2023 BAR REVIEW Handout No.

4
Civil Law
LAST MINUTE

PERSONS AND FAMILY RELATIONS

1. Discuss the democratized concept of “psychological incapacity”.

Psychological incapacity refers to an inability to take cognizance of and to assume basic

marital obligations and not merely difficulty, refusal, or neglect in the performance of marital
obligations or ill will.

a) There is a presumption of validity of marriage, which can only be rebutted by a clear

and convincing evidence.

b) The plaintiff-spouse in an action to nullify a valid marriage has the burden of proving
his or her case with clear and convincing evidence.

c) Psychological incapacity is neither a mental incapacity, medical illness, nor a

personality disorder that must be proven through expert opinion. 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. Courts may rely on the totality of evidence to sustain a finding
of psychological incapacity. Respondent-spouse need not be interviewed by a
psychologist.

d) Although the “psychological incapacity” may not be perceivable at the time of the
celebration of the marriage, such “psychological incapacity” must have attached at
such moment, or prior thereto.

e) The psychological incapacity contemplated in Article 36 of the Family Code is

incurable, not in the medical, but the legal sense.

f) Such illness must be grave enough to bring about the disability of the party to assume
the essential obligations of marriage. There must be a clear and convincing evidence
showing that such incapacity is caused by a genuinely serious psychic cause.

g) Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic

Church in the Philippines, while not controlling or decisive, is persuasive.

h) The trial court must order the prosecuting attorney or fiscal and the Solicitor General
to appear as counsel for the state. No decision shall be handed down unless the
Solicitor General issues a certification, which will be quoted in the decision, briefly
stating therein his reasons for his agreement or opposition, as the case may be, to the

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petition. The Solicitor General, along with the prosecuting attorney, shall submit to
the court such certification within fifteen (15) days from the date the case is deemed
submitted for resolution of the court. Carullo-Padua vs. Padua, G.R. No. 208258,
April 27, 2022; Tan-Andal vs. Andal, G.R. No. 196359, May 11, 2011

2. Does Article 36 of the Family Code merely contemplate the difficulty, refusal, or neglect in
the performance of marital obligations or ill will?

Article 36 contemplates incapacity or inability to take cognizance of and to assume basic

marital obligations and not merely difficulty, refusal, or neglect in the performance of marital
obligations or ill will. This incapacity consists of the following: (a) a true inability to commit
oneself to the essentials of marriage; (b) this inability to commit oneself must refer to the
essential obligations of marriage: the conjugal act, the community of life and love, the
rendering of mutual help, the procreation and education of offspring; and (c) the inability
must be tantamount to a psychological abnormality.

It is worthy to emphasize that Article 36 of the Family Code contemplates downright

incapacity or inability to take cognizance of and to assume the basic marital obligations. It is
not enough to prove that a spouse failed to meet his responsibilities and duties as a married
person; incapacity must be so enduring and persistent with respect to a specific partner, that
the only result of the union would be the inevitable and irreparable breakdown of the
marriage.

Irreconcilable differences, conflicting personalities, emotional immaturity and

irresponsibility, physical abuse, habitual alcoholism, sexual infidelity or perversion, and
abandonment, by themselves, also do not warrant a finding of psychological incapacity under
the said Article. It must be stressed that an unsatisfactory marriage is not a null and void
marriage.

Time and again, it has been held that the State takes a high stake in the preservation of
marriage rooted in its recognition of the sanctity of married life and its mission to protect and
strengthen the family as a basic autonomous social institution. Hence, any doubt should be
resolved in favor of the existence and preservation of the marriage and against its dissolution
and nullity. Presumption is always in favor of the validity of marriage. Semper praesumitur
pro matrimonio. Carullo-Padua v. Padua, G.R. No. 208258, April 27, 2022

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3. When must an action for the recognition of an illegitimate child be filed?

Under the Family Code, an action for the recognition of an illegitimate child must be brought
within the lifetime of the alleged parent. However, illegitimate children who were still minors
at the time the Family Code took effect and whose putative parent died during their minority
are given the right to seek recognition under Article 285 of the Civil Code for a period of up
to four years from attaining majority age, such right being a vested right which remained
unimpaired per Article 255 of the Family Code. Aquino vs. Aquino, G.R. No. 208912,
December 7, 2021

4. May the mother impugn the legitimacy of her child?

No. While the presumption of legitimacy under Article 167 of the Family Code is not
conclusive and may be overthrown by evidence to the contrary, only the father, or in
exceptional instances, his heirs, can impugn the legitimacy of a child born in a valid and
subsisting marriage, based on any of the grounds under Article 166 of the Family Code.
Ordoña vs. The Local Civil Registrar of Pasig City, G.R. No. 215370, November 9, 2021

5. Characterize the alienation or encumbrance of a conjugal property made without the

consent of the spouse.

The applicable law must be reckoned on the date of the alienation or encumbrance of the
conjugal property made without the consent of the other spouse, to wit:

Before the effectivity of the Family Code – voidable. The applicable laws are Articles 166 and
173 of the Civil Code. The wife may file an action for annulment of contract within 10 years
from the transaction.

After the effectivity of the Family Code – void. The applicable law is Article 124 of the Family
Code, without prejudice to vested rights in the property acquired before August 3, 1988.
Unless the transaction is accepted by the non-consenting spouse or is authorized by the court,
an action for declaration of nullity of the contract may be filed before the continuing offer on
the part of the consenting spouse and the third person becomes ineffective. Alexander vs.
Sps. Escalona, G.R. No. 256141, July 19, 2022

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PROPERTY

6. Does the identity of the property and the title of the claimant need to be ascertained in an
action to recover possession of real property pursuant to Article 434 of the Civil Code?

The identity of the property and the title of the claimant must be ascertained in an action to
recover possession of real property pursuant to Article 434 of the Civil Code. If only to shed
light on a few questions of law to serve as guide, Article 434 of the Civil Code is controlling in
this case. It provides that "[i]n an action to recover, the property must be identified, and the
plaintiff must rely on the strength of his title and not on the weakness of the defendant's
claim." It is hornbook doctrine that the entitlement to the possession of real property belongs
to its registered owner. However, the registered owner must seek proper judicial remedy and
comply with the requisites of the chosen action in order to recover possession of a real
property from the occupant who has actual and physical possession thereof. Furthermore, it
must be emphasized that the plaintiff must not bank on the weakness of the defendant's title,
hence, must establish his title and the identity of the property because of the possibility that
neither the plaintiff nor the defendant is entitled or even more the true owner of the property
in dispute. Gemina v. Heirs of Espejo, Jr., G.R. No. 232682, September 13, 2021

7. When must a co-owner implead the other co-owners?

Where the suit is brought by a co-owner, without repudiating the co-ownership, then the suit
is presumed to be filed for the benefit of the other co-owners and may proceed without
impleading the other co-owners. However, where the co-owner repudiates the co-ownership
by claiming sole ownership of the property or where the suit is brought against a co-owner,
his co-owners are indispensable parties and must be impleaded as party-defendants, as the
suit affects the rights and interests of these other co-owners. Heirs of Manuel Eñano vs. San
Pedro Cineplex Properties, Inc., G.R. No. 236619, April 6, 2022

8. May a co-owner alienate his aliquot inchoate pro-indiviso share?

Yes, even absent the consent of his/her other co-owners. The transferee, thus, becomes a co-
owner. Reyes vs. Sps. Garcia, G.R. No. 225159, March 21, 2022

Note: A co-owner cannot claim a specific portion of a co-owned property prior to its partition.
No co-owner may be obliged to remain in a co-ownership. As such, each co-owner may, at
any time, demand partition insofar as his/her share is concerned.

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9. In a forcible entry case, may one recover possession even against the owner?

Yes. Possession in forcible entry suits refers only to possession de facto, or actual or material
possession, and not possession flowing out of ownership; these are different legal concepts
for which the law provides different remedies for recovery of possession. The word
“possession” in forcible entry suits refers to nothing more than prior physical possession or
possession de facto, not possession de jure or legal possession in the sense contemplated in
civil law. Palajos vs. Abad, G.R. No. 205832, March 7, 2022

10. May a person tack his possession?

The law allows a present possessor to tack his possession to that of his predecessor-in-
interest to be deemed in possession of the property for the period required by law.
Possession in this regard, however, pertains to possession de jure and the tacking is made for
the purpose of completing the time required for acquiring or losing ownership through
prescription. Nenita Quality Foods Corporation vs. Galabo, G.R. No. 174191, January 30,
2013

11. What are the two (2) options given to the landowner under Article 448 of the Civil Code?

Whenever both the landowner and the builder/planter/sower are in good faith (or in bad
faith, pursuant to 548 of the Civil Code), the landowner is given two (2) options under Article
448 of the Civil Code, to wit:
i. he may appropriate the improvements for himself after reimbursing the buyer (the
builder in good faith) the necessary and useful expenses under Articles 546 and 548
of the Civil Code; or
ii. he may sell the land to the buyer, unless its value is considerably more than that of
the improvements, in which case, the buyer shall pay reasonable rent. Dinglasan-
Delos Santos vs. Abejon, G.R. No. 215820, March 20, 2017

12. What are the elements of Donation?

Donation has three indispensable elements: (1) the reduction of the patrimony of the donor;
(2) the increase in the patrimony of the donee; and (3) the intent to do an act of liberality or
animus donandi. Not all three are present.

While Anecito's patrimony may have decreased with the correlative increase in that of Juan
by virtue of the Deed of Sale and Agreement, it does not appear that this was impelled by

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liberality on the part of Anecito. Had animus donandi really been the true motive for the
transfer of the subject property, Anecito and Juan would have so stated in the documents
that they executed. However, the Deed of Sale clearly states that the conveyance was for a
consideration of the amount of P15,000.00. Again, petitioner was remiss in her evidentiary
duty to prove otherwise. There was just a dearth of evidence to show that Juan and Anecito
actually intended a donation mortis causa or some contract other than a sale. Bacala v. Heirs
of Poliño, G.R. No. 200608, February 10, 2021

13. What is Usufruct?

Usufruct is the right to enjoy another's property with the obligation of preserving its form
and substance, unless the title constituting it or the law provides otherwise. Art. 562, Civil
Code

While this right to enjoy the property of another temporarily includes both the jus utendi and
the jus fruendi, the owner retains the jus disponendi or the power to alienate the same. Heirs
of Roger Jarque v. Marcial Jarque, et al., G.R. No. 196733, November 21, 2018

14. What are Legal Easements under Philippine laws?

i. Relating to waters;
ii. Right of way;
iii. Light and view;
iv. Party wall;
v. Drainage of buildings;
vi. Distance and works;
vii. Lateral/subjacent support;
viii. Against nuisance

15. What are the requisites for an Easement of Right-of-Way?

i. The dominant estate is surrounded by other immovables and has no adequate outlet
to a public highway;
ii. There is payment of proper indemnity;
iii. The isolation is not due to the acts of the proprietor of the dominant estate; and
iv. The right-of-way claimed is at the point least prejudicial to the servient estate; and
insofar as consistent with this rule, where the distance from the dominant estate to a

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public highway may be the shortest. Sps. Larry and Rosarita Williams v. Rainero A.
Zerda, G.R. No. 207146, March 15, 2017

The criterion of least prejudice to the servient estate must prevail over the criterion of
shortest distance although this is a matter of judicial appreciation.

LAND TITLES AND DEEDS

16. Does registration of a land under the Torrens System vest title to the registrant?

No. Registering a piece of land under the Torrens System does not create or vest title because
registration is not a mode of acquiring ownership.

Accordingly, if the inclusion of the land in the earlier registered title was a result of a mistake,
then the latter registered title will prevail. The ratio decidendi of this exception is to prevent
a title that was earlier registered, which erroneously contained a parcel of land that should
not have been included, from defeating a title that was later registered but is legitimately
entitled to the said land.

A certificate of title is merely an evidence of ownership or title over the particular property
described therein. Sps. Yu Hwa Ping and Mary Gaw v. Ayala Land, Inc., G.R. Nos. 173120 &
173141, July 26, 2017

17. When is a person considered a “buyer in good faith”?

It is only upon registration of the conveyance in good faith will the purchaser acquire such
rights and interest as they appear in the certificate of title, unaffected by any prior lien or
encumbrance not noted therein. The buyer must purchase the property and register the deed
of conveyance without notice that some other person has a right to, or interest in, such
property and pay a full and fair price of the same, at the time of such purchase, or before he
or she has notice of the claim or interest of some other persons in the property. The: (1)
property must be bought for consideration, and (2) purchase should have no knowledge or
notice of adverse claim or interest until registration. Duenas vs. Metropolitan Bank and Trust
Company, G.R. No. 209463, November 29, 2022, J. Hernando

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18. When shall a buyer be considered to have duly registered the conveyance?

A purchaser is deemed the registered owner once he or she: (a) files a duly notarized valid
deed of sale, (b) the sale is entered into the day book, (c) surrenders or presents the owner’s
duplicate certificate of title covering the land sold, and (d) pays the registration fees. Duenas
vs. Metropolitan Bank and Trust Company, G.R. No. 209463, November 29, 2022, J.
Hernando

19. Provide the salient features of Republic Act No. 11573 or An Act Improving the
Confirmation Process for Imperfect Land Titles.

To aid the bench and the bar, the Court lays down the following guidelines on the application
of RA 11573:

i. RA 11573 shall apply retroactively to all applications for judicial confirmation of title
which remain pending as of September 1, 2021, or the date when RA 11573 took
effect. These include all applications pending resolution at the first instance before all
Regional Trial Courts, and applications pending appeal before the Court of Appeals.

ii. Applications for judicial confirmation of title filed on the basis of the old section
Section 14(1) and 14(2) of PD 1529 and which remain pending before the Regional
Trial Court of Court of Appeals as of September 1, 2021 shall be resolved following the
period and manner of possession required under the new Section 14(1). Thus,
beginning September 1, 2021 proof of “open, continuous, exclusive and notorious
possession and occupation of alienable and disposable lands of the public domain not
covered by existing certificates of title or patents under a bona fide claim of ownership
for at least twenty (20) years immediately preceding the filing of the application for
confirmation” shall be sufficient for purposes of judicial confirmation of title, and shall
entitle the applicant to a decree of registration.

iii. In the interest of substantial justice, the Regional Trial Courts and Court of Appeals
are hereby directed, upon proper motion or motu proprio, to permit the presentation
of additional evidence on land classification status based on the parameters set forth
in Section 7 of RA 11573.

a. Such additional evidence shall consist of a certification issued by the DENR

geodetic engineer which (i) states that the land subject of the application for
registration has been classified as alienable and disposable land of the public
domain; (ii) bears reference to the applicable Forestry Administrative Order,
DENR Administrative Order, Executive Order, or proclamation classifying the

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land as such; and (iii) indicates the number of the Land Classification Map
covering the land.

b. In the absence of a copy of the relevant issuance classifying the land as

alienable and disposable, the certification must additionally state (i) the
release date of the LC Map; and (ii) the Project Number. Further, the
certification must confirm that the LC Map forms part of the records of
NAMRIA and is precisely being used by the DENR as a land classification map.

c. The DENR geodetic engineer must be presented as witness for proper

authentication of the certification in accordance with the Rules of Court.
Republic of the Philippines vs. Pasig Rizal Co., Inc., G.R. No. 213207, February
15, 2022

WILLS AND SUCCESSION

20. When do the rights of succession transmitted?

The rights of succession are transmitted from the moment of the death of the decedent. The
operation of Article 777 occurs at the very moment of the decedent's death -the transmission
by succession occurs at the precise moment of death and, therefore, the heir is legally
deemed to have acquired ownership of his/her share in the inheritance at that very moment,
"and not at the time of declaration of heirs, or partition, or distribution." Dr. Nixon L. Treyes
v. Antonio L. Larlar, et al., G.R. No. 232579, September 8, 2020

21. Is a prior and separate judicial declaration of heirship required before one can file an
ordinary civil action to enforce ownership rights acquired by virtue of succession?

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. The ruling of the trial court shall only be in relation to the cause of action of the
ordinary civil action, i.e., the nullification of a deed or instrument, and recovery or
reconveyance of property, which ruling is binding only between and among the parties. Dr.
Nixon L. Treyes v. Antonio L. Larlar, et al., G.R. No. 232579, September 8, 2020

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22. What are the rules in determining which rights are transmissible or intransmissible?

In determining which rights are intransmissible (extinguished by a person’s death) or

transmissible (not extinguished by his death), the following general rules have been laid
down:

i. Rights which are purely personal, not in the inaccurate equivalent of this term in
contractual obligations, but in its proper sense, are, by their nature and purpose,
intransmissible, for they are extinguished by death; examples, those relating to civil
personality, to family rights, and to the discharge of public office.

ii. Rights which are patrimonial or relating to property are, as a general rule, not
extinguished by death and properly constitute part of the inheritance, except those
expressly provided by law or by the will of the testator, such as usufruct and those
known as personal servitudes.

iii. Rights of obligation are by nature transmissible and may constitute part of the
inheritance, both with respect to the rights of the creditor and as regards the
obligations of the debtor.

The third rule stated above has three exceptions, especially with respect to the obligations of the
debtor, to wit:

a) those which are personal, in the sense that the personal qualifications and circumstances
of the debtor have been taken into account in the creation of the obligation,

b) those that are intransmissible by express agreement or by will of the testator, and

c) those that are intransmissible by express provision of law, such as life pensions given
under contract. The Heirs of Zenaida B. Gonzales vs. Sps. Basas, G.R. No. 206847, June
15, 2022

23. Are children, regardless of the circumstances of their birth, qualified to inherit from their
direct ascendants, such as their grandparents, by their right of representation?

Yes. The best interest of the child should prevail. Both marital and nonmarital children,
whether born from a marital or nonmarital child, are blood relatives of their parents and
other ascendants. Nonmarital children are removed from their parents and ascendants in the
same degree as marital children. Nonmarital children of marital children are also removed

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from their parents and ascendants in the same degree as nonmarital children of nonmarital
children.

Likewise, to allow grandchildren and other descendants, regardless of their birth status, to
inherit by right of representation will protect the legitime of the compulsory heir they
represent; otherwise, the legitime will be impaired, contrary to protections granted to this
legitime in other areas of our law on succession. Aquino vs. Aquino, G.R. No. 208912/G.R.
No. 209018, December 7, 2021

24. What is the scope of the court’s inquiry in probate proceedings? Are there any exemptions
to such rule?

The general rule is that in probate proceedings, the scope of the court’s inquiry is limited to
questions on the extrinsic validity of the will; the probate court will only determine the will’s
formal validity and due execution. Morales vs. Olondriz, G.R. No. 198994, February 3, 2016

The probate court may pass upon the intrinsic validity of the will when so warranted by
exceptional circumstances. When practical considerations demand that the intrinsic validity
of the will be passed upon even before it is probated, the probate court should meet the
issue. Morales vs. Olondriz, G.R. No. 198994, February 3, 2016

25. Are lawyers disqualified from being witnesses to a will?

Lawyers are not disqualified from being witnesses to a will; the subscribing witnesses testified
to the due execution of the will. Article 820 of the Civil Code provides that, "[a]ny 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 this
Code." Here, the attesting witnesses to the will in question are all lawyers equipped with the
aforementioned qualifications. In addition, they are not disqualified from being witnesses
under Article 821 of the Civil Code, even if they all worked at the same law firm at the time.
As pointed out by Natividad, these lawyers would not risk their professional licenses by
knowingly signing a document which they knew was forged or executed under duress;
moreover, they did not have anything to gain from the estate when they signed as witnesses.
All the same, petitioners did not present controverting proof to discredit them or to show
that they were disqualified from being witnesses to Consuelo's will at the time of its
execution. xxx The lawyer-witnesses unanimously confirmed that the will was duly executed
by Consuelo who was of sound mind and body at the time of signing. The Tanchancos failed
to dispute the competency and credibility of these witnesses; thus, the Court is disposed to
give credence to their testimonies that Consuelo executed the will in accordance with the

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formalities of the law and with full mental faculties and willingness to do so. Tanchanco v.
Santos, G.R. No. 204793, June 8, 2020

OBLIGATIONS AND CONTRACTS

26. Discuss legal compensation as a mode of extinguishing an obligation.

Compensation is a mode of extinguishing obligations of two persons who, in their own right,
are creditors and debtors of each other.

Legal compensation requires the concurrence of several conditions: (1) each one of the
obligors is bound principally and a principal creditor of the other; (2) both debts consist in a
sum of money, or if the things due are consumable, they are of the same kind, and also of the
same quality if the latter has been stated; (3) the two debts are due; (4) the debts are
liquidated and demandable; and (5) over neither of them is there any retention or
controversy, commenced by third persons and communicated in due time to the debtor.

A debt is considered liquidated when the amount and time of payment is fixed, and its exact
amount is known. The exact amount of the debt may be expressed already in definite figures
or determinable through a simple arithmetical operation. Compensation cannot extend to
unliquidated, disputed claims arising from breach of contract. Meanwhile, a debt is
demandable when it is enforceable in court, there being no apparent defenses inherent in it.
For instance, debts which are subject to suspensive conditions or those barred by prescription
are not considered demandable. Linear Construction Corporation vs. Dolmar Property
Ventures, Inc., G.R. No. 212327, November 17, 2021

27. Discuss novation, expromision, and delegacion.

One of the ways to novate an obligation is by changing its object, cause, or principal
conditions. A necessary element of novation is the cancellation of the old obligation by the
new one, which may be effected expressly or impliedly. It is never presumed and must be
proven as a fact. The test of incompatibility is whether the two contracts can stand together,
each one having an independent existence.

Novation is done by: (1) changing the object or principal conditions; (2) substituting the
person of the debtor; or (3) subrogating a third person in the rights of the creditor.

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In expromision, the initiative for the change does not come from the debtor and may even
be made without his knowledge, since it consists in a third person assuming the obligation.
As such, it only requires the consent of the third person and the creditor. In delegacion, the
debtor offers and the creditor accepts a third person who consents to the substitution and
assumes the obligation. Hence, the intervention and the consent of these three persons are
necessary. But in either mode of substitution, the consent of the creditor is indispensable.

After all, substitution of one debtor for another may delay or prevent the fulfillment of the
obligation by reason of the financial inability or insolvency of the new debtor. It is only just,
therefore, that the creditor expressly accepts the novation that extinguishes the obligation
of the original debtor. Chua vs. Secretary of Justice, G.R. No. 214960, June 15, 2022

SALES AND LEASE

28. Distinguish contract of sale from contact to sell.

In a contract to sell, the payment of the purchase price is a positive suspensive condition;
whereas, in a contract of sale, non-payment of the price is a negative resolutory condition.

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. The Heirs of Zenaida B. Gonzales vs. Sps. Basas,
G.R. No. 206847, June 15, 2022

29. In a sale of real estate for lump sum, what will prevail when there is a conflict between the
area as stated in the contract and the actual area covered by the boundaries declared
therein?

Where both the area and the boundaries of the immovable are declared in a sale of real
estate for a lump sum, the area covered within the boundaries of the immovable prevails
over the stated area; provided, that excess or deficiency between the former and the latter

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is reasonable. The vendor is obliged to deliver all that is included within the boundaries
regardless of whether the actual area is more than what was specified in the contract of sale;
and he/she shall do so without a corresponding increase in the contract price. This is
particularly true when the stated area is qualified to be approximate only, such as when the
words “more or less” were used. Dasmariñas T. Arcaina, et al. v. Noemi L. Ingram, G.R. No.
196444, February 15, 2017

30. When does the rule on double sales apply?

The rule on double sale applies only when there are two perfected “Contracts of Sale”. If
there is only one valid sale and another contract to sell where full payment has never been
made, the rule on double sales under Article 1544 of the Civil Code does not apply. Spouses
Domingo vs. Manzano and Aquino, G.R. No. 201883, November 16, 2016

31. What are the manifestations of an equitable mortgage?

The contract shall be presumed to be an equitable mortgage, in any of the following cases:

i. When the price of a sale with right to repurchase is unusually Inadequate;

ii. When the vendor remains in Possession as lessee or otherwise;
iii. 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;
iv. When the purchaser Retains for himself a part of the purchase price;
v. When the vendor binds himself to pay the Taxes on the thing sold;
vi. 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. Art. 1602, Civil Code
vii. In case of Doubt, a contract purporting to be a sale with right to repurchase shall be
construed as an equitable mortgage. Art. 1603, Civil Code

32. May a title be nullified and real property be reconveyed in case of equitable mortgage?

Title may be nullified and real property may be reconveyed in case of equitable mortgage. As
the transaction between the parties herein was demonstrated to be one of equitable
mortgage, petitioner did not become owner of the subject property but a mere mortgagee
thereof. As such, petitioner was bound by the prohibition against pactum commissorium as
embodied in Article 2088 of the Civil Code: Art. 2088. The creditor cannot appropriate the
things given by way of pledge or mortgage, or dispose of them. Any stipulation to the contrary

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is null and void. The mortgagee's consolidation of ownership over the mortgaged property
upon the mortgagor's mere failure to pay the obligation is the essence of pactum
commissorium. The mortgagor's default does not operate to automatically vest on the
mortgagee the ownership of the encumbered property. This Court has repeatedly declared
such arrangements as contrary to morals and public policy and thus void. If a mortgagee in
equity desires to obtain title to a mortgaged property, the mortgagee's proper remedy is to
cause the foreclosure of the mortgage in equity and buy it at a foreclosure sale.

Having proceeded to cause the cancellation of respondents-spouses title to the mortgaged

property and its transfer to his name without availing of the remedy of foreclosure, petitioner
can be concluded to have dabbled in the prohibited practice of pactum commissorium. The
transaction is consequently rendered void, and title to the subject property should be
reverted to respondents-spouses. Dacquel v. Spouses Sotelo, G.R. No. 203946, August 4,
2021

AGENCY

33. A parcel of land was sold through an agent whose authority was made verbally. Is the sale
valid?

No. When the sale of a piece of land or any interest thereon is through an agent, the authority
of the latter shall be in writing; otherwise, the sale shall be void. Mactan-Cebu International
Airport Authority vs. Unchuan, G.R. No. 182537, June 1, 2016

34. When does a contract of agency become irrevocable?

An agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of
fulfilling an obligation already contracted, or if a partner is appointed manager of a
partnership in the contract of partnership and his removal from the management is
unjustifiable. International Exchange Bank (now Union Bank of the Philippines) vs. Briones,
G.R. No. 205657, March 29, 2017

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CREDIT TRANSACTIONS

35. What are the requirements of a pactum commissorium?

Pactum commissorium requires the following elements: (1) There should be a property
mortgaged by way of security for the payment of the principal obligation; and (2) There
should be a stipulation for automatic appropriation by the creditor of the thing mortgaged in
case of non-payment of the principal obligation within the stipulated period. Dala vs. Auticio,
G.R. No. 205672, June 22, 2022

36. An agreement between X and Y reflects the agreed interest rate for forbearance of money.
When may the legal interest rate of 6% per annum apply?

If the rate of interest is stipulated, such stipulated interest shall apply and not the legal
interest, provided the stipulated interest is not excessive and unconscionable. The legal
interest only applies in the absence of stipulated interest. Lara’s Gifts & Decors, Inc. vs.
Midtown Industrial Sales, Inc., G.R. No. 225433, August 28, 2019

37. Summarize the guidelines on the imposition/award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof.

With regard to an award of interest in the concept of actual and compensatory damages, the
rate of interest, as well as the accrual thereof, is imposed, as follows:

i. When the obligation is breached, and it consists in the payment of a sum of money,
i.e, a loan or forbearance of money, goods, credits or judgments, the interest due shall
be that which is stipulated by the parties in writing, provided it is not excessive and
unconscionable, which, in the absence of a stipulated reckoning date, shall be
computed from default, i.e., from extrajudicial or judicial demand in accordance with
Article 1169 of the Civil Code, UNTIL FULL PAYMENT, without compounding any
interest unless compounded interest is expressly stipulated by the parties, by law or
regulation. Interest due on the principal amount accruing as of judicial demand shall
SEPARATELY earn legal interest at the prevailing rate prescribed by the Bangko Sentral
ng Pilipinas, from the time of judicial demand UNTIL FULL PAYMENT.

ii. In the absence of stipulated interest, in a loan or forbearance of money, goods, credits
or judgments, the rate of interest on the principal amount shall be the prevailing legal
interest prescribed by the Bangko Sentral ng Pilipinas, which shall be computed from
default, i.e., from extrajudicial or judicial demand in accordance with Article 1169 of

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the Civil Code, UNTIL FULL PAYMENT, without compounding any interest unless
compounded interest is expressly stipulated by law or regulation. Interest due on the
principal amount accruing as of judicial demand shall SEPARATELY earn legal interest
at the prevailing rate prescribed by the Bangko Sentral ng Pilipinas, from the time of
judicial demand UNTIL FULL PAYMENT.

iii. When the obligation, not constituting a loan or forbearance of money, goods, credits
or judgments, is breached, an interest on the amount of damages awarded may be
imposed in the discretion of the court at the prevailing legal interest prescribed by the
Bangko Sentral ng Pilipinas, pursuant to Articles 2210 and 2011 of the Civil Code. No
interest, however, shall be adjudged on unliquidated claims or damages until the
demand can be established with reasonable certainty. Accordingly, where the amount
of the claim or damages is established with reasonable certainty, the prevailing legal
interest shall begin to run from the time the claim is made extrajudicially or judicially
(Art. 1169, Civil Code) UNTIL FULL PAYMENT, but when such certainty cannot be so
reasonably established at the time the demand is made, the interest shall begin to run
only from the date of the judgment of the trial court (at which time the quantification
of damages may be deemed to have been reasonably ascertained) UNTIL FULL
PAYMENT. The actual base for the computation of the interest shall, in any case, be
on the principal amount finally adjudged, without compounding any interest unless
compounded interest is expressly stipulated by law or regulation. Lara’s Gifts &
Decors, Inc. vs. Midtown Industrial Sales, Inc., G.R. No. 225433, August 28, 2019

38. Are bank deposits considered loans?

Yes. Bank deposits are in the nature of irregular deposits. They are really loans because they
earn interest. All kinds of bank deposits, whether fixed, savings, or current are to be treated
as loans and are to be covered by the law on loans. Current and savings deposit are loans to
a bank because it can use the same. Bank of the Philippine Islands vs. Court of Appeals, G.R.
No. 104612, May 10, 1994

39. What are the elements of Antichresis?

Antichresis involves an express agreement between parties whereby:

i. the creditor will have possession of the debtor’s real property given as security;
ii. such creditor will apply the fruits of the said property to the interest owed by the
debtor, if any, then to the principal amount;

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iii. the creditor retains enjoyment of such property until the debtor has totally paid what
he owes; and
iv. should the obligation be duly paid, then the contract is automatically extinguished
proceeding from the accessory character of the agreement. Reyes vs. Heirs of
Benjamin Malance, G.R. No. 219071, August 24, 2016

Note: For the contract of antichresis to be valid, Article 2134 of the Civil Code requires that
the amount of the principal and of the interest shall be specified in writing; otherwise the
contract of antichresis shall be void. Bangis vs. Heirs of Serafin and Salud Adolfo, G.R. No.
190875, June 13, 2012

TORTS AND DAMAGES

40. What are the requisites before resort to the doctrine of res ipsa loquitur may be allowed?

Before resort to the doctrine may be allowed, the following requisites must be satisfactorily
shown: (1) the accident is of a kind which ordinarily does not occur in the absence of
someone’s negligence; (2) it is caused by an instrumentality within the exclusive control of
the defendant or defendants; and (3) the possibility of contributing conduct which would
make the plaintiff responsible is eliminated. Allarey vs. Dela Cruz, G.R. No. 250919,
November 10, 2021

41. What must the plaintiff prove for a successful medical negligence case?

In order to successfully pursue a claim in a medical negligence case, the plaintiff must prove
that a health professional either failed to do something which a reasonably prudent health
professional would have or have not done; and that the action or omission caused injury to
the patient.

Proceeding from this guideline, the plaintiff must show the following elements by a
preponderance of evidence: duty of the health professional, breach of that duty, injury of the
patient, and proximate causation between the breach and the injury. Our Lady of Lourdes
Hospital vs. Capanzana, G.R. No. 189218, March 22, 2017

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