?

In crimes and quasi-delicts, the defendant is liable for all damages that are the natural and
probable consequences of the act or omission complained of, regardless of whether they were
foreseen or reasonably foreseeable.

310. What is the principle of restitutio in integrum?

The principle of restitutio in integrum means that the amount awarded to the plaintiff should be
sufficient to put them in the same position as if they had not sustained the wrong. The damages
are measured based on the plaintiff's loss, not the defendant's gain. However, in certain cases,
damages may be measured by the benefit that has accrued to the defendant.

311. What damages are awarded in cases of rape?

In cases of rape, civil indemnity, which is in the nature of actual or compensatory damages, is
mandatory upon finding the fact of rape. Moral damages are automatically awarded to a rape
victim without the need for proof. These damages are separate and distinct from civil indemnity.

(b) Moral Damages

312. What does the term "moral damages" include?

The term "moral damages" includes physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injuries.

313. Who can be awarded moral damages?

Moral damages can be awarded to both natural and juridical persons. However, for a juridical
person to be awarded moral damages, it must have a good reputation that is debased, resulting
in social humiliation.

314. What are the requisites for the award of moral damages?

The requisites for the award of moral damages are:

(a) There must be an injury, whether physical, mental, or psychological, clearly sustained by the
claimant.
(b) There must be a culpable act or omission factually established.
(c) The wrongful act or omission of the defendant is the proximate cause of the injury sustained
by the claimant.
(d) The award of damages is based on any of the cases stated in Article 2219 of the Civil Code.

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315. Are corporations and other artificial beings entitled to recover moral damages?

No, corporations and other artificial beings are not entitled to recover moral damages. A juridical
person is generally not entitled to moral damages because it cannot experience physical suffering
or sentiments such as wounded feelings, serious anxiety, mental anguish, or moral shock.
However, there is an exception if the corporation enjoyed a good reputation that the offender
debased and besmirched.

(c) Nominal Damages

316. What are nominal damages awarded for?

Nominal damages are awarded to vindicate or recognize a right of the plaintiff that has been
violated or invaded by the defendant. They are not intended to compensate the plaintiff for any
loss suffered.

317. When can nominal damages be awarded?

Nominal damages can be awarded in every obligation arising from any source listed in Article
1157 of the Civil Code, or in any case where a property right has been invaded. They are awarded
in lieu of actual, moral, temperate, or liquidated damages.

318. What is the purpose of nominal damages?

The purpose of nominal damages is to vindicate or recognize a right of the plaintiff that has been
violated or invaded by the defendant. They are not meant to indemnify the plaintiff for any loss
suffered.

319. Can nominal damages coexist with compensatory damages?

No, nominal damages cannot coexist with compensatory damages. They are awarded to vindicate
or recognize a right, not to compensate for any loss suffered by the plaintiff.

320. What are the elements for the award of nominal damages?

The elements for the award of nominal damages are as follows:

(a) There must be a right of the plaintiff.
(b) The resulting damage must not be capable of pecuniary estimation.
(c) There must be a violation of the right.
(d) The purpose of the award is not to indemnify but to vindicate or recognize the violated right.

(d) Temperate or Moderate Damages

321. What are temperate or moderate damages?

Temperate or moderate damages are damages that lie between nominal damages and
compensatory damages. They are awarded when the court determines that some pecuniary loss
has been suffered, but the exact amount of the loss cannot be proven with certainty.

322. How are the amount of temperate damages determined?

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 The amount of temperate damages is left to the sound discretion of the court. The court will
consider the circumstances of the case and use its judgment to determine a reasonable and fair
amount of damages.

(e) Liquidated Damages

323. What are liquidated damages?

Liquidated damages are damages that have been agreed upon by the parties to a contract to be
paid in the event of a breach. They are predetermined amounts specified in the contract to
provide compensation for the injured party in case of non-performance or violation of the
contractual terms.

324. Can liquidated damages coexist with actual damages?

No, according to the Civil Code of the Philippines, liquidated damages cannot coexist with actual
damages. If actual damages are proven and awarded, the liquidated damages provision becomes
inapplicable.

325. Can liquidated damages be reduced?

Yes, liquidated damages may be equitably reduced if they are found to be iniquitous or
unconscionable. The court has the authority to adjust the amount of liquidated damages if it
deems them unfair or excessive.

326. When are liquidated damages applicable?

Liquidated damages are applicable when there is a contract in place, and a breach of that contract
occurs. The violation of the contract triggers the payment of the pre-agreed liquidated damages.

327. How is interest calculated in a breach of contract case?

The calculation of interest for damages resulting from a breach of contract is at the discretion of
the court. The interest is typically computed not from the date of filing the complaint but from
the date the judgment of the trial court is rendered.

(f) Exemplary or Corrective Damages

328. What are exemplary or corrective damages?

Exemplary or corrective damages are additional damages imposed by the court to serve as an
example or correction for the public good. They are awarded in addition to actual, moral,
temperate, liquidated, or compensatory damages.

329. What is the purpose of exemplary damages?

The purpose of exemplary damages is to promote public policy and deter wanton or reckless
acts. They are intended to set an example and discourage the repetition of similar wrongful acts
by others.

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330. Are exemplary damages always granted?

No, exemplary damages may or may not be granted depending on the necessity of setting an
example for the public good. The court decides whether the circumstances of the case warrant
the imposition of exemplary damages as a form of deterrent.

2. When Damages May Be Recovered

331. When can actual damages be recovered?

Actual damages can be recovered when the aggrieved party has suffered pecuniary loss in
relation to their property, business, trade, profession, or occupation. Competent proof of the
actual amount of loss must be presented to justify the award of actual damages. Claims for actual
damages are typically supported by receipts and other relevant evidence.

332. What are the conditions for awarding moral damages?

Moral damages can be awarded if the case falls within the scope of Article 2219 and Article 2220
of the Civil Code. It must be established that the act or omission of the defendant was the
proximate cause of the damage or injury suffered by the plaintiff. Injuries alone are not sufficient;
there must be a wrongful act, omission, fraud, malice, or bad faith that directly caused the harm.

333. Can moral damages, exemplary damages, and attorney's fees be claimed in cases
involving alleged gross negligence resulting in embarrassment and humiliation?

No, in cases of alleged gross negligence resulting in embarrassment and humiliation, the claimant
cannot automatically claim moral damages. To be eligible for moral damages, it is necessary to
establish a culpable act or omission as the proximate cause of the damage, and the claim must
fall within the instances specified in Arts. 2219 and 2220 of the New Civil Code. Furthermore,
without a valid basis for moral damages, the claimant cannot be awarded exemplary damages.
Similarly, the award of attorney's fees and costs of litigation depends on meeting the
requirements outlined in Article 2208 of the New Civil Code. (Rex Rico v. Union Bank of the Philippines,
G.R. No. 210928, February 14, 2022, J.Hernando)

334. Can nominal damages be awarded alongside compensatory damages?

No, nominal damages for the vindication of a violated right cannot be awarded together with
compensatory damages. If the court has already awarded compensatory and exemplary
damages, it is considered a juridical recognition that the plaintiff's right was violated. However,
nominal damages may be awarded alongside attorney's fees.

335. When can temperate damages be recovered?

Temperate damages may be recovered when the court finds that the aggrieved party has suffered
some pecuniary loss, but the exact amount of loss cannot be precisely determined. The court will
consider the circumstances and make a reasonable award based on its discretion.

336. In what cases can exemplary damages be recovered?

Exemplary damages may be recovered in criminal offenses, quasi-delicts (acts or omissions

causing damage to another), contracts, and quasi-contracts. The court has the authority to decide
whether exemplary damages should be awarded based on the circumstances of the case.

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337. What is required to be awarded exemplary damages?

To be awarded exemplary damages, the claimant must prove their entitlement to moral,
temperate, or compensatory damages. Even if liquidated damages have been agreed upon, the
claimant must establish the basis for other types of damages in order for exemplary damages to
be awarded.

L. DAMAGES IN CASE OF DEATH

338. What are the types of damages that can be claimed in case of death?

In cases of death, the following damages may be claimed:

(a) Moral damages
(b) Exemplary damages
(c) Attorney's fees and expenses for litigation
(d) Indemnity for death
(e) Indemnity for loss of earning capacity
(f) Interest in proper cases

339. What is the required payment to the heirs of the deceased in case of death?

The law requires a fixed amount of P3,000.00 to be paid to the heirs of the deceased. However,
the Supreme Court has increased this amount to reflect the current value of the currency and
prevailing inflation. The current fixed amount of damages, as increased by the Court, is
P75,000.00.

340. How much death indemnity was granted by the court in a specific case?

In the case of Sulpicio Lines, Inc. vs. Curso, et al. (2010), the court granted death indemnity in
the amount of P50,000 for the death of the passengers.

341. Can the expenses incurred during the wake and funeral of the deceased be claimed?

Yes, the plaintiff is entitled to claim the amount spent during the wake and funeral of the
deceased. However, expenses incurred after the burial are generally not compensable.

M. DUTY OF INJURED PARTY

342. What is the duty of the injured party in case of loss or injury?

The injured party has the duty to exercise the diligence of a good father of a family to minimize
the damages resulting from the act or omission in question.

343. What is the responsibility of the injured party in minimizing damages caused by the
wrongful or negligent act of another?

The injured party should exercise reasonable care and diligence to minimize the resulting
damage. They are expected to make reasonable efforts to preserve the injured property and
prevent further damage. The injured party can also recover money lost in these reasonable efforts
and for injuries incurred in attempting to prevent damage.

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344. Who has the burden of proof regarding the injured party's duty to mitigate damages?

The burden of proof lies with the defendant to satisfactorily demonstrate that the injured party
could have mitigated their damages and the amount thereof. If the defendant fails to provide
satisfactory evidence in this regard, the amount of damages awarded cannot be proportionately
reduced.

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