2023 Civil Law Golden Notes

FACULTY OF CIVIL LAW (1734)
CIVIL LAW
2023 GOLDEN NOTES

FACULTY OF CIVIL LAW
UNIVERSITY OF SANTO TOMAS
MANILA
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Faculty of Civil Law (1734)
ACADEMIC YEAR 2022-2023

CIVIL LAW STUDENT COUNCIL
NICOLO B. BONGOLAN PRESIDENT
IVAN ARNIE C. QUIAMCO VICE PRESIDENT INTERNAL
JANNODIN D. DIPATUAN VICE PRESIDENT EXTERNAL
BRIAN CHOOYE S. LIM SECRETARY
ROMBERT JOSEPH EMIEL D. CRUZ TREASURER
HARLEY JANSEN L. CALDERON AUDITOR
BIENVENIDO L. ORTIZ III PUBLIC RELATIONS OFFICER
KAREN DARYL L. BRITO CHIEF-OF-STAFF
UST BAR-OPS
JUSTINE RENEE GERVACIO CHAIRPERSON

PAULINNE STEPHANY G. SANTIAGO VICE-CHAIRPERSON
KAREN DARYL L. BRITO HEAD, SECRETARIAT
JAN YSABEL U. DE LEON HEAD, PUBLIC RELATIONS OFFICER
GABRIEL C. LAPID HEAD, FINANCE COMMITTEE
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FRITZ N. CANTERO HEAD, LOGISTICS COMMITTEE
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JOHN FREDERICK A. NOJARA SENIOR MEMBER
JEDIDIAH R. PADUA SENIOR MEMBER
VANESSA A. SIENA SENIOR MEMBER
ATTY. AL CONRAD B. ESPALDON

ADVISER
ACADEMICS COMMITTEE 2023

ANGELA BEATRICE S. PEÑA KATHERINE S. POLICARPIO
SECRETARIES-GENERAL
RON-SOPHIA NICOLE C. ANTONIO CRIMINAL LAW
HERLENE MAE D. CALILUNG LABOR LAW AND SOCIAL LEGISLATION
POLITICAL LAW AND

PATRISHA LOUISE E. DUMANIL
PUBLIC INTERNATIONAL LAW
LEGAL AND JUDICIAL ETHICS WITH

ALEXANDRA MAUREEN B. GARCIA
PRACTICAL EXERCISES
HANNAH JOY C. IBARRA COMMERCIAL LAW
JEDIDIAH R. PADUA CIVIL LAW
PAULINNE STEPHANY G. SANTIAGO TAXATION LAW
DIANNE MICAH ANGELA D. YUMANG REMEDIAL LAW
EXECUTIVE COMMITTEE
PAULA ANDREA F. PEÑAFLOR COVER DESIGN ARTIST

CIVIL LAW COMMITTEE 2023

RAUL GABRIEL M. MANALO
CIVIL LAW SUBJECT HEAD
AILEEN ALEXABELLE M. DE LEON ASST. HEAD, PERSONS AND FAMILY RELATIONS

MARIA ALEXA LOUISE U. DAÑO ASST. HEAD, OBLIGATIONS AND CONTRACTS
ASST. HEAD, PROPERTY, OWNERSHIP, AND
MICHAEL JOHN D. NATABLA
ITS MODIFICATIONS
IRISH KATE B. MARAMAG ASST. HEAD, SPECIAL CONTRACTS
CIVIL LAW ASSISTANT SUBJECT HEADS
MEMBERS
LEARSI RAY G. AFABLE ALYSSA E. FELICIANO
JODEE A. AGONCILLO KATLEEN ANN B. MATEO
MARIELLE DIANNE S. BERNARDO CHUSTINE IRA C. SISON
ALLIAH FATIMA P. CUI ARIEL B. TAMONDONG
LINN JERARD A. DANTES MAYNARD DRURY A. TOLENTINO
CHRISTINE JEM D. DOGTA
ADVISERS
ATTY. SHEEN JOSHUA B. BARRIETA
ATTY. KENNETH JAMES CARLO C. HIZON
ATTY. KING JAMES CARLO C. HIZON
FACULTY OF CIVIL LAW

UNIVERSITY OF SANTO TOMAS
ACADEMIC OFFICIALS
ATTY. NILO T. DIVINA REV. FR. ISIDRO C. ABAÑO, O.P.
DEAN REGENT
ATTY. ARTHUR B. CAPILI

FACULTY SECRETARY
ATTY. ELGIN MICHAEL C. PEREZ

LEGAL COUNSEL
UST CHIEF JUSTICE ROBERTO CONCEPCION LEGAL AID CLINIC
JUDGE PHILIP A. AGUINALDO

SWDB COORDINATOR
LENY G. GADIANA, R.G.C.

GUIDANCE COUNSELOR
OUR DEEPEST APPRECIATION TO OUR

MENTORS AND INSPIRATION
Justice Oswaldo D. Agcaoili Justice Georgina D. Hidalgo
Justice Gabriel T. Robeniol Dean Augusto K. Aligada†
Dean Eduardo Juan F. Abella Dean Jose I. dela Rama, Jr.
Dean Gezzez Giezi G. Granado Dean Maria Liza A. Lopez-Rosario
Dean Viviana M. Paguirigan Dean Melencio S. Sta. Maria, Jr.
Judge Philip A. Aguinaldo Judge Katlyn Anne C. Aguilar-Bilgera
Judge Jesusa R. Lapuz-Gaudiano Judge Jose Arturo R. Natividad
Judge Myra B. Quiambao Judge Rigor R. Pascual
Judge Charito M. Macalintal-Sawali Atty. Ruben F. Balane†
Atty. Sheen Joshua B. Barrieta Atty. Elpidio F. Barzaga, Jr.
Atty. Vincent Z. Bolivar Atty. Danny E. Bunyi
Atty. Arthur B. Capili Atty. Teresita L. Cruz
Atty. Joseph Ferdinand M. Dechavez Atty. Enrique V. Dela Cruz, Jr.
Atty. Amado Paolo C. Dimayuga Atty. Irvin Joseph M. Fabella
Atty. Rafaelito M. Garayblas† Atty. Alden Francis C. Gonzales
Atty. Rene B. Gorospe Atty. Kenneth James Carlo C. Hizon
Atty. King James Carlo C. Hizon Atty. Eduardo A. Labitag
Atty. Maria Carolina T. Legarda Atty. Robert Nomar V. Leyretana
Atty. Glenn R. Luansing Atty. Kenneth Glenn L. Manuel
Atty. Lean Jeff M. Magsombol Atty. Anicia C. Marquez
Atty. Benigno G. Par, Jr. Atty. Teofilo R. Ragadio
Atty. Ismael L. Sarangaya, Jr. Atty. Carla E. Santamaria-Seña
Atty. Avelino M. Sebastian, Jr. Atty. Anna Katrina T. Singcol
Atty. Janna Mae B. Tecson Atty. Klinton M. Torrralba
Atty. Mauricio C. Ulep Atty. Crisostomo A. Uribe
For being our guideposts in understanding the intricate sphere of Civil Law.
– Academics Committee 2023
DISCLAIMER
THE RISK OF USE OF THIS BAR

REVIEW MATERIAL SHALL BE
BORNE BY THE USER
Table of Contents
PERSONS AND FAMILY RELATIONS

I. PERSONS ............................................................................................................................................................................. 1
A. WHEN LAW TAKES EFFECT DOCTRINE ................................................................................................................. 1
B. IGNORANCE OF THE LAW ......................................................................................................................................... 5
C. RETROACTIVITY OF LAWS........................................................................................................................................ 7
D. MANDATORY OR PROHIBITORY LAWS ................................................................................................................ 8
E. WAIVER OF RIGHTS .................................................................................................................................................... 9
F. PRESUMPTION AND APPLICABILITY OF CUSTOM........................................................................................... 11
G. LEGAL PERIODS ........................................................................................................................................................ 11
H. TERRITORIALITY PRINCIPLE ............................................................................................................................... 12
I. CONFLICT OF LAWS .................................................................................................................................................. 13
1. LEX NATIONALII.................................................................................................................................................... 13
2. LEX REI SITAE ........................................................................................................................................................ 13
3. LEX LOCI CELEBRATIONIS .................................................................................................................................. 13
4. DOCTRINE OF RENVOI ........................................................................................................................................ 13
J. HUMAN RELATIONS IN RELATION TO PERSONS .............................................................................................. 14
K. CAPACITY TO ACT.................................................................................................................................................... 18
1. RESTRICTIONS ON CAPACITY TO ACT ........................................................................................................... 18
2. BIRTH AND DEATH OF NATURAL PERSONS ................................................................................................. 19
3. PRESUMPTION OF SURVIVORSHIP ................................................................................................................. 20
L. SURNAMES ................................................................................................................................................................. 21
M. RULES GOVERNING PERSONS WHO ARE ABSENT .......................................................................................... 24
II. MARRIAGE ...................................................................................................................................................................... 33

A. GENERAL PRINCIPLES ............................................................................................................................................ 33
1. ESSENTIAL REQUISITES ..................................................................................................................................... 33
2. FORMAL REQUISITES ......................................................................................................................................... 34
B. MIXED MARRIAGES AND FOREIGN DIVORCE ................................................................................................... 41
C. VOID MARRIAGES ..................................................................................................................................................... 45
D. VOIDABLE MARRIAGES .......................................................................................................................................... 65
E. EFFECT OF DEFECTIVE MARRIAGES ................................................................................................................... 74
F. FOREIGN MARRIAGES ............................................................................................................................................. 75
G. LEGAL SEPARATION ................................................................................................................................................ 75
H. PROPERTY RELATIONS BETWEEN SPOUSES ................................................................................................... 85
1. DONATIONS PROPTER NUPTIAS ...................................................................................................................... 86
2. VOID DONATIONS BY THE SPOUSES ............................................................................................................... 94
3. ABSOLUTE COMMUNITY OF PROPERTY REGIME........................................................................................ 95
4. CONJUGAL PARTNERSHIP OF GAINS REGIME ............................................................................................ 102
5. SEPARATION OF PROPERTY REGIME........................................................................................................... 111
6. PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE .......................................................................... 113
7. JUDICIAL SEPARATION OF PROPERTY ........................................................................................................ 118
I. THE FAMILY .............................................................................................................................................................. 121
1. GENERAL PRINCIPLES ...................................................................................................................................... 121
J. FAMILY HOME .......................................................................................................................................................... 122
K. PATERNITY AND FILIATION ............................................................................................................................... 127
1. CONCEPTS OF PATERNITY, FILIATION, AND LEGITIMACY ..................................................................... 127
2. LEGITIMATE CHILDREN ................................................................................................................................... 127
a) WHO ARE LEGITIMATE CHILDREN ...................................................................................................... 127
b) PROOF OF FILIATION OF LEGITIMATE CHILDREN .......................................................................... 128
c) RIGHTS OF LEGITIMATE CHILDREN .................................................................................................... 130
d) GROUNDS TO IMPUGN LEGITIMACY ................................................................................................... 130
3. ILLEGITIMATE CHILDREN ............................................................................................................................... 134
a) WHO ARE ILLEGITIMATE CHILDREN .................................................................................................. 134
b) PROOF OF FILIATION OF ILLEGITIMATE CHILDREN ...................................................................... 134
c) RIGHTS OF ILLEGITIMATE CHILDREN ................................................................................................ 136
d) GROUNDS TO IMPUGN FILIATION ....................................................................................................... 136
4. LEGITIMATED CHILDREN ................................................................................................................................ 137
a) WHO MAY BE LEGITIMATED ................................................................................................................. 137
b) HOW LEGITIMATION TAKES PLACE .................................................................................................... 137
c) GROUNDS TO IMPUGN LEGITIMACY .................................................................................................... 137
5. ADOPTED CHILDREN ........................................................................................................................................ 139
a) DOMESTIC ADMINISTRATIVE ADOPTION AND ALTERNATIVE CHILD CARE ACT
(R.A. NO. 11642) ....................................................................................................................................... 139
b) WHO MAY ADOPT .................................................................................................................................... 140
c) WHO MAY BE ADOPTED.......................................................................................................................... 141
d) EFFECTS OF A DECREE OF ADOPTION (See Arts. 189-190 of the Family Code) ....................... 142
L. SUPPORT .................................................................................................................................................................. 142
1. WHAT COMPRISES SUPPORT ......................................................................................................................... 142
2. WHO ARE OBLIGED TO GIVE SUPPORT ....................................................................................................... 144
3. SOURCE OF SUPPORT ....................................................................................................................................... 146
4. ORDER OF SUPPORT ......................................................................................................................................... 147
M. PARENTAL AUTHORITY ...................................................................................................................................... 151
1. CONCEPT OF PARENTAL AUTHORITY.......................................................................................................... 151
2. SUBSTITUTE PARENTAL AUTHORITY ......................................................................................................... 154
3. SPECIAL PARENTAL AUTHORITY .................................................................................................................. 155
4. EFFECTS OF PARENTAL AUTHORITY ........................................................................................................... 156
PROPERTY OWNERSHIP, AND ITS MODIFICATIONS

I. CLASSIFICATION OF PROPERTY .............................................................................................................................. 163
A. IMMOVABLES .......................................................................................................................................................... 164
B. MOVABLES ............................................................................................................................................................... 170
II. BUNDLE OF RIGHTS ................................................................................................................................................... 177

A. OWNERSHIP ............................................................................................................................................................ 177
B. RIGHTS OF ACCESSION ......................................................................................................................................... 183
2. ACCESSION INDUSTRIAL ................................................................................................................................... 186
3. ACCESSION NATURAL ....................................................................................................................................... 198
C. ACTIONS TO RECOVER OWNERSHIP AND POSSESSION OF PROPERTY ................................................... 202
1. ACCION REIVINDICATORIA ............................................................................................................................... 202
2. ACCION PUBLICIANA .......................................................................................................................................... 204
3. ACCION INTERDICTAL ....................................................................................................................................... 205
4. QUIETING OF TITLE .......................................................................................................................................... 206
D. CO-OWNERSHIP ..................................................................................................................................................... 210
1. DISTINCTIONS BETWEEN RIGHT TO PROPERTY OWNED IN COMMON AND
FULL OWNERSHIP OVER THE IDEAL SHARE .......................................................................................... 215
2. CONTRIBUTIONS FOR EXPENSES .................................................................................................................. 218
AC No. 034
3. REDEMPTION...................................................................................................................................................... 219
4. PARTITION .......................................................................................................................................................... 220
E. POSSESSION ............................................................................................................................................................. 223
1. POSSESSION IN THE CONCEPT OF A HOLDER ............................................................................................ 232
2. POSSESSION IN THE CONCEPT OF AN OWNER ........................................................................................... 233
3. RELEVANCE OF GOOD FAITH AND BAD FAITH .......................................................................................... 235
4. RULES FOR MOVABLES .................................................................................................................................... 244
F. USUFRUCT ................................................................................................................................................................ 246
1. RIGHTS AND OBLIGATIONS OF USUFRUCTUARY ...................................................................................... 247
2. CLASSES OF USUFRUCT .................................................................................................................................... 257
3. EXTINGUISHMENT OF THE USUFRUCT ........................................................................................................ 259
G. EASEMENTS ............................................................................................................................................................. 262
1. CHARACTERISTICS ............................................................................................................................................ 263
2. KINDS OF EASEMENTS...................................................................................................................................... 264
3. MODES OF ACQUIRING EASEMENTS ............................................................................................................. 285
4. EFFECTS OF EASEMENT ................................................................................................................................... 287
5. EXTINGUISHMENT OF EASEMENTS .............................................................................................................. 289
III. DIFFERENT MODES OF ACQUIRING OWNERSHIP ............................................................................................ 291

A. OCCUPATION ........................................................................................................................................................... 292
B. TRADITION .............................................................................................................................................................. 294
C. DONATION ............................................................................................................................................................... 294
1. FEATURES ............................................................................................................................................................ 296
2. CLASSIFICATIONS .............................................................................................................................................. 297
3. DISTINCTIONS BETWEEN MORTIS CAUSA AND INTER VIVOS DONATIONS ........................................ 299
4. FORM..................................................................................................................................................................... 301
5. LIMITATIONS ...................................................................................................................................................... 303
6. REDUCTION AND REVOCATION ..................................................................................................................... 305
D. PRESCRIPTION ....................................................................................................................................................... 308
1. DISTINCTIONS BETWEEN ACQUISITIVE AND EXTINCTIVE PRESCRIPTION ...................................... 309
2. DISTINCTIONS BETWEEN EXTINCTIVE PRESCRIPTION AND LACHES ................................................ 314
IV. LAND TITLES AND DEEDS ....................................................................................................................................... 318

A. TORRENS SYSTEM.................................................................................................................................................. 318
B. REGALIAN DOCTRINE ........................................................................................................................................... 323
C. NATIONALITY RESTRICTIONS ON LAND OWNERSHIP ................................................................................. 329
D. ORIGINAL REGISTRATION (P.D. No. 1529) ..................................................................................................... 331
1. WHO MAY APPLY ............................................................................................................................................... 331
2. DECREE OF REGISTRATION ............................................................................................................................ 336
3. REVIEW OF DECREE OF REGISTRATION; INNOCENT PURCHASER FOR VALUE (IPV);
RIGHTS OF IPV ............................................................................................................................................... 340
E. AN ACT IMPROVING THE CONFIRMATION PROCESS FOR IMPERFECT LAND TITLES
(R.A. No. 11573, amending C.A. No. 141 and PD 1529) ............................................................................... 350
F. CERTIFICATE OF TITLE......................................................................................................................................... 354
G. SUBSEQUENT REGISTRATION ............................................................................................................................ 363
1. VOLUNTARY DEALINGS ................................................................................................................................... 364
2. INVOLUNTARY DEALINGS ............................................................................................................................... 366
(a) ADVERSE CLAIMS .................................................................................................................................... 367
(b) NOTICE OF LIS PENDENS ....................................................................................................................... 370
H. NON-REGISTRABLE PROPERTIES...................................................................................................................... 372
I. DEALINGS WITH UNREGISTERED LAND ........................................................................................................... 375
J. ASSURANCE FUND ................................................................................................................................................... 377
1. NATURE OF ASSURANCE FUND ...................................................................................................................... 377
2. CONDITIONS FOR COMPENSATION FROM ASSURANCE FUND .............................................................. 378
3. PRESCRIPTIVE PERIOD .................................................................................................................................... 378
K. RECONSTITUTION OF TITLES ............................................................................................................................. 380
V. WILLS AND SUCCESSION ........................................................................................................................................... 384

A. GENERAL PROVISIONS.......................................................................................................................................... 384
B. TESTAMENTARY SUCCESSION ............................................................................................................................ 389
1. GENERAL PROVISIONS ..................................................................................................................................... 389
2. CHARACTERISTICS OF A WILL ....................................................................................................................... 389
3. NON-DELEGABILITY OF A TESTAMENTARY POWER ............................................................................... 390
4. APPLICABLE LAW AS TO FORM AND SUBSTANCE OF A WILL ............................................................... 392
5. TESTAMENTARY CAPACITY ............................................................................................................................ 393
6. FORM OF NOTARIAL AND HOLOGRAPHIC WILLS ..................................................................................... 394
7. WITNESSES TO A NOTARIAL WILL (QUALIFICATION AND DISQUALIFICATIONS) .......................... 403
8. CONFLICT RULES ............................................................................................................................................... 404
9. MODES OF REVOCATION OF WILLS AND TESTAMENTARY DISPOSITIONS ....................................... 404
a) EFFECT ON THE RECOGNITION OF A NON-MARITAL CHILD ......................................................... 407
b) THEORY OF DEPENDENT RELATIVE REVOCATION......................................................................... 407
c) REVOCATION BASED ON A FALSE CAUSE ........................................................................................... 408
10. HEIRS .................................................................................................................................................................. 408
a) COMPULSORY HEIRS ............................................................................................................................... 408
b) INSTITUTION OF HEIRS .......................................................................................................................... 411
(1) LIMITATIONS ON THE INSTITUTION OF HEIRS .................................................................. 411
(2) COLLECTIVE INSTITUTION....................................................................................................... 415
(3) PROSCRIPTION AGAINST SUCCESSIVE INSTITUTION ....................................................... 415
(4) INSTITUTION BASED ON A FALSE CAUSE ............................................................................. 415
c) SUBSTITUTION OF HEIRS ....................................................................................................................... 415
(1) CAUSES OF SUBSTITUTION ...................................................................................................... 415
(2) FIDEICOMMISSARY SUBSTITUTION (COMPARED WITH TESTAMENTARY
TRUSTS) ......................................................................................................................................... 416
11. LEGITIME........................................................................................................................................................... 419
a) COLLATION IN CONNECTION WITH THE COMPUTATION OF LEGITIME.................................... 421
b) TABLE OF LEGITIME ................................................................................................................................ 422
c) IMPAIRMENT OF THE LEGITIME .......................................................................................................... 425
d) PRESUMPTIVE LEGITIME ....................................................................................................................... 426
12. PRETERITION ................................................................................................................................................... 426
a) REQUISITES ................................................................................................................................................ 426
b) GOVERNING LAW...................................................................................................................................... 427
13. CONDITIONAL DISPOSITIONS AND DISPOSITIONS ................................................................................ 430
a) CONDITION NOT TO MARRY.................................................................................................................. 431
b) DISPOSICION CAPTATORIA ..................................................................................................................... 432
c) MODAL INSTITUTION .............................................................................................................................. 432
14. VOID TESTAMENTARY DISPOSITIONS ...................................................................................................... 433
15. DISINHERITANCE ............................................................................................................................................ 433
a) GROUNDS FOR DISINHERITANCE......................................................................................................... 434
b) REQUISITES FOR THE VARIOUS GROUNDS FOR DISINHERITANCE ............................................ 435
c) EFFECTS OF RECONCILIATION .............................................................................................................. 435
16. LEGACIES AND DEVISES................................................................................................................................. 435
a) REQUISITES FOR VALIDITY ................................................................................................................... 437
b) PROPERTY NOT OWNED BY THE TESTATOR ................................................................................... 437
c) INEFFECTIVE LEGACIES/DEVISES ........................................................................................................ 440
C. INTESTATE SUCCESSION ...................................................................................................................................... 440
1. RELATIONSHIP ................................................................................................................................................... 440
2. CAUSES OF INTESTACY..................................................................................................................................... 442
3. ORDER OF INTESTATE SUCCESSION ............................................................................................................. 442
4. RULE OF PROXIMITY AND RULE OF EQUALITY ......................................................................................... 447
a) EXCEPTIONS TO THE RULE OF PROXIMITY AND RULE OF EQUALITY ....................................... 447
5. DETERMINATION OF HEIRS ............................................................................................................................ 448
6. SUCCESSIONAL BARRIER (THE “IRON CURTAIN RULE”) ........................................................................ 448
7. SUCCESSIONAL RIGHTS OF ADOPTED CHILDREN ..................................................................................... 451
8. SUCCESSIONAL RIGHTS OF ADOPTING PARENTS ..................................................................................... 452
9. SUCCESSIONAL RIGHTS OF MARITAL AND NON-MARITAL CHILDREN ............................................... 452
10. SUCCESSIONAL RIGHTS OF THE SURVIVING SPOUSE ............................................................................ 453
11. SUCCESSIONAL OF COLLATERAL RELATIVES .......................................................................................... 453
D. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSION........................................................ 454
1. CAPACITY TO SUCCEED .................................................................................................................................... 454
a) INCAPACITY BY REASON OF UNWORTHINESS AND EFFECTS OF CONDONATION .................. 455
b) INCAPACITY BY REASON OF MORALITY ............................................................................................ 458
c) INCAPACITY BY REASON OF POSSIBLE UNDUE INFLUENCE .......................................................... 459
2. RIGHT OF REPRESENTATION IN TESTACY AND INTESTACY ................................................................. 461
a) REQUISITES AND LIMITATIONS ........................................................................................................... 461
3. RIGHT OF ACCRETION IN TESTAMENTARY SUCCESSION AND IN INTESTACY .................................. 462
a) REQUISITES AND LIMITATIONS ........................................................................................................... 462
4. ACCEPTANCE AND REPUDIATION OF INHERITANCE ............................................................................... 464
a) FORM OF REPUDIATION ......................................................................................................................... 465
b) EFFECTS OF REPUDIATION COMPARED TO PREDECEASE AND INCAPACITY .......................... 465
OBLIGATIONS AND CONTRACTS

I. OBLIGATIONS................................................................................................................................................................ 467
1. DEFINITION ......................................................................................................................................................... 467
2. ESSENTIAL ELEMENTS ..................................................................................................................................... 467
3. SOURCES OF OBLIGATION ............................................................................................................................... 469
B. NATURE AND EFFECTS OF OBLIGATIONS ....................................................................................................... 474
1. BREACHES OF OBLIGATIONS .......................................................................................................................... 476
2. REMEDIES FOR BREACH OF OBLIGATION................................................................................................... 486
C. DIFFERENT KINDS OF OBLIGATIONS ................................................................................................................ 492
D. EXTINGUISHMENT OF OBLIGATIONS ............................................................................................................... 512
1. PAYMENT ............................................................................................................................................................. 512
a) CONCEPT OF PAYMENT........................................................................................................................... 512
b) PAYMENT BY CESSION vs. DATION IN PAYMENT ............................................................................. 520
c) TENDER OF PAYMENT AND CONSIGNATION ..................................................................................... 521
2. LOSS OF THE THING DUE ................................................................................................................................. 523
a) CONCEPT OF LOSS .................................................................................................................................... 523
b) REQUISITES................................................................................................................................................ 523
c) FORCE MAJEURE......................................................................................................................................... 526
3. CONDONATION ................................................................................................................................................... 526
4. CONFUSION ......................................................................................................................................................... 527
5. COMPENSATION ................................................................................................................................................. 528
a) REQUISITES ................................................................................................................................................ 528
b) COMPENSATION OF RESCISSIBLE AND VOIDABLE DEBTS ............................................................ 530
c) NON-COMPENSABLE DEBTS................................................................................................................... 531
6. NOVATION ........................................................................................................................................................... 535
a) CONCEPT OF NOVATION ......................................................................................................................... 535
b) EXPRESSED AND IMPLIED NOVATION................................................................................................ 535
(1) REQUISITES ........................................................................................................................................ 535
c) EXPROMISSION AND DELEGACION DISTINGUISHED ........................................................................ 537
(1) CONSENT REQUIRED........................................................................................................................ 538
(2) EFFECT OF INSOLVENCY OF NEW DEBTOR ................................................................................ 538
d) LEGAL AND CONVENTIONAL SUBROGATION .................................................................................... 542
II. CONTRACTS ................................................................................................................................................................. 544

1. DEFINITION OF A CONTRACT ......................................................................................................................... 544
2. ELEMENTS OF A CONTRACT ........................................................................................................................... 544
a) ESSENTIAL ELEMENTS ............................................................................................................................ 544
b) NATURAL ELEMENTS .............................................................................................................................. 544
B. BASIC PRINCIPLES OF CONTRACTS ................................................................................................................... 548
1. OBLIGATORY FORCE OF A CONTRACT ......................................................................................................... 548
2. FREEDOM TO STIPULATE (AUTONOMY OF THE WILL) AND ITS LIMITATIONS .............................. 549
3. BINDING EFFECT OF A CONTRACT ................................................................................................................ 549
4. PRIVITY OF CONTRACT.................................................................................................................................... 550
a) CONCEPT ..................................................................................................................................................... 550
b) EXCEPTIONS TO THE RULE ON PRIVITY OF CONTRACTS .............................................................. 551
5. CONSENSUALITY OF CONTRACTS ................................................................................................................. 552
a) CONCEPT AND COVERAGE...................................................................................................................... 552
b) EXCEPTIONS .............................................................................................................................................. 553
c) REFORMATION OF INSTRUMENTS ....................................................................................................... 553
C. ESSENTIAL REQUISITES OF A CONTRACT........................................................................................................ 556
1. CONSENT .............................................................................................................................................................. 557
2. OBJECT.................................................................................................................................................................. 565
3. CAUSE OR CONSIDERATION............................................................................................................................ 566
D. DEFECTIVE CONTRACTS ...................................................................................................................................... 572
1. RESCISSIBLE CONTRACTS ............................................................................................................................... 572
2. VOIDABLE CONTRACTS.................................................................................................................................... 577
3. UNENFORCEABLE CONTRACTS ...................................................................................................................... 580
4. VOID CONTRACTS .............................................................................................................................................. 581
III. NATURAL OBLIGATIONS ......................................................................................................................................... 584
SPECIAL CONTRACTS
I. SALES .............................................................................................................................................................................. 586
A. DEFINITION AND ESSENTIAL REQUISITES ...................................................................................................... 586
B. CONTRACT OF SALE .............................................................................................................................................. 592
1. CONTRACT TO SELL .......................................................................................................................................... 592
2. OPTION CONTRACT........................................................................................................................................... 596
3. RIGHT OF FIRST REFUSAL ............................................................................................................................... 597
C. EARNEST MONEY.................................................................................................................................................... 602
D. DOUBLE SALES ....................................................................................................................................................... 604
E. RISK OF LOSS ........................................................................................................................................................... 606
F. BREACH OF CONTRACT OF SALE ........................................................................................................................ 608
1. RECTO LAW ......................................................................................................................................................... 614
2. MACEDA LAW ..................................................................................................................................................... 616
G. EXTINGUISHMENT OF THE SALE ....................................................................................................................... 621
1. CONVENTIONAL REDEMPTION ...................................................................................................................... 621
2. LEGAL REDEMPTION ........................................................................................................................................ 622
H. EQUITABLE MORTGAGE ...................................................................................................................................... 624
I. PACTO DE RETRO SALES ....................................................................................................................................... 629
II. LEASE............................................................................................................................................................................. 630

A. KINDS OF LEASE ..................................................................................................................................................... 630
B. RIGHTS AND OBLIGATIONS OF LESSOR ........................................................................................................... 641
C. RIGHTS AND OBLIGATIONS OF LESSEE ............................................................................................................ 644
III. AGENCY........................................................................................................................................................................ 653
IV. CREDIT TRANSACTIONS .......................................................................................................................................... 679

A. LOANS ....................................................................................................................................................................... 679
1. KINDS .................................................................................................................................................................... 679
2. INTEREST............................................................................................................................................................. 684
B. DEPOSIT ................................................................................................................................................................... 694
C. GUARANTY AND SURETYSHIP ............................................................................................................................ 703
D. REAL ESTATE MORTGAGE ................................................................................................................................... 717
E. ANTICHRESIS ........................................................................................................................................................... 736
V. COMPROMISE .............................................................................................................................................................. 747
VI. QUASI-CONTRACTS................................................................................................................................................... 749

A. NEGOTIORUM GESTIO ............................................................................................................................................ 750
B. SOLUTIO INDEBITI.................................................................................................................................................. 753
VII. TORTS AND DAMAGES ........................................................................................................................................... 757

A. PRINCIPLES.............................................................................................................................................................. 757
1. ABUSE OF RIGHTS ............................................................................................................................................. 757
2. UNJUST ENRICHMENT ...................................................................................................................................... 758
3. LIABILITY WITHOUT FAULT .......................................................................................................................... 759
4. ACTS CONTRARY TO LAW ............................................................................................................................... 759
5. ACTS CONTRARY TO MORALS ........................................................................................................................ 760
B. CLASSIFICATION OF TORTS ................................................................................................................................ 761
1. INTENTIONAL ..................................................................................................................................................... 761
2. NEGLIGENT .......................................................................................................................................................... 766
3. STRICT LIABILITY ............................................................................................................................................. 766
C. THE TORTFEASOR ................................................................................................................................................. 769
1. JOINT ..................................................................................................................................................................... 769
2. DIRECT ................................................................................................................................................................. 769
D. QUASI-DELICT vs. CULPA CONTRACTUAL vs. CULPA CRIMINAL .................................................................. 769
1. NATURE OF LIABILITY ..................................................................................................................................... 773
E. PROXIMATE CAUSE ................................................................................................................................................ 773
1. CONCEPT .............................................................................................................................................................. 773
2. DOCTRINE OF LAST CLEAR CHANCE ............................................................................................................. 774
F. VICARIOUS LIABILITY ........................................................................................................................................... 776
G. RES IPSA LOQUITUR ............................................................................................................................................... 790
H. DAMNUM ABSQUE INJURIA................................................................................................................................... 791
I. DEFENSES .................................................................................................................................................................. 793
J. NEGLIGENCE ............................................................................................................................................................. 796
1. STANDARD OF CARE ......................................................................................................................................... 798
2. PRESUMPTIONS OF NEGLIGENCE .................................................................................................................. 799
K. DAMAGES ................................................................................................................................................................. 804
1. KINDS OF DAMAGES.......................................................................................................................................... 804
a) ACTUAL AND COMPENSATORY DAMAGES ......................................................................................... 804
b) MORAL DAMAGES .................................................................................................................................... 813
c) NOMINAL DAMAGES................................................................................................................................. 818
d) TEMPERATE OR MODERATE DAMAGES ............................................................................................. 820
e) LIQUIDATED DAMAGES .......................................................................................................................... 822
f) EXEMPLARY OR CORRECTIVE DAMAGES ............................................................................................ 822
2. WHEN DAMAGES MAY BE RECOVERED ....................................................................................................... 825
L. DAMAGES IN CASE OF DEATH ............................................................................................................................. 825
M. DUTY OF INJURED PARTY ................................................................................................................................... 827
I. PERSONS
LEGEND RPC - Revised Penal Code

A.O. - Administrative Order STD - Sexually Transmissible Disease
ACP - Absolute Community of Property TCT - Transfer Certificate of Title
ASOP - Absolute Separation of Property
C.A. - Commonwealth Act
Comprehensive Agrarian Reform
CARL - PERSONS AND FAMILY RELATIONS
Law
Comprehensive Agrarian Reform
CARP -
Program
Certificate Declaring a Child
CDCLAA -
Legally Available for Adoption
I. PERSONS
Community Environment and
CENRO - Natural Resources Office
Certificate
CPG - Conjugal Partnership of Gains
Department of Agrarian Reform A. WHEN LAW TAKES EFFECT DOCTRINE
DARAB -
Adjudication Board
Department of Environment and
DENR -
Natural Resources Law
E.O. - Executive Order
FC - Family Code Aquinas defined law as “an ordinance of reason for
FH - Family Home the common good, made by him who has care of the
ICAB - Inter-Country Adoption Board community, and promulgated.” (Republic v.
IPV - Innocent Purchasers for Value Sandiganbayan, G.R. No. 104768, 21 July 2002)
JBC - The Judicial and Bar Council
LGC - Local Government Code Effectivity of laws
LRA - Land Registration Authority
M.C. - Memorandum Circular Laws shall take effect after 15 days following the
NACC - National Authority for Child Care completion of their publication either in the Official
National Mapping and Resource Gazette (OG), or in a newspaper of general
NAMRIA -
Information Authority circulation in the Philippines, unless it is otherwise
NCC - New Civil Code provided. (Art. 2, New Civil Code (NCC), as amended
Open, Continuous, Exclusive, by Executive Order (EO) No. 200)
OCENPO - Notorious Possession, and
Occupation Effectivity: It depends on whether it has provided a
OCT - Original Certificate of Title specific date for its effectivity:
Owner's Duplicate of Certificate of
ODCT -
Title 1. If date is specified – Upon the lapse of the said
OG - Official Gazette period following its complete publication and
OSG - Office of the Solicitor General not before.
P.D. - Presidential Decree
Provincial Agrarian Reform 2. If date is NOT specified – Only after the fifteen-
PARAD -
Adjudicator day period following its complete publication,
Provincial Environment and which may either be on the 15th or on the 16th
PENRO -
Natural Resources Office day depending on the language used by the
PLA - Public Land Act Congress in fixing the effectivity date of the
R.A. - Republic Act statute. (Rabuya, 2009)
REM - Real Estate Mortgage
1 U N I V E R S IT Y O F S A N T O T O M A S
FACULTY OF CIVI L LAW
CIVIL LAW
a. Fifteenth (15th) day - If the law declares that Where to publish

it shall become effective “15 days after its
publication.” 1. Official Gazette; or
2. Newspaper of general circulation in the
b. Sixteenth (16th) day - If the law declares that Philippines.
it shall be effective “after 15 days following its
publication.” Newspaper of general circulation
3. If the law provides for immediate effectivity or For a newspaper to be considered of general
upon approval – It is effective immediately after circulation:
its complete publication and NOT after signing
by the President. 1. It must be published for the dissemination
of local news and general information;
4. If the law is voluminous – Reckoning shall begin
from the release of the last of the series. 2. It has a bona fide subscription list of paying
subscribers;
“Unless it is otherwise provided” provision on
effectivity of law 3. It is published at regular intervals;
This clause refers to the date of effectivity and not to 4. It must also not be devoted to the interest
the requirement of publication itself. The or published for the entertainment of a
requirement of publication may not be omitted in particular class, profession, trade, calling,
any event. This clause does not mean that the race or religious denomination. (China
legislature may make the law effective immediately Banking Corp. v. Sps. Martir, G.R. No. 184252,
upon approval, or on any other date without its 11 Sept. 2009)
previous publication.
Indispensability of publication
Publication requirement
GR: All laws are required to be published in full.
Publication is indispensable in every case, but the
legislature may in its discretion provide that the NOTE: The reason for this rule is that the basic
usual 15-day period shall be shortened or extended. constitutional requirement of due process must be
(Umali v. Estanislao, G.R. No. 104037, 29 May 1992; satisfied. Without such notice and publication, there
Tañada v. Tuvera, G.R. No. L-63915, 29 Dec. 1986) would be no basis for the application of the maxim
ignoratia legis non excusat. (Rabuya, 2009)
Publication must be in full or no publication at all
since its purpose is to inform the public of the XPNs: (O-R-L-I)
contents of the law. The mere mention of the
number of the presidential decree (PD), the title of 1. Municipal Ordinances (governed by the Local
such decree, its whereabouts, the supposed date of Government Code (LGC));
effectivity, and in a mere supplement of the Official
Gazette cannot satisfy the publication requirement. 2. Rules and regulations which are internal in
This is not even substantial compliance. (Tañada v. nature;
Tuvera, G.R. No. L-63915, 29 Dec. 1986)
3. Letters of Instruction issued by administrative
supervisors on internal rules and guidelines;
4. Interpretative regulations regulating only the

personnel of administrative agency.
U N I V E R S IT Y O F S A N T O T O M A S 2
2023 GOLDEN NOTES
I. PERSONS
XPNs to the XPNs: (D-P-E) A: YES. The assailed JBC policy does not fall within
the administrative rules and regulations exempted
Administrative rules and regulations that require from the publication requirement. The assailed
publication: policy involves a qualification standard by which
the JBC shall determine proven competence of an
1. The purpose of which is to implement or applicant. It is not an internal regulation, because if
enforce existing laws pursuant to a valid it were, it would regulate and affect only the
Delegation; members of the JBC and their staff. Notably, the
selection process involves a call to lawyers who
2. Penal in nature; and meet the qualifications in the Constitution and are
3. If it diminishes Existing rights of certain willing to serve in the Judiciary to apply to these
individuals. vacant positions. Thus, it is but a natural
consequence thereof that potential applicants be
NOTE: Circulars issued by the Monetary Board are informed of the requirements to the judicial
required to be published if they are meant not positions, so that they would be able to prepare for
merely to interpret but to “fill in the details” of the and comply with them. (Villanueva v. JBC, G.R. No.
Central Bank Act which that body is supposed to 211833, 07 Apr. 2015)
enforce. As a rule, circulars which prescribe a
penalty for violations should be published before Q: Honasan questions the authority and
becoming effective. However, circulars which are jurisdiction of the DOJ panel of prosecutors to
mere statements of general policies as to how the conduct a preliminary investigation and to
law should be construed do not need publication in eventually file charges against him, claiming
the Official Gazette for their effectivity. (Rabuya, that since he is a senator with a salary grade of
2009) 31, it is the Office of the Ombudsman, not the
DOJ, that has authority and jurisdiction to
Q: Judge Ferdinand Villanueva was appointed as conduct the preliminary investigation.
a presiding judge of MTC, Compostela-New
Bataan. The following year, Judge Villanueva DOJ claims that it has concurrent jurisdiction,
applied as Presiding Judge in several Regional invoking an OMB-DOJ Joint Circular which
Trial Courts. outlines the authority and responsibilities
among prosecutors of the DOJ and the Office of
The Judicial and Bar Council (JBC) then the Ombudsman in the conduct of preliminary
informed him that he was not included in the investigations.
list. The JBC’s decision upheld its long-standing
policy of opening the chance for promotion to Honasan counters that said circular is
second-level courts to those judges who have ineffective as it was never published. Is OMB-
served in their current positions for at least five DOJ Circular No. 95-001 ineffective because it
years. was not published?
Judge Villanueva then directly went to Court to A: NO. OMB-DOJ Circular No. 95-001 is merely an
assail the said policy on the ground it is internal circular between the two offices which
unconstitutional; it violates the procedural due outlines the authority and responsibilities among
process for lack of publication. Did the JBC prosecutors of the DOJ and of the Office of the
violate the procedural due process for not Ombudsman in the conduct of preliminary
publishing the questioned policy? investigations. It does not contain any penal
provision nor prescribe a mandatory act or prohibit
any under pain of penalty. It does not regulate the
conduct of persons or the public, in general. It need
not be published. (Honasan, II v. The Panel of
CIVIL LAW
Investigating Prosecutors of the DOJ, G.R. No. 159747, Examples of administrative issuances which
15 June 2004) were not given force and effect for lack of
publication:
Q: The Sangguniang Bayan of Hagonoy, Bulacan
enacted an ordinance which increased the stall 1. Rules and regulations issued by the Joint
rentals of the market vendors in Hagonoy. Art. 3 Ministry of Health-Ministry of Labor and
of the said ordinance provided that it shall take Employment Accreditation Committee
effect upon approval. The ordinance was posted regarding the accreditation of hospitals, media
from 04 to 25 Nov. 1996. clinics and laboratories.
In the last week of November 1997, petitioners 2. Letter of Instruction No. 416 ordering the
were personally given copies and were suspension of payments due and payable by
informed that it shall be enforced in January distressed copper mining companies.
1998.
3. Memorandum Circulars issued by the POEA
The petitioners contended that the subject regulating the recruitment of domestic helpers
ordinance was not published as required by law. to Hongkong.
Did the ordinance comply with the rule of
publication? 4. Administrative Order (A.O.) No. SOSPEC 89-08-
01 issued by Philippine International Trading
A: YES. An ordinance which increased the stall Corporation regulating applications for
rentals of the market vendors has complied with the importation from the People’s Republic of
publication requirement when the same was posted China.
in three conspicuous places. Posting was validly
made in lieu of publication as there was no 5. Corporate Compensation Circular No. 10 issued
newspaper of local circulation in the Municipality of by the Department of Budget and Management
Hagonoy. This fact was known to and admitted by (DBM) discontinuing the payment of other
petitioners. (Sec. 188, LGC); Hagonoy Market allowances and fringe benefits to government
Vendors Assoc. v. Mun. of Hagonoy, G.R. No. 137621, officials and employees. (Ulep, 2006)
06 Feb. 2002)
Q: “A” alleges violation of his right to due process
NOTE: Within 10 days after their approval, certified considering that he is summoned to attend the
true copies of all provincial, city, and municipal tax Senate hearings without being apprised not only
ordinances or revenue measures shall be published of his rights therein through the publication of
in full for 3 consecutive days in a newspaper of local the Senate Rules of Procedure Governing
circulation. However, in provinces, cities, and Inquiries in Aid of Legislation.
municipalities where there are no newspapers of
local circulation, the same may be posted in at least Senate invoked the provisions of R.A. No. 8792,
2 conspicuous and publicly accessible places. (Sec. otherwise known as the Electronic Commerce
188, LGC) Act of 2000, to support their claim of valid
publication through the internet. Did the
publication of the assailed Rules of Procedure
through the Senate’s website satisfy the due
process requirement of the law?
A: NO. R.A. No. 8792 (Electronic Commerce Act of

2000) considers an electronic data message or an
electronic document as a functional equivalent of a
written document only for evidentiary purposes. It
2023 GOLDEN NOTES
I. PERSONS
does not make the internet a medium for publishing change on how the parties involved, including the
laws, rules, or regulations. (Garcillano v. House of investors themselves, will make decisions and
Representatives Committees, G.R. No. 170338, 23 Dec. act.||The questioned regulations should have
2008) undergone notice and hearing prior to their
enactment. They imposed new and substantial
Q: On 17 Dec. 2013, the Department of Finance burdens on those governed. For failure to conduct
(DOF), upon recommendation of the notice and hearing prior to issuance and
Commissioner of Internal Revenue (CIR), issued publication, the questioned regulations are
RR 1-2014, which amended the provisions of RR therefore void. (The Philippine Stock Exchange, Inc.,
2-1998, as further amended by RR 10-2008, et al. v. Secretary of Finance, et al., G.R. No. 213860,
otherwise known as the Consolidated 05 July 2022, as penned by J. Hernando).
Withholding Tax Regulations. Under RR 1-2014,
withholding agents are now required to submit
a digital copy of the alphalist of their employees B. IGNORANCE OF THE LAW
and payees. On 29 Jan. 2014, the CIR issued RMC
5-2014 clarifying, in a Question-and-Answer
format, the provisions of RR 1-2014 on the
Presumption of Knowledge of Laws
submission of the alphalist of employees or
payees of income payments. It requires
GR: Everyone is conclusively presumed to know the
submission of the tax identification number
law. Hence, ignorance of the law excuses no one
(TIN) and the complete name of the payees,
from compliance therewith. (Art. 3, NCC)
together with the corresponding amount of
income and withholding tax. Failure to comply
This conclusive presumption presupposes that the
with these issuances will result to imposition of
law has been published. Without such notice and
administrative and penal sanctions. Petitioners
publication, there would be no basis for the
allege that the Secretary of Finance and the CIR
application of the maxim ignoratia legis non excusat.
violated their right to due process when they did
It would be the height of injustice to punish or
not send notice or conduct hearings to
otherwise burden a citizen for the transgression of
deliberate and discuss the provisions and
a law of which he had no notice whatsoever, not
requirements of the questioned regulations.
even a constructive one. (Rabuya, 2009)
Respondents refute this argument by proffering
that the Bureau of Internal Revenue (BIR), in the
XPNs:
exercise of its legislative functions, had issued
several BIR issuances to amend the reportorial
1. Mistake upon a doubtful or difficult question of
requirements of the payor-corporations, which
law may be the basis of good faith. (Art. 526(3),
do not need to comply with the requirement of
NCC)
notice and hearing. Are the questioned
regulations valid?
2. Payment by reason of a mistake in the
construction or application of a doubtful or
A: NO. The questioned regulations substantially
difficult question of law may come within the
changed the procedure currently observed by the
scope of solutio indebiti. (Art. 2155, NCC)
market participants. The questioned regulations
impose a new obligation — that is, the transmittal
3. In order that fraud may make a contract
of the alphalist of payees to the listed companies —
voidable, it should be serious and should not
on the PDTC, their transfer agents and depository
have been employed by both contracting
account holders. This obligation did not exist before
parties. Incidental fraud only obliges the person
because the practice then was the reporting of PCD
employing it to pay damages. (Art. 1344, NCC)
Nominee as the payee in the alphalist. With the
questioned regulations, there will be a significant
CIVIL LAW
Laws covered As to nature of mistake

When some facts
Occurs when a person
The laws referred to under Art. 3 of the NCC are which really exist are
having full knowledge
those of the Philippine Laws and it applies to all unknown or some fact
of the facts come to an
kinds of domestic laws, whether civil or penal, is supposed to exist
erroneous conclusion
substantive or remedial. However, the article is which really does not
as to its legal effects.
limited to mandatory and prohibitory laws. It does exist.
not include those which are merely permissive. Defense
(Rabuya, 2006) Not excusable, even if
Good faith is an excuse.
in good faith.
Non-applicability to Foreign laws
Q: Eduardo was married to Ruby. He then met
Ignorance of a foreign law is a mistake of fact. There Tina and proposed marriage, assuring her that
is no presumption of knowledge of foreign laws. It he was single. They got married and lived
must be alleged and proved as a matter of fact; together. Tina, upon learning that Eduardo had
otherwise, the doctrine of processual presumption been previously married, charged Eduardo for
will apply. bigamy for which he was convicted. Eduardo
testified that he declared he was “single”
Doctrine of Processual Presumption because he believed in good faith that his first
wife was already dead, having not heard from
This is also known as presumed-identity approach. It her for 20 years, and that he did not know that
is where a foreign law is not pleaded, or even if he had to go to court to seek for the nullification
pleaded, is not proved, the presumption is that the of his first marriage before marrying Tina. Is
foreign law is the same as Philippine Laws. (Orion Eduardo liable for the crime of bigamy?
Savings Bank v. Suzuki, G.R. No. 205487, 12 Nov.
2014) A: YES. Eduardo is presumed to have acted with
malice or evil intent when he married Tina. As a
In international law, the party who wants to have a general rule, mistake of fact or good faith of the
foreign law applied to a dispute or case has the accused is a valid defense in a prosecution for a
burden of proving the foreign law. The foreign law felony by dolo as such defense negates malice or
is treated as a question of fact to be properly criminal intent. However, ignorance of the law is not
pleaded and proved, as the judge or labor arbiter an excuse because everyone is presumed to know
cannot take judicial notice of a foreign law. He is the law. Eduardo has the burden to prove that when
presumed to know only domestic or forum law. he married Tina, he has a well-grounded belief that
(ATCI Overseas Corp. v. Echin, G.R. No. 17855, 11 Oct. his first wife was already dead. He should have
2010) adduced in evidence a decision of a competent court
declaring the presumptive death of his first wife as
Mistake of fact vs. Mistake of law required by Art. 349 of the Revised Penal Code
(RPC), in relation to Art. 41 of the Family Code (FC).
MISTAKE OF FACT MISTAKE OF LAW Such judicial declaration constitutes proof that
As to want of knowledge pertains to Eduardo acted in good faith and would negate
Want of knowledge or criminal intent on his part when he married Tina
Want of knowledge of acquaintance with the and, as a consequence, he could not be held guilty of
some fact or facts laws of the land insofar bigamy in such case. Eduardo, however, failed to
constituting or relating as they apply to the act, discharge his burden. (Manuel v. People, G.R. No.
to the subject matter relation, duty, or 165842, 29 Nov. 2005)
on hand. matter under
consideration.
2023 GOLDEN NOTES
I. PERSONS
Q: Complainants who were connected with the between Cheong Boo and Tan Dit. Gee only
Daily Informer (a widely circulated newspaper presented a document in Chinese stating the alleged
in Western Visayas) were charged before the marriage ceremony but there is no competent
MTC by Judge Pamonag of the crime of libel. testimony as to what the laws of China in the
Respondent judge conducted a preliminary Province of Amoy concerning marriage were in
investigation and thereafter issued warrants for 1895. Therefore, there is lacking proof so clear,
the arrest of the complainants. Complainants strong and unequivocal as to produce a moral
filed an administrative case against the judge for conviction of the existence of the alleged prior
gross ignorance of the law. They contended that Chinese marriage.
the judge neither has authority to conduct a Ignorance of a foreign law is not ignorance of the
preliminary investigation nor to issue warrants law but of fact because such foreign law must be
for their arrest. The judge said that it was his first alleged and proved as a matter of fact, there
first libel case and that he issued the warrants in being no judicial notice of said foreign law. Thus, the
good faith. Is the respondent guilty of gross Chinese marriage was not adequately proved.
ignorance of the law? (Estate of Boo v. Gee, G.R. No. 18081, 03 Mar. 1922)
A: YES. Although the reliance of Judge Pamonag on

the provisions of Art. 360 of the RPC prior to its C. RETROACTIVITY OF LAWS
amendment by R.A. No. 4363, was an honest
mistake, the Court does not condone his failure to
keep himself updated with the amendments and
Laws shall have no retroactive effect, unless the
latest jurisprudence on the said statute. Judges are
contrary is provided. (Art. 4, NCC)
expected more than just cursory acquaintance with
statutes and procedural rules. They must know the
Retroactive law
law and apply them properly in good faith. The
provisions of Art. 360 of the RPC, as amended, on
A legislative act that looks backward or
the persons authorized to conduct preliminary
contemplates the past, affecting acts or facts that
investigation in libel cases is elementary. Not to
existed before the act come into effect. (Black’s Law
know it constitutes gross ignorance of the law.
Dictionary, 2009)
(Miaque v. Judge Pamonag, A.M. No. MTJ-02-1412, 28
Mar. 2003)
Retroactive effect of laws
Q: Cheong Boo, a native of China, died intestate

GR: Laws shall have no retroactive effect.
in Zamboanga. He left a property worth
P100,000. The estate of the deceased was
NOTE: The maxim “lex prospicit, non respicit”
claimed on one hand by Gee, who alleged that he
means, “the law looks forward not backward”. The
was a legitimate child by a marriage contracted
retroactive application of a law usually divests
by Boo with Tan Dit in China in 1895. The estate
rights that have already become vested or impairs
was claimed, on the other hand, by Mora Adong
the obligations of contract and hence, is
who alleged that she had been lawfully married
unconstitutional. (Chavez v. PEA, G.R. No. 133250, 06
to Boo in 1896. Gee introduced in evidence a
May 2003) (2022 BAR)
document in Chinese stating the marriage
ceremony that took place in Amoy, China. Is the
XPNs: (T-I-N-C-R-E-E-P)
document presented by Gee sufficient enough to
prove the Chinese marriage of Cheong Boo and
1. Tax laws;
Tan Dit?
2. Interpretative statutes;
3. Laws creating New substantive rights;
A: NO. The Supreme Court held that the document
4. Curative statutes;
is not sufficient to prove the Chinese marriage
CIVIL LAW
5. Remedial /procedural; 22 of the RPC that “penal laws shall have a

retroactive effect in so far as they favor the person
NOTE: Statutes regulating the procedure of the guilty of a felony.” (People v. Mejares, G.R. No.
courts will be construed as applicable to actions 225735, 10, Jan. 2018)
pending and undetermined at the time of their
passage. Procedural laws are retrospective in Non-retroactivity of laws vs. Judicial Decisions
that sense and to that extent. (Municipal
Government of Coron v. Cariño, G.R. No. L-65894, Judicial decisions have no retroactive effect. When a
24 Sept. 1987) doctrine of the Supreme Court is overruled and a
different view is adopted, the new doctrine should
6. Emergency laws; be applied prospectively and should not apply to
7. When Expressly provided; parties who had relied on the old doctrine and acted
8. Penal laws favorable to the accused provided, on the faith thereon. (Co v. CA, G.R. No. 100776, 28
the accused is not a habitual delinquent. Oct. 1993)
XPNs to the XPNs: If the application of the Retroactivity clause of the Family Code (2005,
retroactive law: (D-I-C-E) 2010 BAR)
1. Impairs obligation of contracts; The FC shall have retroactive effect insofar as it does
2. Is in the nature of Ex post facto law or a bill not prejudice or impair vested or acquired rights in
of attainder; accordance with the NCC or other laws. (Art. 256,
3. Divests vested rights; or FC)
4. Is Constitutionally forbidden. (Black’s Law
Dictionary, 2009)
D. MANDATORY OR PROHIBITORY LAWS
NOTE: In case of doubt, laws apply prospectively.
Q: Belen Mejares was adjudged guilty of the

Mandatory law
crime of qualified theft of cash and jewelry
amounting to P1,056,308.00. Meanwhile, on 29
A law or a provision in a statute is said to be
Aug. 2017, the President signed into law R.A. No.
mandatory when disobedience to it, or want of exact
10951 that sought to help indigent prisoners
compliance with it, will make the act done under the
and individuals accused of committing petty
statute absolutely void. (Black’s Law Dictionary,
crimes. It also increased the baseline amounts
2009)
and values of property and damage to make
them commensurate to the penalties meted on
Prohibitory law
the offenses committed in relation to them.
Should the penalties under the new law benefit
Mejares?
prohibitory when it forbids a certain action. (Black’s
Law Dictionary, 2009)
A: YES. R.A. No. 10951 has since come into effect
during the pendency of this case. It likewise
Permissive law
specifically stipulates that its provisions shall have
retroactive effect. A provision of the law adds that
this retroactivity applies not only to persons
permissive or directory when it allows certain acts
accused of crimes but have yet to be meted their
but does not command them. (Black’s Law
final sentence, but also to those already “serving
Dictionary, 2009)
sentence by final judgment.” This retroactivity is in
keeping with the principle already contained in Art.
2023 GOLDEN NOTES
I. PERSONS
Violation of Mandatory or Prohibitory Laws NOTE: Waivers can be express or implied, however,
it cannot be presumed. It must be clearly and
GR: Acts executed against the provisions of convincingly shown, either by express stipulation or
mandatory or prohibitory laws shall be void. (Art. 5, acts admitting no other reasonable explanation.
NCC)
Right
XPNs: When the law:
It is a legally enforceable claim of one person against
1. Itself authorizes its validity (e.g., lotto, another, that the other shall do a given act, or shall
sweepstakes); not do a given act. (Pineda, 2010)
2. Makes the act valid but punishes the violator Kinds of Rights under the Constitution
(e.g., A widow who remarries before the lapse of
300 days after the death of her husband is liable 1. Natural Rights – Those which grow out of the
to criminal prosecution but the marriage is nature of man and depend upon personality
valid.); (e.g. right to life, liberty, privacy, and good
reputation);
3. Makes the act merely voidable – the act is valid
until annulled (e.g., A marriage celebrated 2. Political Rights – Consist in the power to
through violence or intimidation or fraud is participate, directly or indirectly, in the
voidable.); establishment or administration of government
(e.g. right of suffrage, right to hold public office,
4. Declares the nullity of an act but recognizes legal right of petition); and
effects as arising from it (e.g., Children born after
the nullification of a void marriage due to 3. Civil Rights – Those that pertain to a person by
psychological incapacity are considered virtue of his citizenship in a state or community
legitimate). (Rabuya, 2006) (e.g. property rights, marriage, equal protection
of laws, freedom of contract, trial by jury).
(Pineda, 2010)
E. WAIVER OF RIGHTS
a. Rights of personality or human rights;
b. Family rights; and
c. Patrimonial rights:
Waiver
i. Real rights;
ii. Personal rights. (Rabuya, 2009)
It is a voluntary and intentional relinquishment or
abandonment of a known existing legal right,
Rights that CANNOT be waived
advantage, benefit, claim or privilege, which except
for such waiver the party would have enjoyed.
1. Right to live and right to future support.
2. Right to personality and family rights. (Pineda,
The voluntary abandonment or surrender, by a
2010)
capable person, of a right known by him to exist,
3. Right to future inheritance. (Art. 1347, NCC)
with the intent that such right shall be surrendered
and such person forever deprived of its benefit;
NOTE: This is especially so if the waiver is intended
or such conduct as warrants an inference of the
to prejudice creditors. Hence, if an heir repudiates
relinquishment of such right; or the intentional
the inheritance to the prejudice of his own creditors,
doing of an act inconsistent with claiming it. (Cruz &
the latter may petition the court to authorize them
Co., Inc. v. HR Const. Corp., G.R. No. 187521, 14 Mar.
to accept it in the name of the heir. (Art. 1052, NCC;
2012)
Albano, 2013)
CIVIL LAW
NOTE: If a candidate for mayor agrees to split his 5. When formalities are required, they must be
term of office with the vice-mayor to prevent the complied with. (Pineda, 2010)
latter from running against him, the contract is void
by reason of public policy. (Albano, 2013) Q: Edna filed an action for support against
Colonel Otamias. A deed of assignment was
Waiver of rights executed by Otamias where he waived 50% of
his pension benefits in favor of Edna and his
GR: Rights may be waived. children. The RTC issued a notice of
garnishment to AFP Pension and Gratuity
XPNs: Management Center and ordered the automatic
deduction of support from the pension benefits
1. If waiver is: of Colonel Otamias. The CA annulled the order of
the RTC and cited PD No. 1638 which provides
a. Contrary to law, public order, public for the exemption of the monthly pension of
policy, morals or good customs; or retired military personnel from execution and
b. Prejudicial to a third person with a attachment. Did Colonel Otamias validly waive
right recognized by law. (e.g. If A owes the exemption granted by PD no. 1638 upon the
B P10M, B cannot waive the loan if B execution of the deed of assignment?
owes C and B has no other assets).
A: YES. Under Art. 6 of the NCC, rights may be
2. If the right is: waived, unless the waiver is contrary to law, public
order, public policy, morals or good customs, or
a. A natural right, such as right to life; prejudicial to a third person with a right recognized
b. Inchoate, such as future inheritance. by law. When Colonel Otamias executed the Deed of
Assignment, he effectively waived his right to claim
A person may waive any matter which affects his that his retirement benefits are exempt from
property, and any alienable right or privilege of execution. The right to receive retirement benefits
which he is the owner or which belongs to him or to belongs to Colonel Otamias. His decision to waive a
which he is legally entitled, whether secured by portion of his retirement benefits does not infringe
contract, conferred with statute, or guaranteed by on the right of third persons, but even protects the
constitution, provided such rights and privileges right of his family to receive support. The Deed of
rest in the individual, are intended for his sole Assignment executed by Colonel Otamias was not
benefit, do not infringe on the rights of others, and contrary to law; it was in accordance with the
further provided the waiver of the right or privilege provisions on support in the FC. Hence, there was no
is not forbidden by law, and does not contravene reason for the AFP PGMC not to recognize its
public policy. (Cruz & Co., Inc. v. HR Const. Corp., G.R. validity. (Edna Mabugay-Otamias v. Republic, G.R.
No. 187521, 14 Mar. 2012) No. 189516, 08 June 2016)
Requisites of a valid waiver
1. Waiving party must actually have the right he is

renouncing;
2. He must have full capacity to make the waiver;
3. Waiver must be clear and unequivocal;
4. Waiver must not be contrary to law, public

order, public morals, etc., or prejudicial to a
third person with a right recognized by law; and
2023 GOLDEN NOTES
I. PERSONS
5. General conviction that the practice is the proper

F. PRESUMPTION AND APPLICABILITY OF rule of conduct; and
CUSTOM 6. Conformity with law, morals or public policy.
(Tolentino, 1987)
Application of customs in civil cases

Presumption in case of doubt in the
interpretation of laws (2003 BAR)
In civil cases, customs may be applied by the courts
in cases where the applicable law is:
In case of doubt in the interpretation or application
of laws, it is presumed that the lawmaking body
1. Silent;
intended right and justice to prevail. (Art. 10, NCC)
2. Obscure; or
3. Insufficient.
In case of silence, obscurity, or insufficiency of
the law with respect to a particular controversy
NOTE: Provided said customs are not contrary to
law, public morals, etc.
If the law is silent or is obscure or insufficient with
respect to a particular controversy, the judge shall
Non-applicability of customs in criminal cases
apply the custom of the place, and in default thereof,
the general principles of law and justice.
In criminal cases, customs cannot be applied
because of the maxim nullum crimen nulla poena
Customs which are contrary to law, public order,
sine lege (There is neither crime nor punishment,
public policy shall not be countenanced. (Art. 11,
without a law).
NCC)
Customs
G. LEGAL PERIODS
Customs are rules of conduct, legally binding and
obligatory, formed by repetition of acts uniformly
observed as a social rule. Computation of period
Necessity of proving customs 1. Year – 12 calendar months. (Sec. 31, Chapter

VIII, Administrative Code of 1987; CIR v.
GR: A custom must be proved as a fact, according to Primetown Property Group, Inc., G.R. No. 162155,
the rules of evidence. (NCC, Art. 12) 28 Aug. 2007)
XPN: Courts may take judicial notice of a custom if NOTE: In the said case, the Supreme Court
there is already a decision rendered by the same declared that Sec. 31, Chapter VIII, Book I of the
court recognizing the custom. Administrative Code of 1987, being a more
recent law, governs the computation of legal
Requisites before such custom could be periods with respect to counting “a year.”
considered a source of right
Calendar Month
1. Plurality of acts;
2. Uniformity of acts; It is “a month designated in the calendar without
3. General practice by the great mass of the people regard to the number of days it may contain.” It is
of the country or community; the “period of time running from the beginning of a
4. Continued practice for a long period of time; certain numbered day of the next month, and if
there is not sufficient number of days in the next
CIVIL LAW
month, then up to and including the last day of that the force of the law between the contracting
month.” parties. (Pineda, 2010)
Illustration: One calendar month from 31 Dec.

2007 will be from 01 Jan. 2008 to 31 Jan. 2008; one H. TERRITORIALITY PRINCIPLE
calendar month from 31 Jan. 2008 will be from 01
Feb. 2008 until 29 Feb. 2008. Hence, 12 calendar
months from 31 Dec. 2007 is 31 Dec. 2008; while 12
Penal laws and those of public security and safety
calendar months from 31 Jan. 2008 to 31 Jan. 2009.
shall be obligatory upon all who live or sojourn in
(Rabuya, 2009)
Philippine territory, subject to the principles of
international law and to treaty stipulations. (Art. 14,
2. Month – 30 days, unless designated by their
NCC)
name, in which case, they shall be computed
according to the number of days which they
Q: Reagan, a civilian employee of an American
respectively have;
corporation providing technical assistance to
the United States Air Force in the Philippines,
3. Day – 24 hours;
sold his automobile to a member of the United
4. Nighttime – from sunset to sunrise;
States Marine Corps. The transaction having
taken place at the Clark Field Air Base at
5. Week
Pampanga, the Commissioner of Internal
Revenue assessed said transaction and obliged
a. With reference to the calendar – 7
him to pay the corresponding income tax.
successive days regardless of which day
However, Reagan refused to pay, and he invoked
it would start; or
the exemption clause in the Military Bases
Agreement by virtue of which a "national of the
b. Without reference to the calendar –
United States serving in or employed in the
Sunday to Saturday. (Pineda, 2010)
Philippines in connection with the construction,
maintenance, operation or defense of the bases
NOTE: In the computation of period, the first day
and residing in the Philippines only by reason of
shall be excluded, and the last day included.
such employment" is not to be taxed on his
income unless derived from the Philippine
If the last day falls on a Sunday or a Legal Holiday
sources or sources other than the United States
sources. Is Reagan correct?
If the act to be performed within the period is:
A: NO. In Reagan, et. al. v. Commissioner of Internal

1. Prescribed or allowed by:
Revenue (G. R. No. L-26379, 27 Dec. 1969), the Court
held that for purposes of income tax legislation, the
a. The Rules of Court (ROC);
Military Bases agreement does not lend support to
b. An order of the court; or
the assertion that said base has become a foreign
c. Any other applicable statute.
soil or territory. By virtue of the Military Bases
Agreement, the Philippines merely consents that
The last day will automatically be the next
the US exercise jurisdiction in certain cases. The
working day.
consent was given purely as a matter of comity,
courtesy, or expediency over the bases as part of the
2. From a contractual relationship – The act will
Philippine territory or divested itself completely of
still become due despite the fact that the last
jurisdiction over offenses committed therein. This
day falls on a Sunday or a legal holiday. This is
provision is not and cannot on principle or authority
because obligations arising from contracts have
2023 GOLDEN NOTES
I. PERSONS
be construed as a limitation upon the rights of the 3. Penal Code

Philippine Government. Art. 2;
4. Corporation Code
I. CONFLICT OF LAWS Sec. 133 – Doing business without a license;
5. Constitution
Art. IV and Art. 5, Sec. 1; and
Private International Law
6. Rules of Court
It is a part of the municipal law of a state which
Rule 14 and 39, Sec. 48; Rule 131, Sec. 3 (n),
directs its courts and administrative agencies when
Rule 132, Sec. 35.
confronted with a legal problem involving foreign
element, as to whether or not they should apply the
foreign law. 1. LEX NATIONALII
Conflict of laws Lex Nationalii
It is the inconsistency or difference between the Laws relating to family rights and duties or to the
laws of different states or countries, arising in the status, condition, and legal capacity of persons are
case of persons who have acquired rights, incurred binding upon citizens of the Philippines, even
obligations, injuries or damages, or made contracts, though living abroad. (Art. 15, NCC)
within the territory of two or more jurisdictions.
(Black’s Law Dictionary, Fifth Edition) 2. LEX REI SITAE
Elements of Conflict of laws

Lex Rei Sitae
1. Legal problem or case involving foreign

Real property as well as personal property is
element; and
subject to the law of the country where it is situated.
(Art. 16, NCC)
Foreign element – a factual situation cutting
across territorial lines, affected by diverse laws
of two or more states. 3. LEX LOCI CELEBRATIONIS
2. Primary function is to determine whether the Lex Loci Celebrationis

law or judgments of other state/s will govern
and if so, the extent of its recognition or The forms and solemnities of contracts, wills, and
application in the forum. (Coquia, 2000) other public instruments shall be governed by the
laws of the country in which they are executed. (Art.
Sources of Philippine Conflict Rules 17, NCC)
1. Family Code 4. DOCTRINE OF RENVOI

Arts. 10, 21, 26, 35, 36, 37, 38, 80, 96, 184,
and 187;
Renvoi literally means “referring back.” The
problem arises when there is a doubt as to whether
2. Civil Code
a reference to a foreign law is a reference to the
Arts 14, 15, 16, 17, 815, 816, 818, 819, 829,
internal law of said foreign law; or a reference to the
1039, 1319, and 1753;
whole of the foreign law, including its conflict rules.
(Rabuya, 2009)
CIVIL LAW
order. (Amonoy v. Gutierrez, G.R. No. 140420, 15 Feb.

J. HUMAN RELATIONS IN RELATION TO 2001)
PERSONS
Injury vs. Damage
Injury is the illegal invasion of a legal right; damage

Abuse of right (2006 BAR)
is the loss, hurt, or harm which results from the
injury; and damages are the recompense or
A right, though by itself legal because recognized or
compensation awarded for the damage suffered.
granted by law as such, may nevertheless become
(Panteleon v. American Express, G.R. No. 174269, 25
the source of some illegality. When a right is
Aug. 2010)
exercised in a manner which does not conform with
the norms enshrined in Art. 19 and results in
There can be damage without injury in instances
damage to another, a legal wrong is thereby
which the loss or harm was not the result of a
committed for which the wrongdoer must be held
violation of a legal duty. In such cases, the
responsible. (Tocoms Ph. v. Philips Electronics, G.R.
consequences must be borne by the injured person
No. 214046, 05 Feb. 2020)
alone (Ibid.)
This principle is based upon the famous maxim

Arts. 19, 20, and 21 in the Enforcement and
summum jus summa injuria (the abuse of a right is
Sanctions of Abuse of Right (2022 BAR)
the greatest possible wrong). (Arlegui v. CA, G.R. No.
126437, 06 Mar. 2002)
While Art. 19 lays down a rule of conduct for the
government of human relations and for the
Rationale: The exercise of a right ends when the
maintenance of social order, it does not provide a
right disappears, and it disappears when it is
remedy for its violation. Generally, an action for
abused, especially to the prejudice of others. It
damages under either Art. 20 or Art. 21 would be
cannot be said that a person exercises a right when
proper. (Tocoms Ph. v. Philips Electronics, G.R. No.
he unnecessarily prejudices another or offends
214046, 05 Feb. 2020)
morals or good customs. (Pineda, 2010)
Art. 20 speaks of the general sanction for all other

Elements of abuse of right (L-B-P)
provisions of law which do not especially provide
for their own sanction. (Rabuya, 2006)
1. There is a Legal right or duty;
2. Such duty is exercised in Bad faith; and
Art. 21, on the other hand, speaks of act which is
3. It is for the sole intent of Prejudicing or injuring
legal but is contrary to morals, good custom, public
another. (Pineda, 2010)
order or public policy and is done with intent to
injure. (Ibid.)
Principle of Damnum Absque Injuria
Sanction for abuse of right under Article 20

It means damage without injury.
Generally, laws provide for their own sanctions and

The legitimate exercise of a person's rights, even if
methods of enforcement thereof. Art. 20 applies
it causes loss to another, does not automatically
only in cases where the law does not provide for its
result in an actionable injury. The law does not
own sanctions.
prescribe a remedy for the loss. This principle does
not, however, apply when there is an abuse of a
In view of the general sanction provided for under
person's right, or when the exercise of this right is
Art. 20, a person however does not have an absolute
suspended or extinguished pursuant to a court
right to be indemnified, it is essential that some
2023 GOLDEN NOTES
I. PERSONS
right of his be impaired. Without such, he is not Breach of promise to marry

entitled to indemnification. (Pineda, 2009)
GR: A breach of promise to marry per se is not an
Contra Bonus Mores (1996, 1998, 2006, 2009 actionable wrong.
BAR)
There is no provision in the NCC authorizing an
Any person who willfully causes loss or injury to action for breach of promise to marry.
another in a manner that is contrary to morals, good
customs, or public policy shall compensate the XPN: When the act constitutes one where damages
latter for the damage. (Art. 21, NCC) pursuant to Art. 21 of the NCC may be recovered and
is not a mere breach of promise to marry, such as:
It fills countless gaps in the statutes, which leave so
many victims of moral wrongs helpless, even 1. Where the woman is a victim of moral seduction.
though they suffered material and moral damages. (Gashem Shookat Baksh v. CA, G.R. No. 97336, 19
(Tolentino, 1987) Feb. 1993)
Elements of an action under Art. 21: 2. Where one formally sets a wedding and go
through and spend for all the preparations and
1. There is an act which is legal; publicity, only to walk out of it when the
2. Such act is contrary to morals, good customs, matrimony was about to be solemnized.
public order or policy; and (Wassmer v. Velez, G.R. No. L-20089, 26 Dec.
3. It is done with intent to injure. (Rabuya, 2006) 1964)
Civil liability for moral negligence 3. Where the woman is a victim of abduction and
rape, and thereafter the accused promised to
There is no civil liability for moral negligence. A marry her to avoid criminal liability but later
person is required to act with prudence towards reneged on his promise. (Buñag, Jr. v. CA, G.R. No.
others, but not with charity; the law imposes 101749, 10 July 1992)
diligence and not altruism. Hence, the failure to
make sacrifices or egoism does not constitute a A breach of promise to marry per se is not an
source of liability. (Tolentino, 1987) actionable wrong. But where a man's promise to
marry is the proximate cause of the acceptance of
Illustration: A person who fails to render his love by a woman and his representation to fulfill
assistance to a drowning person or to the victim of that promise thereafter becomes the proximate
an accident, cannot be held liable for damages. (3 cause of the giving of herself unto him in a sexual
Colin & Capitant 826) congress, proof that the promise was only a
deceptive device to inveigle her to obtain her
While a person can be absolved from criminal consent to the sexual act, could justify the award of
liability because his negligence was not proven damages pursuant to Art. 21 not because of such
beyond reasonable doubt, he can still be held civilly promise to marry but because of the fraud and
liable if his negligence was established by deceit behind it and the willful injury to her honor
preponderance of evidence. The failure of the and reputation which followed thereafter. It is
evidence to prove negligence with moral certainty essential, however, that such injury should have
does not negate (and is in fact compatible with) a been committed in a manner contrary to morals,
ruling that there was preponderant evidence of good customs or public policy. (Gashem Shookat
such negligence. And that is sufficient to hold him Baksh v. CA, G.R. No. 97336, 19 Feb. 1993)
civilly liable. (Dominguez v. People, G.R. No. 167546,
17 July 2009)
CIVIL LAW
Q: Soledad a high school teacher used to go NOTE: The article applies only if:
around together with Francisco who was almost
10 years younger than her. Eventually, intimacy 1. Someone acquires or comes into possession of
developed between them after Soledad became “something” which means delivery or
an underwriter in Cebu. One evening, they had acquisition of things;” and
sexual intercourse in Francisco’s cabin on board
M/V Escaño, to which he was then attached as 2. Acquisition is undue and at the expense of
apprentice pilot. After a few months, Soledad another, which means without any just or legal
advised Francisco that she was pregnant, ground. (Pineda, 2010)
whereupon he promised to marry her. Later
their child was born. However, subsequently, The principle of unjust enrichment is codified under
Francisco married another woman. Soledad Art. 22 of the NCC: Every person who through an act
filed a complaint for moral damages for alleged of performance by another, or any other means,
breach of promise to marry. May moral damages acquires or comes into possession of something at
be recovered for breach of promise to marry. the expense of the latter without just or legal
ground, shall return the same to him.
A: NO. It is the clear and manifest intent of our law-
making body not to sanction actions for breach of Requisites for the Application of Principle of
promise to marry. Francisco is not morally guilty of Unjust Enrichment
seduction, not only because he was approximately
10 years younger, and a mere apprentice pilot when For the principle to apply, the following requisites
he became intimate with the 36-year old must concur:
complainant, who is a highly enlightened former
high school teacher and a life insurance agent but, 1. A person is unjustly benefited; and
also, because, the CFI found that, complainant 2. Such benefit is derived at the expense of or
“surrendered herself” to Francisco because, with damages to another.
“overwhelmed by her love” for him, she “wanted to
bind” “by having a fruit of their engagement even NOTE: To substantiate a claim for unjust
before they had the benefit of clergy. (Hermosisima enrichment, the claimant must unequivocally prove
v. CA, G.R. No. L-14628, 30 Sept. 1960) that another party knowingly received something of
value to which he was not entitled and that the state
NOTE: To constitute seduction there must be some of affairs are such that it would be unjust for the
sufficient promise or inducement and the woman person to keep the benefit. (UP v. Philab Industries,
must yield because of the promise or other Inc., G.R. No. 152411, 29 Sept. 2004)
inducement. If she consents merely from carnal lust
and the intercourse is from mutual desire, there is Q: Mekeni Food Corp. offered its employee
no seduction. Locsin a car plan. One-half of the cost of the
vehicle is to be paid by Mekeni and the other half
Prohibition against Unjust Enrichment is to be deducted from Locsin’s salary. The car
was an absolute necessity in Mekeni’s business
No one shall unjustly enrich himself at the expense operations. Locsin paid for his 50% share
of another. (Pacific Merchandising Corp. v. through monthly salary deductions.
Consolacion Insurance and Surety Co., Inc., G.R. No. L- Subsequently, Locsin resigned. By then, a total of
30204, 29 Oct. 1976) ₱112,500 had been deducted from his monthly
salary and applied as part of his share in the car
plan. The vehicle remained in the ownership
and possession of Mekeni, and so Locsin sought
reimbursement of his amortization payments
on the vehicle and posits that if the amount is
2023 GOLDEN NOTES
I. PERSONS
not reimbursed, unjust enrichment would Should Timothee return the proceeds of the
result, as the vehicle remained in the possession check?
and ownership of Mekeni. Should the
amortization payments be refunded in favor of A: YES. Timothee is bound to return the proceeds of
Locsin? the dishonored the Savings Bank Check based on
the principle of unjust enrichment.
A: YES. The amortization payments must be
refunded in favor of Locsin. In the absence of The dishonor of the Savings Bank Check is not
specific terms and conditions governing a car plan disputed. Evidently, Thrift and Save Bank was under
agreement between the employer and employee, no obligation to effect payment in favor of Timothee
the employer may not retain the installment precisely because the Savings Bank Check which
payments made by the employee on the car plan and Timothee deposited for collection had been
treat them as rents for the use of the service vehicle, dishonored. Allowing Timothee to retain the
in the event that the employee ceases his proceeds of the dishonored Savings Bank Check
employment and is unable to complete the despite not being entitled thereto would, therefore,
installment payments on the vehicle. permit unjust enrichment at Thrift and Save Bank’s
expense.
The underlying reason is that the service vehicle
was precisely used in the employer's business; any The requisites for the application of the principle of
personal benefit obtained by the employee from its unjust enrichment are clearly present in this case.
use is merely incidental. Mekeni may not enrich Here, it was unequivocally established that
itself by charging Locsin for the use of its vehicle Timothee withdrew and utilized the proceeds of the
which is otherwise absolutely necessary to the full Savings Bank Check fully knowing that he was not
and effective promotion of its business. (Locsin v. entitled thereto. (Yon Mitori International Industries
Mekeni Food Corporation, G.R. No. 192105, 09 Dec. v. Union Bank of the Philippines, G.R. No. 225538, 14
2001) Oct. 2020)
Q: Timothee, doing business under the name Accion In Rem Verso

and style of Chalamet & Chalamet, deposited
with his Thrift and Save Bank account, the It is an action for recovery of what has been paid or
amount of P420,000.00 through a Savings Bank delivered without just cause or legal ground.
Check which was drawn against the account of (Rabuya, 2006) Every person who, through an act of
Dune Hardware, one of Timothee’s alleged performance by another, or any other means,
clients. acquires or comes into possession of something at
the expense of the latter without just or legal
Timothee then withdrew from the said account ground, shall return the same to him. (Art. 22, NCC)
the amount of P480,000.00. However, the
Savings Bank Check was returned to Thrift and Accion in rem verso is considered merely an
Save Bank as the account against which it was auxiliary action, available only when there is no
drawn had been closed. It was then that Thrift other remedy on contract, quasi-contract, crime,
and Save Bank discovered that Tan's account and quasi-delict. Hence, if there is an obtainable
had been mistakenly credited. Thus, Thrift and action under any other institution of positive law,
Save Bank demanded the return of said amount that action must be resorted to, and the principle of
but Timothee refused on the ground that the accion in rem verso will not lie. (Shinryo Ph. Co. v.
Savings Bank Check proceeded from a valid RRN Incorp. G.R. No. 172525, 20 Oct. 2010)
transaction between Chalamet&Chalamet and
Dune Hardware.
CIVIL LAW
Requisites of Accion in Rem Verso (W-A-L-E)

K. CAPACITY TO ACT
1. The defendant has been Enriched;
2. The plaintiff has suffered a Loss;
3. The enrichment of the defendant is Without just
or legal ground; and 1. RESTRICTIONS ON CAPACITY TO ACT
4. The plaintiff has no other Action based on
contract, quasi-contract, crime or quasi-delict. Restrictions on Capacity to Act: (P-I-D-I-M-C)
(Rabuya, 2006)
1. Minority - State of a person who is under the age
Accion in rem verso vs. Solutio Indebiti of legal majority or 18 years of age;
ACCION IN REM 2. Insanity – State of a person whose mental

SOLUTIO INDEBITI
VERSO faculties are diseased;
As to the presence of the element of mistake
it is not necessary that 3. Deaf-mute– Lacking sense of hearing and the
there should have been mistake is an essential inability to speak;
mistake in the element.
payment. NOTE: Only deaf-mutes who do not know how to
(Rabuya, 2006) write are declared by law incapable of giving
consent.
Accion in rem verso vs. Unjust Enrichment
4. Imbecility – State of a person who, while
An accion in rem verso is merely an auxiliary action advanced in age, has the mental capacity
available only when there is no other remedy on comparable to that of a child between two (2)
contract, quasi-contract, crime and quasi-delict, and seven (7) years of age;
while unjust enrichment, wherein one is unjustly
enriched at the expense of or from the efforts or NOTE: Imbecility is not insanity. (Pineda, 2010)
obligations of others, may be availed of as a
prerequisite for the enforcement of the doctrine of 5. Prodigality – A spendthrift or squanderer of his
restitution. (Shinryo Ph. Co. v. RRN Incorp. G.R. No. money and property without regard to the needs
172525, 20 Oct. 2010) and future of his family; and
Liability without fault or negligence NOTE: Prodigality per se does not automatically
modify or restrict a person’s capacity to act.
Even when an act or event causing damage to There must be a declaration thereof and be
another’s property was not due to the fault or placed under guardianship under the Rules on
negligence of the defendant, the latter shall be liable Special Proceeding.
for indemnity if through the act or event he was
benefited. (Art. 23, NCC) 6. Civil Interdiction – A mandatory accessory
penalty imposed upon an accused who is
sentenced to a principal penalty not lower than
reclusion temporal. (Art. 38, NCC)
NOTE: The following are the effects of civil

interdiction: (A-M-I-Gua)
1. Deprivation of parental or marital Authority;

2. Deprivation of the right to be the Guardian of
2023 GOLDEN NOTES
I. PERSONS
the person and property of a ward; Acquisition of personality through birth
3. Deprivation of his property by act Inter vivos; GR: Actual/Permanent Personality – Personality
and begins at birth, not at conception.
4. Deprivation of the right to Manage one's
properties. (Art. 34, RPC) XPN: Presumptive/Temporary – The law
considers the conceived child as born (Conceptus
They do not exempt the incapacitated person pro nato habetur)
from certain obligations.
The provisional personality of a conceived child
Circumstances that modify or limit capacity to (conceptus pro nato habetur) under Art. 40,
act (I-P-A-I-D-F-A-T-P-I-A) expressly limits such provisional personality by
imposing the condition that the child should be
1. Insanity; subsequently born alive: Provided it be born later
2. Prodigality; with the condition specified in Art. 41 of the NCC.
3. Age; (Geluz v. CA, G.R. No. L- 16439, 20 July 1961)
4. Imbecility;
5. Deaf-Mute; “Born later in accordance with law” (1995, 1999,
6. Family; 2008 BAR)
7. Alienage;
8. Trusteeship; A fetus with an intra-uterine life of:
9. Penalty;
10. Insolvency; and 1. Less than 7 months – Must survive for at least
11. Absence. (Art. 39, FC) 24 hours after its complete delivery from the
maternal womb.
The enumerations in Arts. 38 and 39 are not
exclusive. There are others spread throughout the 2. At least 7 months – If born alive it shall be
Code (e.g., a lawyer cannot buy property in considered born even if it dies within 24 hours
litigation). (Art. 1491(5), NCC) after complete delivery.
2. BIRTH AND DEATH OF NATURAL PERSONS “Complete Delivery”
It means the cutting of the umbilical cord from the

Birth determines personality, but the conceived
mother’s womb.
child shall be considered born for all purposes that
Provisional personality of a conceived child
are favorable to it, provided it is born later with the
conditions specified in Art. 41. (Art. 40, NCC)
A conceived child, although yet unborn, has a
limited and provisional personality for all purposes
NOTE: This provision has been superseded by Art. 5
favorable to it. (Rabuya, 2006) Its personality is
of P.D. 603 (The Child and Youth Welfare Code),
provisional because it depends upon the child being
which declares that the civil personality of the child
born alive later under certain conditions.
shall commence from the time of their conception,
for all purposes favorable to them, subject to the
requirements of Art. 41.
CIVIL LAW
Rights of the conceived child c. If one is under 15 and the other above
60, the former is deemed to have
Since a conceived child has a provisional personality survived;
even while inside the mother’s womb, it is entitled
to the following rights: (S-A-D) d. If both be over 15 and under 60 and the
sex be different, the male is deemed to
1. Right to Support; have survived, if the sex be the same,
2. To be Acknowledged; and the older; and
3. To receive Donations. (Rabuya, 2009)
e. If one be under 15 or over 60, and the
Civil personality ceases depending upon the other between those ages, the latter is
classification of persons deemed to have survived. (Sec. 3(jj),
Rule 131, ROC)
1. Natural persons – by death; and
2. Juridical persons – by termination of NOTE: Both are to be applied only in the absence of
existence facts.
Effect of death on civil personality Q: Jaime, who is 65, and his son, Willy, who is 25,
died in a plane crash. There is no proof as to who
Death extinguishes civil personality. However, the died first. Jaime’s only surviving heir is his wife,
rights and obligations of the deceased are not Julia, who is also Willy’s mother. Willy’s
necessarily extinguished by his death. (Pineda, surviving heirs are his mother, Julia, and his
2009) wife, Wilma. In the settlement of Jaime’s estate,
can Wilma successfully claim that her late
3. PRESUMPTION OF SURVIVORSHIP husband, Willy, had a hereditary share since he
was much younger than his father and therefore,
should be presumed to have survived longer?
It depends on whether the parties are called to
succeed each other.
A: NO. Wilma cannot successfully claim that Willy
had a hereditary share in his father’s estate. The
1. If successional rights are involved – Art. 43 of
presumption of simultaneous deaths applies in
the NCC: Survivorship Rule and Sec 3(kk), Rule
cases involving the question of succession as
131 of the ROC: Presumption of simultaneous
between the two who died, who in this case, are
deaths between persons called to succeed each
mutual heirs, being father and son.
other, applies.
Q: Suppose, Jaime had a life insurance policy

2. If no successional rights are involved – Sec.
with his wife Julia and his son Willy as the
3(jj), Rule 131 of the ROC applies (Presumption
beneficiaries. Can Wilma successfully claim that
of Survivorship).
one-half of the proceeds should belong to Willy’s
estate? (1998 BAR)
Survivorship is determined from the
probabilities resulting from the strength and
A: YES. Wilma can invoke the presumption of
the age of the sexes, according to the following
survivorship and claim that one-half of the proceeds
rules:
should belong to Willy’s estate, under Sec. 3(jj)(5),
a. If both were under the age of 15 years,
Rule 131, of the ROC, as the dispute does not involve
the older is deemed to have survived;
succession.
b. If both were above the age of 60, the
younger is deemed to have survived;
2023 GOLDEN NOTES
I. PERSONS
Under this presumption, the person between the b. Between Marian and the baby, who is
ages of 15 and 60 is deemed to have survived one presumed to have died ahead?
whose age was over 60 at the time of their deaths.
The estate of Willy endowed with juridical A: If the baby was not alive when completely
personality stands in place and stead of Willy, as delivered from the mother’s womb, it was not born
beneficiary. as a person, then the question of whom between
two persons survived will not be an issue. The baby
NOTE: The statutory rules in the determination of had an intra-uterine life of more than 7 months;
sequence of death do not absolutely apply in a case thus, it would be considered born if it was alive at
where indirect and/or inferential evidence the time of its complete delivery from the mother’s
surrounding the circumstances of the deaths exists. womb. We can gather from the facts that the baby
was completely delivered. But whether it was alive
Where there are facts, known or knowable, from has to be proven by evidence.
which a rational conclusion can be made, the
presumption does not step in, and the rule of c. Will Pietro, as the surviving biological father
preponderance of evidence controls. It is the of the baby, be entitled to claim the proceeds
“particular circumstances from which survivorship of the life insurance on the life of Marian?
can be inferred” that are required to be certain as (2008 BAR)
tested by the rules of evidence. (Joaquin v. Navarro,
G.R. No. L-5426, 29 May 1953) A: NO, Pietro will not be entitled since the baby did
not acquire any right under the insurance contract,
Q: At the age of 18, Marian found out that she there is nothing for Pietro to inherit. Pietro is not
was pregnant. She insured her own life and married to Marian neither was he named as the
named her unborn child as her sole beneficiary. beneficiary of the insurance.
When she was already due to give birth, she and
her boyfriend Pietro, the father of her unborn
child, were kidnapped in a resort in Bataan. The L. SURNAMES
military gave chase and after one week, they
were found in abandoned hut in Cavite. Marian
and Pietro were hacked with bolos. Marian and
Children
the baby she delivered were both found dead,
with the baby’s umbilical cord already cut.
Pietro survived. CHILD
SURNAME TO BE USED
CONCERNED
a. Can Marian’s baby be the beneficiary of the
Legitimate
insurance taken on the life of the mother?
A: YES. An unborn child may be designated as the Father’s

beneficiary in the insurance policy of the mother. An (Art. 364, NCC)
unborn child shall be considered a person for
purposes favorable to it provided it is born later in NOTE: There is no legal
accordance with the NCC. There is no doubt that the obstacle if the child chooses
Legitimated to use the surname of the
designation of the unborn child as a beneficiary is
favorable to the child. mother, as the child is
equally entitled to. (Sta.
Maria, 2017)
CIVIL LAW
Natural child, Conceived

acknowledged prior to Father’s
both parents. Father’s annulment (Art. 369, NCC)
(Art. 364, NCC) of marriage
Natural child
Conceived
by legal
after
fiction. Mother’s
annulment of
Natural child,
marriage
acknowledged Recognizing parent
only one (Art. 364, NCC)
parent. Married Woman
Adopted Adopter’s
FACTUAL
Mother’s or father’s if CIRCUMSTANCE SURNAME TO BE USED
requisites of R.A. 9255 are OF THE WIFE
complied with.
1. Maiden first name and
NOTE: An illegitimate child surname + husband’s
shall have the "option" to use surname;
the surname of the father in
the following instances: 2. Maiden first name +
1. husband’s surname;
1. If their filiation has been
expressly recognized by Valid marriage 3. Husband’s full name +
the father through the (before prefix indicating that she is
record of birth appearing husband dies) his wife (e.g., Mrs.); or
in the civil registry; or (Art. 370, NCC)
4. Retain the use of her
maiden name.
2. When an admission of NOTE: Use of husband’s

Illegitimate
paternity is made by the surname is not a duty but
father in a public merely an option for the
document or private wife.
handwritten instrument
provided, the father has
the right to institute an Wife is the GUILTY spouse:
action before the regular
courts to prove non- Shall resume using her
filiation during his maiden name
lifetime. (Art. 176, FC, as
Marriage is
amended by R.A. 9255) Wife is the INNOCENT
annulled
(Art. 371, NCC) spouse:
Under the amendatory
provision of R.A. 9255, the 1. 1. Resume using her maiden
use of the illegitimate name; or
father’s surname is 2.
PERMISSIVE and not 3. 2. Continue using husband’s
obligatory. (Rabuya, 2009) surname.
2023 GOLDEN NOTES
I. PERSONS
XPNs: Remedies available to the person whose name

a. Court decrees has been usurped
otherwise; or
1. Civil – insofar as private persons are concerned:
b. She or the former a. Injunction
husband is married b. Damages
again to another
person. 2. Criminal – when public affairs are prejudiced.
Wife shall continue using
Legally NOTE: If the purpose of the usurpation is to conceal
the name and surname
separated one’s true identity, then, they are guilty of
employed by her, prior to
(Art. 372, NCC) concealing true name under Art. 178 of the RPC.
the legal separation.
(Pineda, 2010)
Widowed She may use the deceased’s

It can also be a violation of Commonwealth Act
spouse husband’s surname as
(C.A.) No. 142 or the Anti-Alias Law.
(Art. 373, NCC) though he is still living.
Use of Another’s Name NOT Always Actionable
Identity of Names and Surnames

GR: The unauthorized or unlawful use of another
person’s surname gives a right of action to the latter.
In case of identity of names and surnames, the
(Art. 378, NCC)
younger person shall be obliged to use such
additional name or surname as will avoid confusion.
XPN: It is NOT actionable when it is used as stage,
(Art. 374, NCC)
screen or pen name. Provided:
In case of identity of names and surnames between

1. It is used in good faith;
ascendants and descendants, the word "Junior" can
2. No injury is caused to the rights of the person
be used only by a son. Grandsons and other direct
whose name was used;
male descendants shall either:
3. Use is motivated by:
a. Modesty
1. Add a middle name or the mother’s
b. Desire to avoid unnecessary trouble
surname, or
c. Other reasons not prohibited by law or
2. Add the Roman Numerals II, III, and so on.
morals.
(Art. 375, NCC)
NOTE: No person can change his name or surname

without judicial authority. (Art. 376, NCC)
Elements of usurpation of name
1. Actual use of another’s name by the

defendant;
2. Use is unauthorized; and
3. Use of another’s name is to designate
personality or identify a person. (Tolentino
v. CA, G.R. No. L-41427, 10 June 1988)
CIVIL LAW
Remedy of an interested party, a relative, or a

M. RULES GOVERNING PERSONS WHO ARE friend of the absentee to protect the latter's
ABSENT interest
They may Petition the court for the Appointment of

a Representative to represent the absentee in all
The special status of a person who has left his
that may be necessary.
domicile and thereafter his whereabouts and fate
are unknown, it being uncertain whether he is
Duty of the Court after appointing the
already dead or still alive. (Olaguiviel v. Morada, 63
representative
O.G. 4940)
The Court shall:

Kinds of absence
1. Take the necessary measures to safeguard the

1. Physical Absence; and
rights and interests of the absentee;
2. Legal Absence
2. Specify the powers, obligations, and

Stages of Absence
remuneration of the representative;
1. Provisional Absence – when a person

3. Regulate the powers, obligations, and
disappears from his domicile his whereabouts
remuneration according to the circumstances
being unknown, without leaving an agent to
by the rules concerning guardians. (Art. 382,
administer his property. (Art. 381, NCC)
NCC)
2. Declared Absence - when a person disappears

Order of preference in the appointment of a
from his domicile and
representative
a. 2 years thereafter have elapsed

1. Spouse present, except, when legally separated.
without any news about him or since
2. In the absence of spouse, any competent
the receipt of the last news; or
person. (Art. 383, NCC)
b. 5 years have elapsed in case he left a

NOTE: The administrator of the absentee's property
person to administer his property. (Art.
shall be appointed in accordance with the same
384, NCC)
order.
3. Presumptive Death – the absentee is presumed

Judicial Declaration of Absence, Requisites:
dead. (Jurado, 2011)
1. The absentee has disappeared from his domicile;

Provisional absence
2. His whereabouts are not known; and
3. He has been absent without any news for two (2)
1. When a person disappears from his domicile
years if nobody was left to administer his
2. His whereabouts are unknown; and
property or (5) years if somebody was left to
a. he did not leave any agent; or
administer such property. (Art. 384, NCC)
b. he left an agent, but the agent’s power
has expired.
When absence may be declared
1. When the absentee left no agent to administer

his property- after two (2) years without any
news about the absentee or since receipt of the
2023 GOLDEN NOTES
I. PERSONS
last news; or Kinds of Presumption of Death Under the NCC
2. When the absentee has left a person to 1. Ordinary presumption – ordinary absence;
administer his property after five (5) years. (Art. absentee disappears under normal conditions
384, NCC) without danger or idea of death; and
Persons who may ask for the declaration of 2. Extraordinary presumption – qualified
absence absence; disappearance with great probability of
death.
The following may ask for the declaration of
absence: Rules in Ordinary Presumption of Death
1. Spouse present; In case of:

2. Heirs instituted in a will, who may present an
authentic copy of the same; 1. Disappearance upon or before reaching the
3. Relatives who may succeed by intestacy; and age of 75 years:
4. Persons who may have over the property of the
absentee some right subordinated to the a. After an absence of 7 years - the absentee is
condition of his death. (Art. 385, NCC) presumed dead for all purposes except
succession.
Effectivity of judicial declaration of absence
b. After an absence of 10 years - the absentee
Judicial declaration of absence takes effect six (6) is presumed dead for all purposes including
months after its publication in a newspaper of succession.
general circulation. (Art. 386, NCC)
NOTE: A judicial declaration of absence is necessary NOTE: It is only after an absence of 10 years
for interested persons to be able to protect their that his succession will be opened. In that
rights, interests, and benefits in connection with the case, his heirs can now commence an
person who has disappeared. It is also necessary to intestate proceeding, for purposes of dividing
protect the interest of the absentee. (Sta. Maria, Jr., or distributing the estate of the absentee, for
2010) by then, the right of inheritance shall have
already become choate, for under Art. 777 of
When Administration of the property of the the NCC, it is from the moment of death that
absentee ceases there shall be transmission of rights,
properties, or even obligations from the
1. Absentee appears personally or by means of an decedent to the heirs because of the
agent. presumptive death of the absentee. There is
no physical death, but there is only
2. Death of the absentee is proved, and his testate presumptive death under the situation.
or intestate heirs appear. (Albano, 2006)
3. A third person appears, showing by a proper 2. Disappearance after the age of 75 years after
document that he has acquired the absentee's an absence of 5 years – the absentee is
property by purchase or other title. (Art. 389, presumed dead for all purposes including
NCC) succession. (Art. 390, NCC)
CIVIL LAW
NOTE: The word “absence” in the rule that a Q: Juana married Arturo in January 1973.
presumption of death is raised by the “absence” of a However, because the latter was unemployed
person from his domicile when unheard of for seven the spouses constantly argued. Thus, Arturo left
years, means that a person is not at the place of his the conjugal dwelling on October 1975. Years
domicile and his actual residence is unknown, and it passed without any word from Arturo. Juana did
is for this reason that his existence is doubtful, and not hear any news of Arturo, his whereabouts or
that, after seven years of such absence, his death is even if he was alive or not. Believing that Arturo
presumed. But removal alone is not enough. (Sta. was already dead, Juana married Dante on June
Maria, 2010) 1986. Subsequently, however, Dante's
application for naturalization filed with the
Presumption of death for all purposes United States Government was denied because
of the subsisting marriage between Juana and
The following are presumed dead for all purposes Arturo. Hence, on March 2007, Juana filed a
including the division of estate among heirs in case Petition for declaration of presumptive death of
of extraordinary presumption of death: Arturo with the RTC. The RTC dismissed the
petition on the ground that Juana was not able to
1. Person on board a vessel lost during a sea prove the existence of a well-grounded belief
voyage, or an airplane which is missing, who that her husband Arturo was already dead as
has not been heard of for four (4) years since required under Article 41 of the FC.
the loss of the vessel or airplane;
a. Was the RTC correct in dismissing the
2. Person in the armed forces who has taken at in petition based on Art. 41 of the FC?
war, and has been missing for four (4) years;
A: NO. Since the marriages were both celebrated
3. Person who has been in danger of death under under the auspices of the NCC, it is the NCC that
other circumstances and his existence has not applies to this case not Art. 41 of the FC. Under the
been known for four (4) years. (Art. 391, NCC) NCC, proof of well-founded belief is not required.
Juana could not have been expected to comply with
Q: May a petition for the declaration of the requirement of proof of “well- founded belief”
presumptive death be the subject of a judicial since the FC was not yet in effect at the time of her
declaration, if it is the only question upon which marriage to Dante. Moreover, the enactment of the
a competent court has to pass? FC in 1988 does not change this conclusion. The FC
shall have no retroactive effect if it impairs vested
A: NO. The presumption of death is established by rights. To retroactively apply the provisions of the
law and no court declaration is needed for the FC requiring Juana to exhibit “well-founded belief”
presumption to arise. Moreover, it is clear that a will, ultimately, result in the invalidation of her
judicial declaration that a person is presumptively second marriage, which was valid at the time it was
dead, being a presumption juris tantum only, subject celebrated. Such a situation would be untenable and
to contrary proof, cannot become final. If a judicial would go against the objectives that the FC wishes
decree declaring a person presumptively dead, to achieve.
which cannot become final and executory even after
the lapse of the reglementary period within which NOTE: the FC took effect on 03 Aug. 1988
an appeal may be taken, then a petition for such a
declaration is useless, unnecessary, superfluous, b. Will the petition for declaration of
and of no benefit to the petitioner. presumptive death, therefore, prosper?
2023 GOLDEN NOTES
I. PERSONS
A: NO. Under the NCC, the presumption of death is 3. That the present spouse has a well-founded
established by law and no court declaration is belief that the absentee is dead; and
needed for the presumption to arise. For the
purposes of the civil marriage law, Art. 83 of the NCC NOTE: The “well-founded belief” in the
provides that it is not necessary to have the former absentee's death requires the present spouse
spouse judicially declared an absentee. The law only to prove that his/her belief was the result of
requires that the former spouse has been absent for diligent and reasonable efforts to locate the
seven (7) consecutive years at the time of the absent spouse, and that based on these efforts
second marriage, that the spouse present does not and inquiries, he/she believes that under the
know his or her former spouse (absentee) to be circumstances, the absent spouse is already
living, that such former spouse is generally reputed dead. It necessitates exertion of active effort,
to be dead and the spouse present so believes at the not a passive one. As such, the mere absence of
time of the celebration of the marriage. Since death the spouse for such periods prescribed under
is presumed to have taken place by the seventh year the law, lack of any news that such absentee
of absence, Arturo is to be presumed dead starting spouse is still alive, failure to communicate, or
October 1982. general presumption of absence under the NCC
would not suffice. The premise is that Art. 41 of
Further, the presumption of death cannot be the the FC places upon the present spouse the
subject of court proceedings independent of the burden of complying with the stringent
settlement of the absentee’s estate. In case the requirement of “well-founded belief” which
presumption of death is invoked independently of can only be discharged upon a showing of
such an action or special proceeding, there is no proper and honest-to-goodness inquiries and
right to be enforced nor is there a remedy prayed for efforts to ascertain not only the absent
by the petitioner against her absent husband. spouse's whereabouts, but more importantly,
Neither is there a prayer for the final determination whether the latter is still alive or is already
of his right or status or for the ascertainment of a dead. (Republic v. Tampus, G.R. No. 214243, 16
particular fact, for the petition does not pray for a Mar. 2016)
declaration that the petitioner's husband is dead,
but merely asks for a declaration that he be 4. That the present spouse files a summary
presumed dead because he had been unheard of for proceeding for the declaration of presumptive
seven (7) years. In sum, the petition for a death of the absentee. (Republic v. Nolasco, G.R.
declaration that the petitioner's husband is No. 94053, 17 Mar. 1993)
presumptively dead, even if judicially made, would
not improve the petitioner's situation, because such NOTE: The requirement for a judgment of the
a presumption is already established by law. (Valdez presumptive death of the absent spouse is for the
v. Republic, G.R. No. 180863, 08 Sept. 2009) benefit of the spouse present because she could be
charged and convicted of bigamy if the defense of
Requisites for Issuance of Judicial Declaration of good faith based on mere testimony is found
Presumptive Death incredible. (Manuel v. People, G.R. No. 165842, 29
Nov. 2005)
1. That the absent spouse has been missing for
four (4) consecutive years, or two consecutive Q: Remar and Lovelyn met in Bislig City got
years if the disappearance occurred where married in 1997. They begot two (2) children.
there is a danger of death under the To support his family, Remar started working as
circumstances laid down in Art. 391 of the NCC; a security guard at the National Food Authority
Warehouse in October 1997, although later on,
2. That the present spouse wishes to remarry; he transferred to Cebu City for an opportunity to
earn a bigger salary. In 2001, Lovelyn went on a
three-month vacation in Manila to visit her
CIVIL LAW
relatives. Initially, they constantly Q: Nilda was married to Dante on 29 Nov. 1975.
communicated through cellphone. Thereafter, On 02 Dec. 1975, Dante, a member of the Armed
the calls and text messages tapered off until the Forces of the Philippines (AFP), left Nilda and
communication between the spouses ceased went to Jolo, Sulu, where he was assigned. Since
altogether. then, Nilda has heard no news from Dante and
has tried everything to locate him by making
Remar was told that Lovelyn was already inquiries with his parents, relatives, and
cohabiting with another man and would no neighbors as to his whereabouts, but
longer be coming back out of shame. In 2003, unfortunately, they also did not know where to
Remar's uncle informed him that Lovelyn was in find him. Thus, on 14 Apr. 2009, she filed before
Bislig City to visit their children. Remar followed the RTC a petition to declare Dante as
her only to be told that his wife had already left presumptively dead for the purpose of
for Lingig, Surigao del Sur. He went after her in remarriage, alleging that after the lapse of 33
Lingig but to no avail. In 2004, Remar went to years without any kind of communication from
Batangas and Cavire to look for her but he was him, she firmly believes that he is already dead.
not able to find her. In 2013, after almost 10 Both RTC and CA ruled in favor of Nilda. Is the
years, he filed a Petition for Declaration of ruling of the courts correct?
Presumptive Death. Rule on the petition.
A: NO. Before a judicial declaration of presumptive
A: I would not rule in favor of Remar. Remar’s death can be obtained, it must be shown that the
efforts fell short of the degree of diligence prior spouse had been absent for four (4)
required by law and jurisprudence. To recall, consecutive years and the present spouse had a
Remar's efforts to locate Lovelyn are marked by well-founded belief that the prior spouse was
the following acts: (1) Remar travelled to several already dead.
places where his wife had been reportedly seen
particularly, Bislig City and the Municipality of The “well-founded belief” in the absentee's death
Lingig in the province of Surigao del Sur, Metro requires the present spouse to prove that his/her
Manila, Batangas and Cavite; and (2) Remar belief was the result of diligent and reasonable
constantly communicated with Lovelyn's efforts to locate the absent spouse and that based on
relatives for a period of 10 years to ascertain these efforts and inquiries, he/she believes that
Lovelyn's whereabouts. under the circumstances, the absent spouse is
already dead. It necessitates exertion of active
Unfortunately, Remar failed to allege, much less effort, not a passive one. As such, the mere absence
prove, the extent of the search he had conducted in of the spouse for such periods prescribed under the
the places where he claims to have gone. This leaves law, lack of any news that such absentee spouse is
the Court with no way to ascertain the extent of still alive, failure to communicate, or general
Remar's search. Remar also failed to identify which presumption of absence under the NCC would not
of Lovelyn's relatives he had communicated with suffice.
and disclose what he learned from these
communications. Again, this leaves the Court with In this case, Nilda testified that after Dante's
no basis to determine whether the information disappearance, she tried to locate him by making
Remar learned is sufficient to engender a well- inquiries with his parents, relatives, and neighbors
founded belief that Lovelyn is dead. Remar never as to his whereabouts, but unfortunately, they also
sought the help of the authorities to locate Lovelyn did not know where to find him. Other than making
in the course of her 10-year disappearance. said inquiries, however, Nilda made no further
(Republic v. Quiñonez, G.R. No. 237412, 06 Jan. 2020,) efforts to find her husband. She could have called or
proceeded to the AFP headquarters to request
information about her husband but failed to do so.
She did not even seek the help of the authorities or
2023 GOLDEN NOTES
I. PERSONS
the AFP itself in finding him. (Republic v. Tampus, not have any knowledge on his whereabouts.
G.R. No. 214243, 16 Mar. 2016) Should the petition be granted?
Finality of Judicial Declaration of Presumptive A: NO. Jurisprudence sets out four requisites for a
Death grant of a petition for declaration of presumptive
death under Art. 41 of the FC. First, the absent
GR: The order of the trial court granting the petition spouse has been missing for four consecutive years,
for judicial declaration of presumptive death under or two consecutive years if the disappearance
Art. 41 of the FC is immediately final and executory occurred where there is danger of death under the
by the express provision of Art. 247 of the FC. circumstances laid down in Art. 391 of the NCC;
(Republic v. Bermudez-Lorino, G.R. No. 160258, 19 second, the present spouse wishes to remarry; third,
Jan. 2005) the present spouse has a well-founded belief that
the absentee is dead; and fourth, the present spouse
XPN: Under Art. 41 of the FC, the losing party in a files for a summary proceeding for the declaration
summary proceeding for the declaration of of presumptive death of the absentee.
presumptive death may file a petition for certiorari
with the CA on the ground that, in rendering The well-founded belief in the absentee's death
judgment thereon, the trial court committed grave requires the present spouse to prove that his/her
abuse of discretion amounting to lack of belief was the result of diligent and reasonable
jurisdiction. From the decision of the CA, the efforts to locate the absent spouse and that based on
aggrieved party may elevate the matter to this Court these efforts and inquiries, he/she believes that
via a petition for review on certiorari under Rule 45 under the circumstances, the absent spouse is
of the ROC. (Republic v. Granada, G.R. No.187512, 13 already dead. It necessitates exertion of active
June 2012) effort, not a mere passive one. Mere absence of the
spouse, even beyond the period required by law,
The declaration of presumptive death is without lack of any news that the absentee spouse is still
prejudice to the effect of reappearance of the absent alive, mere failure to communicate, or general
spouse. (Sta. Maria, 2010) The declared presumption of absence under the NCC would not
presumption will still only be prima facie and can be suffice. The premise is that Art. 41 of the FC places
overthrown by evidence. (People v. Archilla, G.R. No. upon the present spouse the burden of complying
L-15632, 28 Feb. 1961) with the stringent requirement of well-founded
belief which can only be discharged upon a showing
Q: Ali sought to declare her husband, Eloy, of proper and honest-to-goodness inquiries and
presumptively dead in a petition filed before the efforts to ascertain not only the absent spouse's
RTC. Ali testified that a few months after the whereabouts but, more importantly, whether the
marriage, Eloy left without information where absent spouse is still alive or is already dead.
he was going.
Josephine's efforts to search for Agapito only
Ali tried to look for him from Eloy’s only consisted of inquiries not even done personally but
surviving relative. The latter told Ali that she by mere letter-correspondence facilitated by
does not have any knowledge or idea where Eloy another person. Moreover, Josephine's pursuit of
was, in response to her letter. She also inquired Agapito is evidently lackadaisical based on the
from their friends if they saw or heard from following circumstances: (1) her personal
Eloy, but all answered in the negative. As second knowledge of a growing cyst on Agapito's jaw does
witness, Michelle was presented and testified not produce an inevitable conclusion that the latter
that she knew that Eloy left or disappeared was already suffering from some terminal illness
sometime in November 2000. She tried to help prior to his disappearance; (2) while Josephine
Ali look for Eloy but, up to the present, they do attempted to find Agapito, her supposed informers
and their information were unreliable; and (3)
CIVIL LAW
Josephine could have resorted to police assistance Ricardo was aware that she never left their
in seeking out her husband. conjugal dwelling in Quezon City. It was he who
left the conjugal dwelling to cohabit with
Withal, the pieces of evidence on record were too another woman. Celerina referred to a joint
bare and self-serving. Mere allegation is not proof. affidavit executed by their children to support
(Republic v. Ponce-Pilapil, G.R. No. 219185, 25 Nov. her contention that Ricardo made false
2020, as penned by J. Hernando) allegations in his petition.
Q: The RTC declared Celerina presumptively Is the reappearance not a sufficient remedy
dead after her husband, Ricardo, had filed a since it will only terminate the subsequent
petition for declaration of absence or marriage but not nullify the effects of the
presumptive death for the purpose of declaration of her presumptive death and the
remarriage. Ricardo remarried thereafter. In his subsequent marriage?
petition for declaration of absence or
presumptive death, Ricardo alleged that he and A: YES. The proper remedy for a judicial declaration
Celerina rented an apartment somewhere in San of presumptive death obtained by extrinsic fraud is
Juan, Metro Manila, after they had gotten an action to annul the judgment. An affidavit of
married. After a year, they moved to Tarlac City. reappearance is not the proper remedy when the
They were engaged in the buy and sell business. person declared presumptively dead has never
Ricardo claimed that their business did not been absent.
prosper. As a result, Celerina convinced him to
allow her to work as a domestic helper in Hong The filing of an affidavit of reappearance is an
Kong. Ricardo initially refused but because of admission on the part of the first spouse that his or
Celerina's insistence, he allowed her to work her marriage to the present spouse was terminated
abroad. She allegedly applied in an employment when he or she was declared absent or
agency in Ermita, Manila. She left Tarlac two presumptively dead. Moreover, a close reading of
months after and was never heard from again. the entire Art. 42 reveals that the termination of the
Ricardo further alleged that he exerted efforts to subsequent marriage by reappearance is subject to
locate Celerina. He went to Celerina's parents in several conditions. The existence of these
Cubao, Quezon City, but they, too, did not know conditions means that reappearance does not
their daughter's whereabouts. He also inquired always immediately cause the subsequent
about her from other relatives and friends, but marriage's termination. Reappearance of the absent
no one gave him any information. or presumptively dead spouse will cause the
termination of the subsequent marriage only when
Ricardo claimed that it was almost 12 years all the conditions enumerated in the FC are present.
from the date of his RTC petition since Celerina Hence, the subsequent marriage may still subsist
left. He believed that she had passed away. despite the absent or presumptively dead spouse's
According to Celerina, her true residence was in reappearance.
Neptune Extension, Congressional Avenue,
Quezon City. This residence had been her and A subsequent marriage contracted in bad faith, even
Ricardo's conjugal dwelling until Ricardo left. As if it was contracted after a court declaration of
a result of Ricardo's misrepresentation, she was presumptive death, lacks the requirement of a well-
deprived of any notice of and opportunity to founded belief that the spouse is already dead. The
oppose the petition declaring her presumptively first marriage will not be considered as validly
dead. Celerina claimed that she never resided in terminated. Marriages contracted prior to the valid
Tarlac. She also never left and worked as a termination of a subsisting marriage are generally
domestic helper abroad. Neither did she go to an considered bigamous and void. Only a subsequent
employment agency. She also claimed that it was marriage contracted in good faith is protected by
not true that she had been absent for 12 years. law. Therefore, the party who contracted the
2023 GOLDEN NOTES
I. PERSONS
subsequent marriage in bad faith is also not immune choice to file an action for annulment of judgment is
from an action to declare his subsequent marriage the proper remedy as annulment of judgment is the
void for being bigamous. remedy when the RTC’s judgment, order, or
The prohibition against marriage during the resolution has become final, and the remedies of
subsistence of another marriage still applies. Since new trial, appeal, petition for relief (or other
an undisturbed subsequent marriage under Art. 42 appropriate remedies) are no longer available
of the FC is valid until terminated, the “children of through no fault of the petitioner. (Ibid.)
such marriage shall be considered legitimate, and
the property relations of the spouses in such Termination of Subsequent Bigamous Marriage
marriage will be the same as in valid marriages.” If
it is terminated by mere reappearance, the children The recording of the affidavit of reappearance of the
of the subsequent marriage conceived before the absent spouse in the civil registry of the residence
termination shall still be considered legitimate. of the parties to the subsequent marriage shall
Moreover, a judgment declaring presumptive death automatically terminate the terminable bigamous
is a defense against prosecution for bigamy. marriage (subsequent marriage) unless there is a
judgment annulling the previous marriage or
It is true that in most cases, an action to declare the declaring it void ab initio. (Art. 42, FC)
nullity of the subsequent marriage may nullify the
effects of the subsequent marriage, specifically, in In Art. 42, no judicial proceeding to annul a
relation to the status of children and the prospect of subsequent marriage contracted under Art. 41 is
prosecuting a respondent for bigamy. However, a necessary. Also, the termination of the subsequent
Petition for Declaration of Absolute Nullity of Void marriage by affidavit provided for in Art. 42 does
Marriages may be filed solely by the husband or not preclude the filing of an action in court to prove
wife. This means that even if Celerina is a real party- the reappearance of the absentee and obtain a
in-interest who stands to be benefited or injured by declaration of dissolution or termination of the
the outcome of an action to nullify the second subsequent marriage. (SSS v. Vda. De Bailon, G.R. No.
marriage, this remedy is not available to her. 165545, 24 Mar. 2006)
Therefore, for the purpose of not only terminating
the subsequent marriage but also of nullifying the Q: Gregorio married Janet. When he was
effects of the declaration of presumptive death and employed overseas, he was informed that Janet
the subsequent marriage, mere filing of an affidavit left. Five years later, he filed an action for her to
of reappearance would not suffice. Celerina's choice be declared presumptively dead without
to file an action for annulment of judgment will, alleging that he wishes to remarry. Will his
therefore, lie. (Santos v. Santos, G.R. 187061, 08 Oct. action prosper?
2014)
A: NO. A petition to declare an absent spouse
NOTE: A mere filing of an affidavit of reappearance presumptively dead may not be granted in the
would not suffice for the purpose of terminating the absence of any allegation that the spouse present
subsequent marriage and also of nullifying the will remarry. (Republic v. Nolasco, G.R. No. 94053, 17
effects of the declaration of presumptive death and Mar. 1993)
the subsequent marriage. Celerina does not admit to
having been absent. She also seeks not merely the Q: What is the effect if the parties to the
termination of the subsequent marriage but also the subsequent marriage obtain knowledge that the
nullification of its effects. A subsequent marriage spouse absent has reappeared?
contracted in bad faith, even if it was contracted
after a court declaration of presumptive death, lacks
the requirement of a well-founded belief that the
spouse is already dead; the first marriage will not be
considered as validly terminated. Hence, Celerina’s
CIVIL LAW
A: NONE. If the absentee reappears, but no step is

taken to terminate the subsequent marriage, either
by affidavit or by court action, such absentee's mere
reappearance, even if made known to the spouses in
the subsequent marriage, will not terminate such
marriage. (SSS v. Vda. De Bailon, G.R. No. 165545, 24
Mar. 2006)
Any interested party of the parties, including the

parents, their children, the present spouse, or the
subsequent spouse of the present spouse, may file
the sworn statement of reappearance of the spouse
who was absent. (Sta. Maria, 2010)
The law says that if the absent spouse reappears or

if there is registration of an affidavit of
reappearance by any interested person with due
notice to the spouses in the civil registry of the
residence of the parties, the marriage is
automatically terminated. (Albano, 2006)
2023 GOLDEN NOTES
II. MARRIAGE
Evidence of Marriage
II. MARRIAGE
The best documentary evidence of a marriage is the
marriage contract. However, the failure to present it
is not, however, proof that no marriage took place,
as other evidence may be presented to prove
A. GENERAL PRINCIPLES marriage. (Balogbog v. CA, G.R. No. 83598, 07 Mar.
1997)
Marriage under the Family Code Proof of marriage
A special contract of permanent union between a 1. Testimony of a witness to the matrimony;

man and a woman entered into in accordance with
law for the establishment of conjugal and family life. 2. The couple’s public and open cohabitation as
It is the foundation of the family and an inviolable husband and wife after the alleged wedlock;
social institution whose nature, consequences, and
incidents are governed by law and not subject to 3. The birth and baptismal certificate of children
stipulation, except that marriage settlements may born during such wedlock; and
fix the property relations during the marriage
within the limits provided by the FC. (Art. 1, FC) 4. The mention of such nuptial in subsequent
documents. (Sarmiento v. CA, G.R. No. 96740, 25
Nature of Marriage Mar. 1999)
Marriage, as an inviolable social institution, is the 1. ESSENTIAL REQUISITES

foundation of the family and shall be protected by
the State. (Sec. 2, Art. XV, 1987 Constitution)
1. Legal capacity of the contracting parties who
must be a male and a female; and
Marriage is an institution in which the community is
deeply interested. The State has surrounded it with
2. Consent freely given in the presence of the
safeguards to maintain its purity, continuity, and
solemnizing officer. (Art. 2, FC)
permanence. The security and stability of the State
are largely dependent on it. It is in the interest and
Legal capacity of the parties to marry
duty of each member of the community to prevent
the bringing about of a condition that would shake
1. Age – at least 18 years of age
its foundation and lead to its destruction. The
incidents of the status are governed by law, not by
The attainment of the required minimum age
will of the parties. (Beso v. Daguman, A.M. No. MTJ-
for marriage should be reckoned, not on the
99-1211, 28 Jan. 2000)
date of filing of the application for issuance of a
marriage license, but on the date of the
Marriage as a status
marriage. Pursuant to Art. 6 of the FC, parties
may contract marriage on the date of the
As a status, the principle in contracts that the parties
solemnization of the marriage, i.e., when they
may, by mutual agreement, put an end to it, cannot
appear personally before the solemnizing
certainly apply, for the consequences of the
officer and declare in the presence of not less
marriage as a rule are fixed by law. (Paras, 2016)
than two witnesses of legal age that they take
each other as husband and wife. (Rabuya, 2009)
CIVIL LAW
2. Sex – between a male and a female A: NO. Judge Rojo is guilty for violating the Code of
Judicial Conduct and for gross ignorance of the law.
Two females are incapable of entering into As a solemnizing officer, the judge’s only duty
marriage. There is no constitutional protection involving the affidavit of cohabitation is to examine
of the rights of marriage between two persons whether the parties have indeed lived together for
of the same sex. (Jones v. Hallahan, 501 S.W.2d at least 5 years without legal impediment to marry.
588, 09 Nov. 1973) The guidelines do not state that the judge can
notarize the parties’ affidavit of cohabitation.
3. Lack of legal impediment to marry Affidavits of cohabitation are documents not
connected with the judge’s official function and duty
The legal impediments which may affect legal to solemnize marriages. Notarizing affidavits of
capacity are those mentioned in Arts. 37 and 38 cohabitation is inconsistent with the duty to
of the FC. Thus, the contracting parties are not examine the parties’ requirements for marriage. If
legally capacitated to marry each other. the solemnizing officer notarized the affidavit of
cohabitation, he cannot objectively examine and
Other requirements needed for the validity of review the affidavit’s statements before performing
such marriage depending upon the age of the the marriage ceremony. (Tupal v. Rojo, A.M. No. MTJ-
contracting party 14-1842, 24 Feb. 2014)
ADDITIONAL 2. FORMAL REQUISITES

AGE
REQUIREMENTS
Parental consent and Marriage
18 to 21 The formal requisites: (C-A-L) (1996, 2009 BAR)
counseling
Parental advice and Marriage
22 to 25 1. Marriage Ceremony;
counseling 2. Authority of the solemnizing officer; and
3. Valid marriage License, except in a marriage of
Absence of the additional requirement of exceptional character. (Art. 3, FC)
parental advice
Effect of Absence of Requisites in the Status of
It does not make the marriage void or voidable. It Marriage (1995, 1996, 1999, 2008 BAR)
only affects the release of the marriage license to be
postponed until (3) three months from the complete Status of Marriage in case of:
publication of the application. (Art. 15, FC)
1. Absence of any of the essential requisites -
Q: A complaint was filed against Judge Rojo for Void ab initio. (Art. 4, FC)
allegedly violating the Code of Judicial Conduct
and for gross ignorance of the law. Rojo 2. Absence of any of the formal requisites – Void
solemnized marriages without the required ab initio. (Art. 4, FC)
marriage license. He instead notarized affidavits
of cohabitation and issued them to the XPNs: Valid even in the absence of formal
contracting parties. He notarized these requisite:
affidavits on the day of the parties’ marriage.
a. Marriages exempt from license
Was Judge Rojo’s notarization of affidavits of requirement;
cohabitations proper? b. Either or both parties believed in good
faith that the solemnizing officer had
the proper authority (Art. 35(2), FC)
2023 GOLDEN NOTES
II. MARRIAGE
3. Defect in any of the essential requisites – Common-law marriages are Not Recognized in
Voidable. (Art. 4, FC) the Philippines
4. Irregularity in any of the formal requisites - A common-law marriage, otherwise referred to as a

Valid, but the party responsible for such “live-in relationship,” is one where a man and a
irregularity shall be civilly, criminally, or woman just live together as husband and wife
administratively liable. (Art. 4, FC) without getting married. (Paras, 2016)
Marriage Ceremony Validity of Marriage by Proxy
No particular form of ceremony or religious rite for It depends on the place of celebration of the
solemnization of the marriage is required by law. marriage:
(Art. 6, FC)
1. If performed in the Philippines – Void;
Minimum requirements under the law: such marriage is not allowed.
1. Personal appearance of the contracting Philippine laws prohibit marriages by

parties before the solemnizing officer; proxy. Since the marriage is performed in
the Philippines, Philippine laws shall apply
NOTE: There is no marriage ceremony if what following the principle of lex loci
transpired was a mere private act of signing a celebrationis.
marriage contract by the contracting parties,
without the presence of the solemnizing officer. 2. If performed abroad – It depends upon the
(Morigo v. People, G.R. No. 145226, 06 Feb. 2004) law of the place where the marriage was
celebrated (lex loci celebrationis).
2. Their personal declaration that they shall take
each other as husband and wife; and As to marriages between Filipinos – Valid, all
marriages solemnized outside the Philippines, in
NOTE: The declaration shall be contained in the accordance with the laws enforced in said country
Marriage Certificate and shall be signed by the where they are solemnized, and valid there as such,
contracting parties and their witnesses and shall also be valid here in the country, except those
attested by the solemnizing officer. prohibited under Arts. 35(1), (2), (4), (5), (6), 36, 37,
and 38. (Art. 26, FC).
3. In the presence of not less than two (2)
witnesses of legal age. Persons Authorized to Solemnize Marriage
(1994 1995, 1999 BAR)
NOTE: In case of a marriage in articulo mortis, when
one or both parties are unable to sign the marriage The following are the persons authorized to
certificate, it shall be sufficient for one of the solemnize marriage depending upon the
witnesses to write the name of said party, which circumstances:
shall be attested by the solemnizing officer. (Art. 6,
FC) 1. Under ordinary circumstances (Art. 7, FC):
The declaration of consent need not be vocally a. Incumbent judiciary member – provided,
expressed. It can be shown by other manifestations it is within the court’s jurisdiction;
or signs of approval and consent. It is the agreement
itself, not the form in which it is couched, which NOTE: Where a judge solemnized a
constitutes the contract. (Sta. Maria, 2010) marriage outside his court’s jurisdiction,
this is a mere irregularity in the formal
CIVIL LAW
requisite which, while it may not affect the b. Military commander of a unit who is a
validity of the marriage, may subject the commissioned officer – provided the
officiating official to administrative marriage is performed (Art. 32, FC):
liability. (Rabuya, 2009) i. In absence of chaplain;
ii. Within zone of military operation; and
b. Priest, rabbi, imam, or minister of any iii. Between members of the armed forces
church/religious sector or civilians.
i. Duly authorized by his church or
religious sect and registered with Duty of the solemnizing officer in a marriage in
the civil registrar general, acting articulo mortis
within the limits of the written
authority granted him by his The solemnizing officer in a marriage in articulo
church or religious sect; mortis after solemnizing such marriage shall state in
an affidavit executed before the local civil registrar
ii. Provided at least one of the parties or any other person legally authorized to administer
belongs to such church or religious oaths, that the marriage was performed in articulo
sect. mortis and that he took the necessary steps to
ascertain the ages and relationship of the
c. Consul general, consul, or vice-consul contracting parties and the absence of a legal
impediment to the marriage. (Art. 29, FC)
NOTE: Provided that both parties are
Filipinos and marriage takes place abroad NOTE: If any of the listed solemnizing officers fails
in the country where the consul holds to comply with any of the requisites mandated by
office. (Art. 10, FC) law for them to validly solemnize a marriage, the
marriage is generally void, based on the ground of
d. Mayors (Arts. 444 and 445, LGC) – including an absence of a formal requisite, specifically, the
“Acting Mayor” authority of solemnizing officer.
NOTE: From the time of the effectivity of XPN: Unless such marriage was contracted with
the FC (03 Aug. 1988) up to the time of the either or both parties believing in good faith that the
effectivity of the LGC (01 Jan. 1992), solemnizing officer had the legal authority to do so.
mayors do not have the authority to (Art. 35(a), FC)
solemnize marriage.
Effect of Solemnizing Officer’s Failure to Execute
2. Marriages in articulo mortis: an Affidavit
a. Ship captain or airplane chief – Provided It will have no effect as to the validity of the
the marriage is performed: marriage. The marriage will still be valid.
i. During voyage, even during stopovers;
and The LCR is given the original of the affidavit which
takes the place of a marriage license. (Paras, 2016)
ii. Between passengers or crew members.
(Art. 31, FC) Such affidavit is not an essential or formal requisite
of marriage, same with marriage contracts. The
Such authority may be exercised not only signing of the marriage contract and the affidavit is
while the ship is at sea or the plane is in only required for the purpose of evidencing the act.
flight but also during stopovers at ports of It is not a requisite for marriage. It is the obligation
call. (Rabuya, 2018) of the solemnizing officer. It does not affect the
2023 GOLDEN NOTES
II. MARRIAGE
validity of marriage. (De Loria v. Felix, G.R. No. L- Mayors are now authorized to solemnize marriage.
9005, 20 June 1958) They have been excluded by the FC, but they are
now authorized by the LGC to solemnize marriages
Authorized venues of marriage (Secs. 444 and 455 of the LGG as to the authority of
municipal mayors and mayors, respectively). A
GR: Must be solemnized publicly within the mayor of Manila cannot solemnize a marriage in
jurisdiction of the authority of the solemnizing Pasay City because he has no authority there. His
officer: authority can only be exercised in Manila. If he
1. Chambers of the judge or in open court; performs the ceremony outside of his territorial
2. Church, chapel or temple; or, jurisdiction, the marriage is void for lack of
3. Office of the consul-general, consul or vice- authority. Even a vice mayor, acting as mayor, or a
consul. (Art. 8, FC) member of the Sangguniang Bayan can solemnize
marriage because if he is an acting mayor, he can
XPNs: exercise the powers of the mayor. (Albano, 2006)
1. Marriage at the point of death;
2. Marriage in remote places; Exception to the Rule Requiring Authority of the
3. Marriage at a house or place designated by Solemnizing Officer
both of the parties with the written request
from the solemnizing officer to that effect. The exception to the rule requiring authority of the
(Art. 8, FC) solemnizing officer is when a marriage is contracted
with either or both parties believing in good faith
NOTE: This provision is only directory, not that the solemnizing officer had the authority to do
mandatory. The requirement that the marriage be so. (Art. 35(2), FC)
solemnized in a particular venue or a public place is
not an essential requisite for the validity of the Marriage License
marriage.
A marriage license is required in order to notify the
A Marriage Solemnized by a Judge Outside of his public that two persons are about to be united in
Jurisdiction is Valid matrimony and that anyone who is aware or has
knowledge of any impediment to the union of the
Under Art. 3 of the FC, one of the formal requisites two shall make it known to the LCR.
of marriage is the “authority of the solemnizing
officer.” Under Art. 7, marriage may be solemnized The requirement for and issuance of marriage
by, among others, "any incumbent member of the license is the State’s demonstration of its
judiciary within the court's jurisdiction." Art. 8, involvement and participation in every marriage.
which is a directory provision, refers only to the (Rabuya, 2018)
venue of the marriage ceremony and does not alter
or qualify the authority of the solemnizing officer as What is required is the marriage license, not the
provided in the preceding provision. If there is marriage certificate. The latter is neither an
defect in such requirement, the same would not essential nor a formal requisite, thus, an oral
make the marriage void, but it merely subjects the solemnization is valid. In fact, a marriage may be
officer to criminal, civil, or administrative proved by oral evidence. (Paras, 2016)
responsibility. (Navarro v. Domagtoy, A.M. No. MTJ-
96- 1088, 19 July 1996) Validity of marriage license
NOTE: In case of a marriage solemnized by a mayor The license shall be valid in any part of the
outside of his territorial jurisdiction, the LGC is Philippines for a period of 120 days from the date of
silent on the matter, hence the abovementioned issue and shall be deemed automatically cancelled
case may be applied by analogy.
CIVIL LAW
upon the expiration of said period if the contracting Requirement in the Application for Marriage
parties have not made use of it. (Art. 20, FC) License
If the parties contracted marriage after the lapse of Each of the contracting parties is required to file
120 days from the issuance of the marriage license, separately a sworn application for the issuance of
such marriage shall be considered void for lack of marriage license, specifying the following:
marriage license.
1. Full name of the contracting party;
NOTE: Issuance of a marriage license in a city or 2. Place of birth;
municipality, not the residence of either of the 3. Age and date of birth;
contracting parties, and the issuance of a marriage 4. Civil status;
license despite the absence of the 10-day period for 5. If previously married, how, when and where the
publication are considered mere irregularities that previous marriage was dissolved or annulled;
do NOT affect the validity of the marriage. 6. Present residence and citizenship;
7. Degree of relationship of the contracting
An irregularity in any of the formal requisites of parties;
marriage does not affect its validity but the parties 8. Full name, residence and citizenship of the
are civilly, criminally and administratively liable. father;
(Alcantara v. Alcantara, G.R. No. 167746, 28 Aug. 9. Full name, residence and citizenship of the
2007) mother; and
10. Full name, residence and citizenship of the
Status of Marriages Celebrated During the guardian or person having charge, in case the
Suspension of the Issuance of Marriage License contracting party has neither father nor mother
and is under the age of 21. (Art. 11, FC)
The status of the marriage if the parties get married
within the said 3-month period depends: Additional Requirement for Foreign National
Applicants
1. If the parties did NOT obtain a marriage
license – the marriage shall be void for lack of When either or both of the contracting parties are
marriage license. citizens of a foreign country, it shall be necessary for
them to submit a certificate of legal capacity to
2. If the parties were able to obtain a marriage contract marriage, issued by their respective
license – the marriage shall be valid without diplomatic or consular officials.
prejudice to the actions that may be taken
against the guilty party. Stateless persons or refugees from other country
shall, in lieu of the certificate of legal capacity herein
Persons Authorized to Issue the Marriage required, submit an affidavit stating the
License circumstances showing such capacity to contract
marriage. (Art. 21, FC)
The marriage license is issued by the local civil
registrar of the city or municipality where either Marriage without the required certificate of
contracting party habitually resides. (Art. 9, FC) legal capacity to marry is valid
Obtaining a marriage license in a place other than The status of the marriage celebrated on the basis of
where either party habitually resides is a mere a license issued without the required Certificate of
irregularity. Legal Capacity is valid as this is merely an
irregularity in complying with a formal requirement
of the law in procuring a marriage license, which
2023 GOLDEN NOTES
II. MARRIAGE
will not affect the validity of the marriage. (Garcia v. In Cariaga v. Republic (G.R. No. 248643, 07 Dec.
Recio, G.R. No. 138322, 02 Oct. 2001) 2021), the Supreme Court also mentioned of the
doctrine of unclean hands in the context of null and
Q: Lovelle and Henry met while they were still void marriages due to lack of marriage license. It
attending college. They became sweethearts in recognized Lovelle's testimony to the effect that she
1991. They got married in November 2000 but and Henry did not apply for a marriage license, and
decided to live apart in 2013 due to their that they acquiesced to their parents' advice to
differences. In 2015, Lovelle filed a petition to “assist with the documentary requirements of their
nullify their marriage as it was allegedly intended civil wedding,” appears to show that she
contracted without a valid marriage license. The willingly acceded to the possibility that a spurious
first part of the Certification from the Assistant marriage license had been presented to the
City Civil Registrar of Quezon City states that solemnizing officer during the ceremony. However,
“per Registry Records of Marriage License files the Court also recognized that in petitions to declare
xxx, no record of Marriage License No. 131078 the absolute nullity of marriage based on the
dated 09 Nov. 2000 allegedly issued in favor of absence of a valid marriage license, testimony of
[Henry] and [Lovelle].” this nature should not ipso facto preclude a finding
of nullity on the ground that parties who come to
The RTC found the Certification insufficient for court must do so with clean hands. To be sure, a
the purpose of establishing that Lovelle and marriage contracted despite the absence of a
Henry's marriage was contracted without a marriage license necessarily implies some sort of
valid marriage license. On appeal, the CA irregularity. Nevertheless, such irregularity, as well
observed that the fact that no marriage license as any liability resulting therefrom, must be
was issued to Lovelle and Henry cannot be threshed out and determined in a proper case filed
deduced from the Certification. All that it for the purpose. It is in that separate proceeding
confirms is that the marriage license referred to where the party or parties responsible for the
in Henry and Lovelle's Certificate of Marriage irregularity would be ascertained. A contrary ruling
pertains to that issued to a certain Mamerto O. would operate to validate marriages which the law
Yambao (Yambao) and Amelia B. Parado itself declares void
(Parado). Unperturbed, Lovelle appealed to the
SC. Is the appeal meritorious? Marriages exempt from the license requirement
(M-A-R-C-O)
A: YES. The Supreme Court held that the
Certification, taken together with applicable law 1. Marriages among Muslims or members of
and procedure, the attendant facts, and the evidence ethnic cultural communities – Provided they
on record, serves as sufficient basis to hold that are solemnized in accordance with their
Lovelle and Henry's marriage was solemnized customs, rites or practices (Art. 33, FC);
without a valid marriage license. The first part of the
Certification from the Assistant City Civil Registrar 2. Marriages in Articulo mortis
of Quezon City confirms that Lovelle and Henry did.
not file the required application for marriage license a. In case either or both of the contracting
in connection with Marriage License No. 131078. parties are at the point of death; (Art. 27,
The non-filing of the requisite application for FC);
marriage license is rendered even more apparent by b. Solemnized by a ship captain or airplane
the second part of the Certification, which states pilot (Art. 31, FC); and
that the marriage license referred to in Lovelle and c. Within zones of military operation.
Henry's Certificate of Marriage had actually been
issued to Yambao and Parado. (Cariaga v. Republic, 3. Marriages in Remote places. (Art. 28, FC)
G.R. No. 248643, 07 Dec. 2021).
CIVIL LAW
Remote Place - no means of transportation to 5. Solemnizing officer must execute a Sworn

enable the party to personally appear before statement that he had ascertained the
the local civil registrar. (Rabuya, 2018) qualifications of the parties and found no legal
impediment to their marriage. (Manzano v.
4. Marriages between parties Cohabiting for at Sanchez, A.M. No. MTJ-00-1329, 08 Mar. 2001)
least 5 years and without legal impediment to
marry each other; (Art. 34, FC) and Q: Pepito was married to Teodulfa. Pepito shot
Teodulfa resulting in her death. After 1 year and
5. Marriages solemnized Outside the Philippines 8 months, he married Norma without any
where no marriage license is required by the marriage license. In lieu thereof, they executed
country where it was solemnized. an affidavit stating that they had lived together
as husband and wife for at least five years and
Requisites for the 5-year cohabitation as an were thus exempt from securing a marriage
exception to the marriage license requirement license.
(2002, 2008 BAR)
a. What is the status of their marriage?
The requisites are:
A: The marriage is VOID for lack of marriage license.
1. Living together as husband and wife at least 5 To be exempt from the license requirement under
years before the marriage;. the 5-year cohabitation rule, the cohabitation
should be in the nature of a perfect union that is
The 5-year period must be characterized by: valid under the law but rendered imperfect only by
the absence of the marriage contract and is
a. Exclusivity – the partners must live characterized by continuity, that is, unbroken, and
together exclusively, with no other exclusivity, meaning no third party was involved at
partners, during the whole 5-year period; any time within the 5 years. It should be a period of
legal union had it not been for the absence of the
b. Continuity – such cohabitation was marriage. In this case, Pepito and Norma are not
unbroken; exempt from the marriage license requirement
because at the time of Pepito and Norma's marriage,
NOTE: The period is counted from the date it cannot be said that they have lived with each other
of celebration of marriage. It should be the as husband and wife for at least five years prior to
years immediately before the day of the their wedding day because from the time Pepito's
marriage. first marriage was dissolved up to the time of his
marriage with Norma, only about 20 months had
2. No legal impediment to marry each other elapsed.
during the period of cohabitation;
b. Would your answer be the same if Pepito
NOTE: The five-year period of cohabitation was separated in fact from Teodulfa?
must have been a period of legal union had it
not been for the absence of marriage. A: YES. The marriage is still void. Even if they were
separated in fact, and thereafter both Pepito and
3. Fact of absence of legal impediment must be Norma had started living with each other for five
present at the time of the marriage; years, the fact remains that Pepito had a subsisting
marriage at the time he started cohabiting with
4. Parties must execute an Affidavit that they are Norma. It is immaterial that Pepito had already been
living together as husband and wife for 5 years separated in fact from his lawful spouse when they
and that they do not have any impediment to lived with each other. The subsistence of the
marry; marriage even where there was actual severance of
2023 GOLDEN NOTES
II. MARRIAGE
the filial companionship between the spouses Q: Guillermo and Josefa lived together as
cannot make any cohabitation by either spouse with husband and wife, but there is doubt as to
any third party as that of a “husband and wife.” whether they got married as no record of the
(Niñal v. Bayadog, G.R. No. 133778, 14 Mar. 2000) marriage existed in the civil registry. However,
their relatives and friends maintained that the
Q: Roderick and Faye were high school two in fact married each other and lived as
sweethearts. When Roderick was 18 and Faye, husband and wife for more than half a century.
16 years old, they started living together as Is Guillermo married to Josefa?
husband and wife without the benefit of
marriage. When Faye reached 18 years of age, A: YES, they are presumed to be married. In this
her parents forcibly took her back and arranged jurisdiction, every intendment of the law leans
for her marriage to Brad. Although Faye lived toward legitimizing matrimony. Persons dwelling
with Brad after the marriage, Roderick together apparently in marriage are presumed to be
continued to regularly visit Faye while Brad was in fact married. This is the usual order of things in
away at work. During their marriage, Faye gave society and, if the parties are not what they hold
birth to a baby girl, Laica. When Faye was 25 themselves out to be, they would be living in
years old, Brad discovered her continued liaison constant violation of the common rules of law and
with Roderick and in one of their heated propriety. Semper praesumitur pro matrimonio –
arguments, Faye shot Brad to death. She lost no always presume marriage. Although a marriage
time in marrying her true love Roderick, contract is considered as a primary evidence of
without a marriage license, claiming that they marriage, its absence is not always proof that no
have been continuously cohabiting for more marriage took place. (Vda. de la Rosa v. Heirs of Vda.
than 5 years. Was the marriage of Roderick and de Damian, G.R. No. 103028, 10 Oct. 1997)
Faye valid? (2008 BAR)
A: NO, the marriage is void because there was no B. MIXED MARRIAGES AND FOREIGN DIVORCE
marriage license. Their marriage was not exempt
from the requisite of a marriage license because
Roderick and Faye have not been cohabiting for at
Rules governing the validity of marriage (2002,
least 5 continuous years before the celebration of
2004, 2006, 2009, 2010 BAR)
their marriage. The lovers’ trysts and brief
visitations did not amount to “cohabitation.”
1. As to its extrinsic validity – Lex loci celebrationis
Marriage License vs. Marriage Certificate

NOTE: Locus regit actum (the act is governed by
the law of the place where it is done) is adhered
MARRIAGE
MARRIAGE LICENSE to in the Philippines as regards the extrinsic
CERTIFICATE
validity of marriage.
As to their Nature
Authorization by the Best evidence of the 2. As to its intrinsic validity – Personal law
state to celebrate existence of the
marriage. marriage. NOTE: Personal law may either be the national
As to Requisite of Marriage law or the law of the place where the person is
Neither essential nor domiciled. If the person involved is a stateless
Formal requisite of
formal requisite of person, domiciliary rule applies, otherwise, lex
marriage.
marriage. nationalii applies.
CIVIL LAW
Art. 26(1) of the FC on the validity of foreign of Japan was not an official translation. Should
marriages applies, however, only to Filipinos. the court grant the petition?
Foreign marriages of foreigners or of a Filipino and
a foreigner are governed by the Rules on Conflict of A: NO. Under Art. 26 of the FC, a divorce between a
Laws. (Sempio-Diy, 1995) foreigner and a Filipino may be recognized in the
Philippines as long as it was validly obtained
Requirements for the application of Art. 26(2) of according to the foreign spouse’s national law.
the Family Code However, before a foreign divorce decree can be
recognized by the court, the party pleading it must
1. It must be a case of mixed marriage; first prove the fact of divorce and its conformity to
the foreign law allowing it.
2. The divorce must be obtained by either the
alien or Filipino spouse; and In the present case, Jocelyn was able to establish the
fact of divorce but was unable to establish the law of
NOTE: Whether the Filipino spouse initiated Japan on divorce. The Acceptance Certificate,
the foreign divorce proceeding or not, a accompanied by an Authentication from the
favorable decree dissolving the marriage bond Philippine Embassy in Tokyo, suffices as proof of the
and capacitating his or her alien spouse to fact of divorce.
remarry will have the same result: the Filipino
spouse will effectively be without a husband or However, the photocopy of the English translation
wife. of the Civil Code of Japan is devoid of any probative
value. In Nullada v. Civil Registrar of Manila (G.R. No.
Divorces obtained abroad by Filipino citizens 224548, 23 Jan. 2019) and Arreza v. Toyo (G.R. No.
may now be validly recognized in the 213198, 01 July 2019), the Court held that the
Philippines but only in cases of mixed submission of the same document does not
marriages involving a Filipino and a Foreigner.; constitute sufficient compliance with the rules on
(Republic v. Manalo, G.R. No. 221029, 24 Apr. proof of Japan’s law on divorce and that the
2018) translations by the publisher of that document are
not advertised as a source of official translations of
3. The divorce obtained by the alien spouse must Japanese laws. Not being an official translation, the
capacitate him or her to remarry. (Rabuya, document submitted does not prove the existing
2018) law on divorce in Japan. Without such, there is
nothing in the record to establish that the divorce
Q: Jocelyn filed before the trial court a petition was validly obtained and is consistent with the
for judicial recognition of foreign divorce. She Japanese law on divorce. (Republic of the Philippines
alleged that she was married to Fumio in 1993, vs. Jocelyn Asusano Kikuchi, G.R. No. 243646, 22 June
and in 2007, they jointly filed for divorce before 2022, as penned by J. Hernando)
the City Hall of Sakado City, Saitama Prefecture.
As the divorce was accepted, Jocelyn sought the Q: Suppose in a valid mixed marriage the foreign
recognition thereof here in the Philippines. spouse obtained a divorce decree abroad and
was capacitated to remarry.
During the presentation of evidence, the
following documents, among others, were a. May the Filipino spouse remarry despite the
presented: (1) the Acceptance Certificate issued fact that divorce is not valid in the
by the Mayor of Sakado City, Japan; (2) an Philippines?
Authentication from the Vice Consul of
Philippine Embassy in Tokyo; and (3) a A: YES. The Filipino spouse may remarry. Divorce
photocopy of the Civil Code of Japan in English validly obtained abroad by the alien spouse
Text. However, the translation of the Civil Code capacitating him/her to remarry will likewise allow
2023 GOLDEN NOTES
II. MARRIAGE
the Filipino spouse to remarry. (Art. 26 (2), FC) must likewise be proven as our courts cannot take
judicial notice of foreign laws and judgments.
NOTE: Under the nationality principle embodied in Hence, like any other facts, both the divorce decree
Art. 16 of the NCC, only Philippine nationals are and the national law of the alien must be alleged and
covered by the policy against absolute divorces, the proven according to our law on evidence. (Garcia v.
same being considered contrary to our concept of Recio, G.R. No. 138322, 02 Oct. 2002)
public policy and morality. Nevertheless, aliens may
obtain divorces abroad which may be recognized in However, if the Filipino spouse remained to be a
the Philippines, provided they are valid according to citizen of the Philippines when he/she obtained a
their national law. (Van Dorn v. Romillo, Jr., G.R. No. divorce decree abroad, such decree will not be
L- 68470, 08 Oct. 1985) recognized in the Philippines even if that spouse is
subsequently naturalized as a citizen of a foreign
b. Will your answer be the same if it was a valid country because at the time the spouse obtained the
marriage between Filipinos? divorce decree, he/she was still a citizen of the
Philippines and being naturalized afterwards does
A: What is material in this case is the citizenship of not cure this defect. (Republic v. Iyoy, G.R. No.
the spouse who obtained a divorce decree abroad at 152577, 21 Sept. 2005)
the time the decree was obtained and not their
citizenship at the time the marriage was celebrated. As enunciated in the case of Republic v. Manalo (G.R.
If the Filipino spouse was naturalized as a citizen of No. 221029, 24 Apr. 2018), the Supreme Court laid
a foreign country before he/she obtains a divorce down a landmark ruling that allows Filipino Citizens
decree and was thereafter capacitated to remarry, to obtain a foreign divorce provided that such
the Filipino spouse will be capacitated to remarry. marriage is a mixed marriage involving a Filipino
(Republic v. Orbecido, G.R. No. 154380, 05 Oct. 2005) and a foreigner.
Q: A Filipina was married to an American who Q: A Filipino citizen was married to a Japanese
obtained a divorce decree in the U.S. When the national. She divorced her husband in Japan and
Filipina came back to the Philippines and was able to obtain a divorce decree from the
started her business, the American followed suit Japanese Court. Will the Filipino spouse be
and wanted to enforce his rights over the capacitated to remarry under Philippine law?
Filipina to the extent of claiming his rights to
administer the properties of the woman, A: YES. Divorces obtained abroad by Filipino
contending that they are still married. He also citizens may now be validly recognized in the
claimed hereditary rights. Is he correct? Why? Philippines but only in cases of mixed marriages
involving a Filipino and a foreigner.
A: NO. The divorce they obtained in the U.S. released
the Filipina from the marriage. Thus, pursuant to Provided, of course, that the party petitioning for
American law, he is no longer the husband of the the recognition of such foreign divorce decree –
Filipina. He would therefore have no standing to sue presumably the Filipino citizen – must prove the
the Filipina. (Van Dorn v. Romillo, Jr., G.R. No. L- divorce as a fact and demonstrate its conformity to
68470, 08 Oct. 1985) the foreign law allowing it. (Republic v. Manalo, G.R.
No. 221029, 24 Apr. 2018)
Burden of proof in Recognition of Foreign
Divorce Q: If a foreigner who was divorced seeks to
obtain a marriage license in the Philippines,
The naturalization of one of the parties, as well as what should he do?
the divorce decree obtained by him or her, must be
proven as a fact under our rules on evidence. The
foreign law under which the divorce was obtained
CIVIL LAW
A: The applicant for marriage license has to prove obtained in Japan is not binding in the
his legal capacity. If the marriage was dissolved by Philippines. Did the RTC correctly deny
reason of divorce, he has to file a sworn statement Luzviminda’s petition for recognition of divorce
as to how the marriage was dissolved (Art. 11, FC), decree she procured?
furnish the local civil registrar with the judgment,
(Art. 13, FC), and must register the same with the A: NO. It has been ruled in Republic v. Manalo (G.R.
local civil registrar to bind third persons. (Art. 52, No. 221029, 24 Apr. 2018) that foreign divorce
FC) decrees obtained to nullify marriages between a
Filipino and an alien citizen may already be
NOTE: Without the divorce decree and foreign law recognized in this jurisdiction, regardless of who
as part of the evidence, the Court cannot rule on the between the spouses initiated the divorce;
issue of whether petitioner has the personality to provided, of course, that the party petitioning for
file the petition for declaration of nullity of the recognition of such foreign divorce decree –
marriage. After all, petitioner may have the presumably the Filipino citizen – must prove the
personality to file the petition, but the divorce divorce as a fact and demonstrate its conformity to
decree obtained was a limited divorce or a mensa et the foreign law allowing it. A plain reading of the
thoro or the foreign law may restrict remarriage RTC ruling shows that the denial of Luzviminda's
even after the divorce decree becomes absolute. petition to have her foreign divorce decree
(Garcia v. Recio, G.R. No. 138322, 02 Oct. 2002) recognized in this jurisdiction was anchored on the
sole ground that she admittedly initiated the
Q: Luzviminda was married to Ryoji Morisono in divorce proceedings which she, as a Filipino citizen,
Quezon City on 08 Dec. 2009. Thereafter, they was not allowed to do.
lived together in Japan for 1 year and 3 months
but were not blessed with a child. Throughout In light of the doctrine laid down in Manalo (G.R. No.
their married life, they would quarrel mainly 221029, 24 Apr. 2018), such ground relied upon by
due to Ryoji’s philandering ways, and to the fact the RTC had been rendered nugatory. However, the
that he was much older than Luzviminda. As Court cannot just order the grant of Luzviminda's
such, the two of them submitted a “Divorce by petition for recognition of the foreign divorce
Agreement” before the City Hall of Mizuho-ku in decree, as Luzviminda has yet to prove the fact of
Nagoya, Japan, which was approved and duly her. "Divorce by Agreement" obtained in Nagoya
recorded. In view of this, Luzviminda filed a City, Japan and its conformity with prevailing
petition for recognition of foreign divorce Japanese laws on divorce. Notably, the RTC did not
decree obtained by her and Ryoji before the RTC rule on such issues. Since these are questions which
so that she could cancel the surname of her require an examination of various factual matters, a
husband and be able to marry again. remand to the court a quo is warranted. (Morisono
v. Morisono, G.R. No. 226013, 02 July 2018)
The RTC denied Luzviminda’s petition, holding
that while a divorce decree held that while a Q: Cynthia, a Filipina, and Park, a South Korean
divorce obtained abroad by an alien spouse may national, got married in the City of Manila in
be recognized in the Philippines – provided that 2012. Unfortunately, their relationship turned
such decree is valid according to the national sour and ended in a divorce by mutual
law of the alien – the same does not find agreement in South Korea. After the divorce was
application when it was the Filipino spouse, i.e., confirmed in 2012 by the Cheongju Local Court,
petitioner, who procured the same. Invoking the Cynthia filed before the RTC a Petition for the
nationality principle provided under Art. 15 of Judicial Recognition of a Foreign Divorce, which
the NCC, in relation to Art. 26(2) of the FC, the was granted in 2015. On appeal, the CA held that
RTC opined that since petitioner is a Filipino the divorce decree in question cannot be
citizen whose national laws do not allow recognized in this jurisdiction insofar as Cynthia
divorce, the foreign divorce decree she herself
2023 GOLDEN NOTES
II. MARRIAGE
is concerned since it was obtained by mutual 6. Bigamous or polygamous marriages not falling
agreement. Is the CA correct? under Art. 41 of the FC or those allowed under
special laws, such as the Muslim Code;
A: NO, the CA is incorrect. Pursuant to the majority
ruling in Manalo (G.R. No. 221029, 24 Apr. 2018), Art. 7. Marriages contracted by any party below 18
26(2) applies to mixed marriages where the divorce years of age even with the consent of parents
decree is: (i) obtained by the foreign spouse; (ii) or guardians; (Art. 35, FC)
obtained jointly by the Filipino and foreign spouse;
and (iii) obtained solely by the Filipino spouse. As 8. Incestuous Marriages; (Art. 37, FC)
confirmed by Manalo, the divorce decree obtained
by Park, with or without Cynthia's conformity, falls 9. Marriages declared void because they are
within the scope of Art. 26(2) and merits contrary to public policy; (Art. 37, FC)
recognition in this jurisdiction (Galapon v. Republic,
G.R. No. 243722, 22 Jan. 2020). 10. Subsequent marriages which are void under
Art. 53;
C. VOID MARRIAGES 11. Marriages in jest; and
12. Common-law marriages.
See pages 52-53 for discussion on Tan-Andal v.

PSYCHOLOGICAL INCAPACITY
Andal, G.R. No. 196359, 11 May 2021
Null and Void Marriage under Art. 36

Marriages that are void ab initio (1993, 2004,
2005, 2006 BAR)
Psychological incapacity is “no less than a mental
(not physical) incapacity that causes a party to be
1. Marriages contracted by any party, who at the
truly (cognitive) of the basic marital covenants that
time of the celebration of the marriage, was
concomitantly must be assumed and discharged by
Psychologically incapacitated, even if such
the parties to the marriage which include their
incapacity becomes manifest only after its
mutual obligations to live together, observe love,
solemnization; (Art. 37, FC)
respect, fidelity, and to render help and support”.
(Republic v. Iyoy, G.R. No. 152577, 21 Sept. 2005)
2. Absence of any of the essential or formal
requisites of marriage;
Psychological incapacity does not refer to mental
incapacity tantamount to insanity. (Paras, 2016)
3. Solemnized without license, except those
Clearly, the ground is restricted to psychological
marriages that are exempt from the license
incapacity to “comply with the essential marital
requirement;
obligations”. (Sta. Maria, 2010)
4. Solemnized by any person not legally

In such case, the spouse declared to be
authorized to perform marriages unless such
psychologically incapacitated cannot be held liable
marriages were contracted with either or both
to pay moral damages to the other spouse based on
parties believing in good faith that the
Arts. 2217 and 21 of the NCC, which connotes
solemnizing officer had the legal authority to
willfulness of the acts complained of, if the same acts
do so;
constitutive of the psychological incapacity were to
be made the basis for the award of moral damages.
5. Contracted through mistake of one of the
It is contradictory to characterize acts as a product
contracting parties as to the identity of the
of psychological incapacity and, hence, beyond the
other;
control of the party because of an innate inability,
CIVIL LAW
while at the same time considering the same set of By the very nature of Art. 36 of the FC, courts,
acts as willful. (Rabuya, 2018) despite having the primary task and burden of
decision-making, must not discount but, instead,
Constitutional provision on marriage vis-à-vis must consider as decisive evidence the expert
validity of declarations of nullity of marriage opinion on the psychological and mental
based on psychological incapacity temperaments of the parties. (Kalaw v. Fernandez,
G.R. No. 166357, 15 Jan. 2015)
Q: Does the grant of the petition for the
declaration of nullity of marriage based on Art. Instances where allegations of psychological
36 of the FC destroy the constitutional mandate incapacity were not sustained
to protect the sanctity of marriage and
promoting such marriage as a foundation of the 1. Mere showing of irreconcilable differences and
family? conflicting personalities. (Carating-Siayngco v.
Siayngco, G.R. No. 158896, 27 Oct. 2004)
A: NO. In dissolving marital bonds, the Court is not
demolishing the foundation of families, but it is NOTE: Mere sexual infidelity or perversion,
actually protecting the sanctity of marriage, because emotional immaturity, and irresponsibility and
it refuses to allow a person afflicted with a the like, do not by themselves warrant a finding
psychological disorder, who cannot comply with or of psychological incapacity as the same may only
assume the essential marital obligations, from be due to a person's refusal or unwillingness to
remaining in that sacred bond. Art. 36, in classifying assume the essential obligations of marriage.
marriages contracted by a psychologically (Castillo v. Republic, G.R. No. 214064, 06 Feb.
incapacitated person as a nullity, should be deemed 2017)
as an implement of this constitutional protection of
marriage. Given the avowed State interest in 2. It must be shown that these acts are
promoting marriage as the foundation of the family, manifestations of a disordered personality
which in turn serves as the foundation of the nation, which would make respondent completely
there is a corresponding interest for the State to unable to discharge the essential obligations of a
defend against marriages ill-equipped to promote marital state, not merely youth, immaturity, or
family life. (Kalaw v. Fernandez, G.R. No. 166357, 14 sexual promiscuity. (Dedel v. CA, G.R. No. 151867,
Jan. 2015) 29 Jan. 2004)
Determination of psychological incapacity is left 3. Disagreements regarding money matters.

solely with the courts on a case-by-case basis (Tongol v. Tongol, G.R. No. 157610, 19 Oct. 2007)
Every court should approach the issue of nullity 4. Mere abandonment. To constitute psychological
“not on the basis of a priori assumptions, incapacity, it must be shown that the
predilections or generalizations, but according to its unfaithfulness and abandonment are
own facts” in recognition of the verity that no case manifestations of a disordered personality that
would be on “all fours” with the next one in the field completely prevented the erring spouse from
of psychological incapacity as a ground for the discharging the essential marital obligations.
nullity of marriage; hence, every “trial judge must (Republic v. Enselan, G.R. No. 170022, 09 Jan.
take pains in examining the factual milieu and the 2013)
appellate court must, as much as possible, avoid
substituting its own judgment for that of the trial 5. Sexual infidelity (Republic v. Dagdag, G.R No.
court. 109975, 09 Feb. 2001) and
6. Living an adulterous life when specific evidence

was shown that promiscuity as a trait was
2023 GOLDEN NOTES
II. MARRIAGE
already existing at the inception of marriage. Guidelines set by the Court to aid it in its
(Baccay v. Baccay, G.R. No. 173138, 01 Dec. 2010) disposition of cases involving psychological
incapacity
Requisites of Psychological Incapacity (1996,
1997, 2002, 2006 BAR) In the landmark case of Republic v. CA and Molina
(G.R. No. 108763, 13 Feb. 1997), the Supreme Court
1. Juridical antecedence – must be rooted in the enumerated the following guidelines in invoking
history of the party antedating the marriage, and proving psychological incapacity under Art. 36
although overt manifestations may arise only of the Family Code:
after such marriage;
1. Burden of proof to show the nullity of the
2. Gravity – must be shown to be serious or marriage belongs to the plaintiff;
dangerous illness. It cannot be mere refusal,
neglect, or difficulty, much less ill will. It must 2. The incapacity must be proven to be existing at
be caused by a genuinely serious psychic cause; “the time of the celebration” of the marriage;
and
3. Such illness must be grave enough to bring
3. Permanence or Incurability – not in the about the disability of the party to assume the
medical, but in the legal sense. This means that essential obligations of marriage;
the incapacity is so enduring and persistent
with respect to a specific partner and 4. The essential marital obligations must be those
contemplates a situation where the couple’s embraced by Arts. 68 up to 71 of the FC as
respective personality structures are so regards the husband and wife, as well as Arts.
incompatible and antagonistic that the only 220, 221 and 225 of the same Code in regard to
result of the union would be inevitable and parents and their children. Such non-complied
irreparable breakdown of marriage. marital obligation(s) must also be stated in the
petition, proven by evidence and included in the
Proof of Psychological Incapacity text of the decision;
The root cause of psychological incapacity must be: 5. Interpretations given by the National Appellate
Matrimonial Tribunal of the Catholic Church in
1. Medically or clinically identified; the Philippines, while not controlling or
2. Alleged in the complaint; decisive, should be given great respect by our
3. Clearly explained in the decision. courts.
NOTE: Expert evidence may be given by qualified No decision shall be handed down unless the
psychiatrists and clinical psychologists. Solicitor General issues a certification, which will be
quoted in the decision, briefly stating therein his
The physician’s examination is not required in reasons for his agreement or opposition, as the case
establishing psychological incapacity as ground may be, to the petition. (Republic v. CA and Molina,
for declaration of nullity G.R. No. 108763, 13 Feb. 1997)
If the totality of evidence presented is enough to NOTE: In Republic v. Quintero-Hamano (G.R. No.
sustain a finding of psychological incapacity, 149498, 20 May 2004), the SC held that these
physician’s examination of the person concerned guidelines may not be relaxed just because the
need not be resorted to. (Marcos v. Marcos, G.R. No. spouse alleged to be psychologically incapacitated
136490, 19 Oct. 2000) happens to be a foreign national. The norms used
for determining psychological incapacity should
apply to any person regardless of nationality
CIVIL LAW
because the rules were formulated on the basis of solely on Maria's narrations. The psychiatric
studies of human behavior in general. (Rabuya, examination on Maria and interview on her
2018) regarding Joselito's family background merely
established that the cause of Joselito' s personality
In Marcos v. Marcos (G.R. No. 136490, 19 Oct. 2000), disorder is likely due to the contrasting parenting
the Court held categorically that psychological behavior of Joselito's father and mother.
incapacity “may be established by the totality of
evidence presented”, and that “there is no The psychiatrist's description of Joselito's parents'
requirement that the respondent should be traits does not give this Court a deeper intuitive
examined by a physician or a psychologist as a understanding of Joselito's psychological state.
condition sine qua non for such declaration.” Notably, there was no information how Joselito
reacted towards the supposed contrasting
Q: Maria and Joselito were married in a civil personalities of his parents during his formative
ceremony on 05 Feb. 1982 followed by a church years. Neither was there any account as to how the
wedding on 18 Dec. 1982. The spouses begot one said contrasting parenting behavior affected
son. On 17 July 1997, Maria filed a petition for Joselito's social, intellectual, moral, and emotional
declaration of absolute nullity of their marriage growth.
anchored on Art. 36 of the FC. Maria alleged that
at the time of the celebration of their marriage, To emphasize, the testimonies of ordinary
Joselito was psychologically incapacitated to witnesses who have been present in the life of the
perform his marital obligations. During their spouses before the latter contracted marriage
cohabitation, Joselito exhibited excessive sexual should include behaviors that they have
desire and forced her to perform oral and anal consistently observed from the supposedly
sex with him; that there were occasions when incapacitated spouse. Here, not only was there no
Joselito attempted to sexually molest her sister, interview or psychological test conducted upon
nieces and their household help who were Joselito, there was nobody who testified on vital
staying with them; that Joselito admitted to said information regarding his personality structure,
attempts of molestations but begged her to keep upbringing and childhood such as members of his
said incidents a secret; among others. During family, relatives, friends, and co-workers. The
trial, Maria presented psychiatrist Dr. Cecilia evaluation of Dr. Villegas on Joselito was based
Villegas (Dr. Villegas) as witnesses. Dr. Villegas merely on information, accounts and descriptions
testified that she diagnosed Joselito with a relayed solely by Maria which glaringly and
personality disorder of a sexual deviant or expectedly are biased. (Carullo-Padua v. Padua, G.R.
perversion based on Maria's narrations. Was No. 203815, 07 Dec. 2020, as penned by J.
there sufficient to prove that Joselito is Hernando)
psychologically incapacitated to perform his
essential marital obligations? Q: Rodolfo and Natividad were married. On 28
Dec. 1998, Rodolfo filed a verified complaint for
A: NO. Psychological incapacity is neither a mental declaration of nullity of marriage before the RTC
incapacity nor a personality disorder that must be alleging that Natividad was psychologically
proven through expert opinion. There must be incapacitated to comply with her essential
proof, however, of the durable or enduring aspects marital obligations. In support of his complaint,
of a person's personality, called "personality Rodolfo testified, among others, that he first met
structure," which manifests itself through dear acts Natividad when they were students at the
of dysfunctionality that undermines the family. In Barangay High School of Sindangan, and he was
this case, the personality evaluation report forced to marry her barely three (3) months into
prepared by Dr. Villegas carried a finding that their courtship in light of her accidental
Joselito suffers from a sexual deviant personality pregnancy. At the time of their marriage, he was
disorder or perversion. Notably, this was based 21 years old, while Natividad was 18 years of
2023 GOLDEN NOTES
II. MARRIAGE
age. He had no stable job and merely worked in A: NO. "Psychological incapacity," as a ground to
the gambling cockpits as "kristo" and "bangkero nullify a marriage under Art. 36 of the FC, should
sa hantak." When he decided to join and train refer to no less than a mental – not merely physical
with the army, Natividad left their conjugal – incapacity that causes a party to be truly
home and sold their house without his consent. incognitive of the basic marital covenants that
Thereafter, Natividad moved to Dipolog City concomitantly must be assumed and discharged by
where she lived with a certain Engineer Terez the parties to the marriage which, as so expressed
(Terez), and bore him a child named Julie Ann in Art. 68 of the FC, among others, include their
Terez. mutual obligations to live together, observe love,
respect and fidelity and render help and support.
After cohabiting with Terez, Natividad The RTC, as affirmed by the CA, heavily relied on the
contracted a second marriage on 11 Jan. 1991 psychiatric evaluation report of Dr. Zalsos which
with another man named Antonio Mondarez and does not, however, explain in reasonable detail how
has lived since then with the latter in Cagayan de Natividad’s condition could be characterized as
Oro City. From the time Natividad abandoned grave, deeply rooted, and incurable within the
them in 1972, Rodolfo was left to take care of Ma. parameters of psychological incapacity
Reynilda and Ma. Rizza and he exerted earnest jurisprudence. Aside from failing to disclose the
efforts to save their marriage which, however, types of psychological tests which she administered
proved futile because of Natividad’s on Natividad, Dr. Zalsos failed to identify in her
psychological incapacity that appeared to be report the root cause of Natividad's condition and to
incurable. For her part, Natividad failed to file show that it existed at the time of the parties'
her answer, as well as appear during trial, marriage. Neither was the gravity or seriousness of
despite service of summons. Nonetheless, she Natividad's behavior in relation to her failure to
informed the court that she submitted herself perform the essential marital obligations
for psychiatric examination to Dr. Cheryl T. sufficiently described in Dr. Zalsos's report.
Zalsos (Dr. Zalsos) in response to Rodolfo’s
claims. Rodolfo also underwent the same To hark back to what has been earlier discussed,
examination. psychological incapacity refers only to the most
serious cases of personality disorders clearly
In her two-page psychiatric evaluation report, demonstrative of an utter insensitivity or inability
Dr. Zalsos stated that both Rodolfo and to give meaning and significance to the marriage. In
Natividad were psychologically incapacitated to the final analysis, the Court does not perceive a
comply with the essential marital obligations, disorder of this nature to exist in the present case.
finding that both parties suffered from "utter Thus, for these reasons, coupled, too, with the
emotional immaturity [which] is unusual and recognition that marriage is an inviolable social
unacceptable behavior considered [as] deviant institution and the foundation of the family, the
from persons who abide by established norms of instant petition is hereby granted. (Republic v.
conduct." As for Natividad, Dr. Zalsos also Gracia, G.R. No. 171557, 12 Feb. 2014)
observed that she lacked the willful cooperation
of being a wife and a mother to her two Q: Rachel worked as a domestic helper in Hong
daughters. On 10 Feb. 1999, the OSG, Kong to provide for the needs of Jose, the love of
representing petitioner Republic, filed an her life. Eventually, the couple got married and
opposition to the complaint, contending that the settled in a house they acquired. The married
acts committed by Natividad did not life ran smoothly up until Rachel filed a petition
demonstrate psychological incapacity as for declaration of nullity of marriage. Her
contemplated by law, but are mere grounds for petition anchored on the ground that Jose was
legal separation under the FC. Should the psychologically incapacitated to fulfill his
marriage be dissolved? essential marital obligations. She alleged that
Jose was a violent man who used to physically
CIVIL LAW
abuse her. She added that Jose was a drunkard Reghis’ OCPD was the root of the couple’s
and always had sexual relations with different disagreements and that the same is incurable.
women aside from Rachel. On his part, Jose The Office of the Solicitor General (OSG),
simply denied all the allegations in the petition. representing the Republic, opposed the petition.
Is Jose psychologically incapacitated?
Should the marriage be declared null and void?
A: NO. For psychological incapacity to exist, it
should refer to no less than a mental and not merely A: NO. The requirements for psychological
physical incapacity that causes a party to be truly incapacity do not concur. Reghis’ testimony shows
incognitive of the basic marital covenants as that he was able to comply with his marital
provided for under Art. 68 of the FC. In other words, obligations which, therefore, negates the existence
it must be a malady that is so grave and permanent of a grave and serious psychological incapacity on
as to deprive one of awareness of the duties and his part. Reghis admitted that he and Olivia lived
responsibilities of the matrimonial bond one is together as husband and wife under one roof for
about to assume. Also, following the case of Republic fourteen (14) years and both of them contributed in
v Molina, the totality of evidence must show that purchasing their own house. Reghis also fulfilled his
psychological incapacity exists, and its gravity, duty to support and take care of his family.
juridical antecedence, and incurability must be duly Moreover, the OCPD which Reghis allegedly
established. Here, there is no sufficient evidence to suffered from was not shown to have juridical
prove that psychological incapacity exists. Absent antecedence. No specific behavior or habits during
sufficient evidence, Courts are compelled to uphold his adolescent years were shown which would
the indissolubility of the marital tie. (Del Rosario v. explain his behavior during his marriage with
Del Rosario, G.R. No. 222541, 15 Feb. 2017) Olivia. Dr. Basilio simply concluded that Reghis’
disorder is incurable but failed to explain how she
Q: Reghis and Olivia were married and were came to such conclusion. Based on the appreciation
blessed with two (2) children. However, the of the RTC, Dr. Basilio did not discuss the concept of
couple experienced a turbulent and tumultuous OCPD, its classifications, causes, symptoms, and
marriage, often having violent fights and jealous cure, and failed to show how and to what extent the
fits. Reghis could not forgive Olivia for dragging respondent exhibited this disorder in order to
him into marriage and resented her create a necessary inference that Reghis’ condition
condescending attitude towards him. They had no definite treatment or is incurable.
became even more estranged when Reghis
secured a job as a medical representative and Art. 36 of the FC must not be confused with a divorce
became engrossed in his career and focused on law that cuts the marital bond at the time the
supporting his parents and siblings. As a result, grounds for divorce manifest themselves; rather, it
he spent little time with his family, causing must be limited to cases where there is a downright
Olivia to complain that Reghis failed to be a real incapacity or inability to assume and fulfill the basic
husband to her. In 1986, the couple parted ways. marital obligations, not a mere refusal, neglect or
Reghis then filed a petition for declaration of difficulty, much less, ill will, on the part of the errant
nullity of marriage citing his psychological spouse. (Republic v. Romero II, G.R. No. 209180, 26
incapacity to comply with his essential marital Feb. 2016)
obligations. The clinical psychologist submitted
a report and testified that Reghis suffered from Q: Would the state of being of unsound mind or
Obsessive Compulsive Personality Disorder the concealment of drug addiction, habitual
(OCPD). This gave him a strong obsession for alcoholism, homosexuality or lesbianism be
whatever endeavour he chooses, such as his considered indicia of psychological incapacity, if
work, to the exclusion of other responsibilities existing at the inception of marriage? (2002
and duties such as those pertaining to his roles BAR)
as father and husband. Dr. Basilio surmised that
2023 GOLDEN NOTES
II. MARRIAGE
A: The state of being of unsound mind, the Q: After living together as husband and wife for
concealment of drug addiction, habitual alcoholism, two (2) years, Gina and Marjune formalized
lesbianism or homosexuality may be indicia of their marital union through civil rites. As
psychological incapacity, depending on the degree months passed, the communication between
of severity of the disorder. However, the Gina and Marjune became less frequent until it
concealment of drug addiction, habitual alcoholism, ceased altogether. Thus, Gina filed a petition to
lesbianism or homosexuality is a ground of declare her marriage with Marjune null and void
annulment of marriage. (Santos v. CA, G.R. No. on the basis of the latter's psychological
112019, 04 Jan. 1995) incapacity.
Q: Art. 36 of the FC provides that a marriage During trial, Gina presented the findings of
contracted by any party who, at the time of the Professor Emma Astudillo-Sanchez (Prof.
celebration, was psychologically incapacitated Sanchez), the psychologist who conducted a
to comply with the essential marital obligations psychological examination of the parties. She
of marriage, shall be void. Choose the spouse concluded that Gina and Marjune's personality
listed below which is psychologically disorders "affected their behaviors even before
incapacitated. (2006 BAR) they contracted marriage and, in the presence of
situational factors, became more evident during
a. Nagger the time they were together during the
b. Gay or Lesbian marriage. Is upholding the annulment based on
c. Congenital sexual pervert the expert opinion of the psychologist sufficient
d. Gambler proof of the presence of psychological
e. Alcoholic incapacity?
A: B and C. They may serve as indicia of A: NO. The said report failed to show that these
psychological incapacity, depending on the degree traits existed prior to Gina's marriage and that her
and severity of the disorder. (Santos v. CA, G.R. No. alleged personality disorder is incurable or that the
112019, 04 Jan. 1995) If the condition of cure is beyond her means. There was simply no
homosexuality, lesbianism, or sexual perversion, discernible explanation on the juridical antecedence
existing at the inception of the marriage, is of such a or incurability of Gina's supposed condition. More
degree as to prevent any form of sexual intimacy, significantly, the relation of such condition to Gina's
any of them may qualify as a ground for inability to perform her essential marital
psychological incapacity. The law provides that the obligations was not sufficiently shown. To reiterate,
husband and wife are obliged to live together, the psychological condition ought to pertain to
observe mutual love, respect and fidelity. (Art. 68, personality disorders that are grave and serious,
FC) such that, the party would be incapable of carrying
out the ordinary duties required in a marriage.
More than just showing the manifestations of Unfortunately, the Case Analysis Report fails to
incapacity, the petitioner must show that the demonstrate this crucial point. In determining the
respondent is incapacitated to comply with the existence of psychological incapacity, a clear and
essential marital obligations of marriage. It is also understandable causation between the party's
essential that he must be shown to be incapable of condition and the party's inability to perform the
doing so due to some psychological, not physical essential marital covenants must be shown. A
illness. (Republic v. Quintero-Hamano, G.R. No. psychological report that is essentially comprised of
149498, 20 May 2004) mere platitudes, however speckled with technical
jargon, would not cut the marriage tie. (Republic v.
Tecag, G.R. No. 229272, 19 Nov. 2018)
CIVIL LAW
Q: Petitioner Maria Teresa and respondent Q: Anacleto and Linda met during college years
Rodolfo De La Fuente, Jr. first met when they and became romantically involved after 15
were students in UST before they became months of courtship. In 1981, they decided to get
sweethearts. While they were still sweethearts, married. During the first few years of married
petitioner already noticed that respondent was life, they lived with Anacleto’s parents. Linda
an introvert and was prone to jealousy. She also would always complain of not having enough
observed that respondent appeared to have no money as she wanted to live on their own, away
ambition in life, and felt insecure of his siblings, from her parents-in-law. She would always nag
who excelled in their studies and careers. In Anacleto to look for a higher paying job so that
June 1994, they got married in Mandaluyong she could get ahead in life. She wanted a
City and had two children. Respondent’s luxurious life and only appreciated her husband
attitude worsened and they went on with their when he bought her expensive gifts.
marital life. His jealousy was so severe that he
once poked a gun at his own 15-year-old cousin In 2005, Linda left Anacleto to live overseas. She
who was staying at their house because he informed Anacleto that she would come back
suspected his cousin of being the petitioner’s only if he could give her a better life financially.
lover. In 2006, Anacleto filed a petition to declare their
marriage null and void contending that Linda
In addition, respondent treated petitioner like a was suffering from psychological incapacity as
sex slave. They would have sex 4 or 5 times a found by Dr. Lopez, a clinical psychiatrist. Dr.
day. At times, he would fetch respondent from Lopez based his findings on the information fed
her office during lunch break just so they could by Anacleto, his office secretary, and their family
have sex. During sexual intercourse, he would driver. Rule on the petition.
either tie petitioner to the bed or poke her with
things. He even suggested that they invite a third A: I would deny the petition. While Dr. Lopez
person with them while having sex. This made attributes the gravity of Linda's disorder to her
petitioner feel molested and maltreated. Should alleged unhealthy childhood, none of the informants
their marriage be nullified on the ground of whom he interviewed claims to have known Linda
psychological incapacity? since childhood. Moreover, neither Anacleto’s
secretary nor their family driver appears to have
A: YES. Respondent's repeated behavior of known Linda prior to the marriage in question. This
psychological abuse by intimidating, stalking, and significantly impairs the weight of Dr. Lopez's
isolating his wife from her family and friends, as findings, insofar as they are based on the
well as his increasing acts of physical violence, are informants' narration of Linda's childhood events
proofs of his depravity, and utter lack of and circumstances which they appear to have no
comprehension of what marriage and partnership personal knowledge of. (Meneses v. Lee-Meneses,
entail. It would be of utmost cruelty for this Court to G.R. No. 200182, 13 Mar. 2019)
decree that petitioner should remain married to
respondent. After she had exerted efforts to save Tan-Andal v. Andal
their marriage and their family, respondent simply G.R. No. 196359, 11 May 2021
refused to believe that there was anything wrong in
their marriage. This shows that respondent truly Totality of Evidence Rule
could not comprehend and perform his marital
obligations. This fact is persuasive enough for this In the recent case of Tan-Andal v. Andal (G.R. No.
Court to believe that respondent's mental illness is 196359, 11 May 2021), the Supreme Court held that
incurable. (Tani-De La Fuente v. De La Fuente, Jr., G.R. psychological incapacity is not a medical but a legal
No. 188400, 08 Mar. 2017) concept. It is thus a personal condition that prevents
a spouse to perform marital obligations in relation
to a specific person that may exist at the time of
2023 GOLDEN NOTES
II. MARRIAGE
marriage but may have only revealed through 3. Incurability of Psychological Incapacity
behavior subsequent to the ceremonies. Further, it
aemphasized that it need not be a mental or With psychological incapacity not being an
personality disorder and need not be nor illness in a medical sense, psychological
permanent and incurable. Deviating away from the incapacity is not something to be cured. And
guidelines set in the case of Republic v. Molina, the even if it were a mental disorder, it cannot be
Tan-Andal v. Andal case set the ground that a described in terms of being curable or incurable.
testimony of a psychologist or a psychiatrist is not Psychological incapacity is so enduring and
mandatory in all cases. persistent with respect to a specific partner, and
contemplates a situation where the couple’s
In the case of Tan-Andal v. Andal, the Supreme Court respective personality structures are so
set new guidelines in determining the existence of incompatible and antagonistic that the only
psychological incapacity: result of the union would be the inevitable and
irreparable breakdown of the marriage.
1. Burden of Proof in Nullity Cases
4. Juridical Antecedence of Psychological
The burden of proof in proving psychological Incapacity
incapacity still lies on the plaintiff. The Supreme
Court, howeverfore, clarified that the quantum The incapacity must be proven to be existing at
of proof required in nullity cases is clear and the time of the celebration of the marriage even
convincing evidence which is more than if such incapacity becomes manifest only after its
preponderant evidence (ordinary civil cases) solemnization.
but less than proof beyond reasonable doubt
(criminal cases). This is because marriage is 5. Gravity of Psychological Incapacity
presumed valid and, in this jurisdiction, a
presumption can only be rebutted with clear and It must be shown that the incapacity is caused by
convincing evidence. a genuinely serious psychic cause. The gravity is
not in the sense that the psychological incapacity
2. Root Cause of Psychological Incapacity must be shown to be a serious or dangerous
illness, but that "mild characterological
Psychological incapacity is neither a mental peculiarities, mood changes, occasional
capacity nor a personality disorder that must be emotional outbursts" are excluded.
proven through expert opinion. There must be
proof, however, of the durable or enduring 6. Essential Marital Obligations
aspects of a person's personality, called
"personality structure," which manifest itself This is not limited to those between spouses.
through clear acts of dysfunctionality that Hence, those covered by Arts. 68 to 71 of the FC
undermines the family. The spouse's personality as regards the husband and wife as well as Arts.
structure must make it impossible for him or her 220, 221 and 225 thereof as regards parents and
to understand and, more important, to comply their children.
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.
CIVIL LAW
ABSENCE OF ANY OF THE ESSENTIAL OR marriage of Solenn and Sonny voidable.

FORMAL REQUISITES OF MARRIAGE
b. If the marriage is defective, can the marriage
Marriage between Filipinos who are of the same be ratified by the free cohabitation of the
sex is VOID spouses? (2018 BAR)
For a marriage to be valid, it must be between A:YES. Although voidable marriage, their marriage
persons of opposite sexes. could be ratified by free cohabitation. Under Art.
Although gay marriages are definitely not covered 45(1) of the FC, such marriage may be ratified by the
within the purview of Art. 2 of the FC, the emerging cohabitation of the contracting parties (after
issue of transexuals and intersexual gender attaining the age of 21) as husband and wife.
identities have called the attention of the Supreme
Court in the cases of Silverio v. Republic (G.R. No. Q: In case of a change in sex, can the person who
174689, 22 Oct. 2007) and Republic v. Cagandahan has undergone said change be allowed to marry
(G.R. No. 166676, 12 Sept. 2008). (Sta. Maria, 2010) another of the same sex as he/she originally
had? (2014 BAR)
Q: Sidley and Sol were married with one
daughter, Solenn. Sedfrey and Sonia were A: It depends upon the cause for the change in sex.
another couple with one son, Sonny. Sol and
Sedfrey both perished in the same plane 1. If the change is artificial – NO, they
accident. Sidley and Sonia met when the families cannot.
of those who died sued the airlines and went
through grief-counseling sessions. Years later, The sex or gender at the time of birth shall
Sidney and Sonia got married. At that time, be taken into account. He is still, in the eyes
Solenn was four (4) years old and Sonny was five of the law, a man although because of the
(5) years old. These two were then brought up in artificial intervention, he now has the
the same household. Fifteen (15) years later, physiological characteristics of a woman.
Solenn and Sonny developed romantic feelings (Silverio v. Republic, G.R. No. 174689, 22 Oct.
towards each other, and eventually eloped. On 2007)
their own and against their parents’ wishes, they
procured a marriage license and got married in 2. If the change is natural – YES, they can
church. (e.g. Hermaphrodite, Congenital Adrenal
Hyperplasia (CAH))
a. Is the marriage of Solenn and Sonny valid,
voidable or void? Q: Jennifer was registered as a female in her
Certificate of Live Birth. In her early years, she
A: VOIDABLE. Under Art. 14 of the FC, if a party to suffered from clitoral hypertrophy and was
the marriage is between the ages of 18 and 21; the found out that her ovarian structures had
consent of their father, mother, surviving parent or minimized. She also alleged that she has no
guardian, or persons having legal charge of them, in breasts or menstruation. She was diagnosed to
the order mentioned, is an additional requirement. have Congenital Adrenal Hyperplasia (CAH), a
In the absence of such parental consent, the consent condition where persons thus afflicted possess
given by the party between the ages of 18 and 21 is secondary male characteristics because of too
considered defective. Also, under Art. 4 of the FC, a much secretion of androgen. She then alleged
defect in the essential requisites of marriage that for all interests and appearances as well as
renders the marriage voidable. In this case, Solenn in mind and emotion, she has become a male
and Sonny are 19 and 20 years old respectively person. What is Jennifer’s gender or sex?
during the time of the celebration of their marriage.
Thus, the absence of parental consent renders the
2023 GOLDEN NOTES
II. MARRIAGE
A: MALE. Where the person is biologically or Rosario Ado-an-Morimoto and Yoshio Morimoto
naturally intersex the determining factor in one’s should be declared null and void?
gender classification would be what the individual,
having reached the age of majority, with good A: YES. As a special contract, consent is, by
reason thinks of their sex. Jennifer here thinks of definition, indispensable to marriage. Accordingly,
himself as a male and considering that his body the FC stipulates the second essential requisite of
produces high levels of androgen, there is marriage to be “consent freely given in the presence
preponderant biological support for considering of the solemnizing officer.” It is vital to distinguish
him as being male. Sexual development in cases of the authentic, underlying consent of the parties
intersex persons makes the gender classification at from the external manifestation of such consent
birth inconclusive. It is at maturity that the gender during a marriage ceremony. Jurisprudence,
of such persons is fixed. (Republic v. Cagandahan, therefore, recognizes that, when there is no bona
G.R. No. 166676, 12 Sept. 2008) fide intention of becoming a spouse to another, a
marriage is void for want of consent even when
Simulated Marriage is Void marriage ceremonies have been conducted and,
there, the parties declared their intent to enter into
A simulated marriage used as a front for illicitly married life.
obtaining benefits is totally inexistent, as the parties
to it have no genuine intent to enter into marital Petitioner categorically declared that her marriage
relations. (Ado-an-Morimoto v. Morimoto, G.R. No. with respondent Yoshio was totally simulated,
247576, 15 Mar. 2021) made for the sole purpose of their ostensible marital
relations being used as an artifice to bolster her
Q: Rosario recalls that sometime before chances of obtaining a Japanese visa. One might be
December 2007, a friend introduced her to tempted to dismiss this as a self-serving allegation,
Yoshio as one with whom she can simulate made only to obtain a declaration of nullity of
marriage as a way to facilitate her acquisition of marriage. Contrary to this, the Court finds
a Japanese visa. She acceded. Thus, she and petitioner's declarations of having participated in a
Yoshio met at the Manila City Hall. There, they duplicitous design to be worthy of even greater
signed a blank marriage certificate, but were credence, as an admission against interest. A
assured by the solemnizing officer that the simulated marriage used as a front for illicitly
certificate will never be registered or recorded obtaining benefits is totally inexistent, as the parties
in the Civil Registry. It was the last time she saw to it have no genuine intent to enter into marital
Yoshio. Sometime later, Rosario went to the PSA relations. Courts must recognize such a marriage as
to secure a Certificate of No Marriage. To her void. To insist on its validity is to enable a greater
surprise, she found out that a Certificate of affront to the institution of marriage than the
Marriage, registered in the City of San Juan, perceived dangerous tendency of readily declaring
indicates that she married Yoshio, in a it null. Ultimately, the registered marriage between
ceremony officiated by a certain Reverend petitioner and respondent Yoshio is totally fictitious
Roberto Espiritu. Rosario filed a Petition for and inexistent, thereby warranting a declaration of
Declaration of Nullity of Marriage. She nullity. (Ado-an-Morimoto v. Morimoto, G.R. No.
maintained that the marriage attested to by the 247576, 15 Mar. 2021)
marriage certificate she discovered never
actually happened and was never backed by a
marriage license. Prior to trial, the Assistant City
Prosecutor issued a Report stating that there is
no collusion between Rosario and Yoshio to
obtain a favorable ruling from the Regional Trial
Court. Should the registered marriage between
CIVIL LAW
MARRIAGES WHERE ANY OR BOTH OF THE LACK OF AUTHORITY OF THE SOLEMNIZING

PARTIES ARE BELOW 18 YEARS OF AGE OFFICER
Marriage where one or both of the parties are Effect of lack of authority of solemnizing officer
below 18 years of age is VOID
GR: The marriage is void ab initio.
Such marriage is void for lack of legal capacity even
if the parents consented to such marriage. (Sempio- XPNs:
Dy, 1995) 1. Express- If either or both parties believed
in good faith that the solemnizing officer
Validity of the marriage if it is a mixed marriage had the legal authority to do so. (Art. 35, FC)
where the Filipino is 18 years old but the
foreigner is below 18 years of age 2. Implied – Art. 10 in relation to Art. 26 of the
FC. If the marriage between a foreigner and
If the national law of the foreigner recognizes 17- a Filipino citizen abroad solemnized by a
year-old person to be capacitated to marry, then Philippine consul assigned in that country
their marriage is valid; otherwise, it is void. is recognized as valid in the host country,
such marriage shall be considered as valid
LACK OF MARRIAGE LICENSE AND NOT EXEMPT in the Philippines. (Sta. Maria, 2010)
FROM THE MARRIAGE LICENSE REQUIREMENT
MARRIAGES CONTRACTED THROUGH MISTAKE
Q: Judge Palaypayon solemnized marriages even
without the requisite of marriage license. Thus, Mistake to render the marriage void
some couples were able to get married by the
simple expedient of paying the marriage fees. As For marriage to be rendered void, the mistake in
a consequence, their marriage contracts did not identity must be with reference to the actual
reflect any marriage license number. In physical identity of other party, not merely a
addition, the judge did not sign their marriage mistake in the name, personal qualifications,
contracts and did not indicate the date of the character, or social standing, etc. (Rabuya, 2018)
solemnization, the reason being that he
allegedly had to wait for the marriage license to INCENSTOUS MARRIAGE
be submitted by the parties. Such marriage
contracts were not filed with the Local Civil Incestuous Marriages
Registry. Are such marriages valid?
1. Between ascendants and descendants of any
A: NO. A valid marriage license is necessary for the degree;
validity of marriage, except in the cases provided for 2. Between brothers and sisters, whether of the
therein. The absence of any of the essential or full or half-blood. (Art. 37, FC)
formal requisites shall generally render the
marriage void ab initio. (Cosca v. Palaypayon, A.M. NOTE: Regardless of whether the relationship
No. MTJ-92-721, 30 Sept. 1994) between the parties is legitimate or illegitimate.
2023 GOLDEN NOTES
II. MARRIAGE
VOID BY REASON OF PUBLIC POLICY Q: Amor gave birth to Thelma when she was 15-
years-old. Thereafter, Amor met David, and they
Void marriages by reason of public policy (1999, got married when she was 20-years-old. David
2007, 2008 BAR) has a son, Julian, with his ex-girlfriend Sandra.
Can Julian and Thelma get married? (2007 BAR)
Marriages between:
A: YES. Marriage between step-brothers and step-
1. Collateral blood relatives (legitimate or sisters are not among the marriages prohibited
Illegitimate) up to the 4th civil degree; under the Family Code.
2. Step-parents & step-children;
3. Parents-in-law & children-in-law; BIGAMOUS OR POLYGAMOUS MARRIAGES
NOTE: The prohibition under Nos. 2 and 3 Q: If a person contracts a subsequent marriage
applies even after the termination of the during the subsistence of a prior marriage, what
marriage, which is the very source of the is the status of the subsequent marriage? (1992,
relationship by affinity, regardless of the cause 2005, 2008 BAR)
of such termination.
A: GR: Void for being bigamous or polygamous,
Affinity is a relationship gained by marriage and even if celebrated abroad and valid there as such.
a fictive kinship created by law. Also, it is aligned
with the spirit of Article. 332 of the RPC. It holds XPN: Valid if it is a terminable bigamous marriage.
for all intents and purposes favorable to the
strengthening of the bond of the family. Bigamous Marriage
(Intestate Estate of Carungcong vs. People, G.R.
No. 181409, 11 Feb. 2010) Bigamy - When a person contracts a second or
subsequent marriage before the former marriage
4. Adopting parent & the adopted child; has been legally dissolved, or before the absent
5. Surviving spouse of the adopting parent & the spouse has been declared presumptively dead by
adopted child; means of a judgment rendered in the proper
6. Surviving spouse of the adopted child & the proceedings. (Art. 349, RPC)
adopter;
7. Adopted child & legitimate child of the adopter; Elements of the crime of Bigamy:
8. Adopted children of the same adopter;
9. Parties where one, with the intention to marry 1. the offender has been legally married;
the other, killed the latter’s spouse or his/her
spouse. (Art. 38, FC) 2. the marriage has not been legally dissolved or, in
case his or her spouse is absent, the absent
NOTE: The list is exclusive. If not falling within spouse could not yet be presumed dead
this enumeration, the marriage shall be valid. according to the Civil Code;
Such as marriages between:
3. that he contracts a second or subsequent
a. Adopted and Illegitimate child of the marriage; and
adopter;
b. Step-brother and step-sister; 4. that the second or subsequent marriage has all
c. Brother-in-law and sister-in-law; or the essential requisites for validity. (Capili v.
d. Parties who have been guilty of adultery or People. G.R. No. 183805, 13 July 2013)
concubinage.
NOTE: The same applies to polygamy.
CIVIL LAW
A subsequent void bigamous marriage A: YES. In the case of Pulido v. People (G.R. No.
contemplates a situation where such subsequent 220149, 27 July 2021 as penned by J. Hernando),
marriage was contracted at the time when the first the Court held that by the express terms of Article
marriage, which is valid in all respects, was still 40, the prior judicial declaration of nullity of the
subsisting. A void bigamous marriage, therefore, marriage is a requirement only for purposes of
involves a situation where the first marriage is not remarriage and that Art. 40 should not have been
void but completely valid or at least annullable. (Sta. construed as imposing a requirement for the
Maria, 2010) accused to raise the defense of nullity of the first
marriage.
If the first marriage is void and a party to that first
marriage subsequently remarries without obtaining A void marriage is ipso facto void without need of
a judicial declaration of nullity of the first marriage, any judicial declaration of nullity; the only
the subsequent marriage is likewise void. It is void recognized exception under existing law is Art. 40 of
not because it is bigamous but because it failed to the FC where a marriage void ab initio is deemed
comply with the requirements under Article 40 in valid for purposes of remarriage, hence
relation to Arts. 52 and 53 of the FC. (Valdes v. RTC, necessitating a judicial declaration of nullity before
G.R. No. 122749, 31 July 1996) one can contract a subsequent marriage. Clearly,
when the first marriage is void ab initio, one of the
Q: Arnold, a Filipino, and Britney, an American, essential elements of bigamy is absent, i.e., a prior
both residents of California, decided to get valid marriage. There can be no crime when the very
married in their local parish. Two years after act which was penalized by the law, i.e., contracting
their marriage, Britney obtained a divorce in another marriage during the subsistence of a prior
California. While in Boracay, Arnold met Jenny, legal or valid marriage, is not present. Thus, an
a Filipina, who was vacationing there. Arnold accused in a bigamy case should be allowed to raise
fell in love with her. After a brief courtship and the defense of a prior void ab initio marriage
complying with all the requirements, they got through competent evidence other than the judicial
married in Hong Kong to avoid publicity, it being decree of nullity. (Pulido v. People, G.R. No. 220149,
Arnold’s second marriage. Is his marriage with 27 July 2021 as penned by J. Hernando)
Jenny valid? (2006 BAR)
Q: Pulido and Rowena U. Baleda were charged
A: YES. The marriage will not fall under Art. 35(4) before the RTC with Bigamy. Petitioner pleaded
of the FC on bigamous marriages provided that not guilty to the crime charged. Pulido, then 16-
Britney obtained an absolute divorce, capacitating year old petitioner married his teacher, then 22-
her to remarry under her national law. year old Arcon in a civil ceremony. The couple
Consequently, the marriage between Arnold and lived together until 2007 when Pulido stopped
Jenny may be valid as long as it was solemnized and going home to their conjugal dwelling. When
valid in accordance with the laws of Hong Kong. confronted by Arcon, Pulido admitted to his
affair with Baleda. Arcon likewise learned that
Q: May a person contract a valid subsequent Pulido and Baleda entered into a marriage. Hurt
marriage before a first marriage is declared void by the betrayal, Arcon charged Pulido and
ab initio by a competent court? Otherwise Baleda with Bigamy. In his defense, Pulido
stated, may an accused indicted for Bigamy be insisted that he could not be held criminally
exculpated on the basis of the judicial liable for bigamy because both his marriages
declaration of nullity of his first or second were null and void. He claimed that his marriage
marriage?| with Arcon is null and void for lack of a valid
marriage license while his marriage with Baleda
is null and void for lack of a marriage ceremony.
2023 GOLDEN NOTES
II. MARRIAGE
Is a judicial declaration of nullity of marriage Special cases when subsequent marriage is

necessary to establish the invalidity of a void ab allowed
initio marriage as a defense in a bigamy
prosecution? 1. Marriage between a Filipino and a foreigner and
procurement by either of a valid divorce decree
A: NO. The parties are not required to obtain a abroad, capacitating him/her to remarry;
judicial declaration of absolute nullity of a void ab
initio first and subsequent marriages in order to 2. Terminable bigamous marriages. (Art. 41, FC)
raise it as a defense in a bigamy case. The same rule
now applies to all marriages celebrated under the SUBSEQUENT MARRIAGES UNDER
NCC and the FC. Art. 40 of the FC did not amend Art. ART. 53 OF THE FC
349 of the RPC, and thus, did not deny the accused
the right to collaterally attack the validity of a Q: When are non-bigamous subsequent
void ab initio marriage in the criminal prosecution marriages void?
for bigamy.
A: The subsequent marriage of a person whose
However, if the first marriage is merely voidable, prior marriage has been annulled but contracted
the accused cannot interpose an annulment decree said subsequent marriage without compliance with
as a defense in the criminal prosecution for bigamy Art. 52 of the FC, shall be void. (Art. 53, FC)
since the voidable first marriage is considered valid
and subsisting when the second marriage was Before he contracts a subsequent marriage, he must
contracted. The crime of bigamy, therefore, is first comply with the requirement provided for in
consummated when the second marriage was Art. 52, viz:
celebrated during the subsistence of the voidable
first marriage. The same rule applies if the second The recording in the civil registries and registries of
marriage is merely considered as voidable. properties of the following:
To our mind, it is time to abandon the earlier
precedents and adopt a more liberal view that a 1. Judgment of annulment;
void ab initio marriage can be used as a defense in 2. Partition;
bigamy even without a separate judicial declaration 3. Distribution of properties; and
of absolute nullity. The accused may present 4. Delivery of presumptive legitimes.
testimonial or documentary evidence such as the
judicial declaration of absolute nullity of the first Q: Ana Rivera had a husband, a Filipino citizen
subsequent void ab initio marriages in the criminal like her, who was among the passengers
prosecution for bigamy. The said view is more in onboard a commercial jet plane which crashed
accord with the retroactive effects of a void ab in the Atlantic Ocean ten (10) years earlier, and
initio marriage, the purpose of and legislative intent has never been heard of ever since. Believing
behind Article 40 of the Family Code, and the rule on that her husband had died, Ana married Adolf
statutory construction of penal laws. Therefore, the Cruz Staedler, a divorced German national born
absence of a "prior valid marriage" and the of a German father and a Filipino mother
subsequent judicial declaration of absolute nullity residing in Stuttgart. To avoid being required to
of his first marriage, Pulido is hereby acquitted from submit the required certificate of capacity to
the crime of Bigamy charged against him. (Pulido v. marry from the German Embassy in Manila,
People, G.R. No. 220149, 27 July 2021 as penned by J. Adolf stated in the application for marriage
Hernando) license stating that Adolf was a Filipino. The
couple got married in a ceremony officiated by
the parish priest of Calamba, Laguna in a beach
in Nasugbu, Batangas, as the local parish priest
CIVIL LAW
refused to solemnize marriage except in his Prescriptive Period (2002, 2006 BAR)
church. Is the marriage valid? (2008 BAR)
The time for filing an action or defense for the
A: If the missing husband was in fact dead at the declaration of absolute nullity of marriage, whether
time the second marriage was celebrated, the in a direct or collateral manner, does not prescribe.
second marriage was valid. Actual death of a spouse (Art. 39, FC)
dissolves the marriage ipso facto whether or not the
surviving spouse had knowledge of such fact. A Any of the parties in a void marriage can file an
declaration of presumptive death, even if obtained, action for the declaration of nullity of marriage even
will not make the marriage voidable because though such party is the wrongdoer.
presumptive death will not prevail over the fact of
death. Effect of death of a party in a petition for
declaration of nullity of marriages
If the missing husband was in fact alive when the
second marriage was celebrated, the second 1. Before the entry of judgment – The court shall
marriage was void ab initio because of a prior order the case closed and terminated without
subsisting marriage. Had Ana obtained a declaration prejudice to the settlement of estate in proper
of presumptive death, the second marriage would proceedings.
have been voidable. In both cases, the fact that the
German misrepresented his citizenship to avoid 2. After the entry of judgment – The decision
having to present his Certificate of Legal Capacity, or shall be binding upon the parties and their
the holding of the ceremony outside the church or successors-in-interest in the settlement of the
beyond the territorial jurisdiction of the estate.
solemnizing officer, are all irregularities which do
not affect the validity of the marriage.
Necessity of Judicial Declaration of Nullity of

Marriage
The absolute nullity of a previous marriage may be

invoked for purposes of remarriage on the basis
solely of a final judgment declaring such previous
marriage void. (FC, Art. 40)
There has yet to be a judgment declaring it void, for

it is solely on the basis of that final judgment that a
party can remarry. (Albano, 2013)
Remarriage is not the sole purpose of declaration of

nullity of a marriage, as it can be declared void for
other purposes. In Valdes v. RTC, it was said that the
law aims to do away with any continuing
uncertainty on the status of the second marriage.
(Valdez v. Gomez- Valdez, G.R. No. 122749, 31 July
1996; Albano, 2013)
2023 GOLDEN NOTES
II. MARRIAGE
Petition for the declaration of nullity of A: NO, it retroacts to the date of the celebration of
marriage by the heirs of a deceased person after the marriage. Although the judicial declaration of
his death nullity of a marriage on the ground of psychological
incapacity retroacts to the date of the celebration of
The heirs cannot file for declaration of nullity of the marriage insofar as the vinculum between the
marriage. The advent of the Rule on Declaration of parties is concerned, it must be noted that the
Absolute Nullity of Void Marriages marks the marriage is not without legal consequences or
beginning of the end of the right of the heirs of the effects. One such consequence or effect is the
deceased spouse to bring a nullity of marriage case incurring of criminal liability for bigamy. To hold
against the surviving spouse. The heirs can still otherwise would be to render nugatory the State’s
protect their successional right, for compulsory or penal laws on bigamy as it would allow individuals
intestate heirs can still question the validity of the to deliberately ensure that each marital contract be
marriage of the spouses, not in a proceeding for flawed in some manner, and to thus escape the
declaration of nullity but upon the death of a spouse consequences of contracting multiple marriages.
in a proceeding for the settlement of the estate of (Tenebro v. CA, G.R. No. 150758, 18 Feb. 2004)
the deceased spouse filed in the regular courts.
Q: Is a decree of nullity of the first marriage
However, with respect to nullity of marriage cases required before a subsequent marriage can be
commenced before the effectivity of A.M. No. 02-11- entered into validly?
10 (04 Mar. 2003) and marriages celebrated during
the effectivity of the NCC, the doctrine laid down in A:
Niñal v. Bayadog (G.R. No. 133778, 14 Mar. 2000) still GR: Under Art. 40 of the FC, the absolute nullity of a
applies; that the children have the personality to file previous marriage may be invoked for purposes of
the petition to declare the nullity of marriage of remarriage on the basis solely of a final judgment
their deceased father to their stepmother as it declaring such previous marriage void.
affects their successional rights. (De Dios Carlos v.
Sandoval, G.R. No. 179922, 16 Dec. 2008) XPN: If the second marriage, however, took place
prior to the effectivity of the FC, there is no need for
Q: If the court denies a petition for declaration judicial declaration of nullity of the first marriage
of nullity of marriage based on psychological pursuant to the prevailing jurisprudence at that
incapacity, may a party to the said case file time. (Rabuya, 2006)
another petition for declaration of its nullity
based on the absence of a marriage license? NOTE: Art. 40 is applicable to remarriages entered
into after the effectivity of the FC on 03 Aug. 1988,
A: NO. A petition to declare the marriage void due regardless of the date of the first marriage. Besides,
to the absence of marriage license, filed after the under Art. 256 of the FC, said Article is given
court denied a petition to declare the marriage void “retroactive effect” insofar as it does not prejudice
due to psychological incapacity is barred by res or impair vested or acquired rights in accordance
judicata. There is only one cause of action, which is with the Civil Code or other laws”. (Atienza v.
the declaration of nullity of the marriage. Hence, Brillantes, A.M. No. MTJ-92-706, 29 Mar. 1995)
when the second case was filed based on another
ground, there was a splitting of a cause of action Q: While his first marriage is subsisting,
which is prohibited. (Mallion v. Alcantara, G.R. No. Veronico married Leticia, which marriage was
141528, 31 Oct. 2006) later declared void on the ground of
psychological incapacity. When Veronico got
Q: Is the declaration of nullity of marriage married for the third time, Leticia filed a case for
applied prospectively? bigamy against him. For his defense, Veronico
claims that effects of the nullity of his marriage
with Leticia retroacts to the date when it was
CIVIL LAW
contracted, hence, he is not guilty of bigamy for Art. 36 has become final and executory.
want of an essential element – the existence of a (Art. 54, first sentence), FC)
valid previous marriage. Rule on Veronico’s
argument. c. Legitimate if the children were conceived
or born of the subsequent marriage under
A: Veronico’s argument has no merit. Art. 349 of the Art. 53. (Art. 54, FC)
RPC penalizes the mere act of contracting a second
or subsequent marriage during the subsistence of a 2. Property Relations
previous valid marriage. Here, as soon as the second
marriage to Leticia was celebrated, the crime of GR: Either Art. 147 or 148 (Co-ownership) of the
bigamy had already been consummated as the FC will apply.
second marriage was contracted during the
subsistence of the valid first marriage. (Tenebro v. Art. 147 applies if the parties do not suffer any legal
CA, G.R. No. 150758, 18 Feb. 2004) impediment or they are legally capacitated to enter
marriage but nonetheless void. All properties
Q: When a marriage was declared null and void, acquired are made through the joint efforts and
does it carry with it any legal effects? industry of parties,; thus, properties, wages or
income is divided equally among them.
A: YES. When the ground for the declaration of
nullity of marriage is psychological incapacity, the Art. 148 applies if the parties suffer legal
Supreme Court ruled that insofar as State’s penal impediment (i.e., due to age or relationship
laws on bigamy, the declaration of nullity of pursuant to Arts. 37 and 38 of the FC). Here, the
marriage does not retroact from the date of properties, wages or income acquired during
celebration. Thus, there is still criminal liability of marriage are divided according to actual
bigamy although there is a declaration of nullity of contributions made.
marriage. (Tenebro v. CA, G.R. No. 150758, 18 Feb.
2004) XPN: If the subsequent marriage is void for non-
compliance with Art. 40 of the FC, the property
Effects of Judicial Declaration of Nullity of relations of the void subsequent marriage are
Marriage governed either by absolute community or the
conjugal partnership of gains, as the case may be,
1. On the Status of the Children unless the parties agree to a complete separation of
property in a marriage settlement before marriage.
GR: Children conceived and born outside a valid (Diño vs. Diño, G.R. 178044, 29 Jan. 2011)
marriage or inside a void marriage are illegitimate.
Q: Is a decree of nullity of the first marriage
XPNs: required before a subsequent marriage can be
a. Legitimate if the marriage is void on the entered into validly?
ground of:
A: Under the Art. 40 of the FC, the absolute nullity of
i. psychological incapacity of either or a previous marriage may be invoked for purposes of
both parties; or remarriage on the basis solely of a final judgment
ii. Due to the non-compliance with the declaring such previous marriage void.
requirements set forth under Art. 52
of the FC. XPNs:
b. Legitimate if the children were conceived 1. If parties merely signed the marriage contract,
or born before the judgment of annulment i.e., without the presence of the solemnizing
or absolute nullity of the marriage under officer;
2023 GOLDEN NOTES
II. MARRIAGE
NOTE: The mere private act of signing a XPNs:

marriage contract bears no semblance to a
valid marriage and, thus, needs no judicial 1. If the donation propter nuptias is embodied
declaration of nullity of marriage. (Morigo vs. in a marriage settlement, the donation is
People, G.R. 145226, 06 Feb. 2004) void under Art. 86(1) of the FC; or
2. If one of the parties was a victim of identity 2. If the subsequent marriage is judicially
theft. Here, the victim discovered that she was declared void by reason of Art. 40 of the FC,
already married to a Korean national upon the donation remains valid;
receipt of her NSO’s CENOMAR. The SC
affirmed the trial court’s order for correction of XPN to the XPN: If the donee spouse contracted the
entry under Rule 108 of ROC without need of marriage in bad faith, all donations are revoked by
declaration of nullity of the marriage since operation by law.
there is no marriage to be declared void in the
first place; (Republic vs Olaybar, G.R. 189538, 10 When both parties to a subsequent marriage
Feb. 2014) contracted in bad faith under Art. 44 of the FC, all
donations propter nuptias are revoked by operation
3. Proxy marriages conducted in the Philippines; by law.
4. Same sex marriage celebrated abroad 4. Designation as Beneficiary in Insurance

involving Filipino citizens by reason of public Policy
policy. Same sex marriage contracted by a
Filipino citizen is not recognized as a valid If the subsequent marriage is judicially declared
marriage in the Philippines pursuant Art. 1 of void by reason of Art. 40 of the FC, the innocent
FC and Art. 15 of the NCC. spouse may revoke such designation if the
beneficiary spouse acted in bad faith, even if such
Q: Will the nullity of the subsequent marriage designation be stipulated as irrevocable. However,
constitute a prejudicial question in the crime of if the marriage was not judicially declared void and
bigamy? the designation in the insurance policy is
irrevocable, the insured cannot change such
A: YES. “The validity of the second marriage is a designation.
prejudicial question to the criminal prosecution for
bigamy. To our mind, it is time to abandon the 5. Right to Inherit
earlier precedents and adopt a more liberal view
that a void ab initio marriage can be used as a a. Intestate Succession: The parties cannot
defense in bigamy even without a separate judicial inherit from each other by way of intestate
declaration of absolute nullity. The accused may succession since because they are no longer
present testimonial or documentary evidence such considered as spouses;
as the judicial declaration of absolute.” (Pulido v.
People G.R. No. 220149, 27 July 2021 as penned by J. b. Testate Succession:
Hernando)
GR: Any testamentary provision by one in favor of
the other shall remain valid.
3. Donations Propter Nuptias
XPNs:
GR: Donations propter nuptias are revocable at the
instance of the donor. 1. If the subsequent marriage is rendered void by
non-compliance with Art. 40 of the FC, the
spouse who contracted the subsequent marriage
CIVIL LAW
in bad faith is disqualified to inherit from the 4. The innocent spouse may revoke the designation
innocent spouse.; of the other spouse who acted in bad faith as
beneficiary in the insurance policy even if the
2. If the marriage is void by reason of the bad faith designation is irrevocable;
of both parties under Art. 41 of the FC, all
testamentary dispositions made by one in favor 5. The spouse who contracted the marriage in bad
of the other are revoked by operation of law. faith shall be disqualified to inherit from the
innocent spouse by testate and intestate
NOTE: The parties are not disqualified to institute succession; and
each other as voluntary heir in their respective wills
to be executed after the judicial declaration of 6. Donation propter nuptias.
nullity.
GR: It shall remain valid.
6. Parental Authority and Custody of XPN: If the donee spouse acted in bad faith, the
Children donor may revoke the donation.
GR: Since the children are considered as Liquidation of Property if either spouse
illegitimate, the parental authority and the custody contracted the marriage in Bad Faith
of the children will be exercised by their mother.
The illegitimate father, even if he admits paternity, His or her share of the net profits of the community
will only have visitation rights. property or conjugal partnership property shall be
forfeited in favor of the common children or if there
XPN: If the marriage is declared void by reason of be none, the children of the guilty spouse by
psychological incapacity of either or both of the previous marriage, or in default thereof, the
parties, the parental authority and the custody will innocent spouse.
be exercised by the parent designated by the court.
If a child is below seven years old, the law presumes The final judgment of nullity or annulment shall
the mother is the best custodian unless the court provide the following:
decides otherwise for compelling reasons. (Art. 213,
FC) 1. Liquidation, partition, and distribution of the
properties of the spouses;
Effects of Decree of Annulment 2. Custody and support of the common children;
and
1. Termination of the marital bond, as if it had 3. Delivery of their presumptive legitimes.
never been entered into, but the effects thereof
are not totally wiped out; Unless such matters had already been adjudicated
in previous judicial proceedings, in which case, the
2. Children conceived or born before the judgment final judgment of nullity or annulment need not
of annulment has become final and executory provide for those which have already been
are considered legitimate; adjudicated.
3. Absolute community property regime or the NOTE: Where there was a failure to record in the
conjugal partnership property regime is civil registry and registry of property the judgment
terminated or dissolved and the same shall be of annulment or absolute nullity of the marriage, the
liquidated in accordance with the provisions of partition and distribution of the property of the
Arts. 102 and 129; spouses, and the delivery of the children’s
presumptive legitimes, it shall not affect third
persons. (Art. 52, FC)
2023 GOLDEN NOTES
II. MARRIAGE
Forms of presumptive legitime:

1. Cash; D. VOIDABLE MARRIAGES
2. Property; and
3. Sound security.
A voidable marriage is considered valid and

Remarriage after declaration of nullity or
produces all its civil effects until it is set aside by
annulment
final judgment of a competent court in an action for
annulment. (Rabuya, 2018) Simply put, a voidable
A person must comply with the requirements of Art.
marriage is valid until it is annulled. (Paras, 2016)
52 of the FC before he can remarry, viz, the
recording and registration of: (Ju-Pa-D-D)
Voidable Marriages
1. Judgment of Annulment;
1. Marriage of a party 18 years of age or over
2. Partition;
but below 21 solemnized without the consent
3. Distribution of Properties; and
of the parents, guardian, or person having
4. Delivery of Presumptive Legitimes.
substitute parental authority over the party,
in that order;
MARRIAGE IN JEST
2. Either party was of unsound mind;

Marriage in jest is a pretended one, legal in form but
entered as a joke, with no real intentions of entering
3. Consent of either party was obtained by
into the actual marriage status, and with a clear
fraud;
understanding that the parties would not be bound
(Republic v. Albios, G.R. No. 198780, 16 Oct. 2013)
4. Vices of consent such as force, intimidation,
or undue influence; and
COMMON-LAW MARRIAGES
5. Impotence (impotencia copulandi) and

Common-law marriages not recognized in the
afflicted with STD found to be serious and
Philippines
appears to be incurable. (Art. 85, FC)
A common-law marriage, otherwise referred to as a

EITHER PARTY WAS OF UNSOUND MIND
“live-in relationship,” is one where a man and a
woman just live together as husband and wife
Determination of the unsoundness of mind as a
without getting married. (Paras, 2016)
ground for annulment
It is essential that the mental incapacity must relate

specifically to the contract of marriage, and the test
is whether the party at the time of the marriage was
capable of understanding the nature and
consequences of the marriage. (Rabuya, 2018)
CONSENT WAS OBTAINED BY FRAUD
Fraud as a ground for annulment
Fraud, as distinguished from fraud as a ground for

annulment of contracts, refers to the non-disclosure
CIVIL LAW
or concealment of some facts deemed material to A: NO. The non-disclosure to a wife by her husband
the marital relations. (Rabuya, 2009) of his pre-marital relationship with another woman
is not a ground for annulment of marriage. For fraud
No other misrepresentation or deceit as to as a vice of consent in marriage, which may be a
character, health, rank, fortune or chastity shall cause for its annulment, comes under Art. 46 of the
constitute such fraud as will give ground for action FC. The fraud, as vice of consent, is limited
for the annulment of marriage. (Art. 46(5), FC) exclusively by law to those kinds or species of fraud
enumerated in Art. 46 in relation to Art. 45(3).
Circumstances constituting fraud under Art.
45(3) (1996, 1997, 2002, 2003, 2006 BAR) Q: Melvin and Janufi met in 1996 while studying
in Cebu City. They became sweethearts but
1. Non-disclosure of a previous conviction by final eventually separated in 2000. Later, Melvin
judgment of the other party of a crime involving heard that Janufi began dating someone. They
moral turpitude; lost communication. In March 2001, Melvin
visited Janufi and asked her about the rumor.
2. Concealment by the wife of the fact that at the She denied the same and insisted that “no one
time of marriage, she was pregnant by a man touched her” and nothing happened between
other than her husband; her and any third party. They reconciled. In
April 2001, Melvin learned that Janufi was
3. Concealment of sexually transmissible disease pregnant. He was surprised and doubtful to
(STD), regardless of its nature, existing at the learn Janufi was already 1-month pregnant
time of marriage; or because they had sexual intercourse only in
March 2001. Although Melvin doubted the
4. Concealment of drug addiction, habitual paternity of the child, Janufi supposedly assured
alcoholism or homosexuality or lesbianism him that he was the only person she had sexual
existing at the time of the marriage. (Art. 46, FC) intercourse with.
NOTE: Where there has been no misrepresentation After 3 years, the couple got married. During
or fraud, that is, when the husband at the time of the their marriage, the couple quarreled about
marriage knew that the wife was pregnant, the ordinary things. One time, they had a fight and
marriage cannot be annulled. (Buccat v. Buccat, G.R. the issue of their child was brought up. This
No. 47101, 25 Apr. 1941) drove Melvin to finally take a DNA Parentage
Examination which revealed that there was a
Q: Aurora prayed for the annulment of her 0.0% probability that Melvin was the father of
marriage with Fernando on the ground of fraud their child. He decided to file a petition for
in obtaining her consent after having learned annulment of marriage due to fraud. Decide on
that several months prior to their marriage, the petition.
Fernando had pre-marital relationship with a
close relative of his. According to her, the “non- A: To constitute fraud that warrants annulment
divulgement to her of such pre-marital secret” under Art. 46(2) of the FC, (1) the wife must have
constituted fraud in obtaining her consent been pregnant by a man other than her husband at
within the contemplation of Art. 46 of the FC. Is the time of the marriage and; (2) the wife must have
the concealment by the husband of a pre-marital fraudulently concealed the same. In other words,
relationship with another woman a ground for the concealed pregnancy, which vitiates consent,
annulment of marriage? must have existed at the time of the marriage.
2023 GOLDEN NOTES
II. MARRIAGE
In the instant case, the facts readily reveal that their Legal Separation
child was already almost three years old when
a. There should be no condonation or
Melvin and Janufi got married in 2004. As Janufi was
consent to the drug addiction;
not pregnant at the time of the marriage, any
purported fraud she may have committed to induce
b. The action must be filed within 5 years
Melvin to marry her cannot be considered the
from the occurrence of the cause; and
fraudulent concealment contemplated under Art.
46(2). As Janufi's purported fraud does not squarely
c. Drug addiction arises during the
fall under Art. 46(2), the same cannot serve as a
marriage and not at the time of marriage.
ground for annulment.
Q: If drug addiction, habitual alcoholism,

Even assuming that Art. 46(2) was applicable, the
lesbianism, or homosexuality should occur only
Court finds that Melvin failed to discharge his
during the marriage, would these constitute
burden of proving that Janufi acted with bad faith
grounds for a declaration of nullity or for legal
and fraudulent intent with clear and convincing
separation, or would they render the marriage
evidence. While Janufi may have misrepresented
void? (2002 BAR)
the state of her chastity prior to her and Melvin's
reconciliation, it appears that she honestly believed
A: If drug addiction, habitual alcoholism, lesbianism,
in good faith that their child was that of Melvin. As
or homosexuality should occur during the marriage,
there was no bad faith on her part, she cannot be
they will:
guilty of concealment. (Republic v. Villacorta, G.R.
No. 249953, 23 June 2021)
1. Not constitute grounds for declaration of
nullity; (Art. 35, FC)
Q: Under what conditions, respectively, may
2. Not constitute grounds to render the marriage
drug addiction be a ground, if at all, for the
voidable (Arts. 45 and 46, FC); and
declaration of nullity of marriage, annulment of
3. Constitute grounds for legal separation. (Art. 55,
marriage, and legal separation? (1997 BAR)
FC)
A:
VITIATED CONSENT
Declaration of Nullity of Marriage
Vitiated consent as a ground for annulment of
a. The drug addiction must amount to
marriage
psychological incapacity to comply with the
essential obligations of marriage; and
There is vitiation of consent when:
b. It must be antecedent (existing at the time
GR: Consent of either party was obtained by force,
of marriage), grave, and incurable.
intimidation, or undue influence.
Annulment of Marriage
a. The drug addiction must be concealed; Force or violence
b. It must exist at the time of marriage; There is violence when, in order to wrest consent,
serious or irresistible force is employed.
c. There should be no cohabitation with full
knowledge of the drug addiction; and Intimidation
d. The case is filed within 5 years from “There is intimidation when one of the contracting
discovery. parties is compelled by a reasonable and well-
grounded fear of an imminent and grave evil upon
CIVIL LAW
their person or property, or upon the person or to be impotent. (Rabuya, 2018) The husband will
property of their spouse, descendants, or have to overcome this presumption.
ascendants, to give their consent.” (Art. 1335(2),
NCC) NOTE: Relative impotency may now be invoked as a
ground for annulment. The Committee has decided
Undue influence to include relative impotency of one party because
there are cases where a person is impotent with
Control over one’s will. respect to their spouse but not with other men or
women. (Sempio Diy, 1995)
XPN: If the same having disappeared or ceased, such
party thereafter freely cohabited with the other as Q: The day after John and Marsha got married,
husband and wife. John told her that he was impotent. Marsha
continued to live with John for two years. Is
NOTE: A threat to enforce one's claim through Marsha now estopped from filing an annulment
competent authority, however, if the claim is just or case against John? (2007 BAR)
legal, does not vitiate consent.
A: NO. Unlike the other grounds for annulment of
IMPOTENCE voidable marriage which are subject to ratification
by continued cohabitation, the law does not allow
Impotence or physical incapacity ratification in case of impotency.
Impotence (impotentia copulandi) refers to lack of AFFLICTED WITH A SEXUALLY

power of copulation and not to mere sterility TRANSMITTED DISEASE
(impotentia genrandi) which refers to ability to
procreate. The test is not the capacity to reproduce, Requisites of Affliction of a Sexually
but the capacity to copulate. (Paras, 2008) Although Transmitted Disease (STD) as a Ground for
impotency carries with it sterility, a sterile person is Annulment
not necessarily impotent. (Paras, 2016)
1. One of the parties is afflicted with STD;
Requisites for impotence to be a ground for
annulment of marriage (In-Ex-O-P-U) 2. STD must be:
a. Existing at the time the marriage is
1. Exists at the time of the Celebration of celebrated;
marriage; b. Serious; and
2. Permanent (does not have to be absolute); c. Apparently Incurable;
3. Incurable;
4. Unknown to the other spouse; and 3. The other spouse is not aware of the other’s
5. The Other spouse must not also be affliction; and
Impotent.
4. The injured party must be free from STD.
Presumption of potency of one spouse
NOTE: Compulsory HIV testing shall be allowed
GR: Presumption is in favor of potency. when it is necessary to resolve relevant issues
XPN: Doctrine of Triennial Cohabitation. under the FC. (Sec. 30(b), R.A. No. 11166)
Doctrine of Triennial Cohabitation Confidential HIV and AIDS information may be

released by HIV testing facilities without consent
If after 3 years of living together with her husband, when responding to a subpoena duces tecum and
the wife remained a virgin, the husband is presumed subpoena ad testificandum issued by a court
2023 GOLDEN NOTES
II. MARRIAGE
with jurisdiction over a legal proceeding where As to the Nature of the Disease
the main issue is the HIV status of the individual. Must be serious and Does not have to be
Provided: incurable serious and incurable
a. That the confidential medical record, after

Role of the prosecutor or OSG in cases of
having been verified for accuracy shall
annulment and judicial declaration of nullity
remain anonymous and unlinked;
The prosecutor or OSG shall take steps to prevent

b. Shall be properly sealed by its lawful
collusion between the parties and to take care that
custodian, hand-delivered to the court, and
evidence is not fabricated or suppressed. Even if
personally opened by the judge; and
there is no suppression of evidence, the public
prosecutor has to make sure that the evidence to be
c. That the judicial or administrative
presented or laid down before the court is no
proceedings shall be held in executive
fabricated. Only the active participation of the
session. (Sec. 45(c), R.A. No. 11166)
public prosecutor or the OSG will ensure that the
interest of the State is represented and protected in
Q: Yvette was found to be positive for HIV virus,
proceedings for declaration of nullity of marriages
considered sexually transmissible, serious and
by preventing the fabrication or suppression of
incurable. Her boyfriend Joseph was aware of
evidence. (Art. 48, FC)
her condition and yet married her. After 2 years
of cohabiting with Yvette, and in his belief that
NOTE: The non-intervention of the prosecutor is
she would probably never be able to bear him a
not fatal to the validity of the proceedings in cases
healthy child, Joseph now wants to have his
where the respondent in a petition for annulment
marriage with Yvette annulled on the ground
vehemently opposed the same and where they do
that Yvette has STD. Yvette opposes the suit
not allege that evidence was suppressed or
contending that Joseph is estopped from seeking
fabricated by any of the parties. (Tuason v. CA, G.R.
annulment of their marriage since he knew even
No. 116607, 10 Apr. 1996)
before their marriage that she was afflicted with
HIV virus. Can the action of Joseph for
Collusion
annulment of his marriage with Yvette prosper?
Where for purposes of getting an annulment or

A: NO. Concealment of an STD may annul the
nullity decree, the parties come up with an
marriage if there was fraud existing unknown to the
agreement making it appear that the marriage is
party concerned. In this case, there was no fraud
defective due to the existence of any of the grounds
because Joseph knew that Yvette was suffering from
for the annulment of marriage or the declaration of
HIV when he married her. (Art. 46(3), FC)
its nullity provided by law and agreeing to represent
such false or non-existent cause of action before the
Art. 45 vs. 46 of the FC on STD as ground for
proper court. (Sta. Maria, 2010)
annulment
Actions prohibited in annulment and

ART. 45 ART. 46
declaration of absolute nullity of marriage cases
As to Ground for Annulment
The act of concealing The following actions are prohibited in annulment
The fact of being
because it constitutes and nullity of marriage cases:
afflicted
fraud
As to the Presence of Concealment 1. Compromise;
Not necessarily Necessary 2. Confession of judgment;
3. Stipulation of facts;
CIVIL LAW
4. Summary judgment; and

5. Judgment on the pleadings.
What the law prohibits is a judgment based

exclusively or mainly on defendant's confession.
(Ocampo v. Florenciano, G.R. No. L-13553, 23 Feb.
1960) Thus, stipulation of facts or confession of
judgment if sufficiently supported by other
independent substantial evidence to support the
main ground relied upon, may warrant an
annulment or declaration of absolute nullity.
NOTE: In actions for declaration of nullity,

annulment of marriage, or for legal separation, the
material facts in the complaint shall always be
proved. (Sec. 1, Rule 34, ROC)
Pendency of Action
During the pendency of the action for annulment,

declaration of absolute nullity of marriage or legal
separation, the Court shall, in the absence of
adequate written agreement between the spouses,
provide for the:
1. Support of the spouses;

2. Support and custody of the common
children; and
3. Visitation rights of the other parent. (Art.
49, FC)
2023 GOLDEN NOTES
II. MARRIAGE
Void vs. Voidable Marriages
VOID MARRIAGE VOIDABLE MARRIAGE

As to the Status of Marriage
Void ab initio (the marriage is considered never to

Valid until annulled
have taken place)
As to the Petition Filed
Declaration of Nullity of Marriage Annulment of Marriage
Who may file
GR: Solely by the husband or wife.
XPNs: Any real party-in-interest, only in the

following cases:
GR: Offended Spouse

1. Nullity of marriage cases commenced before
the effectivity of A.M. No. 02-11-10 (15 Mar.
XPNs:
2003);
1. Parents or guardians in cases of insanity;

2. Marriages celebrated during the effectivity
of the NCC. (De Dios Carlos v. Sandoval, G.R.
2. Parents or guardians before the party
No. 179922, 16 Dec. 2008); or
reaches 21 years old on the ground of lack
of parental authority.
3. A party to the previous marriage may seek
the nullity of the subsequent marriage on the
ground that the subsequent marriage is
bigamous. (Juliano-Llave v. Republic, G.R. No.
169766, 20 Mar. 2011)
Prescriptive Period
GR: Within 5 years from discovery of the ground
For direct proceeding – only during the lifetime of XPNs:

the parties
1. Lifetime of spouse in cases of insanity; or
For collateral attack – no prescriptive period
2. Before the party reaches 21 in cases where
parents or guardians may file Annulment.
How it may be impugned
Either directly or collaterally Judicial declaration is necessary
CIVIL LAW
As to the Status of Children
GR: Illegitimate;
XPNs: Those conceived or born of marriages

declared void under:
1. Art. 36 (Psychological incapacity) of the FC;

Legitimate
or
2. Art. 52 in relation to Art. 53 of the FC
NOTE: If a person falls under a void marriage fails to

get a Judicial Decree of Nullity of Marriage and
remarries, the child in his second marriage, is
considered illegitimate. (Art. 40, FC)
As to Property Relations
GR: Property relations are governed by rules on co-

ownership Art. 147 (without legal impediment) or
Art. 148 (with legal impediments mentioned under
Arts. 37 and 38).
GR: Governed by rules on absolute community.
XPN: If the marriage is declared void by reason of
non-compliance with Art. 40 of the FC, the absolute XPN: Unless another system is agreed upon in
community or the conjugal partnership, as the case marriage settlement
may be, unless parties agree to complete separation
of property in a marriage settlement prior marriage
shall be dissolved and liquidated. (Art. 43(2) in
relation to Art. 50, FC)
As to Necessity of a Judicial Declaration of Nullity of Marriage
GR: There is no necessity to obtain a judicial

declaration.
Necessary.
XPN: For purposes of remarriage, Judicial
declaration of nullity is required.
2023 GOLDEN NOTES
II. MARRIAGE
Voidable Marriages and How They May be Ratified (1999, 2003, 2006, 2007, 2009 BAR)
RATIFICATION WHO MAY FILE WHEN TO FILE

Marriage of a party 18 years of age or over but below 21 solemnized without the consent of the parents,
guardian or person having substitute parental authority over the party, in that order
Contracting party who failed to By the contracting party whose Within 5 years after attaining the
obtain parental consent: parent did not give consent. age of 21.
Through free cohabitation after
attaining the age of 21.
NOTE: The parents cannot ratify Parent, guardian, or person having

the marriage. The effect of At any time before such party has
legal charge of the contracting
prescription on their part is that reached the age of 21.
party.
they are barred from contesting it,
but the marriage is not yet
cleansed of its defect.
Either party was of unsound mind
GR: Sane spouse who had no
knowledge of the other’s insanity
XPN: a. At any time before the death of

Insane spouse through free a. Any relative, guardian, or either party; or
cohabitation after coming to person having legal charge of
reason. the insane; or b. During a lucid interval or after
regaining sanity.
b. Insane spouse during a lucid
interval or after regaining
sanity.
Consent of either party was obtained by fraud
Injured party through free
Within 5 years after the discovery
cohabitation with full knowledge Injured party
of fraud.
of the facts constituting the fraud.
As to vices of consent such as force, intimidation, or undue influence
Within 5 years from the time the
Injured party through free
force, intimidation, or undue
cohabitation after the vices have Injured party
influence disappeared or
ceased or disappeared.
ceased.
Impotence (impotencia copulandi) and afflicted with STD
found to be serious and appears to be incurable
Only the potent spouse can file the

May not be ratified but action may action and they must not have
Within 5 years after the
be barred by prescription only, been aware of the other’s
celebration of marriage.
which is 5 years after the marriage. impotency at the time of the
marriage.
CIVIL LAW
Status of Children Born or Conceived before

E. EFFECT OF DEFECTIVE MARRIAGES Declaration of Nullity
The children are deemed illegitimate, except when

the ground for the declaration of nullity is
Property Relations
psychological incapacity or a void subsequent
marriage under Art. 53 of the FC.
The absolute community of property (ACP) or the
conjugal partnership of gains (CPG), as the case may
1. Custody of Children - During the pendency of
be, shall be dissolved and liquidated.
the petition (pendente lite), the custody of
children will be governed either by written
In void ab initio marriages, except those under Art.
agreement or by court order based on the best
40 of the FC, the property regime of unions without
interest of the child.
marriage or co-ownership under Art. 147 or Art.
148 shall apply
The court will apply the following order of
preference, both parents jointly:
Art. 147 applies when the parties have no
impediment to marry each other, otherwise, Art.
(a) either parent (may consider the choice of
148 applies.
child over 7 years, unless the chosen parent
is considered unfit);
Under Art.147, there is a presumption that the
contributions are equal. Property acquired by either
(b) Surviving grandparent (if several, then
party exclusively belongs to such party, subject to
choice of child over 7 years, unless the
proof. The property acquired by both through their
chosen grandparent is unfit or disqualified);
work or industry is co-owned. The property
relations between a man and a woman whose
(c) Eldest sibling over 21 unless
marriage was declared null and void on the ground
unfit/disqualified; or
of psychological incapacity is governed by this
article. (Buenaventura v. Buenaventura, G.R. Nos.
(d) Any other person deemed suitable by the
127358 & 127449, 31 Mar. 2005)
court.
NOTE: Even if one of the spouses did not contribute

After the decree, the court shall award custody
materially to the common fund, but the said party
to the innocent spouse, but no child under 7
took care of the household, the other party and their
years shall be separated from the mother unless
common children, these acts are considered the said
there are compelling reasons.
party’s contribution to the common fund. (Ibid.)
2. Child Support – In pendente lite, child support

Under Art. 148, there is no presumption of joint
will be governed by either written agreement, or
acquisition. There is a presumption of equal sharing
in the absence thereof, from properties of the
only when there is evidence of joint acquisition but
ACP or CPG. After decree, either parent or both
none as to the extent of actual contribution.
may be ordered by the court to give an amount
Otherwise, property acquired by either exclusively
necessary for support in proportion to resources
belongs to such property, and property acquired by
or means of giver and necessities of the
both through their work or industry is owned by
recipient.
them in common in proportion to respective
contributions.
3. Spousal Support – In pendente lite, spousal
support will be governed by either written
agreement, or in the absence thereof, from
properties of the ACP or CPG, considered as an
2023 GOLDEN NOTES
II. MARRIAGE
advance to be deducted from the share of the 4. Contracted following the annulment or
spouse supported during liquidation. There may declaration of nullity of a previous marriage but
be restitution of spousal support if after decree, before partition, etc.;
the court finds that the person providing
support pendente lite is not liable therefor. 5. Bigamous or polygamous marriages, except as
provided in Art. 41 of the FC on terminable
bigamous marriages;
F. FOREIGN MARRIAGES
6. Void due to psychological incapacity; and
7. Void for reasons of public policy.

Who may solemnize marriages between Filipino
Citizens abroad
Requirements to Prove a Foreign Marriage
Marriages between Filipino citizens abroad may be

1. The existence of the pertinent provision of the
solemnized by
foreign marriage law; and
a. a consul-general;
2. The celebration or performance of the marriage
b. consul; or
in accordance with said law.
c. vice-consul of the Republic of the
Philippines.
The issuance of the marriage license and the duties G. LEGAL SEPARATION
of the local civil registrar and of the solemnizing
officer with regard to the celebration of marriage
shall be performed by said consular official. (Art. 10, Legal separation is a legal remedy available to
FC) parties in a valid, but failed marriage, for the
purpose of obtaining a decree from the court
Marriages between Filipinos solemnized abroad entitling him or her certain reliefs, such as
in accordance with the law in force in said
country 1. the right to live separately from each
other (without affecting the marital bond
GR: Marriages between Filipinos solemnized that exists between them);
outside the Philippines in accordance with the law
of the foreign country where it is celebrated, if valid 2. the dissolution and liquidation of their
there, shall be valid here as such. property regime; and
XPNs: It shall be void, even if it is valid in the foreign 3. the custody of their minor children.
country where the marriage was celebrated, if any
of the following circumstances are present: Nature of legal separation
1. Lack of legal capacity even with parental An action for legal separation which involves
consent (e.g., party is below 18); nothing more than bed-and-board separation of the
spouses is purely personal. The NCC recognizes this:
2. Incestuous marriages;
1. By allowing only the innocent spouse and no
3. Contracted through mistake of one party as to one else to claim legal separation; and
the identity of the other;
CIVIL LAW
2. By providing that the spouses can, by their 9. Lesbianism or Homosexuality of respondent;

reconciliation, stop or abate the proceedings, and
and even rescind a decree of legal separation
already granted. (Lapuz v. Eufemio, G.R. No. L- NOTE: It must exist after celebration of
31429, 31 Jan. 1972) marriage.
Grounds for Legal Separation (1997, 2002, 10. Abandonment of petitioner by respondent
2003, 2006, 2007 BAR) (SHARAP-BAD-LAGI) without justifiable cause for more than 1 year.
(Art. 55, FC)
1. Repeated physical violence or Grossly abusive
conduct against petitioner, common child, child Q: Lucita left the conjugal dwelling and filed a
of petitioner; petition for legal separation due to the physical
violence, threats, intimidation, and grossly
NOTE: Respondent’s child is not included. abusive conduct she had suffered at the hands of
Ron, her husband. Ron denied such and claimed
2. Attempt to corrupt or induce petitioner, that since it was Lucita who had left the conjugal
common child, child of petitioner to engage in abode, then the decree of legal separation
prostitution, or connivance in such corruption should not be granted, following Art. 56(4) of
or inducement; the FC which provides that legal separation shall
be denied when both parties have given ground
3. Attempt by respondent against the life of for legal separation. Should legal separation be
petitioner; denied on the basis of Ron’s claim of mutual
guilt?
4. Final judgment sentencing respondent to
Imprisonment of more than 6 years, even if A: NO. Art. 56(4) of the FC does not apply since the
pardoned; abandonment contemplated under the law is
abandonment without justifiable cause for more
NOTE: The final judgment must be than one year. In this case, Lucita left Ron due to his
promulgated during the marriage. abusive conduct. Such act does not constitute the
abandonment contemplated in the said provision.
5. Drug addiction or habitual Alcoholism of Therefore, there is no mutual guilt between them as
respondent; there is only one erring spouse. (Ong Eng Kiam v. CA,
G.R No. 153206, 23 Oct. 2006)
NOTE: It must exist after celebration of
marriage. NOTE: No criminal conviction is necessary to issue
a decree of legal separation. In legal separation,
6. Physical violence or moral Pressure to compel preponderance of evidence is enough. (Gandionco v.
petitioner to change religious or political Peñaranda, G.R. No. 79284, 27 Nov. 1987)
affiliation;
Act considered as acts of violence under R.A. No.
7. Bigamous marriage subsequently contracted 9262
by respondent in the Philippines or abroad;
1. Causing, physical harm to the woman or her
8. Sexual infidelity or perversion; child;
NOTE: Sexual perversion includes all unusual 2. Threatening to cause the woman or her child
or abnormal sexual practices which may be physical harm;
offensive to the feelings or sense of decency of
either the husband or wife.
2023 GOLDEN NOTES
II. MARRIAGE
3. Attempting to cause the woman or her child e. Inflicting or threatening to inflict physical
physical harm; harm on oneself for the purpose of
controlling her actions or decisions;
4. Placing the woman or her child in fear of
imminent physical harm; f. Causing or attempting to cause the woman or
her child to engage in any sexual activity
5. Attempting to compel or compelling the woman which does not constitute rape, by:
or her child to:
a. Engage in conduct which the woman or her i. Force, or
child has the right to desist from; or ii. Threat of force;
iii. Physical harm, or
b. Desist from conduct which the woman or her iv. Through intimidation directed against
child has the right to engage in; the woman or her child or her/his
immediate family;
6. Attempting to restrict or restricting the woman’s
or her child’s freedom of movement or conduct 7. Engaging in purposeful, knowing, or reckless
by: conduct, personally or through another that
alarms or causes substantial emotional or
a. Force; psychological distress to the woman or her child.
b. Threat of force; This shall include, but not be limited to, the
c. Physical or other harm; following acts:
d. Threat of physical or other harm; or
e. Intimidation directed against the woman or a. Stalking or following the woman or her child
child. in public or private places;
This shall include, but not limited to, the b. Peering in through the window or lingering
following acts committed with the purpose or outside the residence of the woman or her
effect of controlling or restricting the woman’s child;
or her child’s movement or conduct:
c. Entering or remaining in the dwelling or on
a. Threatening to deprive or actually depriving the property of the woman or her child
the woman or her child of custody to her/his against her/his will;
family;
d. Destroying the property and personal
b. Depriving or threatening to deprive the belongingness or inflicting harm to animals
woman or her children of financial support or pets of the woman or her child; and
legally due their family, or deliberately
providing the woman’s children insufficient e. Engaging in any form of harassment or
financial support; violence; and
c. Depriving or threatening to deprive the 9. Causing mental or emotional anguish, public

woman or her child of a legal right; ridicule or humiliation to the woman or her
child, including, but not limited to, repeated
d. Preventing the woman in engaging in any verbal and emotional abuse, and denial of
legitimate profession, occupation, business financial support or custody of minor children of
or activity, or controlling the victim’s own access to the woman’s child/children.
money or properties, or solely controlling the
conjugal or common money or properties;
CIVIL LAW
NOTE: However, in Acharon v. People (G.R. No. issued if any legal obstacles thereto appear upon the
224946, 09 Nov. 2021), the Court held that mere record.
failure or inability to provide financial support is
not punishable by R.A. 9262. There must be NOTE: This is an exception to the ROC provision
evidence on record that the accused willfully or that defenses not raised in the pleadings will not be
consciously withheld financial support legally considered since provisions on marriage are
due the woman for the purpose of inflicting substantive in nature. (Brown v. Yambao, G.R. No. L-
mental or emotional anguish upon her. 10699, 18 Oct. 1957)
Grounds for denial of petition for legal Q: Rosa and Ariel were married at the Catholic
separation (2006 BAR) Church of Tarlac on 05 Jan. 1988. In 1990, Ariel
went to Saudi Arabia to work. There, after being
1. Condonation of the act complained of; converted into Islam, Ariel married Mystica.
2. Consent to the commission of the offense/act; Rosa learned of the second marriage of Ariel on
3. Connivance in the commission of the act; 01 Jan. 1992 when Ariel returned to the
4. Collusion in the procurement of decree of LS; Philippines with Mystica. Rosa filed an action for
5. Mutual guilt; legal separation on 05 Feb. 1994. (1994 BAR)
6. Prescription: 5 years from occurrence of cause;
7. Death of either party during the pendency of the a. Does Rosa have legal grounds to ask for legal
case (Lapuz-Sy v. Eufemio, G.R. No. L-31429, 31 separation?
Jan. 1972); or
8. Reconciliation of the spouses during the A: YES. The abandonment of Rosa by Ariel for more
pendency of the case. (FC, Art. 56) than 1 year is a ground for legal separation unless
upon returning to the Philippines, Rosa agrees to
Prescriptive period for filing a petition for legal cohabit with Ariel which is allowed under the
separation Muslim Code. In this case, there is condonation. The
contracting of a subsequent bigamous marriage
An action for legal separation shall be filed within 5 whether in the Philippines or abroad is a ground for
years from the time of the occurrence of the cause. legal separation under Art. 55(7) of the FC. Whether
(Art. 57, FC) the second marriage is valid or not, Ariel having
converted into Islam, is immaterial.
Q: If a person commits several acts of sexual
infidelity, particularly in 2002, 2003, 2004, and b. Has the action prescribed?
2005, does the prescriptive period to file for
legal separation run from 2002? (2007 BAR) A: NO. The aggrieved spouse must file the action
within 5 years from the occurrence of the cause.
A: NO. The prescriptive period begins to run upon (Art. 57, FC) The subsequent marriage of Ariel could
the commission of each act of infidelity. Every act of not have occurred earlier than 1990, the time he
sexual infidelity committed by a person is a ground went to Saudi Arabia. Hence, Rosa has until 1995 to
for legal separation. bring the action under the FC.
Failure to interpose prescription as a defense Cooling-off Period
When prescription was not interposed as a defense, An action for legal separation shall be in no case
the courts can take cognizance thereof, because tried before 6 months has elapsed since the filing of
actions seeking a decree of legal separation, or the petition, to enable the contending spouses to
annulment of marriage, involve public interest and settle differences. In other words, it is for possible
it is the policy of our law that no such decree be reconciliation. (Art. 58, FC)
2023 GOLDEN NOTES
II. MARRIAGE
GR: The 6-month cooling-off period is a mandatory Filing of petition for legal separation
requirement. Petition shall not be granted if it is not
observed. (Pacete v. Carriaga, G.R. No. L-53880, 17 Who may
Husband or wife
Mar. 1994) file
When to Within 5 years from the time of the
NOTE: Matters other than the merits of legal file occurrence of the cause
separation can be determined by the court without
Family Court of the province or city
waiting for the lapse of the 6-month period.
where the petitioner or the
respondent has been residing for at
XPN: The court can immediately hear the case if the
Where to least 6 months prior to the date of
grounds alleged are those punishable under R.A. No.
file filing, or in case of a non-resident,
9262.
where he may be found in the
Philippines, at the election of the
Reconciliation Efforts
petitioner.
The Court is required to take steps toward the

Effects of Filing a Petition for Legal Separation
reconciliation of the spouses and must be fully
satisfied that, despite such efforts, reconciliation is
The spouses shall be entitled to live separately from
highly improbable. (Art. 59. FC)
each other. In the absence of a written agreement
between the parties, the court shall designate either
Rule in rendering a judgment of legal separation
the husband or the wife or a third person to
based upon a stipulation of facts or confession of
administer the ACP or CPG. (Art. 61, FC)
judgment
Effect of death of a party in an action for legal
A decree of legal separation cannot be issued solely
separation
based on a stipulation of facts or a confession of
judgment. The grounds for legal separation must be
WHEN EFFECT
proved. Neither confession of judgment nor
summary judgment is allowed. In any case, the court
shall order the prosecuting attorney or fiscal to take Death of the action itself.
steps to prevent collusion between the parties and Being personal in character, it
to take care that the evidence is not fabricated or follows that the death of one
suppressed. (Art. 60, FC) During
party to the action causes the
Pendency
death of the action itself – actio
What the law prohibits is a judgment based personalis moritur cum
exclusively or mainly on defendant’s confession. persona. (Rabuya, 2009)
The law does not, however, exclude, as evidence,
any admission or confession made by the
respondent in a legal separation case outside of the
court. (De Ocampo v. Florenciano, G.R. No. L-13553, Case will be closed. The court
23 Feb. 1960) shall order the case closed and
Before terminated without prejudice
entry of to the settlement of estate
judgment proper proceedings in the
regular courts. (Sec. 21, A.M. 02-
11-11- SC)
CIVIL LAW
NOTE: Prescriptive period: 5 years from finality

Judgment is binding. If the of decree of legal separation.
party dies after the entry of
judgment, the same shall be 7. Innocent spouse may revoke designation of
After
binding upon the parties and offending spouse as beneficiary in any insurance
entry of
their successors-in-interest in policy, even when stipulated as irrevocable.
judgment
the settlement of the estate in
the regular courts. (Sec. 21, A.M. Q: In case an action for legal separation is
No. 02-11-11-SC) granted, what will happen to a child below the
age of 7? Is the rule absolute?
NOTE: In cases where one of the spouses is dead, or

A: As a rule, the custody of the child shall be
where the deceased’s heirs continue the suit,
awarded to the innocent spouse, except if the child
separation of property and any forfeiture of share
is below the age of 7 where the law says that the
already effected subsists, unless spouses agree to
child cannot be separated from the mother, except
revive former property regime. (Sec. 21, A.M. No. 02-
if there is a compelling reason to do so. The
11-11, 4 Mar. 2003)
common-law relationship of a child's mother with a
married man is a ground to separate the child from
Effects of Legal Separation
the mother, because such a situation will not afford
the child a desirable atmosphere where they can
1. Spouses entitled to live separately but the
grow and develop into an upright and moral-
marriage bond is not severed;
minded person. (Cervantes v. Fajardo, G.R. No.
79955, 27 Jan. 1989)
2. ACP/CPG shall be dissolved and liquidated. The
share of the offending spouse in the net profits
Q: Which among the following remedies:
shall be forfeited in favor of:
a. Declaration of nullity of marriage;
b. Annulment of marriage;
a. Common children;
c. Legal separation; and/or
d. Separation of property
b. In default of the common children, children
of the guilty spouse by a previous marriage;
May an aggrieved spouse avail themselves of:
or
(2003 BAR)
c. In default of common children and the

1. If the wife discovers after the marriage that
children of the guilty spouse, innocent
her husband has “AIDS”?
spouse;
A: B. ANNULMENT OF MARRIAGE. Since AIDS is a
3. Custody of minor children is awarded to the
serious and incurable sexually transmissible
innocent spouse (subject to Art. 213, FC);
disease, the wife may file an action for annulment of
the marriage on this ground whether such fact was
4. Offending spouse is disqualified to inherit from
concealed or not from the wife, provided that the
innocent spouse by intestate succession;
disease was present at the time of the marriage. The
marriage is voidable even though the husband was
5. Provisions in the will of innocent spouse which
not aware that he had the disease at the time of
favors offending spouse shall be revoked by
marriage.
operation of law;
6. Innocent spouse may revoke donations he/she

made in favor of offending spouse; and
2023 GOLDEN NOTES
II. MARRIAGE
2. If the wife goes abroad to work as a nurse and 5. If the husband beats up his wife every time he
refuses to come home after the expiration of comes home drunk?
her three-year contract there?
A: C. LEGAL SEPARATION, AND D. SEPARATION
A: D. SEPARATION OF PROPERTY. If the wife OF PROPERTY
refuses to come home for 3 months from the
expiration of her contract, she is presumed to have The wife may file an action for legal separation on
abandoned the husband and he may file an action the ground of repeated physical violence on her
for judicial separation of property. If the refusal person. (Art. 55(1), FC)
continues for more than one year from the
expiration of her contract, the husband may file the She may also file an action for judicial separation of
action for legal separation under Art. 55(10) of the property for failure of the husband to comply with
FC on the ground of abandonment of petitioner by his marital duty of mutual respect. (Arts. 101 and
respondent without justifiable cause for more than 135(4), FC)
1 year. A spouse is deemed to have abandoned their
spouse when they leave the conjugal dwelling She may also file an action for declaration of nullity
without any intention of returning. (Art. 101, FC) of the marriage if the husband’s behavior
The intention not to return cannot be presumed constitutes psychological incapacity existing at the
during the three-year period of her contract. time of the celebration of marriage.
3. If the husband discovers after the marriage Effect to the donations made by the spouses to
that his wife has been a prostitute before each other
they got married?
The revocation of the donations shall be recorded in
A: NONE. If the husband discovers after the the registries of property in the places where the
marriage that his wife was a prostitute before they properties are located. Alienations, liens, and
got married, he has no remedy. No encumbrances registered in good faith before the
misrepresentation or deceit as to character, health, recording of the complaint for revocation in the
rank, fortune, or chastity shall constitute fraud as registries of property shall be respected. The
legal ground for an action for the annulment of revocation of or change in the designation of the
marriage. (Art. 46, FC) insurance beneficiary shall take effect upon written
notification thereof to the insured.
4. If the husband has a serious affair with his
secretary and refuses to stop The action to revoke the donation must be brought
notwithstanding advice from relatives and within 5 years from the time the decree of legal
friends? separation has become final. (Art. 64, FC)
A: C. LEGAL SEPARATION. The wife may file an

action for legal separation. The husband’s sexual
infidelity is a ground for legal separation. (Art. 55,
FC)
She may also file an action for judicial SEPARATION

OF PROPERTY for failure of her husband to comply
with his marital duty of fidelity. (Arts. 135(4) and
101, FC)
CIVIL LAW
Effects of Reconciliation
Those given to the children

During the pendency of the cannot be returned since the
As to the
case: spouses are no longer the owners
Forfeited
of such. But those given to the
Shares
Legal separation proceedings innocent spouse may be
shall be terminated at whatever returned.
As to the stage.
Decree
After the issuance of the decree: Revival of previous property regime after
reconciliation
Final decree of the legal
separation to be set aside. (Art. Reconciliation does not automatically revive the
66, FC) former property regime of the spouses. If the
spouses want to revive the previous property
regime, they must execute an agreement to revive
GR: In case there had been
the former property regime, which agreement shall
already separation of property
be submitted in court, together with a verified
and forfeiture of the share of the
motion for its approval. (Art. 67, FC)
guilty spouse, the same shall be
maintained. (Pineda, 2008)
The agreement to revive must be under oath
and specify:
XPN: The parties, however, can
As to the
come into an agreement to revive
Property 1. The properties to be contributed anew to the
their previous regime. Their
Regime restored regime;
agreement must be under oath
and must contain a list of the
2. Those to be retained as separated properties of
properties desired to be returned
each spouse; and
to the community or conjugal
property and those which will
3. The names of all their known creditors, their
remain separate, and a list of
addresses, and the amounts owed to each.
creditors and their addresses.
(Pineda, 2008)
Effects of reconciliation while the petition is

being heard by the court
The FC does not provide for the If the spouses should reconcile, a corresponding
revival of revoked provisions in a joint manifestation under oath duly signed by them
will originally made in favor of shall be filed with the court in the same proceeding
the offending party as a result of for legal separation. The legal separation
As to
the legal separation. proceedings, if still pending, shall thereby be
Capacity to
Succeed terminated at whatever stage.
NOTE: This absence gives the
innocent spouse the right to
choose whether the offending
spouse will be reinstituted.
2023 GOLDEN NOTES
II. MARRIAGE
Declaration of Nullity of Marriage vs. Annulment vs. Legal Separation
DECLARATION OF NULLITY OF MARRIAGE ANNULMENT LEGAL SEPARATION

As to the effect on the marriage bond
No effect; marriage
Dissolved Dissolved
bond remains
As to the status of children
GR: Illegitimate
XPN: Children conceived or born of marriages before Legitimate

declaration of nullity under Arts. 36 and 53 of the FC
considered legitimate
As to the property relations
ACP/CPG shall be dissolved & liquidated.

(Art. 43(2), FC)
GR: Governed either by Art. 147 or Art. 148 of the FC. Thus,
property regime shall be liquidated pursuant to the 1. Share of spouse, who contracted the
ordinary rules on co-ownership. subsequent marriage in bad faith, in the
net profits of the community property or
XPN: Marriages declared void under Art. 40 which shall be conjugal partnership, shall be forfeited
liquidated in accordance with Art. 43(2) which property in favor of the common children; or
relations could either be governed by ACP or CPG unless
the parties agree to complete separation of property in a 2. If there are none, the children of the
marriage settlement prior to marriage. (Valdes v. RTC, G.R. guilty spouse by a previous marriage; or
No. 122749, 31 July 1996)
3. In default of children, the innocent
spouse.
As to the donations propter nuptias
GR: Donations propter nuptias are revocable at the GR: Donations propter nuptias shall remain
instance of the donor. valid. (Art. 43(3), FC)
XPNs: XPNs:
1. If the donation propter nuptias is embodied in a 1. If the donee contracted the marriage in
marriage settlement, the donation is void under Art. bad faith, such donations made to said
86(1) of the FC; or donee shall be revoked by operation of
law.
2. If the subsequent marriage is judicially declared void
by reason of Art. 40 of the FC, the donation remains 2. If both spouses to the marriage acted in
valid. bad faith, all donations propter nuptias
shall be revoked by operation of law.
CIVIL LAW
XPNs to the XPNs:
1. If the donee spouse contracted the marriage in bad

faith, all donations are revoked by operation by law;
or
2. When both parties to a subsequent marriage

contracted in bad faith under Art. 44 of the FC, all
donations propter nuptias are revoked by operation
by law.
Insurance
If the subsequent marriage is judicially declared by void If one spouse acted in bad faith, innocent
by reason of Art. 40 of the FC, the innocent spouse may spouse may revoke his designation as
revoke such designation if the beneficiary spouse acted in beneficiary in the insurance policy even if such
bad faith, even if such designation be stipulated as designation be stipulated as irrevocable. (Art.
irrevocable. 43(4), FC)
Succession
Intestate Succession:
The parties cannot inherit from each other by way of
intestate succession since they are no longer considered
as spouses.
Testate Succession:
GR: Any testamentary provision by one in favor of the

other shall remain valid.
XPNs: If one spouse contracted the marriage in bad

1. If the subsequent marriage is rendered void by non- faith, he shall be disqualified to inherit from
compliance with Art. 40 of the FC, the spouse who the innocent spouse by testate and intestate
contracted the subsequent marriage in bad faith is succession. (Art. 43(5), FC)
disqualified to inherit from the innocent spouse.
2. If the marriage is void by reason of the bad faith of

both parties under Art. 41 of the FC, all testamentary
dispositions made by one in favor of the other are
revoked by operation of law.
NOTE: The parties are not disqualified to institute each

other as voluntary heir in their respective wills to be
executed after the judicial declaration of nullity.
2023 GOLDEN NOTES
II. MARRIAGE
XPN: Lex rei sitae applies:

H. PROPERTY RELATIONS BETWEEN SPOUSES
1. Where both spouses are aliens;
2. With respect to the extrinsic validity of contracts

Different property regimes which may be
affecting property not situated in the
adopted by future spouses
Philippines, and executed in the country where
the property is located; or
1. Absolute Community of Property (ACP);
2. Conjugal Partnership of Gains (CPG);
3. With respect to extrinsic validity of contracts
3. Absolute Separation of Property (ASOP);
entered into in the Philippines but affecting
4. A combination of the above regimes; and
property situated in a foreign country whose
5. Any other regime within limits provided by the
laws require different formalities for its extrinsic
FC.
validity. (Art. 80, FC)
NOTE: The rule against donation to one another

Rule on waiver of rights over the share in the
between the spouses do not include a spouse being
community or conjugal property
a beneficiary of an insurance contract over the life
of the other. (Gercio v. Sun Life Assurance Co., of
GR: Cannot be waived during the marriage.
Canada, G.R. No. 23S703, 28 Sept. 1925)
XPN: In case of judicial separation of property.

The property relations shall be governed by the
following in order:
NOTE: The waiver must be in a public instrument
and recorded in the office of the local civil registrar
1. Property relation agreed and embodied in the
where the marriage contract was recorded as well
marriage settlement;
as in the proper registry of property.
2. Provisions of the FC; and
3. Local custom. (Art. 74, FC)
Q: Marriage being a contract, may the parties
enter into stipulations which will govern their
Commencement of Property Regime
marriage?
A property regime commences at the precise

A: The nature, consequences and incidents of
moment of the celebration of the marriage (i.e.
marriage are governed by law and not subject to
actual time the marriage is celebrated on a certain
stipulation between the spouses. This, however, is
date).
not an absolute rule. The law allows the spouses to
fix their property relations during the marriage
Any stipulation, express or implied, for the
through a device known as “marriage settlement”
commencement of the community regime at any
subject only to the condition that whatever
other time shall be void. (Art. 88, FC)
settlement they may have must be within the limits
provided by the FC. (Art. 1, FC)
Laws that will govern the property relations of
the spouses
GR: Philippine laws shall govern, regardless of place

of celebration of marriage and residence of spouses,
in the absence of contrary stipulation in a marriage
settlement. (Art. 80, FC)
CIVIL LAW
1. DONATIONS PROPTER NUPTIAS compulsory heirs shall

be impaired. (Art. 752,
NCC)
Donations Propter Nuptias
As to inclusion of future property
Donations by reason of marriage are those which
are made before its celebration, in consideration of Future property may
the same, and in favor of one or both of the future be included, provided Future property
spouses. (Art. 82, FC) the donation is mortis cannot be included.
causa. (Art. 84(2), (Art. 751, NCC)
Requisites of a Valid Donation Propter Nuptias NCC)
To be efficacious, it must be: Revocation
(a) made before the celebration of the Grounds for revocation Grounds for revocation
marriage, are found in Art. 86 of are found in law in
(b) In consideration of the marriage, and FC. donations.
(c) In favor of one or both of the future
spouses. (Pineda, 2011)
Property Relation Governing the Donation
NOTE: Absent any of the above essential elements
there is no donation propter nuptias although there GR: ACP. (Art. 75, FC)
might be an ordinary donation if the required
formalities are complied with (Art. 749, NCC). (Ibid.) XPNs:
1. For marriages contracted prior to the effectivity
Donation propter nuptias vs. Ordinary Donation of the FC on 03 Aug. 1988, CPG shall govern the
property relations and Art. 116 of the NCC will
DONATION PROPTER ORDINARY apply.
NUPTIAS DONATION
NOTE: The provisions of the FC shall have no
As to Formalities retroactive effect because it would impair
Donations of future vested rights.
property are governed
by the provisions on 2. Subsequent marriage contracted within 1 year
Governed by Title III,
testamentary from the death of the deceased spouse without
Book III of the NCC.
succession and the liquidation of the ACP or CPG, either judicially
formalities of wills. or extrajudicially, as required under Arts. 103
(Art. 84(2), FC) and 130 of the FC. In such case, a mandatory
As to inclusion of present property regime of complete separation of property shall
There is no limit except govern the subsequent marriage. (Rabuya,
2009)
Present property may that the donor shall
be donated up to 1/5 of leave sufficient
Wedding Gifts
the donor’s present property for their
property if the future support and that of all
spouses have chosen a relatives entitled to Donations propter nuptias are wedding gifts but not
all wedding gifts are donations propter nuptias, for
regime other than ACP. support from him; (Art.
(Art. 84, FC) 750, NCC) and further, said wedding gifts may be given after the
celebration of the marriage. (Pineda, 2011, citing
no legitimes of
Paras, 1975)
2023 GOLDEN NOTES
II. MARRIAGE
Revocability of Donations Propter Nuptias Rule Regarding Donations Propter Nuptias made
between spouses
GR: Donations propter nuptias are revocable at the
instance of the donor. GR: Future spouses cannot donate to each other
more than 1/5 of their present property and any
XPNs: excess from which shall be considered void.
1. If the donation propter nuptias is embodied in a XPN: If they are governed by ACP, then each spouse
marriage settlement, the donation is void under can donate to each other in their marriage
Art. 86(1) of the FC; settlements present property without limit,
provided there is sufficient property left for their
2. If the subsequent marriage is judicially declared support and the legitimes are not impaired.
void by reason of Art. 40 of the FC, the donation
remains valid; Effect of donations of encumbered property
XPN to the XPN: If the donee spouse contracted Such donations are valid. In case of foreclosure of
the marriage in bad faith, all donations are the encumbrance and the property is sold for less
revoked by operation by law. than the total amount of the obligation secured, the
donee shall not be liable for the deficiency. If the
When both parties to a subsequent marriage property is sold for more than the total amount of
contracted in bad faith under Art. 44 of the FC, the obligation, the donee shall be entitled to the
all donations propter nuptias are revoked by excess. (Art. 85, FC)
operation by law.
Donations that may be revoked by the donor
Effect on the ante-nuptial agreement in case the
marriage is not celebrated (Art. 81, FC) A donation by reason of marriage may be revoked
by the donor in the following cases:
GR: Everything stipulated in the settlements or
contracts in consideration of the marriage shall be 1. GR: Marriage is not celebrated or is judicially
rendered void. declared void ab initio.
XPN: Those stipulations not dependent upon, or are Effect: Donations stipulated in marriage
not made in consideration of, the marriage subsist. settlement which are made not in consideration
of the future marriage remains valid. Thus, can
Those donations which are made before the be revoked by the donor;
celebration of the marriage, in consideration of the
same, and in favor of one or both of the future XPNs:
spouses.
a. Donations made in the marriage settlements
The formalities of the donation propter nuptias in consideration of a future marriage because
follows the same formalities as set forth in the law such donations are rendered void when
on donations. marriage did not take place and, thus, there is
nothing to revoke;
NOTE: Donations of future property are governed
by provisions on testamentary succession and b. If the marriage is judicially declared void by
formalities of wills. reason of non-compliance with Art. 40 of the
FC and the donee spouse contracted the
marriage in bad faith. The donation is
deemed revoked by operation of law; or
CIVIL LAW
c. If both parties acted in bad faith, all donations As to inclusion of present property
by reason of marriage and testamentary
dispositions made by one in favor of the other There is no limit except
are revoked by operation of law. (Art. 44, FC) that the donor shall
leave sufficient
2. Marriage takes place without the required Present property may
property for their
consent of parents or guardians; be donated up to 1/5 of
support and that of all
the donor’s present
relatives entitled to
NOTE: If the donor knew of the absence of property if the future
support from him; (Art.
consent of the parents before the marriage, they spouses have chosen a
750, NCC) and further,
may not revoke the donation because the parent regime other than ACP.
no legitimes of
can still give their consent any time before the (Art. 84, FC)
compulsory heirs shall
marriage ceremony takes palace. (Sta. Maria, be impaired. (Art. 752,
2017) NCC)
3. Marriage is annulled and donee acted in bad

As to inclusion of future property
faith;
4. Upon legal separation, the donee being the guilty Future property may
spouse; be included, provided Future property
the donation is mortis cannot be included.
NOTE: Prescription is 5 years from the judicial causa. (Art. 84(2), (Art. 751, NCC)
declaration of legal separation. A decree is NCC)
necessary for the donor to revoke the donation.
Revocation
5. If with a resolutory condition which was
complied with.; and Grounds for revocation Grounds for revocation
are found in Art. 86 of are found in law in
6. Donee has committed an act of ingratitude as FC. donations.
specified by the provisions of the NCC on
donations in general. (Art. 86, FC)
Grounds for filing an action for revocation of a
Donation propter nuptias vs. Ordinary Donation Donation Propter Nuptias and their respective
prescriptive periods
DONATION PROPTER ORDINARY
The prescriptive periods in other provisions of the
NUPTIAS DONATION
NCC should apply, depending on the ground of
As to Formalities revocation. Except for the action to revoke a
donation to the guilty spouse in case of a legal
separation, which the Art. 64(2) of the Code states
Donations of future must be brought within 5 years from the time of the
property are governed decree of legal separation has become final, there is
by the provisions on no other provision in the FC on the period of
Governed by Title III,
testamentary prescription of the action to revoke a donation
Book III of the NCC.
succession and the proper nuptias. (Sempio-Diy, 2010)
formalities of wills.
(Art. 84(2), FC)
2023 GOLDEN NOTES
II. MARRIAGE
PRESCRIPTIVE
GROUNDS 6. Donation subject to
PERIOD Five (5) years from the
(Art. 86, FC) resolutory condition
(Reckoning Point) happening of the
which was complied
resolutory condition.
1. Marriage is not with.
Five (5) years from the
celebrated.
time the marriage was
not solemnized on the One (1) year from
XPN:
fixed date. (Art. 149, 7. Donee committed an donor’s knowledge of
Those automatically
FC) act of ingratitude. the commission of an
rendered void by law.
act of ingratitude.
Ground
for nullity: Acts of ingratitude
a. 1. Commission of an offense against the person,

Contracted honor or property of the donor, their spouse, or
subsequent their children under their parental authority;
2. marriage
Marriage before 2. Imputation to the donor of any criminal offense
Revoked by operation
is prior or any act involving moral turpitude; and
of law.
judicially marriage
declared has been XPN: If the crime was committed against the
void. judicially donees themselves, their spouse, or their
declared children under their authority.
void.
3. Undue refusal to support the donor when they
b. Any are legally or morally bound to give such
other Five (5) years support. (Art. 765, NCC)
grounds.
Rule regarding donations between spouses
Finality of judicial
during the marriage
declaration of nullity
(if action is to recover
GR: Every donation or grant of gratuitous
3. Marriage took place property).
advantage, direct or indirect, between spouses is
without consent of
considered void. (Art. 87, NCC)
parents or guardian, 5 years from the time
when required by law. the donor came to
XPN: Moderate gifts on the occasion of any family
know that the required
rejoicing.
parental consent was
not obtained.
The aforementioned rules also apply to common-
4. Marriage is annulled law spouses. (Matabuena v. Cervantes, G.R. No. L-
Five (5) years from 28771, 31 Mar. 1971)
and donee acted in bad
finality of decree.
faith.
Other prohibited transactions
Five (5) years from the
5. Upon legal 1. Selling property between spouses; and
time the decree of legal
separation, donee 2. Leasing to each other.
separation has become
being the guilty spouse.
final.
CIVIL LAW
Marriage Settlement Additional requirements for validity of the

Marriage Settlement
It is a contract entered into by a man and a woman
who intend or plan to get married fixing the
FACTUAL ADDITIONAL
property regime that will govern their present and
SITUATION REQUIREMENT
future properties during their marriage. It is also
called as “Ante-nuptial Agreement.” (Sempio-Diy, If the following must be
1995) If one or both of made a party to the
the parties are: marriage settlement,
Requisites of a valid Marriage Settlement otherwise, it is void:
1. In writing; Parents; or those required

18-21 years old
2. Signed by the parties; to give consent
3. Executed before the celebration of marriage; and Sentenced with Guardian appointed by the
4. Registered (to bind third persons). (Art. 77, FC) civil interdiction court
The provisions in the marriage settlement must be Guardian appointed by the

in accordance with law, morals or public policy; Disabled
court
otherwise, such agreement is void. (Paras, 2008)
A marriage settlement need not be notarized. The Modification of the Marriage Settlement (2005
law is clear that the marriage settlements and any BAR)
modification thereof shall be in writing signed by
the parties and executed before the celebration of For any modification to be valid:
the marriage. (Art. 77, FC) The law merely requires
it to be in writing; it does not require that it be in a 1. The requisites for a valid MS must be present;
public instrument for purposes of its validity. 2. There must be judicial approval; and
(Albano, 2013) 3. Subject to the provisions of Arts. 66, 67, 128,
135, and 136 of FC. (Art. 76, FC)
The marriage settlements must be registered in the
proper local civil registry where the marriage Grounds for Revival of Former Property Regime
contract was recorded as well as in the proper
registries of property in order that they may 1. Civil interdiction of the prisoner-spouse
prejudice or bind third persons. (Art. 77, FC) terminates;
2. Absentee spouse reappears;
Under Art. 1328 of the Old Civil Code, a donation
propter nuptias must be made in a public instrument 3. Court authorizes resumption of administration
in which the property donated must be specifically by the spouse formerly exercising such power;
described. In other words, such donation must be in
a public instrument otherwise it is void. (Lorenzo v. 4. Spouse who has abandoned the conjugal home
Eustaquio, G.R. No. 209435, 10 Aug. 2022, as penned returns and resumes common life with the
by J. Hernando). other;
5. Parental authority is judicially restored to the

spouse previously deprived thereof;
6. Reconciliation and resumption of common life

of spouse who had been separated in fact for at
least 1 year; or
2023 GOLDEN NOTES
II. MARRIAGE
7. Spouses agree to revive their former property children and grandchildren asked Maria to
regime. divide the 694 sqm lot into nine equal portions
for distribution to Jose's children and
Grounds for transfer of administration of the grandchildren from his first marriage and Maria
exclusive property of each spouse opposed, insisting that she is the sole owner of
the subject property by virtue of the Kasulatan
When one spouse: ng Pagkakaloob Pala.
1. Is sentenced to a penalty with civil interdiction; Is Maria’s contention correct?

2. Becomes fugitive from justice or is hiding as an
accused in a criminal case; A: NO. Art. 87 of the FC states that every donation or
3. Is judicially declared absent; or grant of gratuitous advantage, direct or indirect,
4. Becomes guardian of another. between the spouses during the marriage shall be
void except moderate gifts which the spouses may
NOTE: Transfer of administration of the exclusive give each other on the occasion of any family
property of either spouse does not confer rejoicing. Based on the foregoing provision,
ownership over the same. (Rodriguez v. De la Cruz, donations between spouses during the marriage are
G.R. No. 3629, 28 Sep. 1907) prohibited.
Q: Jose, who was then married to Josefa, got Jose made in favor of Maria through the Kasulatan
involved in an agricultural tenancy dispute with ng Pagkakaloob Pala prior to his death is null and
his landlord, the Gaspar family. In a DARAB Case, void. Accordingly, Maria cannot claim to be the sole
Jose was granted the right to "peaceful owner of the subject property based on the void
possession of the land cultivated and possessed donation.
by him for the past 18 years." After Jose's wife
died, he courted Maria. On 17 Mar. 2001, Jose As a general rule, ACP shall consist of all the
asked Maria to live with him in a small hut on the properties owned by the spouses at the time of the
land he was cultivating in Barangay Poblacion, celebration of the marriage or acquired thereafter.
Bustos, Bulacan owned by the Gaspar Family. On One of the exceptions is property acquired during
25 Apr. 2002, Jose and Maria got married the marriage by gratuitous title by either spouse,
against the wishes of Jose's children. By then, and the fruits as well as the income thereof, if any,
Jose was 77 years old while Maria was 61 years unless it is expressly provided by the donor, testator
old. or grantor that they shall form part of the
community property. In the present case, since the
The Gaspar family then executed three subject property was acquired by Jose by onerous
documents denominated as “Deed of Donation” title during his marriage to Maria despite being
wherein they gave a total of 6,000 square meters denominated as donation, the subject property was
of rice land allegedly as "Disturbance acquired by way of disturbance compensation.
Compensation of Tenant." Of the 6,000 square Thus, it shall form part of the community property
meters given to Jose, he either sold or donated of Jose and Maria and one-half of the property
segregated portions of the property. On 04 Dec. belongs to Maria. (Santos v. Santos, G.R. No. 250774,
2007, Jose executed a Kasulatan ng Pagkakaloob 16 June 2021)
Pala, gratuitously transferring in favor of Maria
805 sqm. The subject portion was further
subdivided. As a result, the subject property
now has an area of 694 sqm. On 01 June 2010,
Jose died without a will. He was survived by
Maria and five of his children from his first
marriage. After Jose passed away, his surviving
CIVIL LAW
ACP vs. CPG vs. CSOP
ABSOLUTE CONJUGAL ABSOLUTE

COMMUNITY OF PROPERTY PARTNERSHIP OF GAINS SEPARATION OF PROPERTY
(ACP) (CPG) (ASOP)
As to applicability
1. When future spouses adopt

When future spouses:
it in a marriage settlement;
1. Adopt it in a marriage
2. ACP or CPG is dissolved;
settlement; or
1. When the future spouses
adopt it in a marriage 3. Prior marriage is dissolved
2. When spouses:
settlement; or due to death of one spouse,
a. Do not choose any
and surviving spouse failed
economic system
2. If the marriage is celebrated to comply with the
property regime and the
under the NCC or prior to the requirements under Art. 103
marriage took place
effectivity of the FC (03 Aug. (judicial settlement
during the effectivity of
1988) and they have not proceeding of the estate of
the FC (on 03 Aug. 1988
adopted any economic system deceased spouse); or
or after); or
property regime.
4. By judicial order. Judicial
b. Adopted a different
separation of property may
property regime and the
either be voluntary or for
same is void.
sufficient cause.
As to Composition
Each spouse shall own, dispose of,

Each spouse retains his or her
possess, administer and enjoy his
property before the marriage and
All the properties owned by the or her own separate property,
only the fruits and income of such
spouses at the time of marriage whether acquired prior to the
properties become part of the
become community property. marriage or during the marriage,
conjugal properties during the
without need of the consent of the
marriage.
other.
2023 GOLDEN NOTES
II. MARRIAGE
As Effect of Separation in Fact
The separation in fact shall not affect the regime of ACP, but:
1. The spouse who leaves the conjugal home or refuses to live therein, Even though the all the earnings
without just cause, shall not have the right to be supported; and properties remains to each
spouse, both of them shall bear in
2. When consent of one spouse to any transaction of the other is the same proportion to their
required by law, judicial authorization shall be obtained in a income or, as a default, to the
summary proceeding. current market value:
3. In case of insufficiency of community or conjugal partnership 1. The family expenses

property, separate property of both spouses shall be solidarily
liable for the support of the family. Spouse present shall, upon 2. The creditors in connection
proper petition in a summary proceeding, be given judicial with such family expenses,
authority to administer or encumber any specific separate solidary liability.
property of the other spouse and use the fruits or proceeds thereof
to satisfy the latter’s share. (Arts. 100 and 127, FC)
Effect of Dissolution
Upon dissolution of the

Upon dissolution and liquidation
partnership, the separate
of the community property, what
properties of the spouses are
is divided equally between the
returned and only the net profits of --
spouses or their heirs is the net
the partnership are divided
remainder of the properties of the
equally between the spouses of
ACP.
their heirs.
CIVIL LAW
2. VOID DONATIONS BY THE SPOUSES Rationale for the Prohibition
The reasons for the nullity of the said donations are

Donations Between Spouses, Void
threefold:
Every donation or grant of gratuitous advantage,

(a) To protect unsecured creditors from being
direct or indirect, between the spouses during the
defrauded by any or both spouses;
marriage shall be void, except moderate gifts which
the spouses may give each other on the occasion of
(b) To prevent the stronger spouse from
any family rejoicing. The prohibition shall also apply
persuading or imposing upon the weaker
to persons living together as husband and wife
one the transfer of the latter's property to
without a valid marriage. (Art. 87, FC)
the former; and
Donations or gratuitous grants made during the

(c) To prevent the indirect modification of the
marriage between the spouses done directly. (Uy
marriage settlements of the spouses during
Coque v. Navas, G.R. No. 20392, 20 Nov. 1923; Alvarez
the marriage which is prohibited (Art. 76,
v. Espiritu, G.R. No. L-18833, 14 Aug. 1965) or
FC) by the simple expedient of transferring
indirectly through the children or grandchildren of
to the other spouse properties subject of
a spouse by previous marriage (Nazareno v. Birog,
the contract. (Pineda, 2011)
G.R. No. 138842, 18 Oct. 2000) are void. (Pineda,
2011)
Donations Between Common-Law Spouses
Exceptions to the Rule

The proscription applies to donations between
common-law spouses. However, to declare the
1. Moderate gifts which the spouses may give to
donation void, it must be proved that the parties are
each other on occasions of family rejoicing or
having common-law relationship at the time of the
celebration;
donation. (Pineda, 2011, citing Sumbad vs. CA, G.R.
No. 106060, 21 June 1999)
NOTE: What is moderate is relative, as it
depends upon the financial capability and
Rationale for the Extended Application of the
social standing of the donor.
Prohibition
2. Donations mortis causa; and

If the prohibition is not extended to those living in
immoral relationship, they will be in a better
NOTE: will take effect only after the death of
situation than those who are living within valid
the donor, hence after the dissolution of the
marriage. (Matabuena v. Cervantes, G.R. No. L-28771,
marriage.
31 Mar. 1971; Arcaba v. Vda. de Batocael, G.R. No.
146683, 22 Nov. 2001)
3. Donations propter nuptias which are given
before the marriage. (Pineda, 2011)
NOTE: Donation to a paramour is void. But
ownership can be acquired by extraordinary
NOTE: Family distress is not included unlike in
prescription. (Pineda, 2011)
donation of community property for charity and
occasion of family rejoicing or family distress. (Ibid.)
2023 GOLDEN NOTES
II. MARRIAGE
Indirect Donations Husband and Wife Cannot Sell or Lease Property

to Each Other
Indirect Donations fall within the Coverage of the
Prohibition. Under Art. 134 of the NCC, it is provided If spouses cannot donate property to tach other
that donations during the marriage by one of the (except moderate gifts) with more reasons, they
spouses to the children whom the other spouses had cannot sell or lease property to each other.
by another marriage, or to persons of whom the XPNs:
other spouse is a presumptive heir at the time of the
donation are voidable, at the instance of the donor's (a) When separation of property was agreed
heirs after his death. (Pineda, 2011) upon in a marriage settlements; and
NOTE: Although, this article was not reproduced in (b) If there has been a judicial separation of
the FC, the aforementioned situations remain their property under Art. 135 of the FC.
covered within the broader concept of "indirect (Pineda, 2011; Art. 135, FC; Arts. 1490 &
donations" prohibited under Art. 87 of the Code. 1646, NCC).
Any person now, even a non-relative, may fall
within the parameters of indirect donation if they Common-law Spouses Cannot also Sell
are used merely as dummies or alter-egos of the Properties to One Another
donee-spouse. (Ibid.)
Art. 1490 prohibits spouses from selling properties
It has been held that a donation to the children of to one another. The reason for the prohibition is
the donee-spouse had by previous marriage or to similar to the prohibition in donation of properties
the grandchildren to whom the donee-spouse is a between spouses (Art. 87, FC). This prohibition is
presumptive heir is prohibited. (Nazareno v. Birog, made applicable to common-law spouses,
G.R. No. 138842, 18 Oct. 2000) Such is voidable under otherwise, they will be placed in a better position
Art. 134 of the NCC, but now void under Art. 87 of than those who are legally married. A sale made to a
the Family Code being an indirect donation. (Ibid.) concubine is contrary to morals and public policy.
(Calimlim-Canullas v. Fortun, G.R. No. L-57499, 22
Persons Who Can Assail the Donation June 1984)
While donations made between spouses are void, if 3. ABSOLUTE COMMUNITY OF PROPERTY
not moderate, only those who are prejudiced at the REGIME
time of the transfer of the property can legally assail
the same. (Ibid.)
Absolute Community of Property (ACP)
Illustration: An insurance company which was
A property regime wherein the spouses are
sued for collection of insurance indemnity by the car
considered co-owners of all property brought into
owner (Mrs. Harding) was not allowed to attack the
the marriage, as well as those acquired during the
validity of the donation of the car to her by the
marriage, which are not otherwise excluded from
husband, in its bid to avoid payment of an insurance
the community either by the provisions of the FC or
indemnity after the car got destroyed by fire. The
by the marriage settlement. (Rabuya, 2009)
defense that the wife had no insurable interest on
the car anchored on the claim that the donation
Laws that govern the ACP
made by the husband is void was not considered, as
the insurance company is not a proper property to
1. Family Code; and
question the donation. (Ibid., citing Harding v.
2. Civil Code provisions on co-ownership.
Commercial Union Assurance Company, G.R. No. L-
12707, 10 Aug. 1918)
CIVIL LAW
Properties included in the absolute community or encumbrance null and void, including the portion
of the conjugal property pertaining to the husband
1. All the property owned by the spouses: who contracted the sale. Neither would the conjugal
a. At the time of the celebration of the partnership be liable for the loan on the ground that
marriage; or it redounded to the benefit of the family.
b. Acquired thereafter; (Homeowners Savings & Loan Bank v. Dailo, G.R. No.
153802, 11 Mar. 2005)
2. Property acquired during the marriage by
gratuitous title, if expressly made to form part A wife, by affixing her signature to a deed of sale on
of the community property by the donor, the space provided for witnesses, is deemed to have
testator or grantor; or given her implied consent to the contract of sale.
The consent need not always be explicit or set forth
3. Jewelry or properties with monetary value; and in any particular document so long as it is shown by
acts of the wife that such consent or approval was in
4. Winnings in gambling. fact given. (Pelayo v. Perez, G.R. No. 141323, 08 June
2005)
Properties excluded in the Absolute Community
When the sale was entered into prior to the
1. Property acquired during the marriage by effectivity of the FC, Art. 173 of the FC, in relation to
gratuitous title and its fruits as well as income Art. 166 of the NCC, will apply if there was a finding
thereof, unless the grantor expressly provides of lack of the wife's consent. Under said provisions,
that they shall form part of the community the sale would have been merely voidable, and not
property; void.
2. Property for personal and exclusive use of The use of the Jurat, instead of an acknowledgment,
either spouse does not elevate the marital consent into the level of
a public document but instead consigns it to the
NOTE: However, jewelry shall form part of the status of a private writing. Hence, the presumption
ACP because of their monetary value; of regularity does not apply, and the wife still needs
to prove its genuineness and authenticity as
3. Property acquired before the marriage by one required under the rules of evidence. The fact that
with legitimate descendants by former the document contains a jurat, and not an
marriage and its fruits and income, if any; and acknowledgment, should not affect its genuineness
or that of the related document of conveyance itself,
4. Those excluded by the marriage settlement. the Deed of Absolute Sale. In this instance, a jurat
(Art. 92, FC) suffices as the document only embodies the
manifestation of the spouse's consent, a mere
Presumption of inclusion in the Absolute appendage to the main document. (Pan Pacific
Community Industrial Sales Co., Inc. v. CA, G.R. No. 125283, 20 Feb.
2006)
In the absence of evidence, property acquired
during the marriage is presumed to belong to the Q: Lot No. 2836 was previously owned by the two
community, unless proven otherwise by strong and sons of Ramon Bonifacio,i.e., Luis Bonifacio, and
convincing evidence. (Art. 93, FC) Isidro Bonifacio. These two sons sold part of
their interest to the City of Zamboanga and
The sale or encumbrance of a conjugal property retained about 7,991 sq.m. as co-owners.
requires the consent of both the husband and wife. Petitioner Cueno is the daughter of Luis and
(Guiang v. CA, G.R. No. 125172, 26 June 1998) The Juana. In 1961, petitioners bought the pro
absence of the consent of one renders the entire sale indiviso share of Isidro in the subject property
2023 GOLDEN NOTES
II. MARRIAGE
(first sale). Pursuant to said sale, a TCT was may compel her to grant the same. (Sps. Cueno v. Sps.
issued in the names of Luis and Eulalio. Prior to Bautista, G.R. No. 246445, 02 Mar. 2021)
the issuance of TCT, Eulalio supposedly sold his
and Flora's share of the lot to the latter's father, Charges upon the ACP
Luis, without Flora's consent (second sale).
Thereafter, TCT was issued solely in the name of 1. The support of:
Luis, married to Juana. In a Deed of Absolute Sale a. The spouses;
(third sale), Luis allegedly sold the property to b. Their common children;
herein respondents. Hence, another TCT was c. Legitimate children of either spouse;
registered in the name of Spouses Bautista.
Thereafter, it appears that respondents took NOTE: Support of illegitimate children of either
possession of the property and built spouse is chargeable to exclusive property of the
improvements on the same. Much later, illegitimate parent. (Art. 197, FC)
respondents donated the subject property to
their four children and TCTs were issued in the XPN: Support of illegitimate children of either
latter's names. Allegedly deprived of their share spouse is chargeable to community in case of
in the property through fraud, petitioners filed absence or insufficiency of the exclusive property of
a complaint for recovery of shares and the debtor-spouse which shall be considered
participation in the subject property, recovery advances to be deducted from the share of the
of possession, declaration of nullity of the debtor-spouse upon liquidation of the community.
second sale and donation, and cancellation of (Art. 94(9), FC)
the TCTs issued in the names of the Bautista
children. Should the petitioner’s complaint be 2. All debts and obligations contracted during
dismissed? the marriage by:
A: NO. It bears emphasis that under Art. 1413 of the a. the designated administrator-spouse for the
Spanish Civil Code, the wife's consent was not benefit of the community;
required for the sale of conjugal property as the b. by both spouses; and
husband's right to administer and dispose of the c. by one spouse with the consent of the other;
same was considered "full, absolute and complete."
On the other hand, Arts. 96 and 124 of the FC 3. Debts and obligations contracted by either
unequivocally state that a disposition of community spouse without the consent of the other to the
or conjugal property without the consent of the extent that the family may have been
other spouse is void but shall constitute a benefited;
continuing offer on the part of the consenting
spouse and the third person and may be perfected a. All taxes, liens, charges and expenses,
as a binding contract upon the acceptance by the including major or minor repairs, upon the
other spouse or authorization by the court before community property;
the offer is withdrawn by either or both offerors.
b. All taxes and expenses for mere preservation
Under our present Code, all dispositions, made during marriage upon the separate
alienations, or encumbrances of conjugal real property of either spouse used by the family;
property acquired after the effectivity of the NCC
needs the consent of the wife. Also, all donations of c. Expenses to enable either spouse to
real or personal property require the consent of the commence or complete a professional or
wife except those to the common children for vocational course, or other activity for self-
securing their future or finishing a career, and improvement;
moderate donations for charity. But should the wife
refuse unreasonably to give her consent, the court
CIVIL LAW
d. Ante-nuptial debts of either spouse insofar as A: NO. Ante-nuptial debts of either spouse shall be
they have redounded to the benefit of the considered as the liability of the ACP insofar as they
family; (2007 BAR) have redounded to the benefit of the family.
NOTE: For ante-nuptial debts, those There is no presumption that the obligations
contracted by one spouse without the incurred by one of the spouses during the marriage
consent of the other during the marriage and are charged against their community of property.
those contracted by the administrator- Before any obligation may be chargeable against the
spouse, the burden of proof that such debts community of property, it must first be established
were contracted for the benefit of the that such obligation is among the charges against
community or of the family lies with the the same. (Wong v. IAC, G.R. No. 70082, 19 Aug. 1991)
creditor-party litigant claiming as much.
(Rabuya, 2009) Insufficiency of the community property to
cover liabilities
4. The value of what is donated or promised by
both spouses in favor of their common GR: The spouses shall be solidarily liable for the
legitimate children for the exclusive purpose of unpaid balance with their separate properties.
commencing or completing a professional or
vocational course or other activity for self- XPN: Those falling under of Art. 94(9) of the FC
improvement; (Ante-nuptial debts, support of illegitimate
children, liabilities incurred by spouse by reason of
5. Payment, in case of absence or insufficiency of a crime or quasi-delict) – in which case the exclusive
the exclusive property of the debtor-spouse, of: property of the spouse who incurred such debts will
be liable. However, if the exclusive property is
a. Ante-nuptial debts of either spouse which insufficient, payment will be considered as
did not redound to the benefit of the family; advances to be deducted from share of debtor-
b. The support of illegitimate children of either spouse. (Art. 94(9), FC)
spouse; and
c. Liabilities incurred by either spouse by Administration of Community Property
reason of a crime or quasi-delict;
GR: The administration of community property
NOTE: The payment of which shall be belongs to both spouses jointly.
considered as advances to be deducted from the
share of the debtor-spouse upon liquidation of XPN:
the community. 1. Agreement that only one of the spouses shall
administer the community property;
6. Expenses of litigation between the spouses.
However, if the suit is found to be groundless, it 2. If one spouse is incapacitated or otherwise
cannot be charged against the ACP. (Art. 94, FC) unable to participate in the administration of
the common properties – capacitated or able
Q: An individual, while single, purchases a house spouse may assume sole powers of
and lot in 1990 and borrows money in 1992 to administration without the need of court
repair it. In 1995, such individual is married approval or authorization;
while the debt is still being paid. After the
marriage, is the debt still the responsibility of 3. If a spouse without just cause abandons the
such individual? (2007 BAR) other or fails to comply with his or her
obligations to the family, the aggrieved spouse
may petition the court for sole administration;
2023 GOLDEN NOTES
II. MARRIAGE
4. During the pendency of the legal separation The absence of consent of one of the spouses
case, the court may designate either of the renders the entire sale null and void, including the
spouses as sole administrator. sale of the portion of the conjugal property
pertaining to the spouse who contracted the sale.
NOTE: But such powers do not include: The consent of one spouse regarding the disposition
does not always have to be explicit or set forth in
1. Disposition; any particular document, so long as it is shown by
2. Alienation; or acts of the said spouse that such consent or approval
3. Encumbrance of the conjugal or community was indeed given. (Sps. Cirelos v. Sps. Hernandez, et
property. al. G.R. No. 146523, 15 June 2006) However, even if
the other spouse actively participated in negotiating
“Court authorization” in the sale of conjugal for the sale of the property, that other spouse's
properties written consent to the sale is required by law for its
validity. Being aware of a transaction is not consent.
Court authorization is resorted to in cases where (Jader-Manalo v. Camaisa, G.R. No. 147978, 23 Jan.
the spouse who does not give consent is 2002)
incapacitated. If there is no showing that the spouse
is incapacitated, court authorization cannot be Q: Marco and Gina were married in 1989. In
sought. (Manalo v. Fernandez, G.R. No. 147928, 23 1999, Gina left Marco and lived with another
Jan. 2002) man, leaving the two children of school age with
Marco. When Marco needed money for their
Disagreement in the administration of children’s education, he sold a parcel of land
community property registered in his name, without Gina’s consent,
which he purchased before his marriage. Is the
In case of disagreement, the decision of the husband sale by Marco valid, void, or voidable? Explain
shall prevail but subject to recourse to the court by with legal basis. (2015 BAR)
the wife for proper remedy. (Art. 96, FC)
A: VOID. The parties were married in 1989. In the
NOTE: Prescriptive period for recourse is within 5 absence of a marriage settlement, the parties shall
years from the date of the contract implementing be governed by ACP whereby all the properties
such decision. owned by the spouses at the time of the celebration
of the marriage as well as whatever they may
Sale or Disposition of Community Property acquire during the marriage shall form part of the
absolute community. In ACP, neither spouse can sell
Alienation or encumbrance of community property or encumber property belonging to the ACP without
must have the written consent of the other spouse the consent of the other. Any sale or encumbrance
or the authority of the court without which the made by one spouse without the consent of the
disposition or encumbrance is void. However, the other shall be void although it is considered as a
transaction shall be construed as a continuing offer continuing offer on the part of the consenting
on the part of the consenting spouse and the third spouse upon authority of the court or written
person, and may be perfected as a binding contract consent of the other spouse.
upon the acceptance by the other spouse or
authorization by the court before the offer is Q: Does the prohibition cited above include
withdrawn by either or both offerors. (Arts. 96 and lease by the husband over properties of the
124, FC; Sps. Guiang v. CA, G.R. No. 125172, 26 June community of property without the consent of
1998) the wife?
CIVIL LAW
A: YES. In the contract of lease, the lessor absolute community. (Art. 101, FC)
transferred his right of use in favor of the lessee. The
lessor's right of use is impaired therein. He may Presumption of Abandonment
even be ejected by the lessee if the lessor uses the
leased realty. Therefore, the lease is a burden on the A spouse is deemed to have abandoned the other
land. It is an encumbrance on the land. Moreover, when he or she has left the conjugal dwelling
lease is not only an encumbrance but also a qualified without intention of returning. The spouse who has
alienation, with the lessee becoming, for all intents left the conjugal dwelling for a period of 3 months
and purposes, and subject to its terms, the owner of or has failed within the same period to give any
the thing affected by the lease. (Roxas v. CA, G.R. No. information as to his or her whereabouts shall be
92245, 26 June 1991) prima facie presumed to have no intention of
returning to the conjugal dwelling. (Pineda, 2008)
Donation of a community property by a spouse
The presumption is rebuttable by the presentation
GR: A spouse cannot donate any community of clear, strong, and convincing evidence that the
property without the consent of the other. absent spouse did not intend to leave the present
spouse and family. (Pineda, 2008)
XPN: Moderate donations for charity or on occasion
of family rejoicing or distress. (Art. 98, FC) Prohibition against the sale of property between
spouses
Separation in fact between husband and wife
GR: Spouses cannot sell property to each other.
GR: Such separation does not affect the regime of
absolute community. (Art. 100, FC) XPNs:
1. When a separation of property was agreed
XPNs: upon in the marriage settlement;
1. Spouse who leaves the conjugal home or 2. When there has been a judicial separation of
refuses to live therein without just cause has no property under Arts. 135 and 136 of the FC.
right to be supported; (Art. 1490, NCC)
2. When consent of one spouse to any transaction NOTE: The proscription against the sale of property
of the other spouse is required by law, judicial between spouses under Art. 1490 of the NCC applies
authorization must be obtained; even to common law relationships. In an earlier
ruling, the Supreme Court nullified a sale made by a
3. If community property is insufficient, the husband in favor of a concubine, after he had
separate property of both spouses shall be abandoned his family and left the conjugal home
solidarily liable for the support of the family. where his wife and children lived, and from whence
(Ibid.) they derived their support, for being contrary to
morals and public policy. The sale was regarded by
Abandonment (1999, 2003 BAR) the court as subversive of the stability of the family,
a basic social institution which public policy
If a spouse without just cause abandons the other or cherishes and protects. (Ching v. CA, G.R. No. 165879,
fails to comply with his or her obligations to the 10 Nov. 2006)
family, the aggrieved spouse may petition the court
for:
1. Receivership;
2. Judicial separation of property;
3. Authority to be the sole administrator of the
2023 GOLDEN NOTES
II. MARRIAGE
Dissolution of ACP (2009 BAR) 3. Delivery to each spouse of their remaining

exclusive properties;
ACP is terminated by: (Art. 99, FC)
4. Equal division of net community assets unless
1. Death of either spouse; there is:
NOTE: If the surviving spouse contracts a. An agreement for a different

another marriage without compliance with the proportion; or
foregoing requirement, a mandatory regime of b. A voluntary waiver of such share;
complete separation shall govern the property
relations of the subsequent marriage. 5. Delivery of the presumptive legitimes of the
common children; and
Upon lapse of the one-year period and
liquidation is made, any disposition or 6. Adjudication of conjugal dwelling and custody
encumbrance involving the community of common children. (Art. 102, FC)
property of the terminated marriage shall be
void. (Art. 103, FC) “Net Assets” vs. “Net Profits”
The reason for the law is to protect the 1. Net assets

children's interest in the first marriage. (Albano, The net assets constitute the net remainder of
2013) the community or conjugal property after
payment of debts and obligations of the
2. Legal separation; community or conjugal property. (Pineda, 2011,
3. Annulment; Arts. 102(2) & Art. 129(7), FC)
4. When the marriage is declared void under Art.
40 of the FC; or GR: Net assets are required to be divided
5. Judicial separation of property during marriage. equally between spouses
(Art. 99, FC)
XPN:
NOTE: The ACP or the CPG is considered dissolved 1. If proportion or division was agreed upon
only upon the issuance of the judicial decree of in the marriage settlement; or
separation, not at the moment when the parties
enter into a compromise agreement in the course of 2. There is voluntary waiver.
the proceedings for separation of property. (Albano,
2013) 2. Net profits
Procedure in case of dissolution of ACP It constitutes the “increase in value between the
market value of the community property at the
1. Inventory of all properties of the ACP, listing time of the celebration of the marriage and the
separately the communal properties from market value at the time of dissolution.”
exclusive properties of each spouse; (Pineda, 2011)
2. Payment of community debts; NOTE: debts and obligations must have been
paid first and that there is still a remainder
NOTE: First, pay out of the community assets. If before any net profits could be considered.
not enough, husband and the wife are solidarily (Ibid.)
liable for the unpaid balance with their separate
properties.
CIVIL LAW
Formula: marriage shall be governed, mandatorily, by a

regime of complete separation of property.
Net Assets - Fair market value at time of (Rabuya, 2006)
marriage = Net Profits
4. CONJUGAL PARTNERSHIP OF GAINS REGIME
NOTE: in ACP, only the net profits are declared
forfeited to the guilty spouse (Arts. 43(2) and
Conjugal Partnership Gains (CPG)
63(2), FC)
It is the property relation formed by the husband

Forfeiture of Net Profits in Legal and Illicit
and the wife by placing in a common fund:
Relationships
1. The proceeds, product, fruits and income of

Arts. 43(2) and 63(2) of the FC speak of forfeiture of
their separate properties;
shares of spouses in the net profits, and not of the
capital of either spouse.
2. Those acquired by either or both of them
through:
Arts. 147 and 148 (unions without marriage) of the
FC mention also of forfeitures when a partner acted
a. Effort – an activity or undertaking which
in bad faith. What is to be forfeited however is not
may or may not be rewarded;
net profits because there is no conjugal partnership
b. Chance – activities like gambling or betting.
or community property in such unions. What is
(Art. 106, FC)
forfeitable is the share of the errant partner in the
co-ownership.
Commencement of CPG
Applicable procedure in the dissolution of the
CPG shall commence at the precise moment when
ACP in case the marriage is terminated by death
the marriage ceremony is celebrated.
Community property shall be liquidated in the same
Law that governs the conjugal partnership
proceeding for the settlement of the estate of the
deceased.
The rules on the contract of partnership in all that is
not in conflict with what is expressly determined in
If no judicial proceeding is instituted, the surviving
the FC and by the spouses in their marriage
spouse shall, judicially or extra-judicially, liquidate
settlements. (Art. 108, FC)
the community property within 1 year from the
death of the deceased spouse. (Art. 103, FC)
Only inchoate right over conjugal property
Consequences of failure to liquidate within 1
The interest of the spouses in the conjugal
year
properties is only inchoate or a mere expectancy
and does not ripen into title until it appears the
1. Failure to liquidate the community property
dissolution and liquidation of the partnership that
within 1 year from the death of the deceased
there are net assets. (Sempio-Diy, 1995)
spouse contrary to Art. 103 of the FC, would
render any disposition or encumbrance
Q: Melinda is the widow of Jose. In 18 Dec. 1984,
involving community property of the
they acquired a 310-square meter lot.
terminated marriage void.
Subsequently, a TCT was issued to “Jose,
married to Melinda,” covering the disputed
2. If the surviving spouse contracts a subsequent
property. Melinda discovered that the TCT had
marriage without compliance with the
long been canceled through a string of
foregoing requirements, the subsequent
2023 GOLDEN NOTES
II. MARRIAGE
transactions, and that the property was necessary to effect a valid sale since the subject
registered under the name of Sps. Montano. The property was the sole property of Juan and the
Court found that since Jose acquired the gift by spouses had long been separated from bed and
gratuitous title during marriage, the property board. Are the petitioners correct?
was excluded from the conjugal partnership of
gains. As it was his exclusive property, Jose can A: NO. Art. 105 of the FC provides that the
dispose it without Melinda's consent. Is the provisions of CPG, shall also apply to CPG already
property in dispute a conjugal property? established before the effectivity of the FC, without
prejudice to vested rights already acquired in
A: YES, it is a conjugal property. The circumstances accordance with the NCC or other laws. Based on the
here transpired prior to the effectivity of the FC on stipulations of the parties, the subject property was
03 Aug. 1988. Thus, petitioner and Jose's marriage acquired in 1965 while Michael and Esther were
and property relations are governed by the NCC. married, and it was registered in the name of
Michael married to Esther.
Under the NCC, property acquired during marriage
is presumed to be conjugal. What must be In 1965, the prevailing property regime between
established is that the property was acquired during husband and wife was the CPG. There being no
marriage. Only through “clear, categorical, and evidence to the contrary, the property regime
convincing” proof to the contrary will it be between Juan and Juliana was the CPG. A rebuttable
considered the paraphernal property of one of the presumption is established in Art. 116 of the FC, and
spouses. (Malabanan v. Malabanan, Jr., G. R. No. the party who invokes that presumption must first
187225, 06 Mar. 2019) establish that the property was acquired during the
marriage because the proof of acquisition during
Q: Elio and Oliver, respondents, are the heirs of the marriage is a condition sine qua non for the
their deceased parents – Michael and Esther. operation of the presumption in favor of the
The TCT of the subject property shows Michael conjugal partnership. It is not necessary to prove
as the registered owner thereof since 14 Jan. that the property was acquired with conjugal funds
1965, with the certificate of title likewise and the presumption still applies even when the
carried the inscription of his marriage to Esther. manner in which the property was acquired does
According to respondents, the subject property not appear. Once the condition sine qua non is
is under the possession of petitioners by mere established, then the presumption that all
tolerance of their parents. However, when they properties acquired during the marriage, whether
demanded for the surrender of the same, the acquisition appears to have been made,
petitioners refused, which led to the filing of a contracted or registered in the name of one spouse
case for Recovery of Possession and Title against or both spouses, are conjugal, remains until the
them. In their Answer, Petitioners claimed right contrary is proved.
of ownership over the subject property by virtue
of an alleged Deed of Absolute Sale executed by Given the very stipulations and TCT No. 56899,
Michael during his lifetime. On account of such respondents had laid the predicate for the
claim of ownership, the MCTC dismissed the said presumption under Art. 116 to be invoked.
case. Unfortunately, petitioners' evidence that TCT No.
56899 was registered in the name of Juan married
Later on, respondents filed the Complaint before to Juliana and the sale from the previous owner,
the RTC, this time for Annulment of Document, Valete, to Juan only mentioned Juan as the buyer, fell
claiming that the Deed of Absolute Sale allegedly short to overcome the presumption. Since
executed by their father in their favor is void petitioners have not presented evidence that the
since there is no consent given by their mother, subject property was exclusive property of Juan, its
Esther, to the alleged sale. Petitioners also alienation to them required the consent of Juliana to
claimed that the consent of Juliana was not
CIVIL LAW
be valid. (Sps. Anastacio, Sr v. Heirs of. Coloma, G.R. NOTE: In right of redemption, for it to form part
No. 224572, 27 Aug. 2020, J. Caguioa) of the exclusive property of the spouse, the
ownership over such property must still pertain
Exclusive Property of the spouses to the said spouse.
1. Those brought into the marriage as his/her 4. That purchased with exclusive money of
own; either spouse. (Art. 109, FC)
a. A property purchased before the marriage NOTE: The controlling factor is the source of
and fully paid during the marriage remains the money used, or the money promised to be
to be a separate property of either spouse; paid.
(Lorenzo v. Nicolas, G.R. No. L-4085, 30 July
1952) Alienation of exclusive properties of either
spouse
b. Fruits and income of said properties shall
be included in the conjugal partnership; Either spouse may mortgage, encumber, alienate or
and otherwise dispose of his or her exclusive property.
(Art. 111, FC as amended by R.A. No. 10572)
c. Those included therein in the marriage
settlement, subject to the 1/5 limitation Rules in cases of improvement of exclusive
under Art. 84 and the rule in Art. 92(3) of property
the FC which apply by analogy.
1. Reverse accession – If the cost of the
2. Those acquired during the marriage by improvement and the value of the improvement
gratuitous title; is more than the value of the principal property
at the time of the improvement, the entire
a. Pensions will not form part of the conjugal property becomes conjugal.
partnership of gains when it is given to him
voluntarily and he is not entitled as a NOTE: For reverse accession to apply, the
matter of right such as a fruit of industry or separate property must be owned by a spouse
labor; exclusively at the time of the introduction of the
improvement.
b. Proceeds of life insurance policy will not
form part of the conjugal partnership of 2. Accession – If the cost of the improvement and
gains when the beneficiary of the life the value of the improvement is equal to or less
insurance is the estate, and the premiums than the value of the principal property, the
are sourced from the separate property of entire property becomes the exclusive property
the spouse; and of the respective spouse. (Art. 120, FC)
c. Retirement benefits will not form part of NOTE: In either case, there shall be reimbursement
the conjugal partnership of gains when it is upon the liquidation of the CPG, and ownership of
given to him voluntarily, and he is not entire property shall be vested only upon
entitled as a matter of right to such as a fruit reimbursement.
of industry or labor.
Q: A parcel of land is owned by the father of W.
3. Those acquired by right of redemption, With his permission, H and W constructed their
barter or exchange with exclusive property; house over the said parcel of land. After some
time, the father of W died, leaving W as his sole
heir. Who now owns the parcel of land and the
2023 GOLDEN NOTES
II. MARRIAGE
improvements introduced by the H and W? 4. Debts contracted during the marriage by the
Assume that the property regime of the H and W administrator-spouse which does not benefit
is conjugal partnership of gains. the community;
A: W. The wife will now own both the parcel of land 5. Debts contracted during the marriage without
and the house introduced by H and W. Reverse the consent of the other which did not benefit
accession under Art. 120 of the FC will not apply the family;
since at the time of the introduction of the
improvement, the parcel of land is owned by the 6. Ante-nuptial debts by either spouse which did
father of W which she inherited it when her father not benefit the family;
died. What will apply here instead is the ordinary 7. Taxes incurred on the separate property which
rule of accession. However, the CPG will still enjoy is not used by the family; and
the said property as a usufructuary and W will be
the naked owner thereof. 8. Expenses incurred during the marriage on a
separate property if the property is not used by
Q: A, prior to his death, sold his lot. There were the family and not for its preservation.
improvements made on the said lot which was
paid out of the conjugal funds of A and B. When Composition of CPG (1995, 1998, 2004, 2005,
A died, using Art. 120 of the FC to support her 2008 BAR) (Art. 117, FC)
claim, B sought reimbursement of her half of the
sale from C, the buyer of the property. Will the 1. Those acquired by onerous title during the
petition of B prosper? marriage with conjugal funds;
A: NO. The SC ruled that Art. 120 does not give any Requisites:
cause of action on the part of B to claim from C, the a. Acquisition is made during the
subsequent buyer of the property of A, the deceased marriage,
husband. Art. 120 of the FC only allows claims from b. Through onerous title,
the husband if the latter is still the owner of the lot c. At the expense of common fund;
upon liquidation. (Ferrer v.s Ferrer, G.R. No. 166496,
09 Nov. 2006) 2. Livestock in excess of what was brought to the
marriage;
Presumption of inclusion of property in the
Conjugal Partnership of Gains 3. Those acquired by chance such as winnings
from gambling or betting;
GR: All property acquired during the marriage,
whether the acquisition appears to have been made, 4. Those obtained from labor, industry, work or
contracted or registered in the name of one or both profession of either or both spouses;
spouses, is presumed to be conjugal.
5. Fruits of conjugal property due or received
XPN: Unless the contrary is proved. during the marriage and net fruits of separate
property;
Obligations Chargeable to Separate Property
NOTE: Net fruits refer to the remainder of the
1. Support of illegitimate children; fruits after deducting the amount necessary to
2. Liabilities incurred by reason of a crime or cover the expenses of administration of said
quasi-delict; exclusive property.
3. Expenses of litigation between the spouses if
found to be groundless; 6. Share of either spouse in hidden treasure; and
CIVIL LAW
7. Those acquired through occupation such as the exclusive funds of said spouse. (Sps. Go v.
hunting or fishing. (Art. 117, FC) Yamane, G.R. No. 160762, 03 May. 2006)
Property Bought Through Installment Q: Dolores seeks to recover a parcel of land,

alleging that she and her husband acquired such
Requisites: during their marriage, that it formed part of
their conjugal properties, and that he sold it
1. Property is bought on installment prior to the without her consent. She presents their
marriage; and marriage contract and the initial tax declaration
2. Paid partly from exclusive funds and partly over the property as pieces of evidence. Will her
from conjugal funds. (Art. 118, FC) action prosper?
Rules in determining ownership A: Recovery is not warranted because rule is all

properties of the marriage are presumed to be
1. If full ownership was vested before the conjugal in nature. However, for this presumption
marriage – it shall belong to the buyer spouse; to apply, the party who invokes it must first prove
that it was acquired during the marriage. Here,
2. If full ownership was vested during the Dolores' evidence consisted of her marriage
marriage – it shall belong to the conjugal contract and the initial tax declaration over the
partnership; property. She did not identify when she and her
husband first occupied and possessed the land.
NOTE: In either case, any amount advanced by
the partnership or by either or both spouses Neither did she present any witness to prove that
shall be reimbursed by the owner/s upon they first occupied the property during their
liquidation of the partnership. marriage and that they both worked on the land.
(Pintiano-Anno v. Anno, G.R. No. 163743, 27 Jan.
Q: Yamane asserts that the parcel of land, which 2006)
was purchased at auction, belonged to the
conjugal partnership of him and his late wife. In The presumption of conjugality of the properties of
the title, his name appeared to be merely the husband and wife applies only when there is
descriptive of the civil status of the registered proof that the property was acquired during the
owner, his late wife. The purchase took place marriage. If there is no showing as to when the
prior to the advent of the Family Code. Is the properties alleged to be conjugal were acquired, the
property conjugal or paraphernal property of presumption does not apply (Francisco v. CA, G.R.
his late wife? No. 102330, 30 Nov. 1998). Proof of acquisition
during the coverture is a condition sine qua non to
A: CONJUGAL. In this case, the provisions of the NCC the operation of the presumption in favor of the
would apply since the property was purchased conjugal partnership. (Pintiano-Anno, v. Anno, et al.,
before the FC took effect. Under Art. 160 of the NCC, G.R. No. 163743, 27 Jan. 2006)
all properties of the marriage are presumed to
belong to the conjugal partnership, unless it be Effect if properties were registered during the
proved that it pertains exclusively to the husband or marriage
the wife. In this case, there was no proof that the
property had been acquired exclusively by The fact that the properties were registered in the
Yamane's late wife. The mere registration of a name of the spouses is no proof that the properties
property in the name of one spouse does not destroy were acquired during the marriage. It is well-settled
its conjugal nature in the absence of strong, clear, that the registration does not confer title but merely
and convincing evidence that it was acquired using confirms one already existing. (Jocson v. CA, G.R. No.
L-55322, 16 Feb. 1989)
2023 GOLDEN NOTES
II. MARRIAGE
Q: H & W got married on October 1926. H 4. Taxes, liens, charges, expenses, including
subsequently cohabited with X. During the major or minor repairs upon conjugal
cohabitation of H with X, H acquired certain property;
properties and places his status as single. What
is the nature of said properties? 5. Taxes and expenses for mere preservation
made during the marriage of separate
A: They are conjugal properties. Whether a property property;
is conjugal is determined by law and not by the will
of one of the spouses. No unilateral declaration by 6. Expenses for professional, vocational or self-
one spouse can change the character of conjugal improvement courses of either spouse;
property. The clear intent of H in placing his status
as single is to exclude W from her lawful share in the 7. Ante-nuptial debts to the extent the family has
conjugal property. The law does not allow this. The been benefited;
cohabitation of a spouse with another person, even
for a long period, does not sever the tie of a 8. Value of what is donated or promised to
subsisting previous marriage. common legitimate children for professional,
vocation or self- improvement courses; and
H and X’s cohabitation cannot work to the detriment
of W as the legal spouse. The marriage of H and W 9. Expenses of litigation between the spouses
continued to exist although H was already living unless the suit is found to be groundless. (Art.
with X. Hence, all property acquired from the date of 121, FC)
their marriage until the death of W are presumed
conjugal. It was neither claimed nor proved that any NOTE: If the conjugal partnership is insufficient to
of the subject properties was acquired outside or cover the foregoing liabilities, spouses shall be
beyond this period. (Villanueva v. CA, G.R. No. solidarily liable for the unpaid balance with their
143286, 14 Apr. 2004) separate properties.
Q: Suppose a property was acquired by one Charges against the Separate Property that may
spouse while they were living separately, is this be charged upon the CPG (2000, 2005 BAR)
property conjugal or not?
Requisites:
A: It is presumed to be conjugal. All property
acquired during the marriage regardless of whether 1. All the responsibilities of the partnership have
the spouses are living together or not, are presumed already been covered; and
to be conjugal property. (Flores v. Escudero, G.R. No.
L-5302, 11 Mar. 1953) 2. The spouse who is bound has no exclusive
properties or the same are insufficient.
Charges upon and obligations of the CPG
Charges:
1. Support of the spouses, their common children
and the legitimate children of either spouse; 1. Personal debts of either spouse contracted
before the marriage which did not redound to
2. Debts and obligation by one without the the benefit of the family;
consent of the other to the extent of the family
benefited; 2. Support of the illegitimate children of either
spouse; and
3. Debts and obligations contracted during the
marriage by an administrator-spouse, both 3. Fines and indemnities arising from delicts and
spouses or one with the consent of the other; quasi-delicts.
CIVIL LAW
If levy was made on the conjugal property by reason

Expenses of litigation between spouses, unless
of the husband being a guarantor, the levy is
the suit is found to be groundless.
improper. The payment of personal debts
contracted by the husband or the wife before or
For illegitimate
during the marriage shall not be charged to the For illegitimate
children, support from
conjugal partnership except as they redounded to children, support
separate property of
the benefit of the family. (Art. 122, FC) chargeable from
person obliged to give
separate property of
support. In case of
ACP vs. CPG as to charges person obliged to give
insufficiency or
support. In case of
absence of separate
ACP CPG insufficiency or
property, CP shall
Art. 94, FC Art. 121, FC absence of separate
advance support,
property, ACP shall
Support of the spouses, their common children, chargeable to share of
advance support,
and legitimate children of either spouse. parent upon
chargeable to share of
liquidation, but only
parent upon
Debts and obligations contracted during after obligations in Art.
liquidation. (Art. 94(9),
marriage: 121 have been
FC)
covered. (Art. 121, FC)
a. By the administrator spouse designated in 1. Ante-nuptial
the marriage settlement/appointed by debts are
court/one assuming sole administration; chargeable to
ACP if they
b. By one without the consent of the other; redounded to
the benefit of
c. By one with the consent of other; or family.
d. By both spouses. 2. Personal debts

not redounding
NOTE: For (a) and (b), creditor has the burden to benefit of the For ante-nuptial debts,
of proving benefit to the family and ACP/CPG family such as same as ACP but in case
chargeable to the extent of benefit proven,; liabilities of insufficiency of
otherwise, chargeable to the separate property incurred by the separate property,
of the obligor spouse. reason of crime obligations
or quasi-delict enumerated in Art. 121
For (c) and (d), real benefit to family is presumed. are chargeable must first be satisfied
to the separate before such debts may
All taxes, liens, charges and expenses including property of the be chargeable to the
minor repairs upon ACP or CPG. debtor spouse. CPG.
Expenses to enable either spouse to 3. In case of

commence/complete a professional, vocational insufficiency of
or other activity for self-improvement. separate
property,
Value donated or promised by both spouses in
chargeable to
favor of common legitimate children for exclusive
ACP but
purpose of commencing or completing
considered
professional or vocational course or other
advances
activity for self-improvement.
deductible from
2023 GOLDEN NOTES
II. MARRIAGE
the share of the 2. Can the conjugal partnership be held liable

debtor-spouse for the loan contracted unilaterally by Lilia?
upon
liquidation. A: YES. They are jointly and solidarily liable with
each other with their separate properties if their
Q: If one of the spouses committed the crime of conjugal partnership is insufficient to fully pay for
slander and was held liable for damages in a the loan. What the lower courts declared void was
damage suit, is it chargeable against the the real estate mortgage attached to the conjugal
conjugal partnership? property of the Sps. Reyes. Since the real estate
mortgage was an encumbrance attached to a
A: NO. Unlike in the system of absolute community conjugal property without the consent of the other
where liabilities incurred by either spouse by spouse, it is void and legally inexistent. Although
reason of a crime or quasi-delict is chargeable to the petitioner cannot foreclose the mortgage over the
absolute community of property, in the absence or conjugal property in question, it can still recover the
insufficiency of the exclusive property of the debtor- loan amount from the conjugal partnership. (PNB v.
spouse, the same advantage is not accorded in the Reyes, JR., G.R. No. 212483, 05 Oct. 2016)
system of conjugal partnership of gains. To
reiterate, conjugal property cannot be held liable for Administration of the CPG
the personal obligation contracted by one spouse,
unless some advantage or benefit is shown to have GR: The right to administer the conjugal
accrued to the conjugal partnership. (Go v. Yamane, partnership belongs to both spouses jointly.
G.R. No. 160762, 03 May 2006) (Art.124, FC)
Q: Venancio is married to Lilia since 1973. XPN:

During their union, they acquired three (3)
parcels of land in Malolos, Bulacan. The 1. If one spouse is incapacitated or otherwise
properties were mortgaged to Philippine unable to participate in the administration of
National Bank on 25 Aug. 1994 to secure a loan the common properties – capacitated or able
worth P1,100,000.00, and was increased to spouse may assume sole powers of
P3,000,000.00. According to PNB, the spouses administration;.
duly consented with the loan. When the Reyes
Sps. Reyes failed to pay the loan obligations, 2. If a spouse without just cause abandons the
Philippine National Bank foreclosed the other or fails to comply with his or her
mortgaged real properties. The auction sale obligations to the family, the aggrieved spouse
happened and PNB emerged as the highest may petition the court for sole administration;.
bidder and a certificate of sale was issued in its
favor. Venancio claimed that his wife undertook 3. During the pendency of a legal separation case,
the loan and the mortgage without his consent the court may designate either of the spouse as
and his signature was falsified on the sole administrator.
promissory notes and the mortgage.
But such powers do not include:
1. What is the status of the real estate 1. Disposition;
mortgage? 2. Alienation; or
3. Encumbrance of the conjugal or community
A: The real estate mortgage over a conjugal property.
property is void if the non-contracting spouse did
not give consent. Any disposition or encumbrance of
a conjugal property by one spouse must be
consented to by the other; otherwise, it is void.
CIVIL LAW
NOTE: The sale of conjugal property without the Liquidation of community property if the
consent of the husband is void. If one spouse is termination of the marriage is by death
incapacitated or otherwise unable to assume sole
powers of administration of the conjugal properties, Upon termination of marriage by death, the
the other spouse may assume sole powers of community property shall be liquidated in the same
administration. These powers do not include proceeding for the settlement of the estate of the
disposition or encumbrance without authority or deceased spouse. (Art. 130, FC)
written consent of the other spouse. (Aggabao v.
Parulan, G.R. No. 165803, 01 Sept. 2010) Support to the surviving spouse and to the
children during liquidation
Disagreement in the administration of the CPG
The support to be given to the surviving spouse and
In case of disagreement, the decision of the husband to the children during liquidation shall come from
shall prevail subject to recourse to the court by the the common mass of property and shall be
wife for proper remedy. particularly charged against the fruits, rents or
income pertaining to their shares to the inventoried
NOTE: Prescriptive period for recourse is 5 years property. But where the support given exceeds the
from the date of the contract implementing such fruits, rents or income pertaining to their shares, the
decision. (2000, 2002 BAR) excess shall be deducted from their respective
shares as these are deemed advances from the
Dissolution of CPG inventoried property. (Art. 133, FC)
Conjugal partnership is terminated by: Liquidation of Community Property in the

1. Death of either spouse; Absence of a Judicial Settlement Proceeding
2. Legal separation;
3. Annulment or Declaration of Nullity; or In the absence of a judicial settlement proceeding,
4. Judicial separation of property during marriage. the surviving spouse shall liquidate the community
(Art. 126, FC) property either, judicially or extra-judicially within
1 year from the death of the deceased spouse. (Art.
Procedure in case of dissolution of CPG 130, FC)
1. Inventory of all the properties; NOTE: The system of complete separation of

2. Restitution of advances made to each of the property will govern the property relations
spouses; between the spouses only in the following cases:
3. Reimbursement for use of exclusive funds;
4. Debts and obligations of the CP are paid; 1. When it is expressly provided for in the
5. Delivery of exclusive properties; marriage settlement.;
6. Payment of losses and deterioration of
movables belonging to each of the spouses, 2. When it is so decreed by a competent court;.
unless the owner had been indemnified from
whatever source; 3. Mandatory regime of complete separation of
7. Division of the net conjugal partnership; property; and
8. Delivery of the common children’s presumptive
legitimes; and 4. By failure of the surviving spouse to liquidate
9. Adjudication of conjugal dwelling and custody the ACP or CPG of a previous marriage which
of common children. (Art. 129, FC) has been terminated by death within the 1-year
period required by law prior to contracting
another marriage, the subsequent marriage is
mandatorily governed by a regime of complete
2023 GOLDEN NOTES
II. MARRIAGE
separation. Given that complete separation of property

governed the subsequent marriage of Teodulo and
If during the liquidation of the CPG, the conjugal Perla, his undivided share or interest in the subject
partnership assets are less than the conjugal property belonged to him and remained with him as
partnership liabilities, the surviving spouse and the his separate property when he married Perla. Thus,
children shall not be entitled to support. he could have disposed of this without need of
consent from Perla. (Heirs of Caburnay v. Heirs of
Effects if the community property is not Sison, G.R. No. 230934, 02 Dec. 2020)
liquidated
Q: Is this right of disposition by the surviving
1. Any disposition or encumbrance made by the spouse under Art. 145 of the FC, which is
surviving spouse involving community consistent with Article 493 of the Civil Code
property of the terminated marriage shall be insofar as the right of alienation by a co-owner
void; and of his or her interest or share in the co-
ownership is concerned, abrogated by the
2. Should the surviving spouse contract a provision of Art. 130 of the FC which provides
subsequent marriage, a mandatory regime of that “any disposition or encumbrance involving
complete separation of property shall govern the conjugal partnership property of the
the property relations of the subsequent terminated marriage shall be void” if no
marriage. (Art. 130, FC) liquidation of the terminated marriage property
is made upon the lapse of one year from the
Q: Teodulo married twice and has children from death of the deceased spouse?
the first marriage. After the death of his first
wife Perpetua and whole married to his second A: While there appears to be a seeming conflict in
wife Perla, Teodulo entered into a contract the cited provisions of the Family Code and the Civil
wherein he sold property acquired in his first Code, the provisions are not irreconcilable. The
marriage to Apolinario without the consent of disposition or encumbrance is valid only to the
his second wife. Needless to say, the children extent of the share or interest of the surviving
from the first marriage did not also consent. Was spouse in the terminated marriage property, and
the consent of Perla, Teodulo's second wife, cannot in any way bind the shares or interests
necessary for the validity of the sale of the therein of the other heirs of the deceased spouse.
subject property by Teodulo to Apolinario? (Ibid.)
A: Art. 130(3) of the FC provides that a mandatory 5. SEPARATION OF PROPERTY REGIME

regime of complete separation of property shall
govern the property relations of the subsequent
Instances when Separation of Property is
marriage should the surviving spouse contract a
Allowed (Art. 134, FC)
subsequent marriage without liquidating the
conjugal partnership property. When a complete or
1. By agreement through marriage settlement;
total separation of property governs the property
and
relations, no portion of the properties of the
2. By judicial order.
marriage will be common, and the fruits of the
properties of either spouse, as well as his or her
Rules governing the Regime of Separation of
earnings from any profession, work or industry, will
Property
belong to him or her as exclusive property.
1. Marriage settlement; and

2. Family Code in supplemental character. (Art.
149, FC)
CIVIL LAW
Kinds of Separation of Property separation of property for a sufficient cause may be

allowed so long as there is a new ground to rely on.
1. As to extent:
a. Total; The procedure of the revival of previous property
b. Partial – In this case, the property not regime is the same as those followed upon
agreed upon as separate shall pertain to the reconciliation of the spouses after the finality of
absolute community. (Art. 144, FC) legal separation.
2. As to kinds of property: Transfer of Administration of Exclusive

a. Present property; Property to another Spouse during the Marriage
b. Future property; and
c. Both present and future property. (Art. 144, 1. By agreement;
FC)
Requisites:
Rights of the Spouses under the Regime of a. By means of a public instrument;
Separation of Property b. To be recorded in the registry of property
of the place where the property is located.
1. Each spouse shall own, dispose of, administer,
possess, and enjoy his or her own separate 2. By order of the court upon petition.
property, without need of the consent of the
other. Based on these grounds:
a. Other spouse becomes the guardian of the
2. Each spouse shall own all earnings from his or other;
her profession, business or industry and all
fruits, natural, industrial or civil, due or b. The other spouse is judicially declared an
received during the marriage from his or her absentee;
separate property. (Art. 145, FC)
c. Other spouse is sentenced to a penalty
Liabilities of the Spouses for Family Expenses which carries with it civil interdiction; or
under the Regime of Separation of Property
d. Other spouse becomes fugitive from justice
GR: Both spouses shall bear the family expenses in or hiding as an accused in a criminal case.
proportion to their income. (Art. 146, FC) (Art. 142, FC)
XPN: In case of insufficiency or default thereof, to NOTE: For as long as it is proven that said property
the current market value of their separate was acquired during marriage, the presumption of
properties. (Ibid.) conjugality will attach regardless in whose name the
property is registered.
Revival of Previous Property Regime
The presumption is not rebutted by the mere fact
If the spouses opted for voluntary separation of that the certificate of title of the property or the tax
property, the parties may agree to the revival even declaration is in the name of one of the spouses.
in the absence of a reason/ground. However, a (Villanueva v. CA, G.R. No. 143286, 14 Apr. 2004)
subsequent voluntary separation of property is no
longer allowed.
If the separation of property is for a sufficient cause,

the revival of the previous property regime depends
upon the cessation of the ground which was the
basis of the judicial order. A subsequent judicial
2023 GOLDEN NOTES
II. MARRIAGE
Property Regime in case the Marriage is A: I will grant the partial reconsideration. If the
Declared Null and Void on the Ground of marriage is declared void under Art. 36, the
Psychological Incapacity provisions of the FC on liquidation, partition and
distribution of the properties on ACP or CPG will not
The property relation between the parties is apply but rather Art. 147 or Art. 148 depending on
governed by Art. 147 of the FC. Property acquired the presence or absence of the legal impediment
by both spouses through their work and industry between them.
shall be governed by the rules on equal co-
ownership. Any property acquired during the union Art. 50 of the FC, and Sec. 19 of the Rules on
is prima facie presumed to have been obtained Declaration of Nullity applies only to marriages
through their joint efforts. which are declared void ab initio or annulled by final
judgment under Art. 40 and 45 of the FC. Art. 50
A party who did not participate in the acquisition of does not apply to marriages which are declared void
the property shall still be considered as having ab initio under Art. 36 which should be declared
contributed thereto jointly if said party's "efforts void without waiting for the liquidation of the
consisted in the care and maintenance of the family properties of the parties. (Dino v. Dino, G.R. No.
household." Unlike the conjugal partnership of 178044, 19 Jan. 2011)
gains, the fruits of the couple's separate property
are not included in the co-ownership. 6. PROPERTY REGIME OF UNIONS WITHOUT
MARRIAGE
Q: Miko and Dinah started to live together as
Co-ownership under Art. 147
marriage in 1984. Ten years after, they
separated. In 1996, they decided to live together
When a man and a woman who are capacitated to
again, and in 1998, they got married. On 17 Feb.
marry each other, live exclusively with each other as
2001, Dinah filed a complaint for declaration of
husband and wife without the benefit of marriage or
nullity of her marriage with Miko on the ground
under a void marriage, their wages and salaries
of psychological incapacity. The Court rendered
shall be owned by them in equal shares and the
the following decision:
property acquired by both of them through their
work or industry shall be governed by the rules of
1. Declaring the marriage null and void;
co-ownership.
2. Dissolving the regime of Absolute
In the absence of proof to the contrary, properties
Community of Property; and
acquired while they lived together shall be
presumed to have been obtained by their joint
3. Declaring that a decree of absolute
efforts, worker industry, and shall be owned by
nullity of marriage shall only be issued
them in equal shares. A party who did not
after liquidation, partition, and
participate in the acquisition by the other party of
distribution of the parties’ properties
any property shall be deemed to have contributed
under Art. 147.
jointly to the acquisition thereof if the former's
efforts consisted in the care and maintenance of the
Dinah filed a Motion for Partial Reconsideration
family and of the household.
questioning the portion of the decision on the
issuance of a decree of nullity of marriage only
after the liquidation, partition and distribution
of properties under Art. 147. If you are the judge,
how will you decide the petitioner’s Motion?
Why? (2014 BAR)
CIVIL LAW
Requisites for Art. 147 to Operate marriage license. They can repeat the whole
process of getting married. (Ibid.)
The man and the woman:
Q: Can the spouses, whose marriage has been
(1) Must be capacitated to marry each other; declared null and void, donate their share in the
property acquired during cohabitation, without
(2) Live exclusively with each other as husband the consent of the other?
and wife; and
A: NO. It is true that Art. 147 provides that the
(3) Their union is without the benefit of property acquired during the cohabitation shall be
marriage or their marriage is void. (Pineda, governed by the rules on co-ownership, and
2011, citing Mercado-Fehr vs. Fehr, G.R. No. pursuant to Art. 493 of NCC in a co-ownership:
152716, 23 Oct. 2003) "Each co-owner shall have the full ownership of his
part and of the fruits and benefits pertaining
NOTE: Art. 147 is not applicable to a situation thereto, and he may therefore alienate, assign or
where the cohabitation is adulterous or amounts to mortgage it, and even substitute another person in
concubinage but rather Art. 148 is applicable. its enjoyment, except when personal rights are
(Pineda, 2011) involved; but the effect of the alienation or the
mortgage, with respect to the co-owners, shall be
Cohabitation limited to the portion which may be allotted to him
in the division upon the termination of the co-
It means more than sexual intercourse, especially ownership."
when one of the parties is already old and may no
longer be interested in sex. (Ibid.) However, Art. 493 of the NCC must yield to Art. 147
of the FC, which expressly mandates that: "Neither
Cohabitation is the public assumption by a man and party can encumber or dispose by acts inter vivos of
a woman of the marital relation, and dwelling his or her share in the property acquired during
together as man and wife, thereby holding cohabitation and owned in common, without the
themselves out to the public as such. Secret consent of the other, until after the termination of
meetings or nights clandestinely spent together, their cohabitation."
even if often repeated, do not constitute such kind
of cohabitation. (Pineda, 2011, citing Arcaba v. Vda. Given the above express prohibition of a party to the
de Batocael, G.R. No. 146683, 22 Nov. 2001) cohabitation to encumber or alienate by acts inter
vivos, even his or her share in the property acquired
Situations Covered Under Art. 147 of the FC during the cohabitation and owned in common,
without the consent of the other party until after the
1. Common-law or live-in relationships; and termination thereof under Art. 147, then the
donation of any property acquired during the
NOTE: it is required that the parties be cohabitation by one party without the consent of the
capacitated to marry each other and are other can only be but void. The rules on ordinary co-
living exclusively with each other as husband ownership cannot apply to vest validity on the
and wife. What is missing only is marriage. undivided share of the disposing party. The
(Pineda, 2011) donation is simply void. (Perez v. Perez-Senerpida,
G.R. No. 233365, 24 Mar. 2021)
2. Relationships under a void marriage. (Ibid.)
NOTE: the spouses are married to one

another, but the marriage is void due to
reasons like absence of the required
2023 GOLDEN NOTES
II. MARRIAGE
Exclusive Properties in Unions Without shares. A party who did not participate in the
Marriage acquisition of the property shall be deemed to have
contributed in the acquisition thereof, if the efforts
Although the FC does not expressly provide for contributed consisted in the care and maintenance
exclusive properties of the partners, by implication, of the family and household. (Pineda, 2011)
the following shall be considered exclusive
properties: Prohibition to Dispose by Acts Inter Vivos
1. Property acquired by either partner A party cannot, without the consent of the other
through his or her own sole work or dispose of or encumber by acts inter vivos his or her
industry without any contribution by the share in the property acquired during the
other partner whether by way of care and cohabitation and which is owned in common until
maintenance of the family and household the termination of the cohabitation. However,
or through any actual work or industry; disposition can be made by acts mortis causa such
as through a will. (Pineda, 2011)
2. The fruits or income of the said property;
(Valdez v. RTC of QC, G.R. No. 122749, 31 July Forfeiture of Share
1996)
Forfeiture applies only where the parties are
3. Property acquired by exclusive funds or by married to each other, but their marriage is void.
exchange with a partner's separate The one who acted in bad faith shall forfeit his or her
property; share in favor of the following in the order
mentioned:
4. Property acquired by gratuitous title such
as by inheritance and donation; and (a) Common children;
(b) Surviving descendants in case of default of
5. Property brought to the union. (Pineda, or waiver by any or all of the common
2011) children or their descendants;
(c) Innocent party, in the absence of
Wages or Salaries of Either or Both Partners, descendants.
Equal Shares
In all these instances, the forfeiture shall take place
If only one partner happens to be working and only upon termination of the cohabitation. (Pineda,
receiving salary or wages the non-working partner 2011)
shall share one-half thereof. This is a realistic
expression of the principle of mutual help and NOTE: if parties acted in bad faith in entering into
support that exists between husband and wife. (Art. the marriage, such as when both were below 18
68) Such sharing will strengthen their relationship years and they knew of it, no forfeiture will apply.
and may pave the way for the legalization of their (Ibid.)
union through marriage when legally feasible.
(Pineda, 2011) Co-ownership under Art. 148
Presumption if there is no proof that property is Co-ownership may ensue in case of cohabitation
acquired by only one of them where, for instance, one party has a pre-existing
valid marriage, provided that the parties prove their
In the absence of any proof to the contrary, actual joint contribution of money, property or
properties acquired during their cohabitation shall industry and only to the extent of their
be presumed to have been obtained by their joint proportionate interest thereon. (Francisco v. Master
efforts, work or industry and shall be owned is equal
CIVIL LAW
Iron Works Construction Corp., G.R. No. 151967, 16 No Provision on Wages and Salaries
Feb. 2005)
There is no provision concerning wages and salaries
Situations Covered Under Art. 148 of the FC of the parties unlike in Art. 147. The reason for this
is that the parties or one of them is legally married
Art. 148 applies to cases of cohabitation not falling to another, in which case, his or her wages or
under Art. 147, such as the following: salaries form part of the conjugal or community
property with his or her lawful spouse. (Pineda,
1. Man with two or more common-law 2011)
spouses;
2. Married man living with a concubine; XPNs: The only exceptions would be when they are:
3. Married woman living with a paramour; or
4. Persons living in bigamous or polygamous (a) legally separated (for then the conjugal or
relationships. (Pineda, 2011) community property is dissolved); or
(b) they are governed by a regime of absolute
Presumption of Equal Sharing, Not Applicable separation of property. (Ibid.)
Properties acquired through their actual Liability of the Parties for Expenses.
contribution of money, property or industry shall
become their common property in proportion to Both Arts. 147 and 148 are silent on the liability of
their respective contributions. The fact of the parties for expenses. To achieve legal
contribution must be proved. (Pineda, 2011, citing consistency, since wages and salaries in Art. 147 are
Agapay v. Palang, G.R. No. 116668, 28 July 1997) owned in common and to be divided equally upon
dissolution of the union, it is submitted that
Partition when Marriage is Nullified expenses should be shouldered on a fifty-fifty basis,
unless otherwise agreed upon. But liability for
If the basis of the nullification of the marriage is its expenses incurred in the preservation of their
being bigamous or polygamous not falling under common property should be proportionate to their
Art. 41, the properties of the partners shall be respective actual contributions, governed as they
partitioned under Art. 148. (Pineda, 2011, citing are by co-ownership rules. (Pineda, 2011)
Saguid vs. CA, G.R. No. 150611, 10 June 2003)
Anent Art. 148, unless otherwise agreed upon, the
NOTE: The void marriage contemplated under Art. liability for expenses should be on proportionate
147 excludes bigamous or polygamous marriages. basis, depending upon the earnings of each,
considering that it is more equitable that they own
Effect When both Partners are in Bad Faith their salaries and wages exclusively. Expenses for
the preservation of common properties shall also be
If both partners are in bad faith, the same rules on proportionate to their respective contributions. In
forfeiture shall apply in the following order: the absence of proof to the contrary, the expenses
should be shouldered equally. (Ibid.)
(a) common children;
(b) in their absence; or in case of waiver, Retroactive application of Art. 148 of the Family
(c) surviving descendants. Code
NOTE: The principle that when both parties are in Although the adulterous co-habitation of the parties
bad faith, they are considered in good faith, is not or the acquisition of the property occurred before
applicable. the effectivity of the FC on 03 Aug. 1998, Art. 148
applies because the said provision was intended
precisely to fill up the hiatus in Art. 144 of the NCC.
2023 GOLDEN NOTES
II. MARRIAGE
Before Art. 148 of the FC was enacted, there was no A: NO. Art. 147 of the FC cannot apply to Bert and
provision governing property relations of couples Joe because the law only applies to a man and a
living in a state of adultery or concubinage. (Atienza woman who are capacitated to marry each other
v. De Castro, G.R. No. 169698, 29 Nov. 2006) who live together as husband and wife without the
benefit of marriage or under a void marriage. In the
Q: Romeo and Juliet lived together as husband case of Bert and Joe, they are both men, so the law
and wife without the benefit of marriage. During does not apply.
their cohabitation, they acquired a house. When
they broke up, they executed an agreement b. If Bert and Joe had decided in the early
where he agreed to leave the house provided years of their cohabitation to jointly
Juliet will pay his entire share in their adopt the boy, would they have been
properties. She failed to do so but she also legally allowed to do so? Explain with
ignored his demand for her to vacate. Romeo legal basis.
sued her for ejectment which the court granted.
Was the court correct in granting the same? A: NO. Joint adoption is allowed between husband
and wife, even if Bert and Joe are cohabiting with
A: NO. Under Art. 147 of the FC, the property is co- each other, they are not vested with the right to
owned by the parties. In the absence of proof to the jointly adopt under the FC or even under the
contrary, any property acquired by common-law Domestic Adoption Act. (Sec. 7, R.A. No. 8552)
spouses during their cohabitation is presumed to
have been obtained thru their joint efforts and is Q: Benjamin is married to Azucena. While
owned by them in equal shares. Their property Azucena is out of country, Benjamin developed a
relationship in such a case is essentially governed romantic relationship with Sally, but her father
by the rules on co-ownership. Thus, Romeo cannot was against this. In order to appease her father,
seek the ejectment of Juliet therefrom. As a co- Sally convinced Benjamin to sign a purported
owner, she is as much entitled to enjoy its marriage contract. Eventually, their
possession and ownership as him. (Abing v. CA, G.R. relationship ended a few years later. Benjamin
No. 146294, 31 July 2006) asked the court for the partition of the
properties he acquired with Sally in accordance
Q: Bert and Joe, both male and single, lived with Art. 148 of the FC, for his appointment as
together as common-law spouses and agreed to administrator of the properties during the
raise a son of Bert’s living brother as their child pendency of the case. Among the 44 properties
without legally adopting him. Bert worked while which were the subject of the partition, 7 were
Joe took care of their home and the boy. In their enumerated by Benjamin while Sally named 37
20 years of cohabitation, they were able to properties in her answer. Is Benjamin’s
acquire real estate assets registered in their contention correct?
names as co-owners. Unfortunately, Bert died of
cardiac arrest, leaving no will. Bert was survived A: YES. The property relations of Benjamin and Sally
by his biological siblings, Joe and the boy. are governed by Art. 148 of the FC. They cohabitated
without the benefit of marriage. Thus, only the
a. Can Art. 147 on co-ownership apply to properties acquired by them through their actual
Bert and Joe, whereby all properties joint contribution of money, property, or industry
they acquired will be presumed to have shall be owned by them in common in proportion to
been acquired by their joint industry their respective contributions. Thus, the 37
and shall be owned by them in equal properties being claimed by Sally is excluded as part
shares? of her conjugal properties with Benjamin because
Sally was not legally married to Benjamin. As
regards the seven remaining properties, only one of
them is registered in the names of the parties as
CIVIL LAW
spouses. The other four were registered in the name Effects of Judicial Separation of Property
of either one of them with the description “married between Spouses
to” and the last two were named to Sally as an
individual. The words “married to” preceding the 1. The ACP or CPG is dissolved;
name of a spouse are merely descriptive of the civil
status of the registered owner, which do not prove 2. The liability of the spouses to creditors shall be
co-ownership. Without proof of actual contribution solidary with their separate properties;
from either or both spouses, there can be no co-
ownership under Art. 148 of the FC. (Go-Bangayan 3. Mutual obligation to support each other
v. Bangayan, Jr., G.R. No. 201061, 03 July 2013) continues except when there is legal
separation; and
7. JUDICIAL SEPARATION OF PROPERTY
4. Rights previously acquired by creditors are not
prejudiced.
Sufficient causes for Judicial Separation of
Property
In case of voluntary agreement for the separation of
property, the law does not require specific reasons
1. Civil interdiction of the spouse of petitioner;
to justify the Court in approving the same. The law
2. Judicial declaration of absence;
leaves the matter to the discretion of the court.
3. Loss of parental authority as decreed by the
(Sempio-Diy, 1995) (2005 BAR)
court;
4. Abandonment or failure to comply with family
obligation; (2003 BAR)
5. Administrator spouse has abused authority;

and
NOTE: In case such spouse abuses his or her

powers of administration, judicial separation of
property may be availed of by the aggrieved
spouse to avoid further depletion of his or her
interest in the properties. (Sta. Maria, 2019)
6. Separation in fact for one year, and

reconciliation is highly improbable. (Art. 135,
FC)
NOTE: In cases provided in 1, 2 and 3, the

presentation of the final judgment against the guilty
or absent spouse shall be enough bases for the grant
of the decree of judicial separation of propertyhjhh.
2023 GOLDEN NOTES
II. MARRIAGE
Co-Ownership Under Art. 147 vs. Art. 148 (1992, 1997, 1998, 2000, 2006, 2009, 2010 BAR)
ART.147 ART.148
(1997, 2000, 2006, 2009, 2010 BAR) (1992, 1998, 2000, 2006, 2009 BAR)
As to the applicability
With legal impediment caused by:
1. Parties without legal impediment to

1. Adulterous relationships;
marry;
2. Bigamous/polygamous marriages;
2. Void marriage on the ground of
3. Incestuous void marriages under Art.37;
psychological incapacity.
4. Void marriages by reason of public policy.
(Art. 38, FC)
As to the requisites
1. The man and the woman must be

capacitated to marry each other; 1. The man and the woman must be
incapacitated to marry each other, or they
2. live exclusively with each other as do not live exclusively with each other as
husband and wife; and husband and wife; and
3. their union is without the benefit of 2. Their union is without the benefit of
marriage or their marriage is void. marriage or their marriage is void. (Art. 148,
(Mercado-Fehr v. Fehr, G.R. No. 152716, FC)
23 Oct. 2003)
As to the salaries & wages
Separately owned by the parties. If any is married,

Owned in equal shares his/her salary pertains to the CPG of the legitimate
marriage.
As to the property exclusively acquired
Belongs to party upon proof of acquisition

Belongs to such party.
through exclusive funds.
As to the property acquired by both through their work or industry
Owned in common in proportion to their respective

Governed by rules of co-ownership.
contributions.
CIVIL LAW
As to the presumption if joint acquisition
Property acquired while living together

No presumption of joint acquisition.
presumed obtained by their joint efforts, work or
industry and owned by them in equal shares.
Actual joint contribution of money, property or
industry shall be owned by them in common
If one party did not participate in acquisition:
proportion.
presumed to have contributed through care and
maintenance of family and household.
However, their contributions are presumed equal, in
(Buenaventura v. CA, G.R. No. 127358, 31 Mar.
the absence of proof to the contrary.
2005)
As to forfeiture
When only one of the parties to a void marriage

is in good faith, the share of the party in bad faith
in the co-ownership shall be forfeited in favor of:
If one of the parties is validly married to another,

1. their common children;
his/her share in the co-ownership shall accrue to the
ACP or CPG existing in the marriage.
2. in case of default of/or waiver by any or
all of the common children or their
If the party who acted in BF is not validly married to
descendants, each vacant share shall
another or if both parties are in BF, such share be
belong to the respective surviving
forfeited in a manner provided in the last par. of Art.
descendants;
147
3. In the absence of descendants, such

shares shall belong to the innocent
party.
As to proof of actual contribution
Not necessary Necessary
2023 GOLDEN NOTES
II. MARRIAGE
NOTE: Even if not all forms of extra-marital

I. THE FAMILY relations are punishable under penal law, the
sanctity of marriage is constitutionally recognized
and likewise affirmed by our statutes as a special
contract of permanent union. Accordingly, the Court
1. GENERAL PRINCIPLES has had little qualms with penalizing judicial
employees for their dalliances with married
Being the foundation of the nation, it is a basic social persons or for their own betrayals of the marital
institution which public policy cherishes and vow of fidelity. (Concerned Employee v. Glenda
protects. (Art. 149, FC) Mayor, A.M. No. P- 02-1564, 23 Nov. 2004)
Family Relations include: Requisites Before a Suit between Members of

the Same Family may Prosper
1. Between husband and wife;
2. Between parents and children; 1. Earnest efforts toward a compromise have been
3. Among other ascendants and descendants; made;
4. Among brothers and sisters, whether of the full
or half-blood. (FC, Art. 150) 2. Such efforts failed;
A suit between a brother-in-law and a sister-in-law 3. The fact that earnest efforts toward a
is not within the coverage of the law, hence, the compromise have been made but the same have
failure of the plaintiff to allege earnest efforts to failed appears in the verified complaint or
effect a compromise is not necessary. The petition. (FC, Art. 151)
relationship is based on consanguinity, except that
of the husband and wife. (Gayon v. Gayon, G.R. No. L- This rule shall not apply to cases which may not be
28394, 26 Nov. 1970) subject of compromise under the Art. 2035 of the
NCC.
The enumeration of brothers and sisters as
members of the same family does not comprehend Q: Jose alleged that he and his family have been
brothers- or sisters- in-law. (Guerero v. RTC, G.R. No. occupying two (2) parcels of land, which was
109068, January 10, 1994) then offered to sell to Jose the subject lands
which Jose accepted. However, Consuelo
Rules to remember decided to "cancel" their agreement. In
response, Jose expressed his disapproval to
1. Family relations exists even if they are not Consuelo's plan and demanded that
living together. respondents proceed with the sale, which the
latter ignored. Upon learning of such sale, Jose
2. Illegitimate children are not included in the sent a demand letter to Rene asserting his right
family relations under this Article because they to the subject lands. As his demands went
have their own families. unheeded, Jose brought the matter to the
barangay upon for conciliation proceedings
3. Adopted children are included. (Minutes of between him and Rene. When it reached the CA
Committee Meeting of 24 Aug. 1985) such Court moto proprio dismissed the case on
the ground that they failed to apply Art. 151. Can
Rules Governing Family Relations the CA motu proprio dismiss such case?
Family relations are governed by law. No custom,

practice or agreement destructive of the family shall
be recognized or given effect. (FC, Art. 149)
CIVIL LAW
A: NO. Non-compliance with the earnest effort

requirement under Art. 151 of the FC is not a J. FAMILY HOME
jurisdictional defect which would authorize the
courts to dismiss suits filed before them motu
proprio. Rather, it merely partakes of a condition
precedent such that the non-compliance therewith 1. GENERAL PRINCIPLES
constitutes a ground for dismissal of a suit should
the same be invoked by the opposing party at the Family Home (FH)
earliest opportunity, as in a motion to dismiss or in
the answer. Otherwise, such ground is deemed It is the dwelling house where the husband and wife
waived. and their family reside, and the land on which it is
situated. It is constituted jointly by the husband and
If the respondents as parties-defendants could not, the wife or by an unmarried head of a family. (Art.
and did not, after filing their answer-to-petitioner’s 152, FC)
complainant, invoke the objection of absence of the
required allegation on earnest efforts at a A house built on a rented land cannot be made a
compromise, the appellate court unquestionably family home because the house and the lot must be
did not have any authority or basis to motu propio owned by the person who constitutes it. It is in the
order the dismissal of petitioner’s complaint. nature of the family home to be permanent. If built
(Moreno vs. Kahn, G.R. No. 217744, 30 July 2018) on a rented land, there is no element of permanence
as the owner of the lot may evict the family when the
The following cannot be compromised: lease period has terminated or for possible non-
payment of rentals. (Pineda, 2011)
1. Civil status of persons;
2. Validity of a marriage or legal separation; Constitution of Family Home
3. Any ground for legal separation;
4. Future support; The FH is deemed constituted on a house and lot
5. Jurisdiction of courts; and from the time it is occupied as a family residence.
6. Future legitime. (NCC, Art. 2035) (Art. 153, FC)
NOTE: A sister-in-law or a brother-in-law is not NOTE: The family home cannot be constituted upon
covered by these two provisions. Being an exception premises permanently used for business purposes.
to the general rule, Art. 150 of the Family Code must Thus, if the property is utilized primarily for
be strictly construed. (Gayon v. Gayon, G.R. No. L- business as a merchandise store or as a hotel for the
28394, 26 Nov. 1970) public, it cannot be regarded as a family home even
if the family stays there for the purpose of attending
to the business. (Pineda, 2011)
Guidelines in the Constitution of the Family

Home
1. FH is deemed constituted from the time of

actual occupation as a family residence;
2. Only 1 FH may be constituted;
3. Must be owned by the person constituting it;
4. Must be permanent;
5. Same rule applies to both valid and voidable
marriages and even to common-law spouses;
(Arts. 147 and 148, FC) and
2023 GOLDEN NOTES
II. MARRIAGE
6. It continues despite death of one, either Q: On 30 Mar. 2000, Mariano died intestate and
spouses, or an unmarried head of the family for was survived by his wife, Leonora and children,
10 years or as long as there is a minor Danilo and Carlito. One of the properties he left
beneficiary. (Art. 159, FC) was a piece of land in Alabang where he built his
residential house. After his burial, Leonora and
The heirs cannot partition the same unless the court Mariano’s children extra-judicially settled his
finds compelling reasons therefor. This rule shall estate. Thereafter, Leonora and Danilo advised
apply regardless of whoever owns the property or Carlito of their intention to partition the
constituted the FH. (Ibid.) property. Carlito opposed invoking Art. 159 of
the FC. Carlito alleged that since his minor child
The FH must be part of the properties of the Lucas still resides in the premises, the family
absolute community or the conjugal partnership or home continues until the minor beneficiary
the exclusive properties of either spouse, with the becomes of age. Is the contention of Carlito
latter’s consent. It may also be constituted by an tenable? (2014 BAR)
unmarried head of a family on his or her own
property. (Art. 156, FC) A: NO. To qualify as beneficiary of the FH, the person
must be among those mentioned under Art. 154 of
NOTE: Property that is subject of a conditional sale the FC, he/she must be actually living in the FH and
on installments where ownership is reserved by the must be dependent for legal support upon the head
vendor only to guarantee payment of the purchase of the family. (Patricio v. Darion, G.R. No. 170829, 20
price may be constituted as a FH. Nov. 2006) While Lucas satisfies the first and second
requisites, he cannot, however, directly claim legal
Beneficiaries of a Family Home support from his grandmother, Leonora because the
person primarily obliged to give him support is his
1. Husband and wife; or father Carlito. Thus, the partition may be
2. Unmarried head of the family; successfully claimed by Leonora and Danilo.
3. Parents (may include parents-in-law) ;
4. Ascendants; Occupancy of the FH either by the owner thereof or
5. Descendants; by “any of its beneficiaries” must be actual. That
6. Brothers and sisters (legitimate or illegitimate) which is “actual” is something real, or actually
living in the FH and dependent on the head of existing, as opposed to something merely possible,
the family for legal support. (Art. 154, FC) or to something which is presumptive and
constructive. Actual occupancy, however, need not
NOTE: Beneficiaries are the people who are most be by the owner of the house. Rather, the property
likely to be affected by the constitution of the family may be occupied by the “beneficiaries” enumerated
home and its disposition. (Sta. Maria, 2009) Thus, in by Art. 154 of the FC. (Manacop v. CA, G.R. No. 97898,
case the family home has to be sold by the owner, he 11 Aug. 1997)
or she has to obtain the consent, among others, of a
majority of the beneficiaries of legal age. (Art. 158, NOTE: This enumeration may include the in-laws
FC) where the FH is constituted jointly by the husband
and wife. But the law definitely excludes maids and
Requisites to be considered as beneficiary overseers.
1. They must be among the relationships

enumerated in Art. 154 of the FC;
2. They live in the FH; and
3. They are dependent for legal support upon the
head of the family. (Art. 156, FC)
CIVIL LAW
Effect of death of one or both spouses or of the requires the filing of a verified petition before
unmarried head of the family upon the family the courts and the registration of the court’s
home (2010 BAR) order with the Registry of Deeds of the area
where the property is located. Meanwhile,
The FH shall continue despite the death of one or extrajudicial constitution is governed by Arts.
both spouses or of the unmarried head of the family 240 to 242 of the NCC and involves the
for a period of 10 years or for as long as there is a execution of a public instrument which must
minor beneficiary, and the heirs cannot partition also be registered with the Registry of Property.
the same unless the court finds compelling reasons
therefor. This rule shall apply regardless of whoever 2. FH constructed after the effectivity of the FC,
owns the property or constituted the FH. (Art. 159, there is no need to constitute extrajudicially or
FC) judicially, and the exemption is effective from
the time it was constituted and lasts as long as
Exemption of Family Home from execution, any of its beneficiaries actually resides therein.
forced sale, and attachment Moreover, the FH should belong to the absolute
community or conjugal partnership, or if
GR: FH is exempt from execution, forced sale, and exclusively by one spouse, its constitution must
attachment. have been with consent of the other, and its
value must not exceed certain amounts
From the time of its constitution and so long as any depending upon the area where it is located.
of its beneficiaries resides therein, the FH continues Further, the debts incurred for which the
to be such and is exempt from execution, forced sale exemption does not apply as provided under
or attachment. (Art. 153, FC) Art. 155 for which the FH is made answerable
must have been incurred after the effectivity of
XPNs: However, the rule is not absolute. Art. 155 of the FC.
the FC provides the circumstances wherein the FH
will not be exempt from execution, forced sale of 3. In both cases, whether under the NCC or the FC,
attachment, to wit: it is not sufficient that the person claiming
exemption merely alleges that such property is
1. Debts due to laborers, mechanics, architects, a FH. This claim for exemption must be set up
builders, material men and others who and proved. (Ramos, v. Pangilinan, G.R. No.
rendered service or furnished materials for the 185920, 20 July 2010)
constitution of the building;
2. Non-payment of taxes; Exemption of Family Home must first be set up
3. Debts incurred Prior to its constitution; and proved
4. Debts secured by Mortgages on the premises
before or after such constitution. (Art. 155, FC) The FH’s exemption from execution must be set up
and proved to the Sheriff before the sale of the
NOTE: Exemption is limited to the value allowed in property at public auction. It should be asserted that
the FC. the property is a FH and that it is exempted from
execution at the time it was levied or within a
Rule for the family home to be exempted from reasonable time thereafter. It is not sufficient that
execution the person claiming exemption merely alleges that
such property is a FH. Failure to do so will estop one
1. If the FH was constructed before the from later claiming the said exemption. (Sps. de
effectivity of the FC, then it must have been Mesa v. Sps. Acero, G.R. No. 185064, 16 Jan. 2012)
constituted either judicially or extra-judicially
as provided under Arts. 225, 229-231, and 233
of the NCC. Judicial constitution of the FH
2023 GOLDEN NOTES
II. MARRIAGE
Requisites for the creditor to avail of the right to Q: A complaint for damages was filed against
execute Hinahon in 1986 when she incurred liabilities as
early as 1977, which action prospered in 1989.
1. He must be a judgment creditor; The house and lot that she owned was levied
upon and sold at auction. She assails the levy and
2. His claim must not be among those excepted sale on the ground that it was her family home
under Art. 155; and and therefore exempt from execution. Decide.
3. He has reasonable grounds to believe that the A: It is not exempt. Under Art. 155 of the FC, the FH
FH is worth more than the maximum amount shall be exempt from execution, forced sale, or
fixed in Art. 157. (Art. 160, FC) attachment except for, among other things, debts
incurred prior to the constitution of the FH. The
Procedure in exercising the right to execute house-and-lot was not constituted as a FH, whether
judicially or extra-judicially, at the time that the
1. Creditor must file a motion in the court debtor incurred her debts. Under prevailing
proceeding where he obtained a favorable jurisprudence, it is deemed constituted as such by
judgment for a writ of execution against the FH; operation of law only upon the effectivity of the FC
on 03 Aug. 1988, thus, the debts were incurred
2. There will be a hearing on the motion where the before the constitution of the FH. (Gomez-Salcedo v.
creditor must prove that the actual value of the Sta. Ines, G.R. No. 132537, 14 Oct. 2005)
FH exceeds the maximum amount fixed by the
FC, either at the time of its constitution or as a Here, the complaint against Hinahon was instituted
result of improvements introduced after its on 17 June 1986, to seek redress for damages
constitution; suffered by them due to acts and omissions
committed by her as early as 1977. This means that
3. If the creditor proves that the actual value Hinahon’s liability arose long before the levied
exceeds the maximum amount, the court will property was constituted as FH by operation of law
order its sale in execution; and in Aug.ust 1988. It is thus clear that the liability
incurred by Hinahon falls squarely under one of the
4. If the FH is sold for more than the value allowed, instances when a FH may be the subject of
the proceeds shall be applied as follows: execution, forced sale, or attachment to answer for
debts incurred prior to the constitution of the FH.
a. The obligations enumerated in Art. 155 (Gomez-Salcedo v. Sta. Ines, G.R. No. 132537, 14 Oct.
of the FC must be paid; and 2005)
b. The judgment in favor of the creditor will
be paid, plus all the costs of execution. Q: Has the residential house and lot of Cesario
Montana which he and his family built in 1960
The excess, if any, shall be delivered to the judgment but which was not constituted as a family home,
debtor. (Art. 160, FC) whether judicially or extrajudicially, under the
NCC been constituted as a family home by
NOTE: The actual value of the FH shall not exceed, operation of law under Art. 153 of the FC, and
at the time of its constitution, the amount of therefore, exempt from execution from a money
P300,000 in urban areas, and P200,000 in rural judgment where the debt or liability was
areas, or such amounts as may hereafter be fixed by incurred before the effectivity of the FC?
law. (Art. 157, FC)
CIVIL LAW
A: NO. Under Art. 162 of the FC, it is provided that A: NO. Even though Vitug’s property has been
“the provisions of this Chapter shall also govern constituted as a family home, it is not exempt from
existing family residences insofar as said provisions execution. Art. 155 of the FC explicitly provides that
are applicable.” It does not mean that Arts. 152 and debts secured by mortgages are exempted from the
153 of the FC have a retroactive effect such that all rule against execution, forced sale, or attachment of
existing family residences are deemed to have been family home. Since the property was voluntarily
constituted as a FH at the time of their occupation used by Vitug as a security for a loan he obtained
prior to the effectivity of the FC and are exempt from from respondent, it may be subject to execution and
execution for the payment of obligations before the attachment. (Vitug v. Abuda, G.R. No. 201264, 11 Jan.
effectivity of the FC. Art. 162 simply means that all 2016)
existing family residences at the time of the
effectivity of the Family Code are considered FH and Requisites in the sale, alienation, donation,
are prospectively entitled to the benefits accorded assignment or encumbrance of the FH
to a family home under the FC. (Manacop v. CA, G.R.
No. 97898, 11 Aug. 1997) The following must give their written consent:
NOTE: The FC does not have a retroactive effect. 1. The person who constituted the FH;
Thus, prior to 03 Aug. 1988, the procedure 2. The spouse of the person who constituted the
mandated by the NCC had to be followed for a FH to FH; and
be constituted as such. There being no proof that the 3. Majority of the beneficiaries of legal age.
subject property was judicially or extrajudicially
constituted as a family home, it follows that NOTE: In case of conflict, the court shall decide.
petitioner cannot avail of the law’s protective
mantle. (Modequillo v. Breva, G.R. No. 86355, 31 May Limitations on Family Home
1990)
Q: On 17 Mar. 1997, Evangeline A. Abuda loaned 1. Each family can have only one FH. After one FH
P250,000.00 to Florante Vitug and his wife, has been constituted, no other FH can be
Narcisa. As a security for the loan, Vitug established without first dissolving the existing
mortgaged to Abuda his property in Tondo one;
Foreshore. The property was then subject of a
conditional Contract to Sell between the NHA 2. FH can be constituted only on the dwelling place,
and Abuda. Later, the parties executed a and therefore in the locality where the family has
“restructured” mortgage contract on the its domicile; and
property to secure P600,000.00 representing
the original P250,000.00 loan, additional loans, 3. The value of the FH must not exceed the limit
and subsequent credit accommodations. By fixed by law. (Tolentino, 2013)
then, the property was covered by TCT No.
234246 under Vitug’s name. Unfortunately, Sps.
Vitug failed to pay their loans despite demands.
Vitug claimed that the property was exempt
from execution because it was constituted as a
family home before its mortgage. Is Vitug’s
contention proper?
2023 GOLDEN NOTES
II. MARRIAGE
2. LEGITIMATE CHILDREN
K. PATERNITY AND FILIATION
a) WHO ARE LEGITIMATE CHILDREN
1. CONCEPTS OF PATERNITY, FILIATION, AND GR: One who is conceived OR born during the
LEGITIMACY marriage of the parents. (Art. 164, FC)
XPN: Born outside of a valid marriage (void

Paternity
marriages) but considered as legitimate child:
It is the civil status of a father with regard to the

1. Children of marriages which are declared void
child.
under Art. 36; and
Filiation
2. Children of marriages which are declared void
under Art. 53. (Rabuya, 2009)
It is the civil status of a child with regard to his
parents. It may be by nature or adoption, legitimate
Requisites for a child conceived by artificial
or illegitimate.
insemination to be considered legitimate
The filiation of children may be by nature or by

1. The artificial insemination is made on the wife,
adoption. Natural filiation may be legitimate or
not on another woman;
illegitimate. (Art. 163, FC)
2. The artificial insemination on the wife is done

NOTE: Paternity or filiation is established by clear
with the sperm of the husband or of a donor, or
and convincing evidence. (Constantino v. Mendez,
both the husband and a donor;
G.R. No. 57227, 14 May 1992)
3. The artificial insemination has been authorized

Classifications of filiation (2009 BAR)
or ratified by the spouse on a written instrument
executed and signed by them before the birth of
1. Natural
the child; and
a. Legitimate – conceived OR born within a
4. The written instrument is recorded in the civil
valid marriage.
registry together with the birth certificate of the
b. Illegitimate – conceived AND born
child. (Art. 164(2), FC)
outside a valid marriage.
Presumption of Legitimacy (2006, 2008, 2010

2. Judicial Act
BAR)
a. Legitimated – conceived and born

Children conceived or born during the marriage of
outside of wedlock of parents without
the parents are legitimate. (Art. 164, FC) The
impediment to marry at the time of
presumption of legitimacy of children does not only
conception or were so disqualified only
flow out from a declaration contained in the statute
because either or both of them were
but is based on the broad principles of natural
below 18 years of age. (Art. 177, FC)
justice and the supposed virtue of the mother. The
presumption is grounded in a policy to protect
b. Adopted – a filiation created by law which
innocent offspring from the odium of illegitimacy.
vests between two persons a relationship
(Liyao, Jr. v. Tanhoti-Liyao, G.R. 138961, 07 Mar.
similar to that which results from
2002)
legitimate paternity and filiation.
CIVIL LAW
The presumption of legitimacy may be availed only a. What is the filial status of Laica?
upon convincing proof of the factual basis therefor,
i.e., that the child’s parents were legally married, A: Having been born during the marriage of Faye
and that his/her conception or birth occurred and Brad, she is presumed to be the legitimate child
during the subsistence of that marriage. Otherwise, of Faye and Brad. This presumption had become
the presumption of law that a child is legitimate conclusive because the period of time to impugn her
does not arise. (Angeles Maglaya, G.R. No. 153798, 02 filiation had already prescribed.
Sept. 2005)
b. Can Laica bring an action to impugn her own
NOTE: The child by himself cannot choose his own status on the ground that based on DNA
filiation. Neither can he elect the paternity of the results, Roderick is her biological father?
husband of his mother when the presumption of his
legitimacy has been successfully overthrown. A: NO. She cannot impugn her own filiation. The law
does not allow a child to impugn his or her own
Q: What is the effect of the declaration of a wife filiation. In this case, Laica’s legitimate filiation was
against the legitimacy of the child where the accorded to her by operation of law which may be
child is conclusive presumed to be the legitimate impugned only by Brad, or his heirs in the cases
child of H and W? provided by law within the prescriptive period.
A: The child shall still be legitimate, although the b) PROOF OF FILIATION OF LEGITIMATE
mother may have declared against his legitimacy. CHILDREN
This law likewise applies to such instances where
the mother may have been sentenced as an Proof of Filiation of Legitimate Children
adulteress. (FC, Art. 167)
GR: The filiation of legitimate children is
NOTE: Art. 167 of the FC applies only to a situation established by any of the following: (Art. 172 (1),FC)
where the wife denies the paternity of the husband.
Art. 167 does not apply to a situation where a child 1. The record of birth appearing in the civil
is alleged not to be the child of nature or biological register or a final judgment; or
child of the couple. (Rabuya, 2009)
2. An admission of legitimate filiation in a public
Q: Roderick and Faye were high school document or a private handwritten instrument
sweethearts. When Roderick was 18 and Faye, and signed by the parent concerned.
16 years old, they started living together as
husband and wife without the benefit of Art. 265 of the NCC provides that the “filiation of
marriage. When Faye reached 18 years of age, legitimate children is proved by the record of birth
her parents forcibly took her back and arranged appearing in the Civil Register, or by an authentic
for her marriage to Brad. Although Faye lived document or a final judgment.” In the absence
with Brad after the marriage, Roderick thereof, the filiation shall be proved by the
continued to regularly visit Faye while Brad was continuous possession of status of a legitimate child
away at work. During their marriage, Faye gave or by any other means allowed by the ROC and
birth to a baby girl, Laica. When Faye was 25 special laws. (Ende v. Roman Catholic Prelate of the
years old, Brad discovered her continued liaison Prelature Nullius of Cotabato, Inc., G.R. No. 191867,
with Roderick and in one of their heated 06 Dec. 2021, as penned by J. Hernando)
arguments, Faye shot Brad to death. She lost no
time in marrying her true love Roderick, In the absence of the record of birth and admission
without a marriage license, claiming that they of legitimate filiation, Art. 267 of the NCC and Art.
have been continuously cohabiting for more 172 of the FC provide that filiation shall be proved
than 5 years. (2008 BAR) by any other means allowed by the ROC and special
2023 GOLDEN NOTES
II. MARRIAGE
laws, such as, baptismal certificate, a judicial NOTE: A will which was not presented for probate
admission, a family bible in which his or her name sufficiently establish filiation because it constitutes
has been entered, common reputation respecting a public document or private handwritten
his or her pedigree, admission by silence, the instrument signed by the parent concerned.
testimonies of witnesses and other kinds of proof
admissible under Rule 130 of the ROC. (Ende v. Prima facie case of sexual relations with the
Roman Catholic Prelate of the Prelature Nullius of putative father
Cotabato, Inc., G.R. No. 191867, 06 Dec. 2021, as
penned by J. Hernando) A prima facie case exists if a woman declares —
supported by corroborative proof — that she had
NOTE: It is jurisprudentially settled that a baptismal sexual relations with the putative father; at this
certificate has evidentiary value to prove filiation point, the burden of evidence shifts to the putative
only if considered alongside other evidence of father. Further, the two affirmative defenses
filiation. (Heirs. of Fabillar v. Paller, G.R. No. 231459, available to the putative father are:
21 Jan. 2019)
1. Incapability of sexual relations with the mother
Pictures or certificate of baptism do not due to either physical absence or impotency; or
constitute authentic documents to prove the
legitimate filiation of a child 2. That the mother had sexual relations with other
men at the time of conception. (Charles Gotardo
Pictures or canonical baptismal certificate do not v. Divina Buling, G.R. No. 165166, 15 Aug. 2012)
constitute the authentic documents to prove the
legitimate filiation of a child. The baptismal XPN: In the absence of the foregoing evidence, the
certificate of the child, standing alone, is not legitimate filiation shall be proved by:
sufficient. It is not a record of birth. Neither is it a
public instrument nor a private handwritten 1. The open and continuous possession of the
instrument. (Abelle v. Santiago, G.R. No. L-16307, 30 status of a legitimate child; or
Apr. 1963)
2. Any other means allowed by the ROC and
Baptismal certificate does not prove filiation special laws. (Art. 172(2), FC)
Just like in a birth certificate, the lack of Q: The late Juan Santos executed a Deed of
participation of the supposed father in the Donation in favor of Pedro Mendoza, the
preparation of a baptismal certificate renders this predecessor-in-interest of respondents.
document incompetent to prove paternity. And Subsequently, respondents executed an
“while a baptismal certificate may be considered a “Affidavit of Identity of Heirs” (Affidavit), where
public document, it can only serve as evidence of the they claimed to be the legal heirs of the late Juan
administration of the sacrament on the date Santos. On the sole basis of the said Affidavit,
specified but not the veracity of the entries with respondents caused the cancellation of the titles
respect to the child’s paternity. Thus, baptismal of the subject properties and had them
certificates are per se inadmissible in evidence as transferred to their names.
proof of filiation and they cannot be admitted
indirectly as circumstantial evidence to prove the Kaloy, on behalf of the heirs of the late Juan
same”. (Perla v. Mirasol, G.R. No. 172471, 12 Nov. Santos filed a complaint for Annulment,
2012) Reconveyance and Accounting with Prayer for
Preliminary Injunction against respondents.
Kaloy primarily alleged that his mother, Maria
Santos was born to spouses Juan Santos and
Juana Mendoza, as shown in the certified
CIVIL LAW
photocopy of her certificate of birth. Kaloy same. (Bernardo v. Fernando, G.R. No. 211034, 18
submitted that he and his siblings are the Nov. 2020)
children of Juana. Hence, being grandchildren of
Juan Santos, they are the ones who are entitled c) RIGHTS OF LEGITIMATE CHILDREN
to the subject properties.
The rights of Legitimate Children are:
On the other hand, respondents, through their
Answer with Counterclaim, disputed Kaloy’s 1. To bear the surname of the father and the
assertions, and argued that their predecessor- mother;
in-interest, Pedro Mendoza, legally acquired the
subject properties from Juan Santos through a 2. To receive support from their parents, their
Deed of Donation. Respondents prayed for the ascendants, and in proper cases, their brothers
dismissal of the complaint. To whom should the and sisters; and
subject properties be adjudicated?
3. To be entitled to the legitimate and other
A: TO RESPONDENTS. An action to claim legitimate successional rights granted to them by the Civil
filiation is strictly personal to the child whose Code. (ART. 174, FC)
filiation is in question, and he or she may exercise
such anytime within his lifetime. The only three d) GROUNDS TO IMPUGN LEGITIMACY
instances when such right passes to the child's heirs
are: (1) when the child dies during minority; (2) Legitimacy of the child may be impugned only on
when the child dies in a state of insanity; or (3) the following grounds:
when the child dies after the commencement of the
action. 1. Physical impossibility for the husband to have
sexual intercourse with his wife within the first
In this case, petitioners seek to establish the 120 days of the 300 days which immediately
legitimate status of their mother, Maria. However, preceded the birth of the child because of:
there is nothing in the records of the case which
would show that Maria had died under any of the a. Physical incapacity of the husband to
circumstances outlined under Art. 173, which have sexual intercourse with his wife,;
would have transmitted the right to claim her
legitimate status to her heirs, herein petitioners. b. The fact that the husband and wife were
Further, without any proven lawful marriage living separately in such a way that
between Juana and Juan Santos, no presumption of sexual intercourse was not possible; or
legitimate filiation arose in favor of Maria. Since no
such presumption arose, it was incumbent on both c. Serious illness of the husband which
Mario and Josefina, et al., to prove the same. absolutely prevented intercourse;
A birth certificate, being a public document, offers 2. Proved that for biological or other scientific
prima facie evidence of filiation in accordance with reasons, the child could not have been that of the
the rule that entries in official records made in the husband, except in the case of children
performance of the duties of a public officer are conceived through artificial insemination; or
prima facie evidence of the facts therein stated.
However, as the Court has held in several cases, for 3. In case of children conceived through artificial
a birth certificate to prove paternity, it must be insemination, the written authorization or
shown that the putative father had a hand in its ratification of either parent was obtained
preparation. Unfortunately, there is nothing to through mistake, fraud, violence, intimidation or
prove that Juan had a hand in the preparation of the undue influence. (Art. 166, FC)
2023 GOLDEN NOTES
II. MARRIAGE
Period to claim Filiation Court or special laws. The simple reason is that
Apolinario Uyguangco is already dead and can no
Q: Romeo F. Ara and William A. Garcia longer be heard on the claim of his alleged son's
(petitioners), and Dra. Fely S. Pizarro and Henry illegitimate filiation. (Ara v. Pizarro, G.R. No. 187273,
A. Rossi (respondents) all claimed to be children 15 Feb. 2017)
of the late Josefa A. Ara (Josefa). Petitioners,
together with Ramon and respondent Rossi Action to impugn legitimacy vs. Action to claim
(collectively, plaintiffs a quo), filed a Complaint legitimacy
for judicial partition of properties left by the
deceased Josefa. The RTC rendered a decision
ACTION TO IMPUGN ACTION TO CLAIM
among which is the declaration that the other
LEGITIMACY LEGITIMACY
properties are under the co-ownership of all the
(Art. 166, FC) (Art. 173, FC)
plaintiffs and defendant and in equal shares. In
omitting petitioners from the enumeration of As to the remedy
Josefa's descendants, the CA reversed the
Action to claim
finding of the RTC. The CA found that RTC erred Action to impugn
legitimacy
in allowing petitioners to prove their status as legitimacy or
(compulsory
illegitimate sons of Josefa after her death. May illegitimacy
recognition)
the petitioners prove their filiation to Josefa
As to the real-party-in-interest
through their open and continuous possession
GR: Husband.
of the status of illegitimate children, found in the
second paragraph of Art. 172 of the FC?
XPNs: Heirs, in cases
where:
A: NO. In Uyguangco v. CA (G.R. No. 76873, 26 Oct. GR: Child.
1989), while the private respondent has admitted
1. Husband died
that he has none of the documents mentioned in the XPNs: Heirs of the
before the
first paragraph (which are practically the same child, in cases where:
expiration of the
documents mentioned in Art. 278 of the NCC except
period for bringing
for the private handwritten instrument signed by 1. Child died in state of
the action;
the parent himself), he insists that he has insanity; and
nevertheless been in open and continuous
2. Husband died after
possession of the status of an illegitimate child, 2. Child died during
filing the
which is now also admissible as evidence of filiation. minority.
complaint, without
having desisted;
The problem of the private respondent, however, is NOTE: Must be filed
that, since he seeks to prove his filiation under the and
within 5 years.
second paragraph of Art. 172 of the FC, his action is
3. Child was born
now barred because of his alleged father's death in
after the death of
1975. The action must be brought within the same
the husband.
period specified in Art. 173, except when the action
is based on the second paragraph of Art. 172, in As to prescription
which case the action may be brought during the
lifetime of the alleged parent. GR: During the lifetime
1 year – husband of the child.
It is clear that the private respondent can no longer resides in the same
be allowed at this time to introduce evidence of his municipality or city XPN: Lifetime of the
open and continuous possession of the status of an where birth took place; putative father.
illegitimate child or prove his alleged filiation
through any of the means allowed by the Rules of
CIVIL LAW
2 years – husband In cases where the Q: Will an infliction of the last stages of
does NOT reside in the action is for tuberculosis be a ground for impugnation of the
same municipality or recognition of legitimacy of the child?
city.; or illegitimate child by
“open and continuous A: Tuberculosis, even in its last stages, is not the
3 years – husband is possession” of the kind of serious illness of the husband that will
living abroad. status. establish physical impossibility of access. (Andal v.
Macaraig, G.R. No. L- 2474, 30 May 1951)
Persons who may attack the legitimacy of the
child (2008 BAR) Rule on status of child where the mother
contracted another marriage within 300 days
GR: Only the husband can contest the legitimacy of after termination of the former (1999 BAR)
the child.
The child shall be considered as conceived during
XPNs: Heirs of the husband may impugn the the:
filiation of the child within the period prescribed in
Art. 170 of the FC only in the following cases: 1. Former marriage – if child is born:
1. If the husband should die before the expiration Before 180 days after the solemnization of the
of the period fixed for bringing his action; subsequent marriage, provided it is born within
300 days after termination of former marriage
2. If he should die after the filing of the complaint,
without having desisted therefrom; or 2. Subsequent marriage – if a child is born:
3. If the child was born after the death of the 180 days after the celebration of the subsequent
husband. (Art. 171, FC) marriage, even though it be born within 300 days
after the termination of the former marriage.
Prescriptive period for filing action impugning
the legitimacy of the child (2010 BAR)
GR: The prescriptive period for filing action

impugning the legitimacy of the child shall be
counted from the knowledge of birth or its
recording in the civil registry.
XPN: If the birth was:

1. Concealed from; or
2. Was unknown to the husband or his heirs, the
periods shall be counted from the discovery or
knowledge of the birth of the child or of the act
of registration of said birth, whichever is earlier.
(Art. 170, FC)
Sterility and Impotency
Sterility is not synonymous with impotency.

Sterility is the inability to procreate, while
impotency is the Physical inability to copulate.
(Menciano v. San Jose, G.R. No. L-1967, 28 May 1951)
2023 GOLDEN NOTES
II. MARRIAGE
Illustrations:
180th day takes place before 300th day
180th day from 300th day from

solemnization of termination of former
marriage
Born during this period:

Marriage
Marriage
180th day takes place after 300th day

300th day from
termination of 180th day from
solemnization of
former marriage subsequent
marriage

conceived during Former Marriage
Marriage
CIVIL LAW
3. ILLEGITIMATE CHILDREN In the absence thereof, filiation shall be proved by:

1. the open and continuous possession of the
status of a legitimate child; or
a) WHO ARE ILLEGITIMATE CHILDREN
2. any other means allowed by the ROC and
The following are illegitimate children: special laws. (Aguilar v. Siasat, G.R. No.
(V-V-I-C-O-B-A) 200169, 28 Jan. 2015)
1. Children conceived and born outside a valid NOTE: To prove open and continuous possession of
marriage; the status of an illegitimate child, there must be
evidence of manifestation of the permanent
2. Children born of couples who are not legally intention of the supposed father to consider the
married or of common law marriages; child as his, by continuous and clear manifestations
of parental affection and care, which cannot be
3. Children born of incestuous marriage; attributed to pure charity.
4. Children born of bigamous marriage; Such acts must be of such a nature that they reveal
not only the conviction of paternity, but also the
5. Children born of adulterous relations between apparent desire to have and treat the child as such
parents; in all relations in society and in life, not accidentally,
but continuously. (Jison v. CA, G.R. No. 124853, 24 Feb
6. Children born of marriages which are void for 1998)
reasons of public policy under Art. 38, FC;
Effect of the Recognition of an Illegitimate Child
7. Children born of couples below 18; and by the Father
8. Children born of void marriages under Art. 35. Such recognition would be a ground for ordering the
latter to give support to, but not the custody of the
XPN: Where the marriage is void for lack of child. The law explicitly confers to the mother sole
authority on the part of the solemnizing officer, parental authority over an illegitimate child; it
but the parties or either of them believed in good follows that only if she defaults can the father
faith that the solemnizing officer had authority, assume custody and authority over the minor.
in which case the marriage will be considered (Briones v. Miguel, G.R. No. 156343, 18 Oct. 2004)
valid and the children will be considered
legitimate. Also, under the R.A. 9255, the illegitimate child has
the option to use the surname of the father.
b) PROOF OF FILIATION OF ILLEGITIMATE
CHILDREN R.A. No. 9255
The filiation of illegitimate children, like legitimate This act provides that illegitimate children may
children, is established by: optionally use the father’s surname provided that:
1. The record of birth appearing in the civil 1. Filiation has been recognized by the father
register or a final judgment; or through the record of birth appearing in the civil
register; and
2. An admission of legitimate filiation in a
public document or a private handwritten 2. Admission in public document or private
instrument and signed by the parent handwritten instrument is made by the father.
concerned.
2023 GOLDEN NOTES
II. MARRIAGE
NOTE: Provided that the father has the right to recognition during the lifetime of the putative
institute an action before the regular courts to father. The provision of Art. 285 of the NCC allowing
prove non-filiation during his lifetime. the child to file the action for recognition even after
the death of the father will not apply because in the
Establishing Illegitimate Filiation (1995, 1999, case presented, the child was no longer a minor at
2005, 2010 BAR) the time of death of the putative father.
Q: Julie had a relationship with a married man 2. Wishing to keep the peace, the child during
who had legitimate children. A son was born out the pendency of the case decides to
of the illicit relationship in 1981. Although the compromise with his putative father’s family
putative father did not recognize the child in his by abandoning his petition in exchange for
birth certificate, he nevertheless provided the what he would have received as inheritance
child with all the support he needed and spent if he were recognized as an illegitimate child.
time regularly with the child and his mother. As the judge, would you approve of such
When the man died in 2000, the child was compromise?
already 18 years old so he filed a petition to be
recognized as an illegitimate child of the A: NO, I will not approve the compromise
putative father and sought to be given a share in agreement because filiation is a matter to be
his putative father’s estate. The legitimate decided by law. It is not for the parties to stipulate
family opposed, saying that under the FC his whether a person is a legitimate or illegitimate child
action cannot prosper because he did not bring of another. (De Jesus v. Estate of Dizon, G.R. No.
the action for recognition during the lifetime of 142877, 02 Oct. 2001) In all cases of illegitimate
his putative father. (2015 BAR) children, their filiation must be duly proved. (Art.
887, NCC)
1. If you were the judge, how would you rule?
Public instrument subscribed and made under
A: If I were the judge, I will not allow the action for oath by the putative father indicating the
recognition filed after the death of the putative illegitimate child as his is sufficient to establish
father. Filiation of illegitimate children, like illegitimate filiation
legitimate children is established by:
Q: Why is an illegitimate child of a woman, who
a. Record of birth appearing in the civil gets married, allowed to bear the surname of
register or a final judgment; her subsequent spouse, while a legitimate child
may not?
b. An admission of legitimate filiation in a
public document or in a private A: To allow the child to adopt the surname of his
handwritten instrument signed by the mother’s second husband, who is not his father,
parent concerned; and in the absence could result in confusion in his paternity. It could
thereof; or also create the suspicion that the child, who was
born during the covertures of his mother with her
c. The open and continuous possession of the first husband, was in fact sired by the second
status of a legitimate child; husband, thus bringing his legitimate status into
discredit. (Republic v. Vicencio, G.R. No. 88202., 14
An illegitimate child who has not been recognized Dec. 1998)
by options (a) or (b) of the abovementioned
enumeration may prove their filiation under option
(c) based on open and continuous possession of the
status of an illegitimate child but pursuant to Art.
175 of the NCC, they must file the action for
CIVIL LAW
c) RIGHTS OF ILLEGITIMATE CHILDREN acknowledged by the putative parent or must have

otherwise previously established his or her filiation
Rights of an illegitimate child (1990, 2003, 2006, with the putative parent." When "filiation is beyond
2009, 2010 BAR) question, support shall then follow as a matter of
obligation."
1. They shall use the surname of the mother;
2. They shall be under the parental authority of the Having thus far only presented her child's birth
mother; certificate, which made no reference to respondent
3. They shall be entitled to support in conformity as the child's father, the necessary condition of
with the FC, provided, only as to the separate filiation had yet to be established. (Richelle P. Abella,
property of the parent; and For and In Behalf of Her Minor Daughter, Marl
4. They shall be entitled to a legitime which shall Jhorylle Abella v. Policarpio Cabañero, G.R. No.
consist of 1/2 of the legitime of a legitimate child. 206647, 09 Aug. 2017)
(Art. 176, FC)
d) GROUNDS TO IMPUGN FILIATION
Q: Richelle alleged that while she was still a
minor in the years 2000 to 2002, she was Grounds to Impugn Filiation (P-B-A)
repeatedly sexually abused by respondent
Cabañero inside his rest house at Barangay 1. That it was Physically impossible for the
Masayo, Tobias Fornier, Antique. As a result, she husband to have sexual intercourse with his
allegedly gave birth to a child on 21 Aug. 2002. wife within the first 120 days of the 300 days
Richelle added that on 27 Feb. 2002, she which immediately preceeded the birth of the
initiated a criminal case for rape against child because of:
Cabañero. This, however, was dismissed. Later,
she initiated another criminal case, this time for a. The physical incapacity of the husband
child abuse under R.A. No. 7610. This, too, was to have sexual intercourse with his
dismissed. Richelle prayed for the child's wife;
monthly allowance in the amount of P3,000.00.
She presented the child’s birth certificate in b. The fact that the husband and wife
evidence. were living separately in such a way
that sexual intercourse was not
Cabañero denied sexually abusing Richelle, or possible;
otherwise having any sexual relations with her.
Thus, he asserted that he could not have been c. Serous illness of the husband, which
the father of Richelle’s child. Is Richelle’s child absolutely prevented sexual
entitled for support? intercourse;
A: NO. The obligation to give support shall only be 2. That is proved that for Biological or other
demandable from the time the person entitled to it scientific reasons, the child could not have been
needs it for maintenance, but it shall not be paid that of the husband, except in the instance
except from the date of judicial or extrajudicial provided in the second paragraph of Art.164; or
demand. Support pendente lite may also be claimed,
in conformity with the manner stipulated by the 3. That in case of children conceived through
ROC. Artificial insemination, the written
authorization or ratification of either parent
An illegitimate child, "conceived and born outside a was obtained through mistake, fraud, violence,
valid marriage," as is the admitted case with intimidation, or undue influence. (ART. 166, FC)
petitioner's daughter, is entitled to support. To
claim it, however, a child should have first been
2023 GOLDEN NOTES
II. MARRIAGE
4. LEGITIMATED CHILDREN c) GROUNDS TO IMPUGN LEGITIMACY
Legitimation may be impugned only by those who

Legitimated children are those who, because of the
are prejudiced in their rights, within 5 years from
subsequent marriage of their parents to each other,
the time their cause of action accrues, that is, from
are by legal fiction considered legitimate.
the death of the putative parent. (Art. 182, FC)
Legitimation (2004, 2010 BAR)

NOTE: The right referred to are successional rights.
Hence, only those whose successional rights are
Legitimation is a remedy or process by means of
directly affected may impugn the legitimation that
which those who in fact not born in wedlock and
took place.
should therefore be ordinarily illegitimate, are by
fiction, considered legitimate.
Q: Who may impugn the legitimation?
It takes place by a subsequent valid marriage

A: Legitimation may be impugned only by those
between parents. Furthermore, it shall retroact to
who are prejudiced in their rights, within 5 years
the time of the child’s birth. (Art. 180, FC)
from the time their cause of action accrues, that is,
from the death of the putative parent. (FC, Art. 182)
NOTE: The annulment of a voidable marriage shall
not affect the legitimation. (Art. 178, FC)
NOTE: The right referred to are successional rights.
Hence, only those whose successional rights are
a) WHO MAY BE LEGITIMATED
directly affected may impugn the legitimation that
took place.
Who may be legitimated (1990, 2004, 2008,
2009 BAR)
Q: Roderick and Faye were high school
sweethearts. When Roderick was 18 and Faye,
Only children conceived and born outside of
16 years old, they started living together as
wedlock of parents who, at the time of conception of
the former, were not disqualified by any
marriage. When Faye reached 18 years of age,
impediment to marry each other, or were so
her parents forcibly took her back and arranged
disqualified only because either or both of them
for her marriage to Brad. Although Faye lived
were below 18 years of age. (Art. 177, FC, as
with Brad after the marriage, Roderick
amended by R.A. 9858)
continued to regularly visit Faye while Brad was
away at work. During their marriage, Faye gave
b) HOW LEGITIMATION TAKES PLACE birth to a baby girl, Laica. When Faye was 25
years old, Brad discovered her continued liaison
1. Child must have been conceived and born with Roderick and in one of their heated
outside of wedlock; arguments, Faye shot Brad to death. She lost no
time in marrying her true love Roderick,
2. Child’s parents, at the time of former’s without a marriage license, claiming that they
conception, were not disqualified by any have been continuously cohabiting for more
impediment to marry each other or were so than 5 years. Can Laica be legitimated by the
disqualified only because either or both of them marriage of her biological parents? (2008 BAR)
were below 18 years of age; and
A: NO, she cannot be legitimated by the marriage of
3. The subsequent valid marriage of the parents. her biological parents. In the first place she is not,
under the law, the child of Roderick. In the second
place, her biological parents could not have validly
married each other at the time she was conceived
CIVIL LAW
and born simply because Faye was still married to

As to Period for filing action for claim of
Roderick Brad at that time. Only children conceived
legitimacy or illegitimacy
or born outside of wedlock of parents who, at the
time of the conception of the child were not For primary proof:
disqualified by any impediment to marry each Their whole lifetime their whole lifetime.
other, may be legitimated. (Art. 177, FC) regardless of type of
proof provided under For secondary proof:
Rights of Legitimate vs. Illegitimate Children Art. 172 of the FC only during the lifetime
of the alleged parent.
Legitimated children shall enjoy the same rights as As to transmissibility of right to file an action
legitimate children. (Art. 179, FC) to claim legitimacy
Yes. No.
LEGITIMATE ILLEGITIMATE
CHILDREN CHILDREN As to Right to inherit ab intestato
As to surname No right to inherit ab

intestate from
Bear the surname of legitimate children and
either the mother or Yes relatives of father and
the father under R.A. mother under Art. 992,
9255 NCC (Iron Curtain
Rule).
Bear the surnames of NOTE: Under the
both parents (mother amendatory provisions
Action to Claim Filiation
and father) of R.A. No. 9255, the
use of illegitimate
Paternity and filiation or the lack of the same is a
father's surname is
relationship that must be judicially established, and
permissive and not
it is for the court to declare its existence or absence.
obligatory. (Rabuya,
It cannot be left to the will or agreement of the
2008)
parties. (De Asis v. CA, G.R. 127578, 15 Feb. 1999)
As to support
The manner of claiming filiation is the same for both
Receive support from: legitimate and illegitimate children.
1. Parents; Persons who may file for claim legitimate

2. Ascendants; and Receive support filiation
according to provision
In proper cases, of FC. GR: The right of claiming legitimacy belongs to the
brothers and sisters child. (Art. 173, FC)
under Art. 174 of the
FC. XPN: The right is transferred to his heirs when the
child dies:
As to Legitime
1. During minority; or
Full legitime and other 2. In a state of insanity; or.
1/2 of the share of a
successional rights 3. After commencing the action for legitimacy.
legitimate child
under the NCC.
2023 GOLDEN NOTES
II. MARRIAGE
NOTE: Questioning legitimacy may not be 5. ADOPTED CHILDREN

collaterally attacked. It can be impugned only in a
direct action.
Adoption is the process of making a child, whether
related or not to the adopter, possess in general, the
Person/s who may file for claim illegitimate
rights accorded to a legitimate child. It is a juridical
filiation
act, a proceeding in rem which creates between two
persons a relationship similar to that which results
GR: The right of claiming illegitimacy belongs to the
from legitimate paternity and filiation. The modern
child.
trend is to consider adoption not merely as an act to
establish a relationship of paternity and filiation,
XPN: The right is transferred to his heirs when:
but also as an act which endows the child with a
1. During minority;
legitimate status. (In the Matter of the Adoption of
2. In a state of insanity; or
Stephanie Nathy Astorga Garcia, G.R. No. 148311, 31
3. After commencing the action for legitimacy.
Mar. 2005)
Prescription of action to claim legitimacy or

The relationship established by the adoption is
illegitimacy
limited to the adopting parents and does not extend
to their other relatives, except as expressly
An action must be brought:
provided by law. Thus, the adopted child cannot be
1. By the child – during his lifetime; or
considered as a relative of the ascendants and
collaterals of the adopting parents, nor of the
2. By his heirs – within 5 years should the child
legitimate children which they may have after the
dies during minority, in a state of insanity or
adoption, except that the law imposes certain
after commencing the action for legitimacy.
impediments to marriage by reason of adoption.
Neither are the children of the adopted considered
NOTE: Provided that the action for illegitimacy is
descendants of the adopter.
based on admission of paternity or filiation in a
birth certificate or written instrument.
a) DOMESTIC ADMINISTRATIVE ADOPTION
AND ALTERNATIVE CHILD CARE ACT
However, if the action for illegitimacy is based on an
(R.A. No. 11642)
open and continuous possession of status of
illegitimate filiation or any other means allowed by
Domestic Administrative Adoption and
the Rules of Court and special laws, the action must
Alternative Child Care Act
be brought during the lifetime of the alleged parent.
R.A. No. 11642 otherwise known as “Domestic

Paternity and filiation or the lack of the same is a
Administrative Adoption and Alternative Child Care
relationship that must be judicially established, and
Act” took effect on 06 Jan. 2022.
it is for the court to declare its existence or absence.
It cannot be left to the will or agreement of the
An act strengthening alternative childcare by
parties. (De Asis v. CA., G.R. 127578, 15 Feb. 1999)
providing for an administrative process of domestic
adoption, reorganizing for the purpose the Inter-
The manner of claiming filiation is the same for both
Country Adoption Board (ICAB) into the (NACC),
legitimate and illegitimate children.
amending for the purpose R.A. No. 8043, R.A. No.
11222, and R.A. No. 10165, repealing R.A. No. 8552,
and R.A. No. 9523, and appropriating funds thereto.
CIVIL LAW
b) WHO MAY ADOPT cannot adopt. (Rabuya, 2006)
1. Any Filipino citizen; 2. Legal Guardian with Respect to the Ward;

2. Legal Guardian with respect to the ward;
3. Legal guardians with respect to the foster May only adopt the ward after the termination
child of the guardianship and clearance of his/her
4. Philippine government officials and financial accountabilities. (Sec. 21(b), R.A. No.
employees deployed or stationed abroad; 11642)
and
3. Legal Guardian with Respect to the Foster
5. Any Alien who are permanent or habitual Child; (Sec. 21(c), Ibid.)
residents of the Philippines for at least 5
years possessing the same qualifications 4. Philippine government officials and
for Filipino nationals. (Sec. 21, R.A. 11642) employees deployed or stationed abroad; and
Qualifications of Adoptee They are able to bring the child with them. (Sec.
21(d), Ibid.)
1. Filipino Adopter
5. Foreign Nationals
If the adopter is any Filipino citizen, they must
possess the following: If the adopter is an alien, they must possess the
following:
a. At least 25 years of age;
b. is in possession of full civil capacity a. Permanent or habitual residents of the
and legal rights; Philippines for at least five (5) years;
c. has not been convicted of any crime
involving moral turpitude b. Same qualifications as Filipino adopter
d. is of good moral character and can prior to filing of the petition;
model the same;
e. is emotionally and psychologically c. Their country must have diplomatic
capable of caring for children; relations with the Republic of the
f. at least 16 years older than the Philippines;
adoptee; and
d. Their country’s laws will acknowledge the
NOTE: When the adoptee is the Certificate of Adoption as valid,
biological parent of the adoptee, or is acknowledge the child as the legal child of
the spouse of adoptee’s parent, the 16- the adopters, and allow entry of the child
year difference requirement may be into such country as an adoptee;
waived.
NOTE: The requirements on residency may be
g. who is in a position to support and waived for the following:
care for adopted children in keeping
with the means of the family. (Sec. i. A former Filipino citizen, habitually
21(a), R.A. No. 11642) residing in the Philippines, who seeks to
adopt a relative within 4th civil degree of
NOTE: If a person is not in possession of full consanguinity or affinity;
civil capacity and legal rights, as in the case of
insane, imbecile, deaf-mute or a person ii. One who seeks to adopt legitimate child of
suffering from civil interdiction, such person the Filipino spouse; or
2023 GOLDEN NOTES
II. MARRIAGE
iii. One who is married to a Filipino citizen Whose Consent is Necessary to the Adoption
and seeks to adopt jointly with the spouse
a relative within the 4th degree of a. The adoptee, if 10 years of age or over;
consanguinity or affinity of the Filipino
spouse. b. The biological parents of the child, if known,
or the legal guardian, or the proper
GR: Spouses shall jointly adopt. government instrumentality which has legal
XPNs: custody of the child, except in the case of a
(a) If one spouse seeks to adopt the Filipino of legal age if, prior to the adoption,
legitimate child of the other; or said person has been consistently considered
and treated as their own child by the
(b) If one spouse seeks to adopt own adopters for at least 3 years;
illegitimate child provided that the
other spouse has signified consent c. The legitimate and adopted children, 10
thereto; or years of age or over, of the adopters, if any;
(c) If the spouses are legally separated d. The illegitimate children, 10 years of age or
from each other. (Sec. 21(e), R.A. No. over, of the adopter if living with said adopter
11642) or over whom the adopter exercises parental
authority and the latter’s spouse, if any; and
c) WHO MAY BE ADOPTED
e. The spouse, if any, of the person adopting or
1. A child who has been issued a Certificate to be adopted. (Sec. 23, R.A. 11642)
Declaring a Child Legally Available for Adoption
(CDCLAA); NOTE: That children under 10 years of age shall be
counseled and consulted but shall not be required
2. The legitimate child of one spouse by the other to execute within consent.
spouse;
Child
3. An illegitimate child by a qualified adopter to
improve status of legitimacy; A child refers to a person below 18 years of age or a
person 18 years of age or over but who is unable to
4. A Filipino of legal age if, prior to the adoption, fully take care or protect himself or herself from
said person has been consistently considered abuse, neglect, cruelty, exploitation, or
and treated by the adopters as their own child discrimination because of physical or psychological
for a period of at least three (3) years; disability or condition: Provided, that where
relevant, a child could also refer to an adult son,
5. A foster child; daughter, or offspring. (Sec. 4(h), Art. 1, R.A. No.
11642)
6. A child whose adoption has been previously
rescinded; NOTE: The prohibition against physical transfer
shall not apply to adoption by a relative or children
7. A child whose biological or adoptive parents with special medical conditions. (Rabuya, 2018)
have died; and
NOTE: No proceedings shall be initiated within

6 months from the time of death of said parents.
8. A relative of the adopter. (Sec. 22)

CIVIL LAW
d) EFFECTS OF A DECREE OF ADOPTION by the adopters,

(See Arts. 189-190 of the Family Code)
4. When the adopters concur with the
Effects of a Decree of Adoption illegitimate children and the surviving
spouse of the adopted, they shall divide the
Adoption shall have the following effect: entire estate in equal shares, one-third to
be inherited by the illegitimate children,
1. For civil purposes, the adopted child shall one-third by the surviving spouse, and one-
be deemed legitimate child of the adopters third by the adopters;
and both shall acquire the reciprocal rights
and obligations arising from the 5. When only the adopters survive, they shall
relationship of parent and child, including inherit the entire estate; and
the right of the adopted to use the surname 6. When only collateral blood relatives of the
of the adopters; adopted survive, then the ordinary rules of
legal or intestate succession shall apply.
2. The parental authority of the parents by (Art. 190, FC)
nature over the adopted shall terminate
and be vested in the adopters, except that
if the adopter is the spouse of the parent by L. SUPPORT
nature of the adopted, parental authority
over the adopted shall be exercised jointly
by both spouses; and
1. WHAT COMPRISES SUPPORT
3. The adopted shall remain an intestate heir
of his parents and other blood relatives. Support (2010 BAR)
(Art. 189, FC)
It comprises everything indispensable for
Legal or intestate succession to the estate of the sustenance, dwelling, clothing, medical attendance,
adopted shall be governed by the following rules: and transportation, in keeping with the financial
capacity of the family, including the education of the
1. Legitimate and illegitimate children and person entitled to be supported until he completes
descendants and the surviving spouse of his they complete their education or training for
the adopted shall inherit from the adopted, some profession, trade or vocation, even beyond the
in accordance with the ordinary rules of age of majority. (Art. 194, FC)
legal or intestate succession;
Characteristics of support (P-R-I-M-P-E-N)
2. When the parents, legitimate or
illegitimate, or the legitimate ascendants of 1. Personal;
the adopted concur with the adopter, they 2. Reciprocal on the part of those who are by law
shall divide the entire estate, one-half to be bound to support each other;
inherited by the parents or ascendants and 3. Intransmissible;
the other half, by the adopters; 4. Mandatory;
5. Provisional character of support judgment;
3. When the surviving spouse or the 6. Exempt from attachment or execution; and
illegitimate children of the adopted concur 7. Not subject to waiver or compensation
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,
2023 GOLDEN NOTES
II. MARRIAGE
Composition of Support 3. Separate property of person, for the support of

the following:
Support comprises everything indispensable for: a. Illegitimate children;
b. Legitimate ascendants;
1. Sustenance; c. Descendants, whether legitimate or
2. Dwelling; illegitimate; and
3. Clothing; d. Brothers and sisters, whether legitimately
4. Medical attendance; or illegitimately related. (Art. 197, FC;
5. Education; and Rabuya, 2009)
NOTE: includes schooling or training for some SUPPORT OF SPOUSES TO OTHERS

profession, trade or vocation, even beyond the
age of majority; and PROPERTY REGIME INSUFFICIENCY OR
TO BE LIABLE ABSENCE
Legitimate children of both or either spouse
6. Transportation and common children
NOTE: Includes expenses going to and from ACP or CPG is

school, or to from place of work. (Art. 194, FC) ACP or CPG is insufficient, separate
principally liable. (Arts. property of both
Kinds of Support 94 and 121, FC) spouses are solidarily
liable. (Art. 197, FC)
1. Legal – required or given by law;
Illegitimate children of either spouse
2. Judicial – required by court; may be:
a. Pendente lite; or Separate property is
b. In a final judgment. principally liable;
3. Conventional – by agreement. (Paras, 2009) ACP can advance the If separate property of
support; the spouse is
Rules on support of illegitimate children of insufficient, the
either spouse CPG can be liable if the spouses can use ACP or
responsibilities in Art. CPG. (Art. 197, FC)
1. It depends upon the property regime of the 121 are covered. (Art.
spouses. 197, FC in relation to
Arts. 94 and 121, FC)
2. ACP or CPG for the support of the following:
a. spouses; Parents and siblings
b. common children of the spouses; and
c. legitimate children of either spouse. Separate property is
principally liable;
NOTE: If the community property or the There must be a
conjugal partnership is insufficient to cover ACP or CPG can complete absence of
them, the spouses shall be solidarily liable for advance support, but separate property on
the unpaid balance with their separate only if there is the part of the obligor-
properties. (Arts. 94 and 121, FC) complete absence of spouse. (Art. 197, FC)
separate property.
(Art. 197, FC)
CIVIL LAW
2. WHO ARE OBLIGED TO GIVE SUPPORT them to furnish support provisionally, without
prejudice to their right to claim reimbursement
from the other obligors of their corresponding
1. Spouses;
shares. (Art. 200, FC)
NOTE:
b. Two or more recipients at the same time
a. The spouse must be the legitimate spouse
claim support from the same persons who
in order to be entitled to support; and
does not have sufficient means to satisfy all
claims.
b. The spouse who leaves the conjugal home
or refuses to live therein, without just
A: The order established under Art. 199 of the FC
cause, shall not have the right to be
shall be followed, unless the concurrent obligees
supported. (Art. 100 and 127, FC)
should be the spouse and a child, in which case, the
2. Legitimate ascendants and descendants;
child shall be preferred. (Art. 200, FC)
3. Parents and their legitimate children, and

Liability to support
the legitimate and illegitimate children of
the latter;
The liability to support should be observed in the
following order:
4. Parents and their illegitimate children,
1. Spouse;
and the legitimate and illegitimate
2. Descendants in the nearest degree;
children of the latter; and
3. Ascendants in the nearest degree; and
4. Brothers and sisters. (Art. 199, FC)
NOTE: The alleged father of a child must first
recognize the latter before he or she may be
Q: Belen, in behalf of her minor children,
entitled to support.
instituted a petition for declaration of
legitimacy and support against Federico, their
5. Legitimate brothers and sisters whether
alleged father, and Francisco, father of Federico.
full or half- blood. (Art. 195, FC)
It appears that the marriage of the two was
annulled due to the minority of Federico. May
NOTE: Brothers and sisters not legitimately
Francisco be ordered to give support?
related, whether full or half-blood, are
likewise bound to support each other.
A: YES. There appears to be no dispute that the
However, when the need for support of the
children are indeed the daughters of Federico by
brother or sister, being of age, is due to a
Belen. Under Art. 199 of the FC, “Whenever two or
cause imputable to the claimant’s fault or
more persons are obliged to give support, the
negligence, the illegitimate brother or sister
liability shall devolve upon the following persons in
has no right to be supported. (Art. 196, FC;
the following order herein provided:
Rabuya, 2009)
1. The spouse;
Q: What is the rule when:
2. The descendants in the nearest degree;
3. The ascendants in the nearest degree; and
a. Two or more persons are obliged to give
4. The brothers and sisters.
support; and
The obligation to give support rests principally on

A: The payment of the same shall be divided
those more closely related to the recipient.
between them in proportion to the resources of
However, the more remote relatives may be held to
each. However, in case of urgent need and by special
shoulder the responsibility should the claimant
circumstances, the judge may order only one of
prove that those who are called upon to provide
2023 GOLDEN NOTES
II. MARRIAGE
support do not have the means to do so. Here, since caught Edward in “a very compromising
it has been shown that the girls' father, Federico, situation” with the midwife of Edward’s
had no means to support them, then Francisco, as grandmother. After a violent confrontation with
the girls’ grandfather, should then extend the Edward, Cheryl left the Forbes Park residence.
support needed by them. She subsequently sued, for herself and her
children, Edward, Edward’s parents and
NOTE: The second option in Art. 204 of the FC, that grandparents for support. Edward and his
of taking in the family dwelling the recipient, is parents were ordered by the RTC to “jointly”
unavailing in this case since the filing of the case has provide, monthly support to Cheryl and her
evidently made the relations among the parties children. Is the court’s judgment in making
bitter and unpleasant. (Mangonon, et al. v. CA, et al., Edward’s parents concurrently liable with
G.R. No. 125041, June 30, 2006) Edward to provide support to Cheryl and her
children correct?
Q: Marcelo and Juana called Dr. Arturo to their
house to render medical assistance to their A: YES. However, the Supreme Court modified the
daughter-in- law who was about to give birth to appealed judgment by limiting liability of Edward’s
a child. He performed the necessary operation. parents to the amount of monthly support needed
When Dr. Arturo sought payment, Marcelo and by Cheryl’s children. Edward’s parents are liable to
Juana refused to pay him without giving any provide support but only to their grandchildren. By
good reason. Who is bound to pay the bill for the statutory and jurisprudential mandate, the liability
services rendered by Arturo? of ascendants to provide legal support to their
descendants is beyond cavil. Petitioners themselves
A: HER HUSBAND, not her father and mother-in- admit as much — they limit their petition to the
law. The rendering of medical assistance in case of narrow question of when their liability is triggered,
illness is comprised among the mutual obligations not if they are liable.
to which the spouses are bound by way of mutual
support. (Arts. 142 & 143, FC) There is no showing that private respondent is
without means to support his son; neither is there
If every obligation consists in giving, doing or not any evidence to prove that petitioner, as the
doing something (NCC, Art. 1088), and spouses are paternal grandmother, was willing to voluntarily
mutually bound to support each other, there can be provide for her grandson's legal support. Cheryl is
no question but that, when either of them by reason unable to discharge her obligation to provide
of illness should be in need of medical assistance, sufficient legal support to her children. It also shows
the other is under the unavoidable obligation to that Edward is unable to support his children. This
furnish the necessary services of a physician in inability of Edward and Cheryl to sufficiently
order that health may be restored, and he or she provide for their children shifts a portion of their
may be freed from the sickness by which life is obligation to the ascendants in the nearest degree,
jeopardized. (Pelayo v. Lauron, G.R. No. L-4089, 12 both in the paternal (petitioners) and maternal
Jan. 1909) lines, following the ordering in Article 199. (Spouses
Lim v. Cheryl Lim, G.R. No. 163209, 30 Oct. 2009)
Q: Cheryl married Edward Lim and they begot
three children. Cheryl, Edward and their Q: Petitioner was charged for violation of Sec.
children lived at the house of Edward’s parents, 5(e)(2) of R.A. No. 9262. According to AAA, she
Prudencio and Filomena, together with gave birth to their son BBB. The hospital
Edward’s ailing grandmother and her husband. expenses were shared by AAA’s mother and
Edward was employed with the family business, petitioner. BBB was later diagnosed to be
which provided him with a monthly salary of suffering from Congenital Torch Syndrome,
P6,000 and shouldered the family expenses. resulting in delayed development and training.
Cheryl had no steady source of income. Cheryl AAA brought BBB to a medical specialist who
CIVIL LAW
recommended that BBB wear a hearing aid. 3. SOURCE OF SUPPORT

When she asked petitioner for financial help, the
latter informed her that he was not capable of
giving anything since his salary could only cover DURING PENDING AFTER
his own expenses. Eventually, AAA enrolled BBB MARRIAGE LITIGATION LITIGATION
in a school for the hearing impaired and
Spouses
singlehandedly shouldered the tuition fee of
P20,000.00. When AAA informed petitioner ACP
about BBB's expenses, he told her that he could GR: From the
not afford the costs and agreed to find a cheaper community
school. property
assets.
Petitioner argues, among others, that when BBB
was born, he only had limited income. Hence, he XPN:
could only provide BBB with milk and other If Art. 203
miscellaneous baby needs until AAA forced him applies, that
to sign the kasunduan that they would live if the
separate lives. He claims that he was asked to claimant GR: No
stay away from his family, under the threat of a spouse is the obligation to
restraining order. In truth, AAA is manipulative guilty support
and the present controversy is only a case of spouse,
blackmail because the former asked him for he/she is XPN: If there
P1,000,000.00. Lastly, he contends that his they are not is Legal
From the
failure to give BBB support was not attended entitled to Separation.
community
with malice, which warrants his acquittal. Is the support. In which
property.
petitioner correct? CPG case, the
court may
A: NO. Petitioner deliberately deprived his son BBB Support is require the
of financial support for the latter's sustenance, considered guilty spouse
clothing, medical, and educational expenses. From an advance of to give
the moment the child was born until the case was such support.
filed, petitioner was only able to give a total of about spouses’
P10,000.00 in a span of five years. To the mind of share.
this Court, this does not meet the necessity of BBB's
expenses, considering that the child is suffering NOTE: The
from Congenital Torch Syndrome, resulting in rule does not
delayed development and hearing impairment. This apply if the
especially holds true since petitioner is capable of spouses are
giving support based on his Income Tax Return for under ACP
the year 2009, when his gross compensation was based on Art.
P234,565.79. 153.
Children
There is also no merit in petitioner's argument that
the absence of malice on his part should warrant his From the
acquittal. (XXX v. People, G.R. No. 221370, June 28, From the From the
separate
2021, as penned by J. Hernando) community community
properties of
property. property.
the spouses.
2023 GOLDEN NOTES
II. MARRIAGE
4. ORDER OF SUPPORT NOTE: The second option in Art. 204 of the FC, that
of taking in the family dwelling the recipient, is
unavailing in this case since the filing of the case has
The liability to support should be observed in the
evidently made the relations among the parties
following order:
bitter and unpleasant. (Mangonon v. CA, G.R. No.
125041, 30 June 2006)
GR:
1. Spouse;
Q: Marcelo and Juana called Dr. Arturo to their
2. Descendants in the nearest degree;
house to render medical assistance to their
3. Ascendants in the nearest degree; and
daughter-in- law who was about to give birth to
4. Brothers and sisters. (Art. 199, FC)
a child. He performed the necessary operation.
When Dr. Arturo sought payment, Marcelo and
XPN: Unless the concurrent obligees should be the
Juana refused to pay him without giving any
spouse and a child, in which case, the child shall be
good reason. Who is bound to pay the bill for the
preferred. (Art. 200, FC)
services rendered by Arturo?
Q: Belen, in behalf of her minor children,
A: Her husband, not her father and mother-in-law.
instituted a petition for declaration of
The rendering of medical assistance in case of
legitimacy and support against Federico, their
illness is comprised among the mutual obligations
alleged father, and Francisco, father of Federico.
to which the spouses are bound by way of mutual
It appears that the marriage of the two was
support. (Arts. 142 and 143, FC)
annulled due to the minority of Federico. May
Francisco be ordered to give support?
If every obligation consists in giving, doing or not
doing something (Art. 1088, NCC), and spouses are
A: YES. There appears to be no dispute that the
mutually bound to support each other, there can be
children are indeed the daughters of Federico by
no question but that, when either of them by reason
Belen. Under Art. 199 of the Family Code,
of illness should be in need of medical assistance,
“Whenever two or more persons are obliged to give
the other is under the unavoidable obligation to
support, the liability shall devolve upon the
furnish the necessary services of a physician in
following persons in the following order herein
order that health may be restored, and he or she
provided:
may be freed from the sickness by which life is
jeopardized. (Pelayo v. Lauron, G.R. No. L-4089, 12
1. The spouse;
Jan. 1909)
2. The descendants in the nearest degree;
3. The ascendants in the nearest degree; and
Support during marriage litigation
4. The brothers and sisters.
During the pendency of the action for annulment or

The obligation to give support rests principally on
declaration of absolute nullity of marriage and
those more closely related to the recipient.
action for legal separation, the court shall provide
However, the more remote relatives may be held to
for the support of the spouses and their common
shoulder the responsibility should the claimant
children in the absence of a written agreement
prove that those who are called upon to provide
between the spouses. (Art. 49, FC)
support do not have the means to do so. Here, since
it has been shown that the girls' father, Federico,
Sources of support shall be the properties of the
had no means to support them, then Francisco, as
absolute community or conjugal partnership. (Arts.
the girls’ grandfather, should then extend the
94 & 121, FC)
support needed by them.
CIVIL LAW
Mutual support of the spouses after the final NOTE: Adultery is not a defense when it is to be
judgment granting the petition for legal taken from the conjugal properties or the absolute
separation, annulment, and declaration of community of properties of the spouses.
nullity of marriage
Q: H and W are living separately. Both had been
GR: Spouses are no longer obliged to render mutual unfaithful to each other. After their separation,
support after final judgment. The obligation of H had been giving money to W for her support.
mutual support ceases after final judgment. Subsequently, W brought an action against H for
separate maintenance. Will the action prosper?
XPN: In case of legal separation the Court may order
that the guilty spouse shall give support to the A: YES. The principle of in pari delicto is applicable.
innocent one. (Art. 198, FC) Both are at fault. Consequently, H cannot avail of
himself of the defense of adultery of W. Besides, the
Support During Marriage Litigation act of H in giving money to W is implied condonation
of the adultery of W. (Amacen v. Baltazar, G.R. No. L-
During the pendency of the action for annulment or 10028, May 28, 1958)
declaration of absolute nullity of marriage and
action for legal separation, the court shall provide Amount of Support
for the support of the spouses and their common
children in the absence of a written agreement Amount shall be in proportion to the resources or
between the spouses. (FC, Art. 49) means of the giver and to the necessities of the
recipient. (FC, Art. 201)
Sources of support shall be the properties of the Support may be decreased or increased
absolute community or conjugal partnership. proportionately according to the reduction or
increase of the necessities of the recipient and the
Mutual support of the spouses after the final resources of the person obliged to furnish the same.
judgment granting the petition for legal separation, (FC, Art. 202)
annulment and declaration of nullity of marriage
Support, When Demandable
GR: Spouses are no longer obliged to render mutual
support after final judgment. The obligation of The obligation to give support is demandable from
mutual support ceases after final judgment. the time the person who has a right to receive
support needs it for maintenance.
XPN: In case of legal separation the Court may order
that the guilty spouse shall give support to the The support shall be paid only from the date of
innocent one. (Art. 198, FC) judicial or extrajudicial demand.
Effect of adultery of the wife The right to support does not arise from mere fact
of relationship but from imperative necessity
Adultery of the wife is a valid defense in an action without which it cannot be demanded. The law
for personal support (i.e. support coming from the presumes that such necessity does not exist unless
spouse’s own funds). If adultery is proved and support is demanded.
sustained, it will defeat the action for support. But if
both are equally at fault, the principle of in pari Effect of Reaching Age of Majority
delicto applies in which the husband cannot avail of
the defense of adultery. If a person is of age and no longer studies, he still
entitled to support unless there are just reasons for
the extinguishment of the right. (Javier v. Lucero, 94
Phil. 634) If, upon the other hand, he has not yet
2023 GOLDEN NOTES
II. MARRIAGE
finished his studies even if already of age, he still Attachment or execution of the right to receive
entitled generally to be supported. Of course, if the support (FC, Art. 208)
person supporting dies, the obligation ceases.
(Falcon v. Arca, L-18135, 31 July 1963) GR: The right to receive support and any money or
property obtained as support cannot be attached
Manner of Payment nor be subject to execution to satisfy any judgment
against the recipient.
Payment shall be made within first five days of each
corresponding month. In case of death of the person XPN: In case of contractual support or support given
entitled to receive support, his heirs shall not be by will, the excess in amount beyond that required
obliged to return what he has received in advance for legal support shall be subject to levy on
for such support. (FC, Art. 203) attachment or execution.
Payment by Third Person under Art. 208 NOTE: Contractual support shall be subject to
adjustment whenever modification is necessary due
The obligation to reimburse under this article is one to changes in circumstances beyond the
that likewise arises from quasi-contract. As contemplation of the parties.
distinguished from Arts. 206 of the FC and 2164 of
the NCC, “the obligor unjustly refuses or fails to give Q: Jurisdictional questions may be raised at any
support.” The law creates a promise of time. What is the exception with respect to the
reimbursement on the part of the person obliged to provisional character of judgment for support
furnish support, in spite of the deliberate disregard and the application of estoppel?
of his legal and moral duty. (Rabuya, 2006)
A: Judgment for support is always provisional in
Options given to persons giving support character. Res Judicata does not apply. The lower
court cannot grant a petition based on grounds,
1. To give a fixed allowance; or such as bigamy, not alleged in the petition. Such
2. To receive and maintain the recipient in the decision based on grounds not alleged in the
giver’s home or family dwelling. (FC, Art. 204) petition is void on the ground of no jurisdiction.
NOTE: In cases when there is a moral or legal However, if the lower court’s void decision is not
obstacle, the latter alternative in giving support assailed on appeal which dealt only with the matter
cannot be availed of. of support, the losing party is now estopped from
questioning the declaration of nullity and the SC will
If support is given by a stranger without the not undo the judgment of the RTC declaring the
knowledge of the person obliged to give marriage null and void for being bigamous.
support;
It is axiomatic that while a jurisdictional question
GR: The stranger shall have the right of may be raised at any time, this however admits of an
reimbursement exception where estoppel has supervened. (Lam v.
Chua, G.R. No. 131286, 18 Mar. 2004)
XPN: Unless it appears that he gave it without any
intention of being reimbursed. (FC, Art. 206) Q: Edward abandoned his legitimate children
when they were minors. After 19 years from the
NOTE: If the person obliged to give support unjustly time Edward left them, they, through their
refuses or fails to give it when urgently needed, any mother, finally sued him for support, which the
third person may furnish support to the needy court granted. The court ordered him to pay 2M
individual, with a right of reimbursement. (FC, Art. pesos as support in arrears.
207)
CIVIL LAW
Edward assails the grant of the support in A: The assailed order did not convert the action for
arrears as erroneous since under Art. 203 of the support into one for recognition but merely allowed
FC, there was never any demand for support, Fe to prove their cause of action. But even if the
judicial or extrajudicial, from them. Is his order effectively integrated an action to compel
contention correect? recognition with an action for support, such was
valid and in accordance with jurisprudence. The
A: NO. Edward could not possibly expect his integration of an action to compel recognition with
daughters to demand support from him considering an action to claim one’s inheritance is allowed.
their tender years at the time that he abandoned (Tayag v. CA, G.R. No. 95229, 09 June 1992) A
them. In any event, the mother of the girls had made separate action will only result in a multiplicity of
the requisite demand for material support although suits. Furthermore, the declaration of filiation is
this was not in the standard form of a formal written entirely appropriate to the action for support.
demand. Asking one to give support owing to the (Agustin v. CA, G.R. No. 162571, 15 June 2005)
urgency of the situation is no less a demand just
because it came by way of a request or a ppeal. Q: Can DNA testing be ordered in a proceeding
(Lacson v. Lacson, et al., G.R. No. 150644, 28 Aug. for support without violating the constitutional
2006) right against self-incrimination?
Q: Noel helped Lea by extending financial help to A: YES. Compulsory DNA testing and the
support Lea’s children with Edward. May Noel admissibility of the results thereof as evidence are
seek reimbursement of his contributions? If yes, constitutional. (People v. Yatar, G.R. No. 150224, 19
from whom may he do so? May 2004)
A: YES. Pursuant to Art. 207 of the FC, Noel can Moreover, it has mostly been in the areas of legality
rightfully exact reimbursement from Edward. This of searches and seizure and in the infringement of
provision reads that “[W]hen the person obliged to privacy of communication where the constitutional
support another unjustly refuses or fails to give right to privacy has been critically at issue.
support when urgently needed by the latter, any
third person may furnish support to the needy If, in a criminal case, an accused whose very life is at
individual, with right of reimbursement from the stake can be compelled to submit to DNA testing, so
person obliged to give support.” The resulting much more so may a party in a civil case, who does
juridical relationship between the Edward and Noel not face such dire consequences, be likewise
is a quasi-contract, an equitable principle enjoining compelled. DNA testing and its results is now
one from unjustly enriching himself at the expense acceptable as object evidence without running afoul
of another. (Lacson v. Lacson, et al., supra.) self-incrimination rights of a person. (Agustin v. CA,
G.R. No. 162571, 15 June 2005)
Q: Fe and her son Martin sued Martin’s alleged
biological father Arnel for support. Arnel denied
having sired Martin, arguing that his affair and
intimacy with Fe had allegedly ended in long
before Martin’s conception. As a result, Fe and
Martin moved for the issuance of an order
directing all the parties to submit themselves to
DNA paternity testing. The said motion was
granted by the court. Did the order of the court
convert the complaint for support to a petition
for recognition?
2023 GOLDEN NOTES
II. MARRIAGE
NOTE: Joint parental authority may be exercised

M. PARENTAL AUTHORITY over an illegitimate child when:
1. The father is certain;
1. CONCEPT OF PARENTAL AUTHORITY 2. The illegitimate children are living with the said
father and mother, who are cohabiting without
Parental Authority is defined as the mass of rights the benefit of marriage or under a void
and obligations which parents have in relation to marriage not falling under Art. 36 and 53. (Sta.
the person and property of their children until their Maria, 2017)
emancipation and even after this under certain
circumstances. (Rabuya, 2009) Parental authority and responsibility are
Parental authority includes inalienable and may not be transferred or
renounced except in cases authorized by law. The
1. Caring for and rearing of such children for right attached to parental authority, being purely
civic consciousness and efficiency; and personal, the law allows a waiver of parental
authority only in cases of adoption, guardianship,
2. Development of their moral, mental, and and surrender to a children's home or an orphan
physical character and well-being. (Art. 209, institution. (Arts. 222-224, FC; Act No. 3094)
FC)
Visitation rights
Characteristics of parental authority
It is the right of access of a non-custodial parent to
1. Jointly exercised by the father and mother; his or her their child or children. (Sec. 5, A.M. No. 02-
2. Natural right and duty of the parents; 11-12-SC)
GR: Cannot be renounced, transferred, or Who are entitled of visitation rights

waived.
1. The non-custodial parent in cases of:
XPN: In cases authorized by law such as in a. Legal separation;
cases of adoption, guardianship, and b. Separation de facto;
surrender to a children's home or an c. Annulment; and
orphan institution. (Santos v. CA, G.R. No. d. Declaration of nullity on the ground of
113054, 16 Mar. 1995) psychological incapacity or failure to
comply with the requirements of Art. 52;
3. Purely personal; and and
4. Temporary. (Rabuya, 2009)
2. Illegitimate father over his illegitimate child.
Exercise of parental authority
NOTE: In case of annulment or declaration of
The father and the mother shall jointly exercise absolute nullity of marriage, Article 49 of the Family
parental authority over the persons of their Code grants visitation rights to a parent who is
common children. In case of disagreement, the deprived of custody of his children. Such visitation
father’s decision shall prevail unless there is a rights flow from the natural right of both parent and
judicial order to the contrary. (Art. 211, FC) child to each other’s company. There being no such
parent-child relationship between them, a person
If the child is illegitimate, parental authority is with has no legally demandable right of visitation.
the mother. (Art. 176, FC) (Concepcion v. CA, G.R. No. 123450, 31 Aug. 2005)
CIVIL LAW
Q: Carlitos Silva and Suzanne Gonzales had a The paramount consideration in matters of custody
live-in relationship. They had two children, of a child is the welfare and well-being of the child.
namely, Ramon Carlos and Rica Natalia. Silva (Espiritu v. CA, G.R. No. 115640, 15 Mar. 1995)
and Gonzales eventually separated. They had an
understanding that Silva would have the The use of the word “shall” in Art. 213 of the FC is
children in his company on weekends. Silva mandatory in character. It prohibits in no uncertain
claimed that Gonzales broke that understanding terms the separation of a mother and her child
on visitation rights. Hence, Silva filed a petition below 7 years, unless such separation is grounded
for custodial rights over the children before the upon compelling reasons as determined by a court.
RTC. The petition was opposed by Gonzales who (Lacson v. San Jose-Lacson, G.R. No. L-23482, 30 Aug.
claimed that Silva often engaged in gambling 1968)
and womanizing which she feared could affect
the moral and social values of the children. In NOTE: The general rule that children less than 7
the meantime, Suzanne had gotten married to a years of age shall not be separated from the mother
Dutch national. She eventually immigrated to finds its raison d'etre in the basic need of minor
Holland with her children Ramon Carlos and children for their mother's loving care. This is
Rica Natalia. Can Silva be denied visitation predicated on the “best interest of the child”
rights? principle which pervades not only child custody
cases but also those involving adoption,
A: NO. During the pendency of the action and in the guardianship, support, personal status and minors
absence of adequate provisions in a written in conflict with the law. (Pablo-Gualberto v.
agreement between the spouses, the Court shall Gualberto, G.R. No. 154994/G.R. No. 156254, 28 June
provide for the support of the spouses and the 2005)
custody and support of their common children. The
Court shall give paramount consideration to the This also avoids the tragedy where a mother has
moral and material welfare of said children and seen her baby torn away from her. No man can
their choice of the parent with whom they wish to sound the deep sorrows of a mother who is
remain as provided to in Title IX. It shall also deprived of her child of tender age. (Dacasin v.
provide for appropriate visitation rights of the other Dacasin, G.R. No. 168785, 05 Feb. 2010)
parent. (Art. 49, FC)
Compelling Reasons
XPN: If the fears and apprehensions were founded
as to the father’s corrupting influence over the The so-called “tender-age presumption” under Art.
children and if it is proven therefore that indeed the 213 of the FC may be overcome only by compelling
father is a negative influence because of reasons like evidence of the mother’s unfitness. The mother has
immorality, drunkenness, etc. on the children, the been declared unsuitable to have custody of her
court, taking into consideration the best interest of children in one or more of the following instances:
the children, can deny his petition for the exercise of 1. Insanity;
his visitation rights. (Silva v. CA, G.R. No. 114742, 17 2. Abandonment;
July 1997) 3. Neglect;
4. Drug addiction;
Tender-Age Presumption (2006 BAR) 5. Affliction with a communicable disease;
6. Maltreatment of the child Immorality;
No child under 7 years of age shall be separated 7. Unemployment; and/or
from the mother, unless the court finds compelling 8. Habitual drunkenness. (Perez v. CA, G.R. No.
reasons to order otherwise. (Art. 213(2), FC) 118870, 29 Mar. 1996)
2023 GOLDEN NOTES
II. MARRIAGE
NOTE: The SC ruled that sexual preference or moral joint custody of Stephanie. In 2004, Herald sued
laxity alone does not prove parental neglect or Sharon alleging that she violated their contract
incompetence; to deprive the wife of custody of her as she retained sole custody over Stephanie. The
minor child, her moral lapses must have an adverse RTC dismissed Herald’s complaint and ruled
effect on the welfare of the child or it must have that the parties’ contract is void for
distracted the offending spouse from exercising contravening Art. 2035 (5) of the NCC. Is the RTC
proper parental care. (Pablo-Gualberto v. Gualberto, correct?
G.R. No. 154994 & 156254, 28 June 2005)
A: YES. The contract is not only void ab initio for
Exercise of Parental Authority in Case of being contrary to law, but it has also been
Absence, Death, Remarriage of Either Parent, or repudiated by the mother when she refused to allow
Legal or De facto Separation of Parents joint custody by the father. The agreement would be
valid if the spouses have not divorced or separated
1. Absence or death of either parent – parent because the law provides for joint parental
present shall continue exercising parental authority when spouses live together. However,
authority. (Art. 212, FC) upon separation of the spouses, the mother takes
sole custody under the law if the child is below 7
2. Remarriage of either parent – it shall not years old and any agreement to the contrary is void.
affect the parental authority over the children, Thus, the law suspends the joint custody regime for
unless the court appoints another person to be (1) children under seven of (2) separated or
the guardian of the person or property of the divorced spouses. Simply put, for a child within this
children. (Art. 213, FC) age bracket (and for commonsensical reasons), the
law decides for the separated or divorced parents
NOTE: Parental authority is not automatically how best to take care of the child and that is to give
given to the new spouse over the child of the custody to the separated mother. Indeed, the
surviving parent, unless such new spouse separated parents cannot contract away the
legally adopts the children. provision in the FC on the maternal custody of
children below 7 years. The Philippine courts do not
3. Legal or de facto separation of parents – the have the authority to enforce an agreement that is
parent designated by the court. (Art. 213, FC) contrary to law, morals, good customs, public order,
or public policy. (Dacasin v. Dacasin, G.R. No. 168785,
Considerations in the Designation of Child 05 Feb. 2010)
Custody
Q: If the parents are separated de facto, who
The Court shall take into account all relevant between them has custody over their child/
considerations in the designation of the parent, children?
especially the choice of the child over 7 years of age
except when the parent chosen is unfit. (Art. 213, A: In the absence of a judicial grant of custody to one
FC) parent, both of them have custody over their
child/children. (Art. 211, FC)
Q: Herald, an American citizen, and Sharon,
Filipino, got married in Manila in 1994. Their The parent who has been deprived of the rightful
union was blessed with one daughter, Stephanie custody of the child may resort to the remedy of
who was born in 1995. In 1999, Sharon sought habeas corpus. (Salientes v. Abanilla, G.R. No. 162734,
and obtained a divorce decree against Herald 29 Aug. 2006)
from Illinois. The Illinois court dissolved the
parties’ marriage and awarded to Sharon the
sole custody of Stephanie. In 2002, Herald and
Sharon executed in Manila a contract for the
CIVIL LAW
Q: Queenie was born to Renalyn and Ricky 2. SUBSTITUTE PARENTAL AUTHORITY

James, who had been living together with
Renalyn's parents without the benefit of
Substitute Parental Authority (2004 BAR)
marriage. Three (3) years later, the relationship
ended. Renalyn went to Manila, supposedly
It is the parental authority which the persons
leaving Queenie behind in the care and custody
designated by law may exercise over the persons
of her father, Ricky James. Ricky James alleged
and property of unemancipated children in case of
that, the parents of Renalyn took Queenie from
death, absence or unsuitability of both parents, or in
the school where he had enrolled her. When
default of a judicially appointed guardian.
asked to give Queenie back, Renalyn's parents
refused. Consequently, Ricky James filed a
Parental Preference Rule
petition for habeas corpus and child custody
before the RTC (petition a quo). Upon reaching
There is a recognition of the deep ties that bind
the CA it remanded the case a quo for
parent and child. Parents are thus placed first in
determination of who should exercise custody
rank in matters of parental authority.
over Queenie. Was such action proper?
The father or mother, if suitable, is entitled to

A: NO, CA erroneously applied Sec. 6 of Rule 99 of
exercise parental authority over his or her children.
ROC. This provision contemplates a situation in
As a consequence of which, the father or the mother,
which the parents of the minor are married to each
if suitable, is entitled to the custody of the child
other but are separated either by virtue of a decree
against all persons, even against the grandparents.
of legal separation or because they are living
(Rabuya, 2009)
separately de facto. In the present case, it has been
established that petitioner and Respondent Loreta
Order of preference for substitute parental
were never married. Hence, that portion of the CA
authority
Decision allowing the child to choose which parent
to live with is deleted, but without disregarding the
1. Surviving Grandparent (Art. 214, FC);
obligation of petitioner to support the child.
NOTE: The law considers the natural love of a

General rule is that the father and the mother shall
parent to outweigh that of the grandparents,
jointly exercise parental authority over the persons
such that only when the parent present is
of their common children. However, insofar as
shown to be unfit or unsuitable may the
illegitimate children are concerned, Art. 176 of the
grandparents exercise substitute parental
FC states that illegitimate children shall be under
authority. (Santos v. CA, G.R. No. 113054, 16 Mar.
the parental authority of their mother. Accordingly,
1995)
mothers (such as Renalyn) are entitled to the sole
parental authority of their illegitimate children
2. Oldest brother or sister, over 21 years unless
(such as Queenie), notwithstanding the father's
unfit or disqualified;
recognition of the child. In the exercise of that
authority, mothers are consequently entitled to
3. Actual Custodian over 21 years unless unfit or
keep their illegitimate children in their company,
disqualified (Art. 216, FC); and
and the Court will not deprive them of custody,
absent any imperative cause showing the mother's
4. In case of foundlings, abandoned, neglected, or
unfitness to exercise such authority and care.
abused children similarly situated, parental
(Masbate v. Relucio, G.R. No. 235498, 30 July 2018)
authority shall be entrusted in summary
judicial proceedings to heads of children’s
homes, orphanages, and similar institutions
duly accredited by the proper government
2023 GOLDEN NOTES
II. MARRIAGE
agency. (Art. 217, FC) required of a guardian. In fact, in her petition,

Bonifacia admitted the difficulty of discharging the
NOTE: duties of a guardian by an expatriate, like her. To be
a. Foundlings – newborn child children sure, she will merely delegate those duties to
abandoned by its their parents who are someone else who may not also qualify as a
unknown; guardian. (Vancil v. Belmes, G.R. No. 132223, 19 June
2001)
b. Abandoned – a child children who has have
no proper parental care or guardianship; 3. SPECIAL PARENTAL AUTHORITY
and
Special Parental Authority (2003, 2004, 2005,

c. Neglected – a child whose basic needs have
2010 BAR)
been deliberately or inadequately
unattended. (Rabuya, 2009)
It is the parental authority granted by law to certain
persons, entities, or institutions in view of their
Q: Bonifacia Vancil, a US citizen, is the mother of
special relation to children under their supervision
Reeder C. Vancil, a US Navy serviceman who died
instruction or custody. It is denominated as
in the USA on 22 Dec. 1986. During his lifetime,
“special” because it is limited and is present only
Reeder had two children named Valerie and
when the child is under their supervision
Vincent with his common-law wife, Helen G.
instruction or custody. It can also co-exist with the
Belmes. Bonifacia obtained a favorable court
parents’ parental authority. (Rabuya, 2009)
decision appointing her as legal and judicial
guardian over the persons and estate of Valerie
Persons who may exercise special parental
Vancil and Vincent Vancil, Jr. She alleged that
authority (Art. 218, FC)
Helen was morally unfit as guardian of Valerie
considering that Helen’s live-in partner raped
1. The school;
Valerie several times. Can Bonifacia exercise
2. School administrators;
substitute parental authority over Valerie and
3. School teachers; and
Vincent?
4. Individual, entity or institution engaged in child
care.
A: NO. Bonifacia, as the surviving grandparent, can
exercise substitute parental authority only in case of
Scope of Special Parental Authority (2003, 2010
death, absence or unsuitability of Helen, the parent.
BAR)
Considering that Helen is very much alive and has
exercised continuously parental authority over
The scope of special parental authority and
Vincent, Bonifacia has to prove, in asserting her
responsibility applies to all authorized activities,
right to be the minor’s guardian, Helen’s
whether inside or outside the premises of the
unsuitability. Bonifacia, however, has not proffered
school, entity, or institution. (Rabuya, 2009)
convincing evidence showing that Helen is not
suited to be the guardian of Vincent. Bonifacia
NOTE: The nature of the liability of persons having
merely insists that Helen is morally unfit as
special parental authority over said minors for their
guardian of Valerie considering that her live-in
acts or omissions causing damage to another is
partner raped Valerie several times.
principal and solidary. The parents, judicial
guardians, or the persons exercising substitute
Even assuming that Helen is unfit as guardian of
parental authority over said minor shall be
minor Vincent, Bonifacia still cannot qualify as a
subsidiarily liable. (Art, 219, FC)
substitute guardian. She is an American citizen and
a resident of Colorado. Obviously, she will not be
able to perform the responsibilities and obligations
CIVIL LAW
Substitute Parental Authority vs. Special 4. To enhance, protect, preserve and maintain
Parental Authority their physical and mental health at all times;
5. To furnish them with good and wholesome

SUBSTITUTE SPECIAL
educational materials, supervise their
PARENTAL PARENTAL
activities, recreation and association with
AUTHORITY AUTHORITY
others, protect them from bad company, and
Exercised prevent them from acquiring habits
concurrently with detrimental to their health, studies and morals;
the parental
authority of the 6. To represent them in all matters affecting their
parents. interests;
Exercised in case of:
It rests on the theory 7. To demand from them respect and obedience;
1. Death that while the child is
2. Absence, or in the custody of the 8. To impose discipline on them as may be
3. Unsuitability of person exercising required under the circumstances; and
parents. (Art. 214, special parental
FC) authority, the 9. To perform such other duties as are imposed
parents temporarily by law upon parents and guardians.
relinquish parental
authority over the Effects of Parental Authority upon the Person of
child to the latter. the Children
(Rabuya, 2009)
Parental rights mean the sum total of the rights of
the parents to the child, as well as the rights of the
4. EFFECTS OF PARENTAL AUTHORITY
child in and to the parent/s. Under the modern
concept, however, the concept of parental rights is
The parents and those exercising parental authority merely ancillary to the performance of parental
shall have with the respect to their unemancipated duties. In other words, the obligational aspect is
children on wards the following rights and duties: now supreme. (Rabuya, 2009)
(Art. 220, FC)
The following are parental rights protected to
1. To keep them in their company, to support, varying degrees by constitution and statutes:
educate and instruct them by right precept and
good example, and to provide for their a. Physical possession of child (custody);
upbringing in keeping with their means;
NOTE: In case of custodial parent, includes
2. To give them love and affection, advice and day-to-day care and companionship of
counsel, companionship and understanding; child;
3. To provide them with moral and spiritual b. Right to discipline child;

guidance, inculcate in them honesty, integrity,
self-discipline, self-reliance, industry and thrift, NOTE: Includes right to inculcate in child
stimulate their interest in civic affairs, and parent’s moral and ethical standards; right
inspire in them compliance with the duties of to control and manage minor child’s
citizenship; earnings;
2023 GOLDEN NOTES
II. MARRIAGE
c. Right to control and manage minor Rule on the Parent’s Duty of Representation
child’s property;
d. Right to be supported by adult child; GR: Parents are duty-bound to represent their
e. Right to have child bear parent’s name; minor children in all matters affecting their
and interests (Art. 220(5), FC).
f. Right to prevent adoption of child without
parents’ consent. (Rabuya, 2009) NOTE: This duty extends to representation in court
litigations. (Sec. 5, Rule 5, ROC)
Right to Child’s Custody
XPN: A guardian ad litem may be appointed by the
The right of parents to the custody of their minor court to represent the child when the best interest
children is one of the natural rights incidental to of the child so requires. (Art. 222, FC)
parenthood, a right supported by law and sound
public policy. The right is an inherent one, which is Scope of the Parent’s Right to Discipline the
not created by the State or decisions of the courts Child
but derives from the nature of the parental
relationship. (Sagala-Eslao v. CA, G.R. No. 116773, 16 Persons exercising parental authority may:
Jan. 1997)
1. Impose discipline on minor children as may be
Parents’ Right to Custody of the Child required under the circumstances; or
GR: Parents are never deprived of the custody and 2. Petition the court for the imposition of
care of their children. appropriate disciplinary measures upon the
child, which include the commitment of the
XPNS: child in entities or institutions engaged in
1. For cause; childcare or in children’s homes duly accredited
by the proper government agency. (Art. 223, FC)
NOTE: The law presumes that the child’s
welfare will be best served in the care and NOTE: Such commitment must not exceed 30
control of his parents. days.
2. If in consideration of the child’s welfare or well- Limitations on the Exercise of the Right to
being, custody may be given even to a non- Discipline the Child and its Consequences
relative. (Rabuya, 2009)
Persons exercising such right are not allowed to:
Basis for the Duty to Provide Support
1. Treat the child with excessive harshness or
Family ties or relationship, not parental authority. cruelty; or
2. Inflict corporal punishment.
NOTE: The obligation of the parents to provide
support is not coterminous with the exercise of Otherwise, the following are its consequences:
parental authority. (Rabuya, 2009)
1. Parental authority may be suspended;
2. Parent concerned may be held criminally

liable for violation of R.A. No. 7160 also
known as “Child Abuse Law”.
CIVIL LAW
Liability of Parents for Crimes Committed by and spend for medication. Jayson filed a
their Minor Children complaint for damages against the school and
Tabugo. Can the said school and its teacher,
Parents are also civilly liable for the felonies Tabugo, be held liable for the unfortunate
committed by their minor children under Art. 101 of incident of Jayson?
the RPC. (Rabuya, 2009)
A: YES. The proximate cause of the student’s injury
NOTE: The provision of the RPC does not cover was the concurrent failure of petitioners to prevent
situations where the issue of the civil liability of the foreseeable mishap that occurred during the
parents is based on crimes committed by their conduct of the science experiment. Petitioners were
minor children over 9 but under 15 years of age, negligent by failing to exercise the higher degree of
who acted with discernment, and also of minors 15 care, caution, and foresight incumbent upon the
years of age. This shall be resolved under Art. 2180 school, its administrators, and teachers. Art. 218 of
of the NCC. (Salen v. Balce, G.R. No. L-14414, 27 Apr. the FC, in relation to Art. 2180 of the NCC, bestows
1960) special parental authority on a school, its
administrators and teachers, or the individual,
Liability of Persons Exercising Special Parental entity or institution engaged in childcare, and these
Authority over the child persons have responsibility over the minor child
while under their supervision, instruction or
GR: They are principally and solidarily liable for custody. Authority and responsibility shall apply to
damages caused by the acts or omissions of the child all authorized activities whether inside or outside
while under their supervision, instruction, or the premises of the school, entity, or institution.
custody.
In this case, the petitioners’ negligence and failure
XPN: Unless they exercised the proper diligence to exercise the requisite degree of care and caution
required under the particular circumstance. This was demonstrated by the following:
may extinguish the liability with the minor. (Art.
219, FC) (i) petitioner school did not take affirmative
steps to avert damage and injury to its
NOTE: Parents, judicial guardians, or those students although it had full information on
exercising substitute parental authority over the the nature of dangerous science
minor are subsidiarily liable for said acts and experiments conducted by the students
omissions of the minor. during class;
Q: Jayson and his classmates were conducting a (ii) petitioner school did not install safety
science experiment about fusion of Sulphur measures to protect the students who
powder and iron fillings under the tutelage of conduct experiments in class;
Tabugo, the subject teacher and employee of St.
Joseph College. Tabugo left her class while the (iii) petitioner school did not provide protective
experiment was ongoing without having gears and devices, specifically goggles, to
adequately secured the students from any shield students from expected risks and
untoward incident or occurrence. In the middle dangers; and
of the experiment, Jayson checked the result of
the experiment by looking into the test tube (iv) petitioner Tabugo (the teacher) was not
with magnifying glass and it was moved towards inside the classroom the whole time her
his eyes. At that instance, the compound spurted class conducted the experiment,
from the test tube and several particles hit specifically, when the accident involving
Jayson’s eyes. His left eye was chemically the student occurred. (St. Joseph’s College v.
burned, for which he had to undergo surgery Miranda, G.R. No. 182353, 29 June 2010)
2023 GOLDEN NOTES
II. MARRIAGE
Effects of Parental Authority upon the Property Rules regarding the use of the child’s property
of the children
1. The property of minor children shall be devoted
Legal guardianship can be exercised by the father or to their support and education unless the title
mother, jointly, without need of court appointment or transfer provides otherwise.
over the property of an emancipated child.
2. The parents have the right to use only the fruits
NOTE: In case of disagreement, the father’s decision and income of said property for the following
shall prevail unless there is a judicial order to the purposes:
contrary. (Art. 229, FC) a. Primarily, to the child’s support;
b. Secondarily, to the collective daily
Kinds of Properties of a Minor needs of the family. (Art. 226, FC)
ADVENTITIOUS PROSFECTITIOUS NOTE: Income of the child may be used to help pay
Art. 226, FC Art. 227, FC the daily collective needs of the family when the
1. Earned or former’s property or income is more than sufficient
acquired by the to maintain his or her needs.
child through his
work or industry Rule on Lease of Property Belonging to Minor
1. Property given
by onerous or Children
by the parents
gratuitous title;
to the child for
GR: The parents, as legal guardians of the minor’s
the latter to
2. Owned by the property, may validly lease the same, even without
administer;
child; court authorization, because lease has been
considered as an act of administration.
2. Owned by the
3. Child is also the
parents;
usufructuary, XPNs: Court authorization is required if:
but the child’s 1. If the lease will be recorded in the Registry
3. Parents are
use of the of Property;
usufructuary;
property shall be
secondary to all 2. If the lease is for a period of more than one
4. Property
collective daily year, because this is already deemed an act
administered
needs of the of dominion. (Art. 1647, NCC)
by the child.
family; and
Grounds for Termination of Parental Authority
4. Administered by
the parents. 1. Permanently;
Necessity of Posting a Bond by the Parents a. Death of parents;

b. Emancipation of the child;
A parent is required to post a bond if the market
value of the property or the annual income of the NOTE: Child is emancipated upon reaching
child exceeds P50,000. the age of majority.
NOTE: The bond shall not be less than 10% of the c. Death of child. (Art. 228, FC)
value of the property or annual income. (Art. 225,
FC)
CIVIL LAW
2. Temporarily – it may be revived through Revocation of suspension of Parental Authority

and its revival
a. Adoption of the child;
b. Appointment of general guardian; The suspension may be revoked, and parental
c. Judicial declaration of abandonment of the authority revived by filing a case for the purpose, or
child in a case filed for the purpose; in the same proceeding if the court finds that the
d. Final judgment divesting parents of cause therefore had ceased and will not be repeated.
parental authority;
e. Incapacity of parent exercising parental Transfer or renunciation of Parental Authority
authority;
f. Judicial declaration of absence or GR: Parental authority and responsibility are
incapacity of person exercising parental inalienable and may not be transferred and
authority. (Art. 229, FC) renounced.
NOTE: In case of temporary termination of parental XPN: In cases authorized by law.

authority, parental authority may be revived
through a court judgment. (Rabuya, 2009) Loss of parental authority over the minor under
the Child Abuse Law
Grounds for Suspension of Parental Authority
(C-A-B-I-C-H) When an ascendant, step-parent,or guardian of the
minor, induces, delivers, or offers him to any person
1. Gives the child Corrupting orders, counsel, who would keep or have in his company such minor,
or example; 12 years or under or who in 10 years or more his
2. Treats child with excessive Harshness and junior, in any public or private place, hotel, motel,
cruelty; beer joint, discotheque, cabaret, pension house,
3. Subjects the child or allows them to be sauna or massage parlor, beach and/or other tourist
subjected to Acts of lasciviousness; resort or similar places.
4. Compels the child to Beg;
5. Culpable negligence of parent or person Corporal Punishment
exercising parental authority (Art. 231, FC);
6. Conviction of crime with penalty of civil It is the infliction of physical disciplinary measures
Interdiction; (Art. 230, FC) to a student. This is absolutely prohibited under the
FC. (Sta. Maria, 2010)
NOTE: If the ground for suspension of
parental authority is civil interdiction, the NOTE: While a teacher is administratively liable or
suspension is automatic so as its civilly liable in the event that he or she inflicts
reinstatement. (Art. 230, FC) corporal punishment to a student, it has been held
that where there was no criminal intent on the part
NOTE: If the person exercising parental authority of the teacher who angrily and repeatedly whipped
has subjected the child or allowed him to be a student resulting in slight physical injuries to the
subjected to sexual abuse, they shall be said student and where the purpose of the teacher
permanently deprived of parental authority. (Art. was to discipline a student, the said teacher cannot
232, FC) be held feloniously liable for the criminal offense of
slight physical injuries. (Bagajo v. Marave, G.R. No. L-
33345, 20 Nov. 1978)
2023 GOLDEN NOTES
II. MARRIAGE
Emancipation (2010 BAR) Q: Antonia Aruego and her sister Evelyn filed a
petition in the courts seeking Jose Aruego, Jr.
It is the release of a person from parental authority and his five children to recognize them as
whereby he becomes capacitated for civil life. illegitimate children and compulsory heirs of
Jose. They claim that there is open and
Emancipation takes place by attainment of majority continuous possession of status of illegitimate
at the age of 18 years. (Art. 234, FC, as amended by children of Jose who had an amorous
R.A. No. 6809) relationship with their mother Luz Fabian until
the time of the death of Jose. The court declared
Effects of Emancipation that Antonia Aruego is an illegitimate daughter
of the deceased with Luz Fabian while Evelyn is
1. Parental authority over the person and not. Antonia and Evelyn contested the decision
property of the child is terminated. citing provisions of the FC particularly Art. 127
2. Child shall be qualified and responsible for on Filiation, Art. 172 on illegitimate children’s
all acts of civil life. (Art. 236, FC) filiation, and Art. 256 on the retroactivity of the
code. Whether the provisions of the Family Code
Rights and obligations retained by the parents can be applied retroactively, and will it impair
even after the termination of parental authority the vested rights of the respondents?
1. Contracting marriage shall require parental A: The action for compulsory recognition and
consent until the age of 21. enforcement of successional rights which was filed
prior to the advent of the FC, must be governed by
2. The responsibility of parents or guardians Art. 285 of the NCC and not by Art. 175(2) of the FC.
for children and wards below 21 under Art. The present law cannot be given retroactive effect
2180(2) and (3) of the NCC shall not be insofar as the instant case is concerned, as its
derogated. application will prejudice the vested right of private
respondent to have her case decided under Art. 285
3. The parents are still liable for the quasi- of the NCC. The right was vested to her by the fact
delict committed by said child if the latter is that she filed her action under the regime of the
below 21. (Rabuya, 2009) NCC. Presiding from this, the conclusion then ought
to be that the action was not yet barred,
Retroactivity of Family Code (2005, 2010 BAR) notwithstanding the fact that it was brought when
the putative father was already deceased, since
GR: The Code shall have retroactive effect. (Art. 256, private respondent was then still a minor when it
FC) was filed, an exception to the general rule provided
under Art. 285 of the NCC. Hence, the trial court,
XPN: When retroactivity would prejudice vested which acquired jurisdiction over the case by the
rights. (Ibid.) filing of the complaint, never lost jurisdiction over
the same despite the passage of the FC. (Aruego v.
Vested right CA, G.R. No. 112193, 13 Mar. 1996)
Some right or interest in property that has become NOTE: If an action for recognition was filed prior to
fixed or established and is no longer open to doubt the effectivity of the Art. 173, FC cannot be given
or controversy. Rights are vested when the right to retroactive effect because it will prejudice the
enjoyment, present or prospective, has become the vested rights of petitioners transmitted to them at
property of some person as present interest. the time of the death of their father, Eutiquio
(Balboa v. Farrales, G.R. No. L-28059, 14 Feb. 1928) Marquino. “Vested right” is a right in property which
has become fixed and established and is no longer
open to doubt or controversy. It expresses the
CIVIL LAW
concept of present fixed interest, which in right

reason and natural justice should be protected
against arbitrary State action. (Marquino v. IAC, G.R.
No. 72078, 27 June 1994)
2023 GOLDEN NOTES
I. CLASSIFICATION OF PROPERTY
As to the objects involved
PROPERTY, OWNERSHIP, AND ITS It involves only It may refer to

MODIFICATIONS corporeal objects intangible matters
(Pineda, 2009)
Q: Are the rights under the Bill of Rights

I. CLASSIFICATION OF PROPERTY considered as property?
A: NO. They are not susceptible of appropriation.
Classification of Property (2022 BAR)

Requisites for a Thing to be Considered as
Property (U-S-A)
All things which are or may be the object of
appropriation are considered as either immovable or
1. Utility – It can serve as a means to satisfy human
real property, or movable or personal property. (Art.
needs;
414, NCC)
2. Substantivity or Individuality – It has a

GR: Those properties belonging to everyone. While
separate and autonomous existence and not
in particular no one owns common property, still in
simply a part of a whole; and
another sense, res communes are really owned by
everybody in that their use and enjoyment are
3. Appropriability – Susceptibility to ownership
given to all of mankind (e.g., air, wind, sunlight).
or possession, even if not yet actually
(Paras, 2008)
appropriated. (De Leon, 2006)
It is an object or a right which is appropriated or

Properties NOT susceptible of appropriation
susceptible of appropriation by man, with capacity
(C-L-A-P)
to satisfy human wants and needs. (Pineda, 2009)
1. Common things (res communes) (e.g., electricity,

NOTE: Property does not only cover material things
oxygen, distilled water);
because it mentions of rights which could either be
classified as real or personal right. (Art. 415(10),
XPN: Those that may be appropriated under
NCC; Paras, 2008)
certain conditions in a limited way.
Thing vs. Property

2. Not yet been appropriated (res nullius) (e.g.,
wild animals, hidden treasures) or because it
THING PROPERTY
has been lost or Abandoned by the owner;
As to the definition
It refers to all objects 3. Not susceptible due to Physical impossibility
It refers to objects
that exist, including (e.g., sun, moon, and other heavenly bodies);
already possessed by
those which could not and
man or are in their
be appropriated by
possession
man 4. Not susceptible due to Legal impossibility (e.g.,
human body while the person is alive). (De Leon,
As to the scope
2006)
All kinds of property
It is broader in scope
are things but not all
than property
things are property
CIVIL LAW
The human body is NOT a Property 5. Machinery, receptacles, instruments or

implements intended by the owner of the
It is neither real nor personal property, whether tenement for an industry or works which
alive or dead. It is not even property at all, in that it may be carried on in a building or on a piece
generally cannot be appropriated. of land, and which tend directly to meet the
needs of the said industry or works;
While a human being is alive, he cannot, as such, be
the object of a contract, for he is considered outside 6. Animal houses, pigeon-houses, beehives,
the commerce of man. He may donate part of his fish ponds or breeding places of similar
blood, may even sell part of his hair, but he cannot nature, in case their owner has placed them
sell his body. (Paras, 2008) or preserves them with the intention to
have them permanently attached to the
Under the R.A. No. 7170 or the Organ Donation Act of land, and forming a permanent part of it;
1991, donation of all or a part of a human body may the animals in these places are included;
only occur after a person’s death.
7. Fertilizer actually used on a piece of land;
NOTE: Death is the irreversible cessation of
circulatory and respiratory functions or the 8. Mines, quarries, and slag dumps, while the
irreversible cessation of all functions of the entire matter thereof forms part of the bed, and
brain, including the brain system. (Sec. 2(j), R.A. No. waters either running or stagnant;
7170, as amended)
9. Docks and structures which, though
floating, are intended by their nature and
A. IMMOVABLES object to remain at a fixed place on a river,
lake, or coast; and
10. Contracts for public works, and servitudes

Immovable Properties under the NCC
and other real rights over immovable
property. (Art. 415, NCC)
1. Land, buildings, roads and constructions of
all kinds adhered to the soil;
Classifications of Immovable Property
2. Trees, plants, and growing fruits, while
1. As to nature/mobility
they are attached to the land or form an
a. Immovable or real property; and
integral part of an immovable;
b. Movable or personal property.
3. Everything attached to an immovable in a

2. As to ownership
fixed manner, in such a way that it cannot
a. Public dominion; and
be separated therefrom without breaking
b. Private ownership.
the material or deterioration of the object;
3. As to alienability
4. Statues, reliefs, paintings or other objects
a. Alienable or within the commerce of men;
for use or ornamentation, placed in
and
buildings or on lands by the owner of the
b. Inalienable or outside the commerce of
immovable in such a manner that it reveals
men.
the intention to attach them permanently
to the tenements;
4. As to individuality
a. Specific property; and
b. Generic property.
2023 GOLDEN NOTES
5. As to susceptibility to touch 2. Incorporation – Those which are attached to an

a. Tangible; and immovable in a fixed manner and considered as
b. Intangible. an integral part thereof, irrespective of its
ownership;
6. As to susceptibility to substitution
a. Fungible; and 3. Destination – Things placed in buildings or on
b. Non-fungible. lands by the owner of the immovable or his
agent in such a manner that it reveals the
7. As to accession dependence or importance intention to attach them permanently thereto;
a. Principal; and and
b. Accessory
4. Analogy – Classified by express provision of law
8. As to existence or those which are not actually tangible
a. Existing or present property (res properties but are rights and interests over
existentes); and existing immovable properties. (Paras, 2008)
b. Future property (res futurae)
LAND, BUILDINGS, ROADS, AND
9. As to consumability CONSTRUCTIONS OF ALL KINDS ADHERED TO
a. Consumable; and THE SOIL
b. Non-consumable
Immovable by nature and incorporation
10. As to divisibility
a. Divisible; and Land, buildings, roads, and constructions of all kinds
b. Indivisible. (Paras, 2008) adhered to the soil. (Art. 415(1), NCC)
Classification of Things Land
1. Res nullius – belonging to no one; those objects By its very nature is immovable property. In
which have not yet been appropriated, or have whatever transaction land is involved, it is always
been abandoned by the owner with the immovable.
intention of no longer owning them.
A truck full of soil taken from the land (like garden
2. Res communes – belonging to everyone; things soil) becomes a personal property because it is no
which are used and enjoyed by all of mankind. longer adhered to the land. However, the moment it
(e.g., sunlight, starlight, and wind). is used to cover a land for ornamentation or
gardening, it becomes immovable again. (Pineda,
3. Res alicujus – belonging to someone; objects, 2009)
whether tangible or intangible, which are
privately owned, either in a collective or Building
individual capacity. (Paras, 2008)
GR: A building is always immovable whether built
Real properties are categorized by: (N-I-D-A) on one’s own land or rented.
1. Nature – Those which by their essence and XPN: When a building is merely superimposed on
nature are immovable or cannot be moved from the soil or is sold for immediate demolition, in which
one place to another; case it may be considered as movable or personal
property. (Paras, 2008)
CIVIL LAW
NOTE: Barong-barongs are not permanent Insofar as execution proceedings are considered,
structures but mere superimpositions on land. the house or building is considered real property.
Effect of demolition of a house A building subjected to a chattel mortgage cannot be

sold extrajudicially. For purposes of sale at public
Once a house is demolished, its character as an auction or execution sales, the building or house
immovable ceases because a house is classified as shall be treated as real property. The requirements
an immovable property by reason of its adherence of the ROC on foreclosure of REMs must therefore
to the soil on which it is built. (Bicerra v. Teneza, G.R. be followed. (Ibid.)
No. L-16218, 29 Nov. 1962)
TREES, PLANTS, AND GROWING FRUITS, WHILE
Mortgage of a building erected on a land THEY ARE ATTACHED TO THE LAND OR
belonging to another FORM AN INTEGRAL PART OF AN IMMOVABLE
A building, by itself, may be mortgaged apart from Trees and Plants

the land on which it was built even if a mortgage of
land necessarily includes, in the absence of Trees, plants, and growing fruits, while they are
stipulation of the improvements thereon, buildings. attached to the land or form an integral part of an
Such a mortgage would still be a real estate immovable. (Art. 415(2), NCC)
mortgage (REM) for the building would still be
considered immovable property even if dealt with 1. A real property; or
separately and apart from the land. (Yee v. Strong a. By nature - If they are spontaneous
Machinery Co., G.R. No. 11658, 15 Feb. 1918) products of the soil; or
A building can be the subject of a chattel b. By incorporation - If they have been

mortgage planted through cultivation or labor.
When the parties have so expressly designated, 2. A personal property.

especially when it is considered that the property
given as a security is a house of mixed materials The moment trees are detached or uprooted from
which by its very nature is considered as personal the land it is considered as personal property.
property. (Luna v. Encarnacion, G.R. No. L-4637, 30
June 1952) NOTE: In case of uprooted timber, they are still not
considered as personal property because timber is
Requisites for a building to be the subject of a an integral part of the timber land. (Paras, 2008)
Chattel Mortgage
Growing fruits
1. Parties mutually agreed to consider the house a
personal property; and GR: Growing fruits are considered as real property
2. That no innocent third party is prejudiced. so long as they are still attached to the soil. Once
removed from the soil, they become personal
NOTE: Under the Doctrine of Estoppel, parties to a properties.
contract who agreed to treat as personal property
that which by nature would be real property are XPN: Growing fruits may be exceptionally treated as
prohibited from assuming inconsistent positions personal property pursuant to the provisions of Art.
and repudiating an obligation voluntarily assumed. 416(2) of the NCC. (Rabuya, 2008)
(Pineda, 2009)
2023 GOLDEN NOTES
For example: “Placed by the owner”
1. For the purposes of sale of the whole or part of This means that the objects must be placed by the
the crops; owner of the immovable and not necessarily the
2. For purposes of attachment and execution; and owner of the object. (Paras, 2008)
3. For applying the provisions of the Chattel
Mortgage Law. (Ibid.) Requisites
EVERYTHING ATTACHED TO AN IMMOVABLE IN 1. Placed in buildings or on lands by the owner of

A FIXED MANNER the immovable or by his agent; and
2. Placed there in a manner that it reveals the
Immovable by incorporation intention to attach them permanently to the
tenements.
Everything attached to an immovable in a fixed
manner, in such a way that it cannot be separated Art. 415(3) v. Art. 415(4)
therefrom without breaking the material or
deterioration of the object. (Art. 415(3), NCC) Art. 415(3) Art. 415(4)
As to separability
An incorporated thing is considered as real Cannot be separated Can be separated from
property when in cases of separation, the injury, from the immovable the immovable without
breakage, or deterioration is substantial. (Paras, without breaking or breaking or
2008) deterioration. deterioration.
As to who placed the property
Res vinta Must be placed by the
owner of the
These are immovables by incorporation, which Need not be placed by
immovable, or by his
when separated from the immovable, regain their the owner.
agent whether express
condition as movable. (Pineda, 2009) or implied.
As to category of the real property
Steel towers are personal properties Real property by
Real property by
incorporation and
They are not buildings adhered to the soil (Art. incorporation.
destination.
415(1), NCC); they are not attached to an immovable (Paras, 2008)
in a fixed manner; they can be separated without
substantial damage or deterioration, and they are MACHINERY, RECEPTACLES, INSTRUMENTS,
not machineries intended for works on the land. OR IMPLEMENTS
(Board of Assessment Appeals v. Meralco, G.R. No. L-
15334, 31 Jan. 1964) Requisites for Machinery to be considered Real
Property (C-O-T-E)
STATUES, RELIEFS, PAINTINGS OR OTHER
OBJECTS FOR USE OR ORNAMENTATION 1. The industry or work must be Carried on in a
building or on a piece of land;
Immovable by Incorporation and by Destination
2. The machinery must:
Statues, reliefs, paintings, or other objects for use or a. Be placed by the Owner of the tenement
ornamentation placed in buildings or on lands by or his agent; and
the owner of the immovable in such a manner that it b. Tend directly to meet the needs of the
reveals the intention to attach them permanently to said industry or work; and
the tenements. (Art. 415(4), NCC)
CIVIL LAW
3. Be Essential and principal to the industry or Equipment of a transportation business

work, and not merely incidental thereto. (Paras, classified as personal property
2008)
A transportation business is not carried on in a
NOTE: Machinery, receptacles, instruments or building or on a specified land. Hence, equipment
implements intended by the owner of the tenement destined only to repair or service a transportation
for an industry or works which may be carried on business may not be deemed real property, but
in a building or on a piece of land and which tend personal property.
directly to meet the needs of the said industry or
works. (Art. 415(5), NCC) Machines must be essential and principal elements
in the industry and must directly meet the needs of
Machinery placed by a tenant or by a said industry. It does not include movables which
usufructuary is NOT real property are merely incidentals, without which the business
can still continue or carry on their functions.
Since it is placed by a person having only a
temporary right, it does not become immobilized. Cash registers, typewriters, etc. usually found and
(Valdez v. Central Altagracia, 225 U.S. 58, 1912) used in hotels and restaurants are merely
incidentals not considered immobilized by
Where a tenant places the machinery under the destination because these businesses can carry on
express provision of lease that it shall become a part their functions without this equipment. (Mindanao
of the land belonging to the owner upon the Bus Co. v. City Assessor and Treasurer, G.R. No. L-
termination of the lease without compensation to 17870, 29 Sept. 1962)
the lessee, the tenant acts as an agent of the owner
and the immobilization of the machineries arises Machineries bolted or cemented on real
from the act of the owner in giving by contract a property mortgaged
permanent destination to the machinery. (Ibid.)
It is not considered an immovable property. The fact
Equipment and living quarters of the crew that machineries were bolted or cemented on real
permanently attached are immovable property mortgaged does not make them ipso facto
properties (2007 BAR) immovable under Art. 415(3) and (5) as the parties’
intent has to be looked into. (Rabuya, 2008)
It is intended to meet the needs of the industry
being undertaken by MPC. The equipment partakes When immovable property by nature may be
of the nature of the immovable upon which it has treated as a chattel
been placed.
Even if the properties appear to be immovable by
The living quarters, if attached to the immovable nature, nothing detracts the parties from treating
platform with permanence, becomes an immovable them as chattels to secure an obligation under the
as well. Permanence means they cannot be principle of estoppel. (Tsai v. CA, G.R. No. 120098, 02
separated without destroying the platform or the Oct. 2001)
quarters. If the attachment is not permanent, or not
merely superimposed on the platform, then the Effect of temporary separation of movables
living quarters are movable properties. from the immovables to which they are attached
There are two views:

1. They continue to be regarded as immovables;
and
2. Fact of separation determines the condition of
the objects thus recovering their condition as
2023 GOLDEN NOTES
movables. (De Leon, 2006) intended them to be permanent.
Machines though essential and principal The animals in the animal houses, the pigeons in the
elements of the industry are personal pigeon houses, the bees in the beehives, the fish in
properties when provided in the lease the fishponds are included and considered part of
agreement the immovable property. (Pineda, 2009)
The Court’s holding that the machines should be Cages are not included
deemed personal property pursuant to the Lease
Agreement is good only insofar as the contracting It will be considered as personal property since they
parties are concerned. Hence, while the parties are can be moved from one place to another. (Paras,
bound by the Lease Agreement, third persons acting 2008)
in good faith are not affected by its stipulation
characterizing the subject machinery as personal. FERTILIZER ACTUALLY USED ON A
(Serg’s Products, Inc. v. PCI Leasing and Finance, Inc., PIECE OF LAND
G.R. No. 137705, 22 Aug. 2000)
Fertilizers
ANIMAL HOUSES, PIGEON-HOUSES, BEEHIVES,
FISH PONDS,OR BREEDING PLACES OF Fertilizer actually used on a piece of land. (Art.
SIMILAR NATURE 415(7), NCC)
Animal houses, pigeon houses, etc. Fertilizers in sacks are not included
Animal houses, pigeon-houses, beehives, fishponds, Fertilizers which are still in the sacks, although
or breeding places of similar nature, in case their there is intention to place them or use them on land,
owner has placed them or preserves them with the are movable. Only fertilizers actually used on a piece
intention to have them permanently attached to the of land are deemed immovable since it is already
land and forming a permanent part of it; the animals placed in the land and can never be separated from
in these places are included. (Art. 415(6), NCC) it without scraping the soil or destroying it. (Pineda,
2009)
These are immovable by destination or by
incorporation. The Code requires that they be MINES, QUARRIES, AND SLAG DUMPS, AND
placed by the owner of the land in order to acquire WATERS
the nature of real property. However, they are still
considered as real property even if not placed by the Mines, Quarries, and Slag Dumps
owner if such structures are adhered to the soil in a
permanent manner. (Rabuya, 2008; Davao Saw Mill Mines, quarries, and slag dumps, while the matter
Co., Inc., v. Castillo, G.R. No. L-40411, 07 Aug. 1935) thereof forms part of the bed, and waters either
running or stagnant. (Art. 415(8), NCC)
Beehives, fishponds or breeding places of
similar nature are real property; animals By their nature, mines quarries and slag dumps are
contained therein, included immovable property.
When purposely constructed or attached to the 1. Mines – These are mineral lands where
ground or on another immovable (like a tree-wall), excavations are done to extract minerals
fishponds and other similar breeding places, like such as gold, ores etc.
cemented container where breeding of fishes or
crustaceans is done, are considered immovable 2. Quarries – These are lands where stones
property if the owner of the land or tenement are chipped of or where sand is being
CIVIL LAW
extracted. CONTRACTS FOR PUBLIC WORKS, AND

SERVITUDES, AND OTHER REAL RIGHTS OVER
3. Slag dumps – They consist of waste and IMMOVABLE PROPERTY
dirt taken from a mine and mounted on the
surface of the ground under excavation Immovable by analogy
4. Running or Stagnant Waters – These Contracts for public works and servitudes and
waters refer to waters still running through other real rights over immovable property. (Art.
the soil or ground in mines and quarries. 415(10), NCC)
(Pineda, 2009)
These properties refer to contracts for public works,
DOCKS AND FLOATING STRUCTURES servitudes and real rights over immovable property
(like usufruct). They are inseparable from their
Docks and structure which, though floating, are sources which are immovable. Hence, for
intended by their nature and object to remain at a convenience, they are considered immovable not by
fixed place on a river, lake or coast. (Art. 415(9), their nature, destination or incorporation but by
NCC) analogy. While no tangible, they have the
characteristics of real property (e.g., Contract over a
When power barges are classified as real construction of a bridge). (Pineda, 2009)
properties
Power barges are categorized as immovable B. MOVABLES

property by destination, being in the nature of
machinery and other implements intended by the
owner for an industry or work which may be carried
Movable properties (S-O-F-A-S-T)
on in a building or on a piece of land and which tend
directly to meet the needs of said industry or work.
1. Movables susceptible of Appropriation which
(Fels Energy, Inc. v. Province of Batangas, G.R. No.
are not included in Art. 415, NCC;
168557, 19 Feb. 2007)
2. Real property which by any Special provision of
Floating platform is an immovable property
law considers as personality (e.g., Growing
crops under the Chattel Mortgage Law);
The platform is an immovable property by
destination. It was intended by the owner to remain
3. Forces of nature which are brought under the
at a fixed place on a river or coast. Art. 415(9) of the
control of science (e.g., Electricity generated by
NCC considers as real property “docks and
electric powers, solar light for batteries power);
structures which, though floating are intended by
their nature and object to remain at a fixed place on
4. In general, all things which can be Transported
a river, lake, or coasts.” (Ibid.)
from place to place without impairment of the
real property to which they are fixed; (Art. 416,
Vessels are considered personal property under the
NCC)
civil law and common law and occasionally referred
to as peculiar kind of personal property. It is
5. Obligations and actions which have for their
essential that a record of documents affecting the
object movables or demandable sums; and
title to a vessel be entered in the record of the
Collector of Customs at the port of entry. (Art. 585,
6. Shares of stock of agricultural, commercial and
Code of Commerce)
industrial entities, although they have real
estate. (Art. 417, NCC)
2023 GOLDEN NOTES
Special kind of personal property 3. Test of Mobility – If the property is capable of

being carried from place to place without
The author, composer, painter, sculptor, inventor injuring the real property to which it may in the
have rights over their works. These rights are meantime be attached. (De Leon, 2006)
personal property. (Pineda, 2009)
Classification of property by nature
Interest in business is a personal property
Movable property is either consumable or non-
With regard to the nature of the property consumable. To the first class belong those
mortgaged which is one-half interest in the movables which cannot be used in a manner
business, such interest is a personal property appropriate to their nature without their being
capable of appropriation and not included in the consumed; to the second class belong all others.
enumeration of real properties in Art. 335 of the (Art. 418, NCC)
NCC and may be the subject of mortgage.
(Strochecker v. Ramirez, G.R. No. 18700, 26 Sept. Properties classified according to
1922) consumability
The business of providing telecommunication is 1. Consumable property – That which cannot be

a personal property used according to its nature without being
consumed or being eaten or used up (e.g.,
The business of providing telecommunication or cigarette, glass of wine); and
telephone service is likewise personal property
which can be the object of Theft under Art. 308 of the 2. Non-consumable property – That which can be
RPC. used according to its nature without being
consumed or being eaten or used up (e.g.,
Indeed, while it may be conceded that international eyeglasses, book). (Rabuya, 2008)
long-distance calls, the matter alleged to be stolen
in the instant case, take the form of electrical Properties classified according to Susceptibility
energy, it cannot be said that such international to Substitution
long-distance calls were personal properties
belonging to PLDT since the latter could not have 1. Fungible property – If it can be substituted by
acquired ownership over such calls. PLDT merely another thing of the same kind, quantity and
encodes, augments, enhances, decodes and quality; and
transmits said calls using its complex
communications infrastructure and facilities. 2. Non-fungible property – if not replaceable in
(Laurel v. Abrogar, G.R. No. 155076, 13 Jan. 2009 such equivalents. (Paras, 2008)
Tests to determine whether a property is a NOTE: It is fungible if, by the intention of the parties,
movable property (M-E-S) it can be replaced by another of the same kind;
otherwise, it is a non-fungible. (Rabuya, 2008)
1. Test of Exclusion – Everything not included in
Art. 415 of NCC (e.g., ships or vessels or interest Property is either of public dominion or of
in a business); private ownership
2. By reason of a Special law – Immovable by 1. In relation to the State

nature but movable for the purpose of the a. Public Dominion; and
special law (e.g., Growing crops for purposes of b. Patrimonial. (Arts. 420 & 421, NCC)
the Chattel Mortgage Law); and
CIVIL LAW
2. In relation to political subdivisions/local Kinds of property of Public Dominion (U-S-D)

government unit
a. Public use; and 1. For Public Use – may be used by anybody;
b. Patrimonial. (Arts. 423 & 424, NCC)
2. Intended for Public Service and not for public
use – may be used only by duly authorized
3. In relation to private persons persons; and
a. Owned individually; and 3. For the Development of the national wealth –
b. Owned collectively. (Art. 425, NCC) like our natural resources. (Art. 420, NCC)
NOTE: Sacred and religious objects are considered Characteristics of Properties of Public Dominion
outside the commerce of man. They are neither (BOLERU-Pre)
public nor private party. (Barlin v. Ramirez, G.R. No.
L-2832, 24 Nov. 1906) 1. In general, they can be Used by everybody;
2. Cannot be Levied upon by execution or
Public dominion attachment;
3. May Either be real or personal property;
It means ownership by the public in general, in that 4. Cannot be acquired by Prescription;
not even the State or subdivisions thereof may make 5. Cannot be Registered under Land Registration
them the object of commerce as long as they remain Law and be the subject of Torrens Title;
properties for public use. (Paras, 2008) 6. Outside the commerce of man – cannot be
alienated or leased or be subject of any
Properties classified as public dominion cannot be contract; and
alienated but are not totally outside the commerce 7. Cannot be Burdened by voluntary easement.
of man as the Constitution allows the State to enter
into co-production, joint ventures or production- All other property of the State, which is not of the
sharing agreements with private individuals or character stated in the preceding article, is a
corporations for their exploration, development patrimonial property. (Art. 421, NCC)
and utilization. (Rabuya, 2008)
Patrimonial Property
NOTE: In order to be classified as property of public
dominion, an intention to devote it to public use or This is a property pertaining to the State, which is
to public service is sufficient and it is not necessary not intended for public use, public service, or for the
that it must actually be used as such. (Ibid.) development of national wealth. It is intended
rather for the attainment of the economic ends of
The following things are property of public the State, that is, for its subsistence.
dominion:
NOTE: The patrimonial property of the State or any
1. Those intended for public use, such as roads, of its subdivisions may be acquired by private
canals, rivers, torrents, ports and bridges individuals or juridical persons through
constructed by the State, banks, shores, prescription. It can be the object of an ordinary
roadsteads, and others of similar character; and contract. (Cebu Oxygen & Acetylene Co., Inc. v.
Bercilles, G.R. No. L40474, 29 Aug. 1975)
2. Those which belong to the State, without being
for public use, and are intended for some public Q: How would you classify the rail roads,
service or for the development of the national terminals and other properties of the Light Rail
wealth. (Art. 420, NCC) Transit Authority (LRTA)? Are they lands of
public dominion?
2023 GOLDEN NOTES
A: The properties of LRTA are properties of public restrictions and other conditions for the use of the
dominion and therefore owned by the State or the road do not affect the public character of the road.
Republic of the Philippines. No one can dispute (Light Rail Transit Authority v. City of Pasay, G.R. No.
properties of public dominion mentioned in Art. 211299, 28 June 2022, as penned by J. Hernando)
420(1) of the NCC, such as “roads, canals, rivers,
torrents, ports and bridges constructed by the Conversion from property of public dominion to
State," are owned by the State. While there is no patrimonial property, how effected
specific mention of "rail roads" or "rail road tracks,”
the wording of the said provision permits inclusion Property of public dominion, when no longer
of other properties of similar character. There is no intended for public use or for public service, shall
question that the LRT System is devoted to public form part of the patrimonial property of the State.
use because the same was constructed with the (Art. 422, NCC)
intent of providing mass transportation to the
people to alleviate the traffic and transportation When no longer intended or operated for public
situation in Metro Manila. Rail roads are of a similar use or public service, a property of public dominion
nature with roads, as both are man-made shall form part of the State’s patrimonial property
constructions on land to facilitate the passage of as of the date the Government, through the
certain vehicles. In fact, the LRT's rail roads and Executive or Legislative Departments, has formally
terminals are anchored at certain points, on public declared that it is no longer needed for said
roads, similar with elevated highways. (Light Rail purposes. (Ignacio v. Director of Land, G.R. No. L-
Transit Authority v. City of Pasay, G.R. No. 211299, 28 12958, 30 May 1960)
June 2022, as penned by J. Hernando)
The property of provinces, cities, and
Q: Does the fact that the LRTA charge fees municipalities is divided into property for public
change the character of the LRT properties? use and patrimonial property. (Art. 423, NCC)
A: The mere fact that LRTA collects fees and other Property for public use, in the provinces, cities, and
charges from the public does not remove the municipalities, consist of the provincial roads, city
character of the rail roads and terminals as streets, municipal streets, the squares, fountains,
properties for public use. The operation by the public waters, promenades, and public works for
government of an elevated highway or expressway public service paid by said provinces, cities, or
with a toll does not change the character of the road municipalities.
as one for public use. Someone must pay for the
maintenance of the road, either the public indirectly All other property possessed by any of them is
through the taxes they pay the government, or only patrimonial and shall be governed by the NCC,
those among the public who actually use the road without prejudice to the provisions of special laws.
through the toll fees they pay upon using the road. (Art. 424, NCC)
In fact, the tollway system is a more efficient and
equitable manner of taxing the public for the Properties for public service and properties for
maintenance of public roads. The charging of fees to the development of national wealth
the public does not determine the character of the
property whether it is of public dominion or not. 1. Public service – It depends on who pays for the
Art. 420 of the NCC defines property of public service. If paid for by the political subdivision,
dominion as one “intended for public use.” Even if public; if for profit, patrimonial; and
the government collects toll fees, the road is still
"intended for public use" if anyone can use the road 2. National wealth – It is still property for public
under the same terms and conditions as the rest of use under the Regalian Doctrine. (Rabuya, 2008)
the public. The charging of fees, the limitation on the
kind of vehicles that can use the road, the speed
CIVIL LAW
Property of Municipal Corporations An executive or legislative act is necessary to

reclassify property into patrimonial. The
1. Provincial roads; conversion cannot be inferred from non-use.
2. City streets;
3. Municipal streets; NOTE: It may be disposed of by the State in the same
4. Squares; manner that private individuals dispose of their
5. Fountains; own property subject, however, to administrative
6. Public waters; laws and regulations.
7. Promenades; and
8. Public works for public service paid for by said The fact that the Roppongi site has not been used for
provinces, cities, or municipalities. (Art. 424, a long time for actual embassy service does not
NCC) automatically convert it to patrimonial property. An
abandonment of the intention to use the Roppongi
NOTE: All other property possessed by any of them property for public service and to make it
are patrimonial. (Rabuya, 2008) patrimonial property must be definite.
Abandonment cannot be inferred from the non- use
Charging of fees does not remove property as alone. (Laurel v. Garcia, G.R. No. 92013, 25 July 1990)
public dominion Any such conversion happens only if the property is
withdrawn from public use. Accordingly, the
The charging of fees to the public does not withdrawal of the property in question from public
determine the character of the property whether it use by the City of Cebu and its subsequent sale to the
is of public dominion or not. The airport lands and petitioner is valid. (Cebu Oxygen and Acetylene Co. v.
buildings are devoted to public use because they are Bercilles, G.R. No. L40474, 29 Aug. 1975)
used by the public for international and domestic
travel and transportation. The terminal fees MIAA Sewage system of a city is a patrimonial property
charges to passengers, as well as the landing fees
MIAA charges to airlines, constitute the bulk of the It is property of the city, purchased with private
income that maintains the operations of MIAA. funds and not devoted to public use (it is for profit).
(Manila International Airport Authority v. CA, G.R. It is therefore patrimonial under the NCC. Nor can
No. 155650, 20 July 2006) the system be considered “public works for public
service” under Art. 424 of the NCC because such
Private Ownership classification is qualified by ejusdem generis; it must
be of the same character as the preceding items.
Property of private ownership, besides the (City of Cebu v. NAWASA, G.R. No. 12892, 20 Apr.
patrimonial property of the State, provinces, cities, 1960)
and municipalities, consists of all property
belonging to private persons, either individually or Q: The Delfin spouses claimed that they were the
collectively. (Art. 425, NCC) owners of a 28,800 square meter parcel of land
in Iligan City. They had been declaring the Iligan
Patrimonial Property of the State property in their names for tax purposes since
1952, and had been planting it with mangoes,
It is the property intended for the attainment of the coconuts, corn, seasonal crops, and vegetables.
economic ends of the State, that is, for subsistence. They alleged that NHA took possession of a
It is owned by the State in its private or proprietary 10,798 square meter portion of the property.
capacity. It is the property not devoted to public use, Despite their repeated demands for
public service, or the development of the national compensation, the National Housing Authority
wealth. (NHA) failed to pay the value of the property.
The NHA alleged that the Delfin spouses'
property was part of a military reservation area.
2023 GOLDEN NOTES
It reserved the area in which property is temporarily. (Pineda, 2009)

situated for Iligan City's slum improvement and
resettlement program as cited in Proclamation XPN: Aliens may only acquire such lands by
No. 2143, and the relocation of families who hereditary succession. (Krivenko v. Registry of
were dislocated by the National Steel Deeds, G.R. No. L-630, 15 Nov. 1947)
Corporation's five-year expansion program.
Effect of a subsequent sale by the disqualified
Does the Delfin Sps. have the right to claim the alien vendee to a qualified Filipino citizen
just compensation?
If land is invalidly transferred to an alien who
A: YES. Sec. 48 of C.A. No. 141 (Public Land Act) subsequently becomes a citizen or transfers it to a
enabled the confirmation of claims and issuance of citizen, the flaw in the original transaction is
titles in favor of citizens occupying or claiming to considered cured and the title of the transferee is
own lands of the public domain or an interest rendered valid.
therein. Sec. 48(b) thereof specifically pertained to
those who "have been in open, continuous, Thus, the subsequent transfer of the property to
exclusive, and notorious possession and, occupation qualified Filipinos may no longer be impugned on
(OCENPO) of agricultural lands of the public the basis of invalidity of the initial transfer. The
domain, under a bona fide claim of acquisition or objective of the constitutional provision to keep our
ownership, since 12 June 1945.” lands in Filipino hands has been achieved. (Lee v.
Republic, G.R. No. 12819, 03 Oct. 2001)
Sec. 48(b) of C.A. No. 141 therefore requires that two
requisites be satisfied before claims of title to public NOTE: The constitutional proscription against
domain lands may be confirmed: first, that the land ownership of lands of the public or private domain
subject of the claim is agricultural land; and second, by an alien was intended to protect lands from
OCENPO of the land since 12 June 1945. That the falling in the hands of non-Filipinos. (Ibid.)
Iligan property was alienable and disposable,
agricultural land, has been admitted. What is Regalian Doctrine
claimed instead is that petitioners' possession is
debunked by how the Iligan property was All lands not otherwise appearing to be clearly
supposedly part of a military reservation area which within private ownership are presumed to be
was subsequently reserved for Iligan City's slum owned by the State. (Pineda, 2009)
improvement and resettlement program, and the
relocation of families who were dislocated by the Reversion
National Steel Corporation's five-year expansion
program. (Heirs of Sps. Delfin v. NHA, G.R. No. 193618, An action where the ultimate relief sought is to
28 Nov. 2016) revert the land back to the government under the
Regalian Doctrine. (Ibid.)
Private ownership of land prohibited to aliens
(Krivenko Doctrine) “Muebles” Or “Furniture” when used alone;
effects
GR: Aliens have no right to acquire any public or
private agricultural, commercial, or residential If used alone in a contract or agreement, it will not
lands in the Philippines. include things found therein like money, credits,
commercial securities, stocks and bonds, jewelry,
The same rule is applicable to a foreign corporation scientific or artistic collection, books medals, arms,
even if it is a religious and non-stock corporation. A clothing, horses or carriages and their accessories,
foreign-owned corporation cannot be the grains, liquids which do not have as their principal
transferee of a land in the Philippines even purpose the furnishing or the ornamenting of the
CIVIL LAW
building where the “muebles” or “furniture” is

found.
XPN: When the law or the individual declaration

clearly provides that the aforesaid things are
included. (Art. 426, NCC; Pineda, 2009
2023 GOLDEN NOTES
II. BUNDLE OF RIGHTS
right to the ownership and possession of the

II. BUNDLE OF RIGHTS subject property?
A: YES. Respondents have the better right to the

ownership and possession of the subject property.
The basis is the LRA certification, daybook entry, and
A. OWNERSHIP Decree No. 98992 that was issued to Emiliana
Bacalso. The Decree bars all claims and rights which
arose as may have existed prior to the decree of
Ownership may be exercised over things or rights. registration. (Heirs of Delfin v. Rabadon, G.R. No.
(Art. 427, NCC) 165014, 31 July 2013)
Ownership is the juridical relation of a person over a Attributes of ownership

thing by virtue of which said person has the
exclusive power or authority to receive all the 1. Right to enjoy (jus utendi); (Art. 428, NCC);
benefits and advantages arising from said thing, 2. Right to the fruits (jus fruendi);
save those restricted by law or the recognized rights 3. Right to abuse (jus abutendi);
of others. (Pineda, 2009) 4. Right to dispose (jus dispodendi); (Ibid.)
5. Right to recover (jus vindicandi); (Ibid.)
Kinds of Ownership (Fu-N-Co-S) 6. Right to accessories (jus accessiones);
7. Right to possess (jus possidendi);
1. Full ownership – Includes all the rights of an 8. Right to exclude; (Art. 429, NCC); and
owner; 9. Right to enclose. (Art. 430, NCC).
NOTE: Naked ownership + Usufruct The owner has the right to enjoy and dispose of a
thing, without other limitations than those
2. Naked ownership – Ownership where the established by law.
rights to the use and to the fruits have been
denied; The owner has also a right of action against the
holder and possessor of the thing to recover it.
NOTE: Full ownership – Usufruct (Art. 428, NCC)
3. Sole ownership – Ownership is vested in only The owner or lawful possessor of a thing has the
one person; and right to exclude any person from the enjoyment
and disposal thereof. For this purpose, he may use
4. Co-ownership – Ownership is vested in two or such force as may be reasonably necessary to repel
more persons. There is unity of the property, or prevent an actual or threatened unlawful
and plurality of the subjects. (Paras, 2008) physical invasion or usurpation of his property.
(Art. 429, NCC)
Q: Respondents inherited the subject property
from Emiliana Bacalso, by virtue of Decree No. Lease merely follows the property as a lien or
98992. Sometime later, they found the heirs of encumbrance
Alejandra Delfin to be occupying the said
property, to which they even constructed houses Q: On 15 Apr. 1991, Nicolasa authorized her
there. The heirs argued they have better right for daughter, Carmelita, Artemio's sister, to
it was inherited to them after it was bought by mortgage the subject property to Jose, the
the predecessor from Emiliana Bacalso; also, predecessor-in-interest of Jose, Jose Jr., and
they are the ones paying the subject property’s Virginia in order to secure a loan in the amount
realty taxes. Do the respondents have the better of P112,000.00. As Nicolasa failed to settle her
CIVIL LAW
loan obligation when it fell due, Jose, led an ownership would not suffice.
application for extra-judicial foreclosure of
mortgage before the RTC of Olongapo City, As jurisprudence prescribes, the demonstration by
Branch 72, docketed as Case No. 07-0-91. After the third party-claimant should be made within the
the requirements of posting, notices, and context of an adversarial hearing, where the basic
publication were complied with, the subject principles of Evidence and Civil Procedure ought to
property was sold at a public auction, where be followed, such as: (1) it is the claimant who has
Jose emerged as the highest bidder. A Certificate the burden of proving his claim; (2) the claim must
of Sale was thus issued in his favor. The period be established through a preponderance of
of redemption expired without the subject evidence; and (3) evidence not presented or
property being redeemed. Hence, a Final Bill of formally offered cannot be admitted against the
Sale was issued and registered in Jose's name. opposing party. In this case, none of these principles
Thereafter, the latter executed an Affidavit of were followed for the CA considered evidence that
Consolidation of Ownership. This were not only submitted in a totally different case
notwithstanding, Nicolasa persisted in her against an entirely different party but are also
occupancy of the subject property and refused to innately inadequate to — at least — prima facie
deliver possession to Jose. show the source of the third party claimant's
independent title, all to the detriment of the
Is the Writ of Possession and Notice to Vacate mortgagee who had already consolidated his title to
issued by the RTC is valid? the contested property. (Heirs of Peñaflor v. Dela
Cruz, G.R. No. 197797, 08 Aug. 2017)
A: YES. It is well-settled that the purchaser in an
extrajudicial foreclosure of real property becomes Limitations on the right of ownership (2008
the absolute owner of the property if no redemption BAR)
is made within one (1) year from the registration of
the certificate of sale by those entitled to redeem. As Those imposed by the: (GLOSS-COC)
absolute owner, he is entitled to all the rights of
ownership over a property recognized in Art. 428 of 1. State in the exercise of:
the NCC not least of which is possession, or jus a. Power of taxation;
possidendi. b. Police power; and
c. Power of eminent domain
It should be clarified that the purpose of a petition
for the issuance of a writ of possession under Act 2. Law;
3135, as amended by Act 4118, is to expeditiously a. Legal easements (i.e., easements of
accord the mortgagee who has already shown prima waters and of right of way); and
facie right of ownership over the subject property b. The requirement of legitime in
(based on his consolidated title over the same) his succession
incidental right to possess the foreclosed property.
To reiterate, "possession being an essential right of 3. Owner himself;
the owner with which he is able to exercise the a. Voluntary easement;
other attendant rights of ownership, after b. Mortgage;
consolidation of title, the purchaser in a foreclosure c. Pledge; or
sale may demand possession as a matter of right." d. Lease
Thus, it is only upon a credible showing by a third- 4. Grantor of the property on the grantee,
party claimant of his independent right over the through:
foreclosed property that the law's prima facie a. Contract;
deference to the mortgagee's consolidated title b. Donation; or
should not prevail. Verily, a mere claim of c. Will;
2023 GOLDEN NOTES
5. Those arising from Conflicts of private Justifying circumstances. — The following do not
rights – Those which take place in incur any criminal liability:
accession continua;
(1) Anyone who acts in defense of his person or
6. Constitution – On the prohibition against rights, provided that the following circumstances
the acquisition of private lands by aliens; concur: (U-L-R)
7. Acts in State of necessity – The law permits 1. Unlawful aggression;

injury or destruction of things owned by 2. Reasonable necessity of the means
another provided this is necessary to avert employed to prevent or repel it; and
a greater danger (with right to indemnity v. 3. Lack of sufficient provocation on the part of
principle of unjust enrichment); and the person defending himself.
8. True Owner must resort to judicial Right of Self-Help exercised by third person
process – When thing is in possession of
another; law creates a disputable A third person who is not a possessor may repel
presumption of ownership to those in unlawful possession of the property owned by
actual possession. (Rabuya, 2008) another. In such an event, he is acting as a
negotorium gestor. The owner must indemnify him
Principle of Self-Help for the injuries sustained. (Pineda, 2009)
The owner of lawful possessor of a thing has the Test of Reasonableness

right to exclude any person from the enjoyment
and disposal thereof. For this purpose, he may use The reasonableness of the defensive acts resorted to
such force as may be reasonably necessary to repel by a possessor is determined not by what he
or prevent an actual or threatened unlawful imagined to exist but by the objective situation.
physical invasion of usurpation of his property. (Pineda, 2009) He will be liable for damages, if he
(Art. 429, NCC). There must be no delay in the uses force more than what is necessary in repelling
pursuit, otherwise, his recourse will be to go to the the aggression.
court for the recovery of property.
German Management's drastic action of bulldozing
Requisites of the Principle of Self-Help and destroying the crops of private respondents on
(D-O-R-A) the basis of the doctrine of self-help was unavailing
because the doctrine of self-help can only be
1. Reasonable force used; exercised at the time of actual or threatened
2. Such force is used by the Owner or lawful dispossession which is absent in the case at bar.
possessor; (German Management Services Inc. v. CA, G.R. No.
3. There is no Delay; and 76216, 14 Sept. 1989)
4. Actual or threatened physical invasion or
usurpation of the property. (De Leon, 2006) NOTE: The intruder must not have succeeded in its
entry, for otherwise, he must resort to court action;
Counterpart of Self-help in Criminal Law self-help cannot apply. One cannot put the law into
his own hands. Art. 429 of the NCC must be read in
The loose counterpart of the Principle of Self-help relation to Art. 536 of the NCC.
under the criminal law is self-defense provided for
in Art. 11(1) of the RPC.
CIVIL LAW
“Sic utere tuo ut alienum non laedas” 2009; Art. 433, NCC)
The owner of a thing cannot make use thereof in Resort of the owner rebutting the presumption
such manner as to injure the rights of a third person.
(Art. 431, NCC) The remedy is judicial process to recover the
property of the person. (Art. 433, NCC)
Every owner may enclose or fence his land or
tenements by means of walls, ditches, live or dead Requisites to prove claim of ownership
hedges, or by any other means without detriment
to servitudes constituted thereon. (Art. 430, NCC) 1. Proper identification of the property; and
2. Title must be clear, strong, and credible.
Doctrine of State of Necessity (Pineda, 2009)
The owner of a thing has no right to prohibit the Requisites for Action to Recover Property
interference of another with the same, if the
interference is necessary to avert an imminent 1. To clearly identify the land he is claiming in
danger and the threatened damage, compared to accordance with the title or titles on which
the damage arising to the owner from the he bases his right of ownership; and
interference, is much greater. The owner may
demand indemnity from the person benefited for 2. To prove that he has a better title than the
the damage to him. (Art. 432, NCC) defendant. (Pineda, 2009; Art. 434, NCC)
NOTE: This principle authorized the destruction of Eminent Domain

property which is less in value to avert the danger
poised to another property of greater value. This is the superior right of the State to acquire
private property whether registered or not for
Requisites of Doctrine of State of Necessity public use upon payment of just compensation.
1. Interference necessary to avert an imminent It is one of the limitations on the right of ownership
danger and the threatened damage to the actor in the pursuit of public interest. (Pineda, 2009)
or a third person;
No person shall be deprived of his property except
2. Damage to another is much greater than the by competent authority and for public use and
damage to the property. always upon payment of just compensation.
3. That the evil sought to be avoided actually Should this requirement be not first complied
exists; with, the courts shall protect and, in a proper case,
restore the owner in his possession. (Art. 435, NCC)
4. The injury feared be greater than that done to
avoid it; and Elements of “taking” of property for purposes
of Eminent Domain (E-M-O-P-A)
5. There be no other practical and less harmful
means of preventing it. (Art. 11(4), RPC) 1. The expropriator must Enter a private
property;
Disputable Presumption of Ownership
2. The entrance into private property must be
There is disputable presumption of ownership for more than a Momentary period;
when a person is in actual possession of the
property under the claim of ownership. (Pineda,
2023 GOLDEN NOTES
3. The entry into the property should be Form. Is the CA correct in setting aside the
under warrant or color of legal Authority; computation of RTC?
4. The property must be devoted to a Public A: YES. Just compensation is defined as the full and
use or otherwise informally appropriated fair equivalent of the property taken from its owner
or injuriously affected; and by the expropriator. It has been repeatedly stressed
by this Court that the measure is not the taker's gain
5. The utilization of the property for public but the owner's loss. The word “just” is used to
use must be in such a way as to Oust the intensify the meaning of the word “compensation”
owner and deprive him of all beneficial to convey the idea that the equivalent to be
enjoyment of the property. (NPC v. CA, G.R. rendered for the property to be taken shall be real,
No. 113194, 11 Mar. 1996) substantial, full, and ample.
Q: Alfredo Hababag, Sr. (Alfredo) was the owner In this relation, the RTC, sitting as a Special Agrarian
of several parcels of agricultural land situated in Court, has been conferred with the original and
the Municipality of Gubat, Sorsogon. The exclusive power to determine just compensation for
aforesaid landholdings were voluntarily offered parcels of land acquired by the State pursuant to the
for sale to the government under R.A. No. 6657, agrarian reform program. To guide the RTC in this
otherwise known as the Comprehensive function, Sec. 17 of R.A. No. 6657 enumerates the
Agrarian Reform Law (CARL) of 1988. The Land factors which must be taken into consideration to
Bank of the Philippines (LBP) initially valued accurately determine the amount of just
the subject lands at P1,237,850.00, but Alfredo compensation to be awarded in a particular case.
rejected the valuation. After summary They are:
administrative proceedings for the i. the acquisition cost of the land;
determination of the amount of just ii. the current value of like properties;
compensation, the Office of the Provincial iii. the nature and actual use of the property,
Agrarian Reform Adjudicator (PARAD) of the and the income therefrom;
Department of Agrarian Reform Adjudication iv. the owner's sworn valuation;
Board (DARAB) fixed the value of the subject v. the tax declarations;
lands at P1,292,553.20.
vi. the assessment made by government
Dissatisfied, Alfredo filed a Complaint for the assessors;
determination of the amount of just
compensation before the RTC. RTC rendered a vii. the social and economic benefits
Decision fixing the amount of just compensation contributed by the farmers and the
of the subject lands at P5,653,940.00. The RTC farmworkers, and by the government to the
applied the Income Productivity Approach. CA property; and
set aside the RTC's valuation for failure to give
due consideration to the factors enumerated in viii. the nonpayment of taxes or loans secured
Sec. 17 of R.A. 6657 and the formula under DAR from any government financing institution
A.O. 6-92, as amended by DAR A.O. 11-94. on the said land, if any.
Moreover, contrary to the limitation imposed by
DAR A.O. 6-92 (i.e., that the computed value Corollarily, pursuant to its rule-making power
using the applicable formula shall not exceed under Sec. 49 of the same law, the DAR translated
the landowner's offer to sell) the CA found that these factors into a basic formula, which courts have
the amount as recomputed by the RTC was way often referred to and applied, as the CA did in this
beyond the landowner's offer of P1,750,000.00 case. It, however, bears stressing that courts are not
as stated in the Claims Valuation and Processing constrained to adopt the said formula in every case
since the determination of the amount of just
CIVIL LAW
compensation essentially partakes the nature of a granted, and was required to deposit with the
judicial function. In this accord, courts may either court the amount of P550,000.00 (i.e., at
adopt the DAR formula or proceed with its own P2,750.00/sq.m.) as provisional deposit.
application for as long as the factors listed Sec. 17 of However, respondent Macabagdal was
R.A. No. 6657 have been duly considered. substituted as party- defendant upon sufficient
showing that the subject lot is registered in her
In keeping with these considerations, the Court name under the TCT of the lot. Respondent did
finds the CA's valuation - which made use of the DAR not oppose the expropriation and received the
formula - as reflective of the factors set forth in Sec. provisional deposit.
17 of R.A. No. 6657. Records disclose that the CA's
computation, as adopted from the LBP's own The RTC appointed a board of commissioners to
computation, is based on: (a) actual production determine the just compensation for the subject
data; (b) the appropriate industry selling prices of lot, which thereafter submitted report dated 23
the products from the Philippine Coconut Authority May 2014, recommending a fair market value of
and the Bureau of Agricultural Statistics of P9,000.00/sq.m. as the just compensation for
Sorsogon; and (c) the actual uses of the property. the subject lot, taking into consideration its
Likewise, the (a) income from the coconut fruit- location, neighborhood and land classification,
bearing trees, as well as the unirrigated riceland, (b) utilities, amenities, physical characteristics,
cumulative cost of the non-fruit-bearing trees; and occupancy and usage, highest and best usage,
(c) market value of the cogonal land have been duly current market value offerings, as well as
considered. The Court observes that the holistic previously decided expropriation cases of the
data gathered therefrom adequately consider the same RTC involving properties similarly
factors set forth in Sec. 17 of R.A. No. 6657, as well situated in the same barangay. The CA affirmed
as the DAR formula. As such, the CA's computation, this decision and imposed interest the rate of
which was derived from the same, must be 12% per annum from the time of the filing of the
sustained. Lest it be misunderstood, the complaint until 30 June 2013, and thereafter, at
ascertainment of just compensation on the basis of 6% per annum until full payment. Is the 12% per
the landholdings' nature, location, and market annum interest on the unpaid balance be
value, as well as the volume and value of the computed from the time of the taking of the
produce is valid and accords with Sec. 17 of R.A. No. subject until full payment valid?
6657 and the DAR formula, as in this case.
A: NO. The value of the landholdings should be
On the contrary, the Court finds the RTC's valuation equivalent to the principal sum of the just
to be improper, as it contradicts the definition of compensation due, and interest is due and should be
"market value" as crafted by established paid to compensate for the unpaid balance of this
jurisprudence on expropriation. (Land Bank of the principal sum after taking has been completed.
Philippines v. Hababag, G.R. No. 172352, 16 Sept. From the date of the taking of the subject lot on 05
2015) May 2008 when the RTC issued a writ of possession
in favor of petitioner, until the just compensation
Q: The Republic of the Philippines filed before therefor was finally fixed at P9,000.00/sq. m.,
the RTC a complaint against an unknown owner petitioner had only paid a provisional deposit in the
for the expropriation of a lot located in Barangay amount of P550,000.00 (i.e., at P2,750.00/sq. m.).
Ugong, Valenzuela City for the construction of Thus, this left an unpaid balance of the "principal
the C-5 Northern Link Road Project, otherwise sum of the just compensation," warranting the
known as North Luzon Expressway (NLEX) imposition of interest.
Segment 8.1, traversing from Mindanao Avenue
in Quezon City to the NLEX in Valenzuela City.
Petitioner applied for a writ of possession over
the subject lot on 05 May 2008, which was
2023 GOLDEN NOTES
It is settled that the delay in the payment of just Extent of ownership of parcel of land
compensation amounts to an effective forbearance
of money, entitling the landowner to interest on the The owner of a parcel of land is the owner of its
difference in the amount between the final amount surface and of everything under it, and he can
as adjudged by the court and the initial payment construct thereon any works or make any
made by the government. It bears to clarify that plantations and excavations which he may deem
legal interest shall run not from the date of the filing proper, without detriment to servitudes and subject
of the complaint but from the date of the issuance of to special laws and ordinances. He cannot complain
the Writ of Possession on 05 May 2008 since it is of the reasonable requirements of aerial navigation.
from this date that the fact of the deprivation of (Art. 437, NCC)
property can be established. As such, it is only proper
that accrual of legal interest should begin from this Ad Coleum
date. (Republic v. Macabagdal, G.R. No. 227215, 10
Jan. 2018) The owner of a land has rights not only to its surface
but also to everything underneath and the airspace
Q: National Power Corporation (NPC) instituted above it up to a reasonable height.
expropriation proceedings for the acquisition of
a right of way easement and for the construction Presumably, the landowner’s right extends to such
of the Substation Island Grid Project over the height or depth where it is possible for them to
parcels of land owned by respondents. During obtain some benefit or enjoyment, and it is
the pendency of the proceedings, NPC filed a extinguished beyond such limit as there would be
motion to discontinue the proceedings since the no more interest protected by law. (NAPOCOR v.
delay in the possession of the properties would Ibrahim, G.R. No. 168732, 02 June 2007)
adversely affect the project. NPC also claims that
the properties were no longer needed as it was
set to acquire an alternative site. B. RIGHTS OF ACCESSION
May NPC be allowed to discontinue the

expropriation proceedings?
1. GENERAL PRINCIPLES
A: YES. No expropriation proceeding can continue if
the property to be expropriated will not be for Right of Accession
public use. In Metropolitan Water District v. De Los
Angeles (G.R. No. 33545, 07 Mar. 1931), the Court It is the right pertaining to the owner of a thing over
held that the fundamental basis then of all actions everything which is produced thereby, or which is
brought for the expropriation of lands, under the incorporated or attached thereto, either naturally
power of eminent domain, is public use. That being or artificially. (Art. 440, NCC)
true, the very moment that it appears at any stage of
the proceedings that the expropriation is not for a It is that right of ownership of which an owner of a
public use, the action must necessarily fail and thing has over the products of said thing (accession
should be dismissed, for the reason that the action discreta), as well as to all things inseparably
cannot be maintained at all except when the attached or incorporated thereto whether naturally
expropriation is for some public use. Considering or artificially (accession continua). (Pineda, 2009)
that the NPC is no longer using respondents'
properties for the purpose of building the
Substation Project, it may be allowed to discontinue
with the expropriation proceedings, subject to the
approval of the court. (NPC v. Posada, G.R. No.
191945, 11 Mar. 2015)
CIVIL LAW
Accession is NOT a Mode of Acquiring Should the roads the respondent constructed
Ownership within the leased area be assessed with real
property taxes?
It is not one of the modes of acquiring ownership
enumerated under Art. 712 of the NCC. It is, A: NO. The roads that respondent constructed
therefore, safe to conclude that accession is not a within the leased area should not be assessed with
mode of acquiring ownership. real property taxes. The roads that respondent
constructed became permanent improvements on
Reason: Accession presupposes previously existing the land owned by the NGPI-NGEI by right of
ownership by the owner over the principal. accession under the Civil Code, to wit:
Fundamentally, accession is a right implicitly
included in ownership, without which it will have no Despite the land being leased by respondent when
basis or existence. (Paras, 2008) the roads were constructed, the ownership of the
improvement still belongs to NGPI-NGEI. As
NOTE: In general, the right to accession is automatic provided under Arts. 440 and 445 of the NCC, the
(ipso jure), requiring no prior act on the part of the land is owned by the cooperatives at the time
owner or principal. respondent built the roads. Hence, whatever is
incorporated in the land, either naturally or
Q: Filipinas Palm Oil Plantation Inc. is a private artificially, belongs to the NGPI-NGEI as the
organization engaged in palm oil plantation landowner. (Provincial Assessor of Agusan Del Sur v.
with a total land area of more than 7,000 Filipinas Palm Oil Plantation, Inc., G.R. No.183416, 05
hectares of National Development Company Oct. 2016)
lands in Agusan del Sur. Harvested fruits from
oil palm trees are converted into oil through Accession Discreta
Filipinas' milling plant in the middle of the
plantation area. Within the plantation, there are The right of accession with respect to what is
also three plantation roads and a number of produced by the property. To the owner belongs the
residential homes constructed by Filipinas for belongs the:
its employees.
1. Natural fruits - The spontaneous products of
The LBAA found that the P207.00 market value the soil, and the young and other products of
declared in the assessment by the Provincial animals;
Assessor was unreasonable. It found that the
market value should not have been more than 2. Industrial fruits - Are those produced by lands
P85.00 per oil palm tree. The sudden increase of of any kind through cultivation or labor; and
realty tax assessment level from P42.00 for each
oil palm tree in 1993 to P207.00 was 3. Civil fruits - The rents of buildings, the price of
confiscatory. The LBAA adopted Filipinas' claim leases of lands and other property and the
that the basis for assessment should only be 98 amount of perpetual or life annuities or other
trees. Although one (1) hectare of land can similar income. (Arts. 441-442, NCC)
accommodate 124 oil palm trees, the
mountainous terrain of the plantation should be Obligation of the owner who receives the fruit
considered. Because of the terrain, not every from a third person (2009 BAR)
meter of land can be fully planted with trees.
The LBAA found that roads of any kind, as well He who receives the fruits has the obligation to pay
as all their improvements, should not be taxed the expenses made by a third person in their
since these roads were intermittently used by production, gathering, and preservation. (Art. 443,
the public. NCC)
2023 GOLDEN NOTES
“Third person” When Fruits are Deemed to Exist
One who is not the owner, builder, planter, or 1. Civil fruits accrue daily and are considered
sower. (Pineda, 2009) personal property and may be pro-rated; and
Only such as are manifest or born are considered 2. Natural and industrial fruits, while still growing,
as natural or industrial fruits. are considered as real property. Ordinarily, they
cannot be pro-rated. (De Leon, 2006; 3 Manresa
With respect to animals, it is sufficient that they 190)
are in the womb of the mother, although unborn.
(Art. 444, NCC) Ownership of Fruits
Existence of the Fruit GR: Fruits belong to the owner. (Art. 441, NCC)
It depends on the type of fruit: XPNs: If the thing is: (P-U-L-P-A)
1. Annual - must be planted every year or must be 1. In possession of a Possessor in good faith
re-planted after harvest, such as rice, wheat, (Art. 546, NCC) before the possession is
and corn; and legally interrupted; (1992, 1996, 2000
BAR)
NOTE: It is deemed manifest the moment their
seedlings appear. 2. Subject to a Usufruct; (Art. 566, NCC)
2. Perennial - only planted once and bear fruit for 3. Lease of rural land;
several seasons, such as mango and coconut
trees) 4. Pledged (Arts. 1680 & 2102(7), NCC) - pledgee
is entitled to the fruits but has the obligation
NOTE: It is deemed to exist only when they to compensate or set-off what he receives
actually appear. (Paras, 2008) with those which are owing to him; or
Animal Young 5. In possession of an Antichretic creditor. (Art.

2132, NCC)
It is considered existing even if it still in the
maternal womb. It should be considered existing Accession Continua
only at the commencement of the maximum
ordinary period for gestation. (Paras, 2008) It is the right pertaining to the owner of a thing over
everything incorporated or attached thereto either
Pratus Sequitor Ventrem naturally or artificially, by external forces.
This legal maxim means that “the offspring follows 1. Immovable Property
the dam (mother).” The legal presumption, in the
absence of proof to the contrary, is that the calf, as a. Accession Industrial (Arts. 445-455, NCC)
well as its mother, belongs to the owner of the latter, i. Building;
by the right of accretion. (US v. Caballero, G.R. No. ii. Planting; and
8608, 26 Sept. 1913) Thus, when the ownership over iii. Sowing.
the offspring of the animal when the male and
female belongs to different owners, the owner of the b. Accession Natural
female was considered also the owner of the young, i. Alluvium; (Art. 457, NCC)
unless there is a contrary custom or speculation. ii. Avulsion; (Art. 459, NCC)
CIVIL LAW
iii. Change of course of rivers; (Arts. 461-462, 3. Sowing – Scattering or spreading of germinated
NCC); and seeds indiscriminately or evenly through hand
iv. Formation of islands. (Arts. 464- 465, NCC) or mechanical device.
2. Movable Property Maxims in connection with Accession Industrial

a. Adjunction or Conjunction;
b. Mixture; and 1. The accessory follows the principal;
c. Specification. (Paras, 2008)
2. The accessory follows the nature of that to
Basic principles in Accession Continua which it relates; and
(B-A-D-O-N-G-E)
3. What is built upon the land goes with it; or the
1. He who is in Bad faith is liable for damages. land is the principal, and whatever is built on it
becomes the accessory. (Paras, 2008)
2. Accessory follows the principal;
Rule on Ownership regarding Accession
3. Union or incorporation must generally be Industrial
effected in such a manner that to separate the
principal from the accessory would result in GR: The owner of the land is the owner of whatever
substantial Damage to either or diminish its is built, planted, or sown on that land, including the
value; improvements or repairs made thereon.
4. To the Owner of the thing belongs the extension XPNs:

or increases to such thing;
1. When the doer is in good faith, the rule is
5. Bad faith of one party Neutralizes the bad faith modified; or
of the other so that they shall be considered in
good faith; 2. Improvements on the land of one of the spouses
at the expense of the conjugal partnership will
6. He who is in Good faith may be held responsible belong to the partnership or to the spouse who
but not penalized; and owns the land depending on which of the two
properties has a higher value. (Art. 120, F.C.)
7. No one shall unjustly Enrich himself at the
expense of another. (Paras, 2008) NOTE: If the doer is in bad faith, he is entitled only
to necessary expenses for the preservation of the
2. ACCESSION INDUSTRIAL land.
The owner of the land who makes thereon,

Three kinds of Industrial Endeavors (B-P-S)
personally or through another, plantings,
constructions or works with the materials of
1. Building – Erecting a structure or construction
another, shall pay their value; and, if he acted in bad
of any kind, with roof for residential, office,
faith, he shall also be obliged to the reparation of
social, commercial or other purposes;
damages. The owner of the materials shall have the
right to remove them only in case he can do so
2. Planting – Setting into the soil or land seeds or
without injury to the work constructed, or without
seedlings of trees such as mangoes, coconuts,
the plantings, constructions or works being
etc.; and
destroyed. However, if the landowner acted in bad
faith, the owner of the materials may remove them
2023 GOLDEN NOTES
in any event, with a right to be indemnified for It implies honesty of intention, and freedom from
damages. (Art. 447, NCC) knowledge of circumstances which ought to put the
builder, etc. upon inquiry. (De Leon, 2006)
Person in Good Faith vs. Bad Faith
NOTE: Art. 448 of the NCC applies only where one
GOOD FAITH BAD FAITH builds, etc. on land in the belief that he is the owner
A person who is not A person who is aware of the land; it does not apply where one’s interest in
aware that there exists that there exists in his the land is merely that of a holder such as a mere
in his title or mode of title or mode of lessee under a rental contract, an agent, or a
acquisition any flaw acquisition any flaw usufructuary. (Ibid.)
which invalidates it which invalidates it.
RIGHTS OF BUILDER, PLANTER, OR SOWER
When both parties are in bad faith IN GOOD FAITH
If both parties are in bad faith, the bad faith of one As to presumption of good faith
cancels the bad faith of the other. Hence, both are He who alleges bad faith on the part of the
considered in good faith. (Paras, 2008) builder, etc. has the burden of proof. (Art. 527,
NCC; De Leon, 2006)
NOTE: Good faith is always presumed; and the one
As to necessary expenses
who alleges bad faith on the part of the possessor
rests the burden of proof. (Art. 527, NCC) The builder, etc. may retain the thing until he has
been reimbursed by the owner of the land. (Art.
Rights of Builder, Planter, or Sower in good faith 546, NCC)
As to useful improvements
The owner of the land on which anything has been
built, sown, or planted in good faith, shall have the If it can be removed without damage to the
right to appropriate as his own the works, sowing, principal thing, may remove them. (Art. 546, NCC)
or planting, after payment of the indemnity
provided for in Arts. 546 and 548, or to oblige the As to expenses of pure luxury/mere pleasure
one who built or planted to pay the price of the land, Shall not be refunded but he may remove the
and the one who sowed, the proper rent. However, ornaments with which he has embellished the
the builder or planter cannot be obliged to buy the principal thing if it suffers no injury thereby, and
land if its value is considerably more than that of the if his successor in the possession does not prefer
building or trees. In such case, he shall pay to refund the amount expended. (Art. 547, NCC)
reasonable rent, if the owner of the land does not As to the materials not owned
choose to appropriate the building or trees after Owner of the land is subsidiarily liable for the
proper indemnity. The parties shall agree upon the value if the builder, etc. made use of them has no
terms of the lease and in case of disagreement, the property with which to pay.
court shall fix the terms thereof. (Art. 448, NCC)
If builder, etc. pays the owner of the materials,
Good faith under Art. 448 of the NCC consists in the demand from landowner the value of the
honest belief of the builder, planter, or sower that materials and labor. (Art. 455, NCC)
the land he is building, planting, or sowing on, is his
or that by some title he has a right to build, etc.
thereon, and his ignorance of any defect or flaw in
his title.
CIVIL LAW
Instance Where Bad Faith is Offset by Act of While respondents may have merely tolerated
Owner petitioners' possession, respondents never denied
having knowledge of the fact that petitioners
Q: Respondents alleged that they are owners of possessed, cultivated, and constructed various
a lot covered by a TCT and a tax declaration, permanent improvements on the subject lot for
both in the name of respondent Marco, who over 34 years. As such, the Court finds that
allegedly purchased the same in October of respondents likewise acted in bad faith under Art.
1978. As the parties were close relatives, 453 of the NCC, which provides:
respondents allegedly allowed petitioners to
possess the lot, subject to the condition that they Art. 453. If there was bad faith, not only on the part of
would vacate the same upon demand. the person who built, planted or sowed on the land of
Respondents then sent petitioners a letter another, but also on the part of the owner of such
requiring the latter to vacate the property land, the rights of one and the other shall be the same
within 30 days from receipt of the letter. as though both had acted in good faith.
Petitioners, however, refused to comply. Hence,
a complaint against the latter was filed. On the It is understood that there is bad faith on the part of
other hand, petitioners claimed that in 1979, the the landowner whenever the act was done with his
subject property was purchased by the late knowledge and without opposition on his part.
Loren, the mother of petitioner Camille and
respondent Marco. Marco, however, allegedly Pursuant to the aforementioned article, the rights
succeeded in registering the property solely in and obligations of the parties shall be the same as
his name. Hence, an implied trust was allegedly though both acted in good faith. Therefore, Art.448,
created over the 1/2 undivided hereditary share in relation to Arts. 546 and 548 of the NCC, applies.
of petitioner Camille. For over 34 years, (Sps. Belvis v. Sps. Erola, G.R. No. 239727, 24 July
petitioners alleged that they possessed and 2019)
cultivated the lot in the concept of an owner,
believing in good faith that they were co-owners
of the subject lot. In the course of their
possession, petitioners allegedly introduced
various improvements thereon by planting
bamboos, nipa palms and coconut trees, and by
constructing fishponds. Are petitioners builders
in good faith under Art. 448 of the NCC?
A: YES. While petitioners cannot be deemed to be

builders in good faith, it being undisputed that the
land in question is titled land in the name of
respondents, the CA and the lower courts
overlooked the fact that petitioners constructed
improvements on the subject lot with the
knowledge and consent of respondents. In
exceptional cases, the Court has applied Art. 448 to
instances where a builder, planter, or sower
introduces improvements on titled land if with the
knowledge and consent of the owner.
2023 GOLDEN NOTES
Rules When the Planter and Owner of the Land are Different (2008 BAR)
GATHERED FRUITS
Planter in Good Faith Planter in Bad Faith
Keeps fruits before possession is legally Reimbursed for expenses for production,
Planter interrupted. (Art. 544(1), NCC) (2008 gathering and preservation. (Art. 443,
BAR) NCC)
No necessity to reimburse the planter for Owns fruits provided he pays planter
Landowner the expenses since the planter retains expenses for production, gathering and
the fruits. (Art. 544(1), NCC) preservation. (Art. 443, NCC)
STANDING CROPS
Planter in Good Faith Planter in Bad Faith
Loses what is built, planted, or sown

without the right to indemnity. (Art 449,
Reimbursed for expenses, for NCC)
Planter production, gathering, and preservation.
(Art.443, NCC) Entitled to reimbursement for the
necessary expenses of preservation of the
land. (Art. 452, NCC)
Owns fruits provided he pays planter

Landowner expenses for production, gathering, and Owns fruits. (Art. 449, NCC)
preservation. (Art. 443, NCC)
CIVIL LAW
Rules When the Owner of the Land is NOT the Builder, Planter, or Sower (1992, 1996, 1999, 2000, 2001,
2008, 2022 BAR)
BUILDER, PLANTER, SOWER, AND

LANDOWNER
OWNER OF MATERIALS
Good faith Good faith
If the Landowner:
He can either: (Art. 448, NCC) (1992, 1996, 2000

1. Acquires the improvements after paying
BAR)
indemnity, Builder, Planter, or Sower has the
right to retain the thing (and cannot be required
1. Acquire improvements after paying indemnity
to pay rent) until indemnity is paid; (Art. 546,
for:
NCC)
a. Necessary expenses; and

2. If the useful improvements can be removed
without damage to the principal thing, the
b. Useful expenses which could either be:
Builder, Planter, or Sower may remove them; or
1. Original costs of improvements; or
2. Increase in the value of the whole. (Arts.
XPN: Unless the person who recovers the
443 & 546, NCC) or
possession exercises the other. (Arts. 547 & 447,
NCC)
2. Sell the land to builder or planter or collect rent
from sower
3. Sells the land, Builder or Planter cannot be

obliged to buy the land if its value is
XPN: unless the value of the land is considerably
considerably more than that of the building or
greater than the building etc., in which case, the
trees. In such a case, he shall pay reasonable
builder and planter shall pay rent.
rent.
The parties shall agree upon the terms of the lease

The parties shall agree upon the terms of the lease
and in case of disagreement, the court shall fix the
and in case of disagreement, the court shall fix the
terms thereof.
terms thereof. (Art. 448, NCC) (1992, 1996, 1999,
2000, 2001 BAR)
2023 GOLDEN NOTES
BUILDER, PLANTER, SOWER, AND

LANDOWNER
OWNER OF MATERIALS
Good faith Bad faith
1. The landowner can either:
a. Acquire improvements without paying 1. Lose improvements without the right to be

indemnity and collect damages. (Arts. 445, indemnified (1996, 2000 BAR)
449 & 451)
XPN: unless the latter sells the land. (Art. 449,
b. Order the demolition of work or restoration NCC)
to former condition and collect damages in
both cases (Art. 450, NCC); or 2. Recover necessary expenses for
preservation of land without the right to
c. Sell the land to builder and planter or rent it retain the thing until the indemnity is paid.
to the sower and collect damages in both (Arts. 452 & 546, NCC)
cases. (Art. 450, NCC) (2008 BAR)
3. Pay damages to landowner. (Art. 451, NCC)
2. Pay necessary expenses for preservation. (Arts.
452 & 546, NCC)
Bad Faith Good Faith
Acquires improvements after paying indemnity and

damages to builder, planter, or sower
XPN: unless the latter decides to remove. (Arts. 454 &

447, NCC)
He cannot compel the builder, planter, or sower to 1. Receive indemnity for improvements and
buy the land. receive damages; or
NOTE: Art. 447 of the NCC applies because if the 2. Remove them in any event and receive
landowner knew that something was being built, damages. (Arts. 454 & 447, NCC)
planted, or sown on his land by another and he did not
interpose any objection thereto, it is as if he was the
one building, planting, or sowing in bad faith on his
own land with materials belonging to another, using
the owner of the materials as his worker. (Rabuya,
2008)
Bad Faith Bad Faith

As though both acted in good faith (in pari delicto). (Art. 453, NCC)
CIVIL LAW
Rules When the Owner of the Land, Builder, Planter, Sower, and Owner of the Materials are Different
Persons
LANDOWNER BUILDER, PLANTER, SOWER OWNER OF MATERIALS

Good faith Good faith Good faith
Pay value of materials to its owner

He shall answer subsidiarily for without paying damages (Art. 455,
their value and only in the event NCC) and if the landowner:
that the one who made use of them
has no property with which to pay. 1. Acquires the improvement,
(Art. 455, NCC) Builder, Planter, or Sower
may demand from the
He can either: landowner the value of the
materials and labor. (Art 455,
1. Acquire improvements after NCC)
paying indemnity for:
And he has the right to retain 1. Collect value of materials
a. Necessary expenses; the thing (and cannot be primarily from builder,
and required to pay rent) until planter, sower, subsidiarily
indemnity is paid. (Art. 546, from landowner (Art. 455,
b. Useful expenses which NCC) NCC); or
could either be:
If the useful improvements 2. Remove the materials only if:
i. Original costs of can be removed without
improvements; or damage to the principal a. without injury to the
thing, the possessor in good work constructed; or
ii. Increase in the value faith may remove them,
of the whole. (Art. unless the person who b. without the plantings,
546 & 443, NCC) or recovers the possession constructions, or works
exercises the other (Arts. 547 being destroyed. (Art.
2. Sell the land to builder and & 447, NCC); or 447, NCC)
planter or collect rent from
sower 2. Sells the land or rents it, NOTE: Landowner is subsidiarily
Builder or Planter cannot be liable only if he appropriates or
XPN: unless the value of the obliged to buy the land if its acquires the improvements.
land is considerably greater value is considerably more
than the building etc., in than that of the building or
which case, the builder and trees.
planter shall pay rent.
In such a case, he shall pay
The parties shall agree upon reasonable rent.
the terms of the lease and in
case of disagreement, the The parties shall agree upon the
court shall fix the terms terms of the lease and in case of
thereof. (Art. 448, NCC) disagreement, the court shall fix
the terms thereof. (Art. 448, NCC)
2023 GOLDEN NOTES

Good faith Bad faith Good faith
Option to:
1. Acquire improvements
without paying indemnity
and collect damages; (Arts. 1. Lose improvements without
445 & 449, NCC) right to be indemnified unless
the landowner sells the land;
2. Order the demolition of work (Art. 449, NCC)
or restoration to former 1. Collect value of materials
condition and collect 2. Recover necessary expenses primarily from builder,
damages in both cases; (Art. for preservation of land planter, sower, subsidiarily
450, NCC) or without the right to retain the from landowner; (Art. 455,
thing until the indemnity is NCC) or
3. Sell the land to builder and paid; (Arts. 452 & 546, NCC)
planter or rent it to the 2. Remove materials in any event
sower and collect damages in 3. Pay value of materials to its if builder, planter, sower
both cases. (Art. 450, NCC) owner plus damages; (Art. 455, acquired materials.
(2008 BAR) NCC) and
4. Pay necessary expenses for 4. Pay damages to landowner.

preservation; (Arts. 452 & (Art. 451, NCC)
546, NCC) and
5. Subsidiarily liable to owner

of materials.
CIVIL LAW

Good faith Good faith Bad faith
If the Landowner:
Landowner can either: (Art. 448,
NCC) 1. Acquires the improvement,
Builder, Planter, or Sower
1. Acquire improvements after has the right to retain the
paying indemnity for: thing (and cannot be
required to pay rent) until
1. Necessary expenses; indemnity is paid. (Art. 546,
and NCC)
2. Useful expenses which If the useful improvements

could either be: can be removed without
damage to the principal
i. Original costs of thing, the possessor in good 1. Loses materials without right
improvements; or faith may remove them (Art. to indemnity (Art. 449, NCC);
547, NCC) and
ii. Increase in the
value of the whole. XPN: unless the person who 2. Pays damages (Art. 451, NCC)
(Arts. 546 and 443, recovers the possession the builder, planter, or sower
NCC) exercises the other (Art. 547, would be considered merely
NCC); or an agent of the owner of
materials.
3. Sell the land to builder and
planter or collect rent from 2. Sells or rents it, Builder or
Planter cannot be obliged to Therefore, the provisions of Art.
sower
buy the land if its value is 449 of the NCC will apply by
considerably more than that analogy. He is even liable for
XPN: unless the value of the
of the building or trees. damages. (Rabuya, 2008)
land is considerably greater
than the building etc., in which
case, the builder and planter In such case, he shall pay
shall pay rent. reasonable rent.
The parties shall agree upon The parties shall agree upon
the terms of the lease and in the terms of the lease and in
case of disagreement, the case of disagreement, the
court shall fix the terms court shall fix the terms
thereof. thereof. (Art. 448, NCC)
Without subsidiary liability for Without indemnity to owner of

cost of materials. materials and collects damages
from him.
2023 GOLDEN NOTES

Good faith Bad faith Bad faith
Option to:
1. Acquire improvements
without paying indemnity 1. Lose improvements without
and collect damages; (Arts. right to be indemnified
445 & 449, NCC) unless the landowner sells
the land; (Art. 449, NCC)
1. Recover value from Builder,
2. Order the demolition of work
Planter, Sower (in pari
or restoration to former 2. Recover necessary expenses
delicto);
condition and collect for preservation of land
damages in both cases; (Art. without the right to retain
2. If Builder, Planter, Sower
450, NCC) or the thing until the indemnity
acquired improvements,
is paid; (Arts. 452 & 546,
remove the materials only if
3. Sell the land to builder and NCC)
without injury to the work
planter or rent it to the
constructed, or without the
sower, and collect damages 3. Pay the value of the
plantings, constructions or
in both cases; (Art. 450, NCC) materials to the owner of the
works being destroyed; (Art.
materials.; and
447, NCC)
4. Has right to demand
damages from both; (Art. Since both the owner of the
3. No action against landowner;
451, NCC) materials and the builder,
and
etc. acted in bad faith, as
5. Pay necessary expenses for between them, they are
4. May be liable to the landowner
preservation; (NCC, Art. 452 treated as having both acted
for damages. (Art. 451, NCC)
& 546) and in good faith. (De Leon, 2006)
6. Not subsidiarily liable to the 4. Pay damages to landowner.

owner of the materials (Art. 451, NCC)
because as for him, the two
acted in bad faith. (De Leon,
2006)
CIVIL LAW

Bad faith Good faith Good faith
If he pays the owner of the

materials, plants or seeds:
1. Acquires improvements
1. Collect value of materials
after paying indemnity and
1. He may demand from the primarily from builder,
damages
landowner the value of the planter, sower, subsidiarily
materials and labor (Art 455, from landowner (Art. 455,
XPN: unless the latter
NCC) and shall also be NCC); or
decides to remove; (Arts.
obliged to the reparation of
454, 447, & 443); and
damages (Art. 447, NCC); or 2. Remove the materials in any
event, with the right to be
2. Cannot compel builder,
2. Remove the materials in any indemnified for damages.
planter and sower to buy
event, with the right to be (Art. 447, NCC)
land.
indemnified for damages.
(Arts. 454 & 447, NCC)

Bad faith Good faith Bad faith
1. Loses materials without

If he pays the owner of the
right to indemnity (Art. 449,
1. Acquires improvements after materials, plants or seeds:
NCC); and
paying indemnity and
damages 1. He may demand from the
2. Pays damages. (Art. 451,
landowner the value of the
NCC)
XPN: unless the builder, materials and labor (Art. 455,
planter or sower decides to NCC) and shall also be
The builder, planter or sower
remove (Arts. 454, 447 & 443, obliged to the reparation of
would be considered merely an
NCC); and damages (NCC, Art. 447); or
agent of the owner of materials.
2. Cannot compel builder, 2. Remove the materials in any

Therefore, the provisions of Art.
planter and sower to buy event, with the right to be
449 of the NCC will apply by
land. indemnified for damages.
analogy. He is even liable for
(Arts. 454 & 447, NCC)
damages. (Rabuya, 2008)
2023 GOLDEN NOTES

Bad faith Bad faith Good faith
Pay value of materials to its owner
The owner of the land shall
(Art. 455, NCC) and
answer subsidiarily for their value
and only in the event that the one
If the landowner:
who made use of them has no
property with which to pay (Art.
1. Acquires the improvement,
455, NCC); and
Builder, Planter, or Sower may
demand from the landowner
Landowner can either: (Art. 448,
the value of the materials and
NCC)
labor. (Art 455, NCC)
1. Acquire improvements after

And he has the right to retain
paying indemnity for:
the thing (and cannot be
required to pay rent) until
1. Necessary expenses,
indemnity is paid. (Art. 546,
and
NCC)
1. Collect value of materials
2. Useful expenses which
If the useful improvements primarily from builder,
could either be:
can be removed without planter, sower, subsidiarily
damage to the principal thing, from landowner (Art. 455,
i. Original costs of
the possessor in good faith NCC); or
improvements
may remove them
2. Remove the materials in any
ii. Increase in the value
XPN: unless the person who event, with the right to be
of the whole. (Arts.
recovers the possession indemnified for damages.
546 & 443, NCC)
exercises option 2; (Arts. 547 (Art. 447, NCC)
& 447, NCC)
2. Sell the land to builder and
planter or collect rent from
2. Sells or rents it, Builder or
sower.
Planter cannot be obliged to
buy the land if its value is
XPN: unless the value of the
considerably more than that
land is considerably greater
of the building or trees.
than the building etc., in which
case, the builder and planter
In such a case, he shall pay
shall pay rent.
reasonable rent.
The parties shall agree upon

The parties shall agree upon
case of disagreement, the
case of disagreement, the
court shall fix the terms
court shall fix the terms
thereof.
thereof. (Art. 448, NCC)
Bad faith Bad faith Bad faith
Same as though both acted in good faith (in pari delicto). (Art. 453, NCC)
CIVIL LAW
3. ACCESSION NATURAL 3. that the land where the accretion takes

place is adjacent to the banks of the river.
(Delos Reyes v. Municipality of Kalibo, Aklan,
Alluvium or alluvion (2001, 2003, 2008, 2009
G.R. No. 214587, 26 Feb 2018)
BAR)
NOTE: If the deposits accumulate, not through the
It is the gradual deposit of sediment by natural
effects of the current of the water, but because of the
action of a current of fresh water (not sea water),
constructions made by the owner purely for
the original identity of the deposit being lost. Where
defensive purposes against the damaging action of
it is by sea water, it belongs to the State.
the water, the deposits are still deemed to be
(Government of Philippine Islands v. Cabangis, G.R.
alluvion and will belong to the riparian owner.
No. L-28379, 27 Mar. 1929)
If the deposit is brought about by seawater
Riparian owner
When the sea moves towards the estate and the tide
He is the owner of the land adjoining rivers.
invades it, the same becomes a foreshore land which
consequently becomes part of the public domain.
Rule on Alluvion
Thus, it belongs to the state.
To the owners of lands adjoining the banks of rivers

Registration
belong the accretion which they gradually receive
from the effects of the current of the waters. (Art.
Alluvial deposits must be registered. Though it is
457, NCC)
automatically owned by the riparian owner (Heirs of
Navarro v. IAC, G.R. No. 68166, 12 Feb. 1997), it is still
If all the requisites are present, the riparian owner
subject to acquisitive prescription which may divest
is automatically entitled to the accretion.
the riparian owner the ownership over the
accretion.
NOTE: The alluvion starts to become the property
of the riparian owner from the time that the deposit
Failure to Register
created by the current of water becomes manifest.
(Heirs of Navarro v. IAC, G.R. No. 68166, 12 Feb. 12,
If the riparian owner fails to register the deposits
1997)
within the prescriptive period of acquiring real
property (10 years if ordinary prescription or 30
Man-made or artificial accretions to lands NOT
years if extraordinary prescription), it subjects said
included
accretion to acquisition through prescription by
third persons. (Reynante v. CA, G.R. No. 95907, 8 Apr.
The rule on alluvion does not apply to man-made or
1992)
artificial accretions to lands that adjoin canals or
esteros or artificial drainage system. (Ronquillo v.
However, registration under the Torrens System
CA, G.R. No 43346, 20 Mar. 1991)
does not protect the riparian owner against the
diminution of the area of his registered land
Requisites of Alluvion
through gradual changes in the course of an
adjoining stream.
1. That the accumulation of soil or sediment
be gradual and imperceptible;
Q: Benjamin is the owner of a titled lot which is
bounded on the north by the Maragondon River.
2. That it be the result of the action of the
An alluvial deposit of two (2) hectares was
waters of the river; and
added to the registered area. Daniel took
possession of the portion formed by accretion
2023 GOLDEN NOTES
and claims that he has been in open, continuous Q: The First Accretion adjoined the southern
and undisturbed possession of said portion portion of the Motherland. Decades later, the
since 1923 as shown by a tax declaration. In Second Accretion abutted the First Accretion on
1958, Benjamin filed a Complaint for Quieting of its southern portion. OCT was issued in the
Title and contends that the alluvium belongs to names of all the respondents covering the
him as the riparian owner and that since the Second Accretion. Petitioners alleged that
alluvium is, by law, part and parcel of the through deceit, fraud, falsehood, and
registered property, the same may be misrepresentation, respondent Victoriano, with
considered as registered property. Decide the respect to the First Accretion, and the
case and explain. (2016 BAR) respondents collectively, with regard to the
Second Accretion, had illegally registered the
A: I WILL DECIDE IN FAVOR OF DANIEL AND said accretions in their names, notwithstanding
DISMISS THE ACTION TO QUIET TITLE FILED BY the fact that they were not the riparian owners.
BENJAMIN. Under Art. 457 of the NCC, the owner of
lands adjoining the banks of rivers belong the Are the petitioners the exclusive owners of the
accretion which they gradually receive from the First and Second Accretion?
effects of the current of the waters. The accretion,
however, does not automatically become registered A: NO. Petitioners are not the riparian owners of the
land. It must be brought under the Torrens system Motherland to which the First Accretion had
of registration by Benjamin, the riparian owner. attached, hence, they cannot assert ownership over
Since he did not, the then increment, not being the First Accretion. Consequently, as the Second
registered land, was open to acquisition through Accretion had merely attached to the First
prescription by third persons, like Daniel. (Ignacio Accretion, they also have no right over the Second
Grande, et. al. v. Court of Appeals, G.R. No. L-17652, 30 Accretion. Neither were they able to show that they
June 1962; Leonida Cureg v. Intermediate Appellate acquired these properties through prescription as it
Court, G.R. No. 73465, 7 Sept. 1989) was not established that they were in possession of
any of them.
Reasons for Granting a Riparian Owner the
Right to Alluvion Deposited by a River Being the owner of the land adjoining the foreshore
area, respondent is the riparian or littoral owner
1. To compensate him for: who has preferential right to lease the foreshore
area. Accordingly, therefore, alluvial deposits along
b. Danger of loss that he suffers due to the the banks of a creek or a river do not form part of
location of his land; and the public domain as the alluvial property
c. The encumbrances and other easements on automatically belongs to the owner of the estate to
his land which it may have been added. The only restriction
provided for by law is that the owner of the
2. To promote the interests of agriculture as he is adjoining property must register the same under
in the best position to utilize the accretion. The the Torrens system, otherwise, the alluvial property
owners of estates adjoining ponds or lagoons may be subject to acquisitive prescription by third
do not acquire the land left dry by the natural persons. (Heirs of Francisco I. Narvasa, Sr. et.al v.
decrease of the waters or lose that inundated by Emiliana Imbornal et.al, G.R. No. 182908, 6 Aug.
them in extraordinary floods. (Art. 458, NCC) 2014)
NOTE: This rule does not apply to lakes. Change in the Course of the River
Whenever a river, changing its course by natural

causes, opens a new bed through a private estate,
this bed shall become of public dominion. (NCC, Art.
CIVIL LAW
462) Whenever the current of a river, creek, or torrent

segregate from an estate on its banks a known
Requisites of Change in the Course of the River portion of land and transfers it to another estate, the
(N-A-P-A) owner of the land to which the segregated portion
belonged retains the ownership of it, provided that
1. There must be a Natural change in the course of he removes the same within 2 years. (NCC, Art. 459)
the waters of the river; otherwise, the bed may
be the subject of a State grant; Requisites of avulsion (C-A-I)
2. The change must be Abrupt or sudden; 1. Transfer is caused by the Current of a river,
creek, or torrent;
3. The change must be Permanent; and
2. Transfer is sudden or Abrupt; and
NOTE: The rule does not apply to temporary
overflowing of the river. 3. The portion of the land transported is known or
Identifiable.
4. There must be Abandonment by the owner
of the bed. NOTE: By analogy, land transferred from one
tenement to another by forces of nature other than
NOTE: Abandonment pertains to the decision the river current can still be considered as an
not to bring back the river to the old bed. avulsion.
Effect when the riverbed is abandoned Rule on acquisition of titles over an avulsion
Riverbeds which are abandoned through the GR: Original owner retains title.
natural change in the course of the waters ipso facto
belong to the owners whose lands are occupied by XPNs: The owner must remove (not merely claim)
the new course in proportion to the area lost. the transported portion within 2 years to retain
However, the owners of the lands adjoining the old ownership, otherwise, the land not removed shall
bed shall have the right to acquire the same by belong to the owner of the land to which it has been
paying the value thereof, which value shall not adjudicated in case of:
exceed the value of the area occupied by the new
bed. (Art. 461, NCC) 1. Abandonment; or
2. Expiration of 2 years, whether the failure to
NOTE: The rule on abandoned riverbed does not remove be voluntary or involuntary, and
apply to cases where the river simply dries up irrespective of the area of the portion known to
because there are no persons whose lands are have been transferred.
occupied by the waters of the river.
Alluvium vs. Avulsion (2001 BAR)
Under the Water Code, the government or the
riparian owner may return the river back to the ALLUVIUM AVULSION
original bed. (P.D. 1067, Art. 58) Gradual and Sudden or abrupt
imperceptible. process.
Avulsion (2001 BAR) Soil cannot be Identifiable and
identified. Verifiable.
It is the deposit of known (identifiable) portion of Belongs to the owner Real property by
land detached from the property of another which of the property to incorporation and
is attached to the property of another as a result of which it is attached. destination.
the effect of the current of a river, creek or torrent.
2023 GOLDEN NOTES
Rule on avulsion of uprooted trees Rules on ownership with regard to formation of

islands
GR: The owner of the tree retains ownership.
XPNs: LOCATION OWNER
1. The owner must claim them within a period of If formed on Philippine seas, on lakes, and
6 months; and on navigable or floatable rivers
Within territorial
State.
NOTE: The claim does not require actual waters.
recovery. It can be recovered on the basis of Outside territorial First country to
prescriptive period for acquiring movables waters. occupy.
which is four years. If formed on
non-navigable or non-floatable rivers
2. If uprooted trees have been transplanted by the Owner of nearer
owner of the land which the trees may have been Nearer in margin to
margin is the sole
cast and said trees have taken root in said land, one bank.
owner.
the owner of the trees, upon making the claim, is Island divided
required to refund the expenses incurred in If equidistant longitudinally in
gathering them or in putting them in safe place, halves.
including the expenses incurred by the owner of
the land for the preservation of the trees. Q: Eduave is the owner of land forming part of an
(Rabuya, 2008) island in a non-navigable river. Said land was
eroded due to a typhoon, destroying the bigger
Effects of Ramifications of a River portion thereof and improvements thereon. Due
to the movements of the river deposits on the
1. Some parts of the original estate may be isolated part of the land that was not eroded, the area
but remaining steady and secure on their was increased. Later, Eduave allowed Dodong to
location; and introduce improvements thereon and live there
as a caretaker. However, Dodong later denied
2. Other parts may be separated and pushed away Eduave’s claim of ownership so the latter filed
from the original estate. action to quiet title over the property. Who has
a better right to the land?
Formation of Island
A: EDUAVE has a better right to the land. The land
Islands which may be formed on the seas within the in question is an island that appears in a non-
jurisdiction of the Philippines, on lakes, and on floatable and non-navigable river, and it is not
navigable or floatable rivers belong to the State. disputed that Eduave is the owner of the parcel of
(Art. 464, NCC) land. The island belongs to the owner of the parcel
of land nearer the margin. (Art. 465, NCC) Because
Islands which through successive accumulation of the island is longer than the property of Eduave, he
alluvial deposits are formed in non-navigable and is deemed ipso jure the owner of that portion which
non-floatable rivers, belong to the owners of the corresponds to the length of his property along the
margins or banks nearest to each of them, or to the margin of the river. (Jagualing v. CA, G.R. No. 94283,
owners of both margins if the island is in the middle 04 Mar. 1991)
of the river, in which case it shall be divided
longitudinally in halves. If a single island thus NOTE: There is no accession when islands are
formed be more distant from one margin than from formed by the branching of a river; the owner
the other, the owner of the nearer margin shall be retains ownership of the isolated piece of land.
the sole owner thereof.
CIVIL LAW
on a portion of the property leased from Alava.

C. ACTIONS TO RECOVER OWNERSHIP AND Jaime’s possession was on behalf of his mother, and
POSSESSION OF PROPERTY not in his own right. (Lao v. Lao, G.R. No. 149599, 16
May 2005)
Q: In August 2001, the Sps. Javier offered to

1. ACCION REIVINDICATORIA purchase the Marikina property. However, they
could not afford to pay the price of
It is an action whereby plaintiff alleges ownership P3,500,000.00. They offered instead to lease the
over a parcel of land and seeks recovery of its full property while they raise enough money.
possession. Racelis hesitated at first, but she eventually
agreed. The parties agreed on a month-to-
NOTE: Where the facts averred in the complaint month lease and rent of P10,000.00 per month.
reveals that the action is neither one of forcible This was increased to P11,000.00. when Sps.
entry nor unlawful detainer but essentially involves Javier used the property as their residence and
a boundary dispute, the same must be resolved in an site of their tutorial school.
accion reinvindicatoria. (Sarmiento v. CA, G.R. No.
116192, 16 Nov. 1995) Sometime in 2002, Racelis inquired whether
they are still interested to purchase the
Requisites of Accion Reivindicatoria property then Sps. Javier agreed and even said
that they would pay P100,000.00 to buy them
1. Identity of property; and more time within which to pay the purchase
2. Plaintiff’s title to the property. (Rabuya, price but they only delivered P78,000.00 but
2008) they consistently paid rent until February 2004.
Then Racelis wrote to inform them that her
Q: A contract of lease executed by Alava (lessor) family had decided to terminate the lease
and Anita Lao (lessee) was not registered with agreement and to offer the property to other
the Register of Deeds. Aside from Anita, Rudy interested buyers. In the same letter, Racelis
Lao also leased a portion of the same property demanded that they vacate the property by 30
where he put up his business. At that time, Rudy May 2004. The Sps. Javier refused to vacate due
knew that Anita and her husband were the to the ongoing operation of their tutorial
owners of the said building. He also knew that business. They insisted that the sum of
she had leased that portion of the property, and P78,000.00 was advanced rent and proposed
that Jaime Lao, their son, managed and that this amount be applied to their outstanding
maintained the building, as well as the business liability until they vacate the premises.
thereon. Rudy eventually purchased the entire
property from Alava. Rudy then filed a Can Sps. Javier suspend their payment?
complaint for unlawful detainer against Jaime
alleging that the latter had occupied a portion of A: NO. In this case, the disconnection of electrical
his property without any lease agreement and service over the leased premises on 14 May 2004
without paying any rentals and prayed that an was not just an act of physical disturbance but one
order be rendered directing Jaime to vacate the that is meant to remove respondents from the
premises. Should the complaint be dismissed? leased premises and disturb their legal possession
as lessees. Ordinarily, this would have entitled
A: YES. The records in this case show that the respondents to invoke the right accorded by Art.
respondent has been in possession of the property 1658 of the NCC. However, this rule will not apply in
in question, not by mere tolerance or generosity of the present case because the lease had already
Rudy, but as the manager of his mother, who expired when petitioner requested for the
conducted her business in the building which stood temporary disconnection of electrical service.
2023 GOLDEN NOTES
Petitioner demanded respondents to vacate the objects thereto. (Art. 536, NCC) The act of Francisco
premises by 30 May 2004. Instead of surrendering is an abuse of rights because even if he has the right
the premises to petitioner, respondents unlawfully to recover possession of his property, he must act
withheld possession of the property. Respondents with justice and give the lessees their day in court
continued to stay in the premises until they moved and observe honesty and good faith.
to their new residence on 26 Sept. 2004. At that
point, petitioner was no longer obligated to Requisites for recovery of property
maintain respondents in the "peaceful and adequate
enjoyment of the lease for the entire duration of the 1. Clearly identify the land he is claiming in
contract”. (Racelis v. Sps. Javier, G.R. No. 189609, 21 accordance with the title/s on which he
Jan. 2018) bases his right of ownership; and
Effect of non-registration of the contract of lease NOTE: Burden of proof lies on the party
who asserts the affirmative of an issue. The
Although the lease contract was not filed with the description should be so definite that an
Register of Deeds, the buyer of the property was officer of the court might go to the locality
bound by the terms and conditions of said contract. where the land is situated and definitely
The lease, in effect became a part of the contract of locate it.
sale. He had no cause of action for unlawful detainer
against the lessee because of the subsisting contract 2. Prove that he has a better title than the
of lease; hence, he could not file the complaint defendant through:
against her. (Lao v. Lao, G.R. No. 149599, 16 May
2005) a. A Torrens certificate (best proof);
b. Tax receipts and tax declarations.
Q: Sps. Magtanggol managed and operated a
gasoline station on a 1,000 sq.m. lot which they NOTE: Tax receipts and tax declaration
leased from Francisco Bigla-awa. The contract are only prima facie evidence of
was for a period of three (3) years. When the ownership; it is rebuttable.
contract expired, Francisco asked the spouses to
peacefully vacate the premises. The spouses c. Long and actual possession;
ignored the demand and continued with the d. Titles granted by Spanish Government
operation of the gasoline station. e. Occupation of a building for a long time
without paying rentals; and
One month after, Francisco, with the aid of a f. Testimony adverse of adverse and
group of armed men, caused the closure of the exclusive possession of ownership.
gasoline station by constructing fences around (Paras, 2008)
it. Was the act of Francisco and his men lawful?
Why? (2014 BAR) NOTE: Plaintiff’s title must be founded on positive
right or title and not merely on the lack or
A: NO. Even if the lessee’s right to occupy the inefficiency of the defendant’s title. In other words,
premises has expired, the lessor cannot physically he shall not be permitted to rely upon the defects of
oust the lessee from the leased premises if the latter the defendant’s title. (Art. 434, NCC)
refuses to vacate. The lessor must go through the
proper channels by filing an appropriate case for Q: In 1998, Intramuros leased certain real
unlawful detainer or recovery of possession. Every properties of the national government which it
possessor has a right to be respected in his administered to Offshore Construction. Three
possession (Art. 539, NCC) and in no case can properties were subjects of the Contracts of
possession be acquired through force or Lease: Baluarte De San Andres, Baluarte De San
intimidation as long as there is a possessor who Francisco De Dilao and Revellin De Recoletos.
CIVIL LAW
All three properties were leased for 5 years Offshore Const. Dev. Co., G.R. No. 196795, 07 Mar.
from 01 Sept. 1998 to 31 Aug. 2003. 2018)
Offshore Construction occupied and introduced Reasons why the plaintiff is NOT allowed to rely
improvements in the leased premises. However, on the weakness of defendant’s title
Intramuros and the DOT halted the projects due
to Offshore Construction’s non-conformity with 1. Possibility that neither the plaintiff nor the
PD 1616, which required 16th to 19th centuries defendant is the true owner of the
Philippine-Spanish Architecture in the area. property. In which case, the defendant who
During the lease period, Offshore Construction is in possession will be preferred; (Paras,
failed to pay its utility bills and rental fees, 2008)
despite several demand letters. Intramuros
tolerated the continuing occupation, hoping that 2. One in possession is presumed to be the
Offshore Construction would pay its arrears. To owner and he cannot be obliged to show or
settle its arrears, Offshore Construction prove a better title; (Art. 541, NCC)
proposed to pay the DOT’s monthly operational
expenses and the parties executed a 3. Possessor in the concept of an owner is
Memorandum of Agreement covering the period presumed to be in good faith and he cannot
of 15 Aug. 2004 to 25 Aug. 2005. But Offshore be expected to be carrying every now and
Construction failed to pay its arrears amounting then his proofs of ownership over the
to P13,448,867.45. Is Intramuros entitled to property; (Art. 527, NCC); and
possession to the said leased properties to
Offshore Construction? 4. He who relies on the existence of a fact,
should prove that fact. If he cannot prove,
A: YES. Intramuros’ tolerance of respondent's the defendant does not have to prove.
occupation and use of the leased premises after the (Paras, 2008)
end of the lease contracts does not give the latter a
permanent and indefeasible right of possession in 2. ACCION PUBLICIANA
its favor. When a demand to vacate was made, as
what petitioner had done, respondent’s possession
It refers to an ejectment suit filed within 10 years
became illegal and it should have left the leased
after the expiration of 1 year from accrual of cause
premises.
of action or from the unlawful withholding of
possession of the realty. (Gabriel Jr. v. Crisologo, G.R.
More than once has the Supreme Court adjudged
No. 204626, 09 June 2014)
that a person who occupies the land of another at
the latter's tolerance or permission without any
It is an action for recovery of the right to possess and
contract between them is necessarily bound by an
is a plenary action in an ordinary civil proceeding to
implied promise that he will vacate upon demand,
determine the better right of possession of realty
failing which a summary action for ejectment is the
independent of the title or ownership of the
proper remedy against him. The situation is not
property.
much different from that of a tenant whose lease
expires but who continues in occupancy by
If at the time of the filing of the complaint more than
tolerance of the owner, in which case there is
1 year had elapsed since defendant had turned
deemed to be an unlawful deprivation or
plaintiff out of possession or defendant’s possession
withholding of possession as of the date of the
had become illegal, the action will be, not one of the
demand to vacate. In other words, one whose stay is
forcible entry or illegal detainer, but an accion
merely tolerated becomes a deforciant illegally
publiciana. (Rabuya, 2008)
occupying the land or property the moment he is
required to leave. (Intramuros Administration v.
2023 GOLDEN NOTES
3. ACCION INTERDICTAL As to necessity of proof of prior physical

possession
It is a summary action to recover physical or
material possession only and it must be brought Plaintiff need not
within 1 year from the time the cause of action have been in prior
arises. It may be: physical possession.
Plaintiff must prove

1. Forcible Entry; or NOTE: The fact that
that he was in prior
2. Unlawful Detainer. (De Leon, 2006) petitioners are in
physical possession of
possession of the lot
the premises until he
Forcible Entry vs. Unlawful Detainer does not
was deprived thereof
automatically entitle
by the defendant.
UNLAWFUL them to remain in
FORCIBLE ENTRY
DETAINER possession. (Ganilla
As to when possession became unlawful v. CA, G.R. No. 150755,
28 June 2005)
Possession is As to the reckoning period

inceptively lawful but
becomes illegal from One-year period is
One-year period is
the time defendant counted from the
generally counted from
unlawfully withholds date of last demand
Possession of the the date of actual entry
possessions after the or last letter of
defendant is unlawful of the land.
expiration or demand.
from the beginning as
termination of his
he acquired possession (Rabuya, 2008)
right thereto.
by (F-I-S-T-S)
Q: The petitioners discovered sometime in 2006
NOTE: The question
1. Force; that respondent clandestinely encroached the
of possession is
2. Intimidation; subject property by constructing a nipa house
primordial, while the
3. Strategy; and fencing the perimeter of the encroached
issue of ownership is
4. Threat; or area. Due to financial constraints, petitioners
generally unessential
5. Stealth. did not immediately file an action in court and
in unlawful detainer.
allowed respondent to remain in possession of
(Rosa Rica Sales
said portion, even against their will. Sometime
Center v. Sps. Ong, G.R.
in June 2013, petitioners learned that
132197, 16 Aug.
respondents, through strategy and stealth,
2005)
occupied the remaining area of the subject
property. The CA dismissed the complaint for
As to necessity of demand ejectment filed by petitioners. Is the dismissal
proper?
Demand is
jurisdictional if the
A: NO. In a forcible entry case, the 1-year
No previous demand ground is non-
prescriptive period is generally reckoned from the
for the defendant to payment of rentals or
date of actual entry on the land. However, if forcible
vacate is necessary. failure to comply
entry is done through stealth, the period is counted
with the lease
from the time the plaintiff discovered the entry. In
contract.
this case, the one-year period for filing a forcible
CIVIL LAW
entry case from the date of discovery of entry constitutes hearsay considering that it was based
prescribed in 2007. Hence, with respect to this one- not on Talaue's personal knowledge, but rather, on
hectare portion, they should have filed an accion the allegations in Dizon's Complaint. Talaue's
publiciana or recovery of possession. As to the testimony is thus clearly inadmissible for being
illegal entry of the remaining area of the subject violative on the rule on hearsay. It must be
property, the forcible entry case was filed well emphasized, however, that in civil cases, the burden
within the one-year prescriptive period. The stealth of proof is on the plaintiff to establish his or her case
was discovered in June 2013 and petitioners filed by a preponderance of evidence. The plaintiff must
the complaint in February 2014. However, rely on the strength of his or her own evidence and
considering that the property subject matter of this not on the weakness of that of his or her opponent.
case pertain to only one parcel of land covered by Since Dizon claims to have the better right to
one certificate of title and the intruders are the possess the subject property pursuant to law, hers
same, the Court gives due course to the filing of the was the burden to establish all jurisdictional facts
instant forcible entry case for the whole area of the required by law. (Sarmiento v. Dizon, G.R. No.
subject property. (Barcelo v. Riparip, G.R. No. 235424, 03 Feb. 2021)
250159, 26 Apr. 2021)
4. QUIETING OF TITLE
Q: Dizon filed an unlawful detainer case based
based on Ang’s alleged tolerance against
It is a proceeding in equity, the purpose of which is
Sarmiento. However, the sole evidence
the declaration of the invalidity of a claim on a title
presented by Dizon to prove the fact of tolerance
or the invalidity of an interest in property adverse
is the testimony of her attorney-in-fact Talaue.
to that of the plaintiff, and thereafter to free the
In Talaue's Counter-Affidavit therein, he
plaintiff and all those claiming under him from any
acknowledged that he did not have personal
hostile claim thereon. (Pineda, 2009)
knowledge of the purported arrangement
between Ang and Sarmiento and that his
Quieting of title is a common law remedy for the
testimony was only based on Dizon's allegations
removal of any cloud upon, doubt, or uncertainty
in the Complaint. Will the unlawful detainer
affecting title to real property. Whenever there is a
prosper?
cloud on title to real property or any interest in real
property by reason of any instrument, record, claim,
A: NO. To sustain an action for unlawful detainer,
encumbrance, or proceeding that is apparently valid
the plaintiff bears the burden of alleging and
or effective, but is, in truth and in fact, invalid,
proving, by preponderance of evidence, the
ineffective, voidable, or unenforceable, and may be
following jurisdictional facts: (1) initially,
prejudicial to said title, an action may be brought to
possession of property by the defendant was by
remove such cloud or to quiet the title. In such
contract with or by tolerance of the plaintiff; (2)
action, the competent court is tasked to determine
eventually, such possession became illegal upon
the respective rights of the complainant and the
notice by plaintiff to defendant of the termination of
other claimants, not only to place things in their
the latter's right of possession; (3) thereafter, the
proper places, and make the claimant, who has no
defendant remained in possession of the property
rights to said immovable, respect and not disturb
and deprived the plaintiff of the enjoyment thereof;
the one so entitled, but also for the benefit of both,
and (4) within one year from the last demand on
so that whoever has the right will see every cloud of
defendant to vacate the property, the plaintiff
doubt over the property dissipated, and he can
instituted the complaint for ejectment.
thereafter fearlessly introduce any desired
improvements, as well as use, and even abuse the
Talaue's testimony with respect to Ang and
property. (Phil-Ville Dev. and Housing Corp. v.
Sarmiento's purported arrangement and the
Bonifacio, G.R. No. 167391, 08 June 2011)
circumstances which purportedly gave rise to the
former's tolerance of the latter's occupation clearly
2023 GOLDEN NOTES
Nature of the Action to Quiet Title 4. To determine and make known the precise
state of title for the guidance of all. (Paras,
Significantly, suits to quiet title are characterized as 2008)
proceedings quasi in rem. Technically, they are
neither in rem nor in personam. In an action quasi in Persons who may File an Action to Quiet Title
rem, an individual is named as defendant. However,
unlike suits in rem, a quasi in rem judgment is 1. Registered owner;
conclusive only between the parties. A proceeding 2. A person who has an equitable right or
quasi in rem is one brought against persons seeking interest in the property; or
to subject the property of such persons to the 3. The State.
discharge of the claims assailed. (Portic v. Cristobal,
G.R. No. 156171, 22 Apr. 2005) Q: Lim filed in the RTC in Cebu City a petition for
the reconstitution of the owner's duplicate copy
Classifications of Actions of OCT No. RO-9969-(O-20449), alleging that
said OCT had been lost during World War II by
1. Remedial action – one to remove cloud on his mother, Luisa, who acquired title to it by
title; and virtue of a deed of sale, albeit unregistered.
2. Preventive action – one to prevent the Because of the Oños' opposition, and upon order
casting of a (threatened) cloud on the title. of the RTC, Lim converted the petition for
(De Leon, 2006) reconstitution into a complaint for quieting of
title. The Oños now contend that this action for
Scope of the Action to Quiet Title quieting of title should be disallowed because it
constituted a collateral attack on OCT No. RO-
Only real properties can be subject of an action for 9969-(O-20449). Is their contention correct?
quieting of title. (Pineda, 2009)
A: NO. The attack is direct when the objective is to
Requisites for an Action to Quiet Title (L-C-D) annul or set aside such judgment or enjoin its
enforcement. On the other hand, the attack is
For an action for quieting of title to prosper: indirect or collateral when, in an action to obtain a
different relief, an attack on the judgment is
1. the plaintiff or complainant must have a nevertheless made as an incident thereof. The
legal or an equitable title to or interest in averments readily show that the action was neither
the real property subject of the action; and a direct nor a collateral attack for Lim was asserting
only that the existing title registered in the name of
2. the deed, claim, encumbrance, or the petitioners' predecessors had become
proceeding claimed to be casting cloud on inoperative due to the conveyance in favor of Lim's
his title must be shown to be in fact invalid mother, and resultantly should be cancelled. (Oño v.
or inoperative despite its prima facie Lim, G.R. No. 154270, 09 Mar. 2010)
appearance of validity or legal efficacy.
(Gatmaytan and Valdellon v. Misibis Land, Q: Which between the certificate of title and the
Inc., G.R. No. 222166, 10 June 2020) title itself cannot be the subject of collateral
attack?
Reasons for Quieting of Title
A: To be clear, what cannot be collaterally attacked
1. Prevent future litigation on the ownership is the certificate of title, and not the title itself. The
of the property; Certificate referred to is the document issued by the
2. Protect true title and possession; Register of Deeds known as the Transfer Certificate
3. To protect the real interest of both parties; of Title or TCT. In contrast, the title referred to by
and law means ownership, which is represented by that
CIVIL LAW
document. Title as a concept of ownership should NOTE: They must appear valid or effective –
not be confused with the certificate of title and extraneous evidence is needed to prove
evidencing such ownership. (Heirs of Marquez v. their invalidity or ineffectivity.
Heirs of Hernandez, G.R. No. 236826, 23 Mar. 2022, as
penned by J. Hernando) 2. But such instrument is in Truth:
a. Invalid;
Rules in Actions for Quieting of Title b. Ineffective;
c. Voidable;
1. These put an end to vexatious litigation in d. Unenforceable;
respect to property involved; plaintiff e. Has been extinguished or terminated; or
asserts his own estate & generally declares f. Has been barred by extinctive
that defendant’s claim is without prescription.
foundation;
3. Such instrument may be Prejudicial to the title.
2. Remedial in nature; (Art. 476(1), NCC)
Purpose of an Action to Remove Cloud on Title
NOTE: An action may also be brought to
prevent a cloud from being cast upon title It is intended to procure the cancellation, or
to real property or any interest therein. delivery of, release of an instrument, encumbrance,
(Art. 476, NCC) or claim constituting a claim on plaintiff’s title, and
which may be used to injure or vex him in the
3. Neither suits in rem nor personam but suits enjoyment of his title. (Pineda, 2009)
against a particular person or persons in
respect to the res (quasi in rem); Action to Quiet Title vs. Action to Remove Cloud
on Title
4. May not be brought for the purpose of
settling a boundary disputes;
ACTION TO QUIET ACTION TO REMOVE
TITLE CLOUD ON TITLE
5. Applicable to real property or any interest
therein; As to purpose
To procure the
6. An action to quiet title brought by the cancellation; delivery;
person in possession of the property is release of an
imprescriptible; (Pineda, 2009) and To put an end to instrument,
vexatious litigation in encumbrance, or claim,
7. If he is not in possession, he must invoke his respect to the which constitutes a
remedy within the prescriptive period. property involved. claim in plaintiff’s title,
and which may be used
a. Ordinary prescription - 10 years; to injure or to vex him
(Art. 1134, NCC) or in his enjoyment of his
title.
b. Extraordinary prescription - 30 As to nature of the action
years. (Art. 1137, NCC)
Preventive in nature, to
Requisites for existence of a Cloud (T-A-P) Remedial in nature,
remove a cloud which
involving a present
may be used for future
1. There is an Apparently valid or effective adverse claim.
actions.
instrument;
2023 GOLDEN NOTES
As to nature of claims The plaintiff must have legal or equitable title to,
or interest in the real property which is the subject
Plaintiff asserts own matter of the action. He need not be in possession
Plaintiff declares his
claim and declares of said property. (Art. 477, NCC)
own claim and title and
that the claim of the
at the same time
defendant is Prescription of an Action for Quieting of Title
indicates the source and
unfounded and calls
nature of defendant’s
on the defendant to GR: As a general rule, an action for quieting of title,
claim pointing its defect
justify his claim on the being a real action, prescribes 30 years after
and prays for the
property that same accrual.
declaration of its
may be determined by
validity.
the court. XPN: However, by way of exception, an action to
quiet title involving property in the possession of
Filed against whom the plaintiff is imprescriptible.
Against people who Against defendant who Q: The Quejados filed a complaint for Quieting of
have claims; claims asserts claims based on Title against the Gaetos alleging ownership over
are more general in an invalid instrument a 10,000 sqm. lot in San Juan, La Union, which
nature (but not apparent). they inherited from their predecessor-in-
interest who had openly, publicly, continuously
(Pineda, 2009)
and peacefully possessed the same without
interruption for more than 30 years in the
Action to quiet title cannot be availed until the
concept of an owner. The Quejados alleged that
donation has been first revoked
the Gaetos, surreptitiously and without their
knowledge and consent caused the subject
The barangay traces its claim of ownership over the
property to be surveyed for the purpose of
disputed property to a valid contract of donation
claiming ownership. Their acts disturbed and
which is yet to be effectively revoked. Such rightful
put a cloud on their ownership, possession, and
claim does not constitute a cloud on the supposed
title over the subject property. The Quejados’
title of Edgardo over the same property removable
neighbor and tenant testified as to the Quejado’s
by an action to quiet title. (Dolar v. Brgy. Lublub, G.R.
ownership of the said lot, and documentary
No. 152663, 18 Nov. 2005)
evidence, like the mortgages and their
cancellation and Tax Declaration were
Indispensable Requirement for Action to Quiet
presented to support their claim of ownership.
Title
The Gaetos insisted that the Quejados were not
the owners of the subject property. The Gaetos
For an action to quiet title or remove cloud on a title
also testified and then presented receipts of
to stand, the plaintiff must have legal or equitable
expropriation payments for the properties
title to or interest in the subject real property. This
ordered expropriated by the CFI of La Union,
requirement is indispensable, the absence of which
including the decision in the said case involving
is fatal to the action. (Pineda, 2009)
the subject property. Will the action to quiet title
filed by the Quejados prosper?
Legal title covers a situation when the owner is
registered as the owner of the property. Equitable
A: NO. Under Art. 476 and 477 of the NCC, for an
title covers a situation when the person has the
action to quiet title to prosper, two indispensable
beneficial ownership of the property. (Ibid.)
requisites must concur, namely: (1) the plaintiff or
complainant has a legal or an equitable title to or
interest in the real property subject of the action;
and (2) the deed, claim, encumbrance, or
CIVIL LAW
proceeding claimed to be casting cloud on his title 6. It is governed, first of all, by the Contract of the
must be shown to be in fact invalid or inoperative parties; otherwise, by special legal provisions,
despite its prima facie appearance of validity or and in default of such provisions, by the
legal efficacy. In an action for quieting of title, the provisions of Title III of the NCC on co-
plaintiff has the burden to show by preponderance ownership. (De Leon, 2006)
of evidence that they have a legal and equitable title
to or interest in the real property subject of the Legal effect of Co-ownership
action. Legal title denotes registered ownership,
while equitable title means beneficial ownership. In Co-ownership creates rights in favor of each one of
the absence of such legal or equitable title, or the co-owners with respect to the property owned
interest, there is no cloud to be prevented or in common.
removed.
The rights of a co-owner can be viewed in two
In this case, petitioners did not have a legal title to senses:
the subject property. There were no certificates of
title in their respective names. Tax declarations and 1. His right over the thing owned in common is
receipts are not conclusive evidence of ownership limited by the other co- owner’s concomitant
or of the right to possess land when not supported rights; or
by other evidence. Mere allegation of open,
continuous, and exclusive possession of the 2. His right over his ideal share or his undivided
property in dispute without substantiation does not interest over the same property; the individual
meet the requirements of the law. (Viloria v. Heirs of co-owner has absolute control and ownership
Gaetos, G.R. No. 206240, 12 May 2021, as penned by over his ideal share.
J. Hernando)
Requisites of Co-Ownership (P-U-S)
D. CO-OWNERSHIP 1. Plurality of owners;

2. Unity of object, which is an undivided thing or
right; and
3. Each co-owner’s right must be limited only to
There is co-ownership whenever the ownership of
his ideal Share of the physical whole. (De Leon,
an undivided thing or right belongs to different
2006)
persons. (Art. 484, NCC) It is the right of common
dominion which two or more persons have in a
NOTE: By the very nature of co-ownership, a co-
spiritual (or ideal) part of the thing which is not
owner cannot point to any specific portion of the
physically divided.
property owned in common as his own because his
share remains intangible and ideal. (Sps. Avila et al
Characteristics of Co-ownership in general
v. Sps. Barabat, GR. No. 141993, 17 May 2006)
(P-E-P-C-M-O)
Rules to govern in Co-Ownership

1. Plurality of subjects or owners;
2. There is no Mutual representation by the co-
1. Contracts;
owners;
2. Special provision of law; and
3. It exists for the common Enjoyment of the co-
3. Arts. 484 to 501, Title III of the NCC (Pineda,
owners;
2009)
4. There is a single Object which is not materially
divided;
5. It has no distinct legal Personality; and
2023 GOLDEN NOTES
Co-ownership vs. Joint Tenancy Co-ownership vs. Partnership
CO-OWNERSHIP ORDINARY
JOINT OWNERSHIP CO-OWNERSHIP
(TENANCY IN PARTNERSHIP
(JOINT TENANCY)
COMMON) As to existence of legal personality
As to the extent of ownership No legal personality. Has legal personality.
Each co-owner is the
Each joint owner As to creation
owner of his own ideal
owns the whole thing. Can be created
share. Can be created only by
without the
As to disposition contract, express or
formalities of a
implied.
contract.
Joint owner may not
Each co-owner may
dispose of his own
dispose of his By contract or by will. By contract only.
share without the
undivided share
consent of all the rest, As to period
without the other co-
because he really has
owners’ consent. Agreement to exist for
no ideal share. No term limit is set by
more than 10 years is
law.
As to transfer of shares in case of death void.
Upon the death of a As to mutual representation

Upon the death of a
joint owner, his share No mutual There is mutual
co-owner, his ideal
goes to the other joint representation. representation.
share goes to his heirs.
owners by accretion.
As to as to effect of death or incapacity
As to minority or legal disability
Not dissolved by the Dissolved by death or
In case of a minor who
death or incapacity of incapacity of a
is a co-owner, this The legal disability of
a co- owner. partner.
does not benefit the one joint owner
others for the purpose benefits the others. As to substitution of a co-owner or a partner
of prescription.
Prescription A co-owner can
dispose of his share A partner cannot be
Prescription will
Prescription will not without the consent of substituted without
continue to run among
run among them. the others, hence, in a the consent of the
co-owners.
way a co-owner is others.
(Pineda, 2009; Paras, 2008)
substituted.
As to profits
Profits may be
Profits of a co-owner
stipulated upon;
depend on his
(e.g., profit-sharing
proportionate share.
agreements).
As to purpose
For collective
For profit.
enjoyment.
CIVIL LAW
As to formalities A co-owner has a right to freely sell or dispose his

undivided share of interest but has no right to sell a
No public instrument
May be made in any divided or definite part of a real estate owned in
is needed even if the
form except when real common. (Lopez v. Illustre, G.R. No. 2426, 24 Jan.
object of the co-
property is 1906; Torres v. Lapinid, G.R. No. 187987, 26 Nov.
ownership is an
contributed. 2014)
immovable.
(Pineda, 2009) In a property co-owned by the compulsory heirs,

any act tantamount to partition such as identifying
Alienation of property co-owned (2022 BAR) their shares and constructing their respective
houses automatically terminates co-ownership.
When a co-owner sells the whole property as his, (Avila v. Sps. Arabat, G.R. No. 141993, 17 Mar. 2006)
the sale will affect only his own share but not those
of the other co-owners’ who did not consent to the Duration of the Co-ownership (2000, 2002, 2008
sale. BAR)
A sale of the entire property by one co-owner An agreement to keep the thing undivided for a
without the consent of the other co-owners is not certain period of time, not exceeding 10 years, shall
null and void but affects only his undivided share be valid. This term may be extended by a new
and the transferee gets only what would correspond agreement.
to his grantor in the partition of the thing owned in
common. (Paulmitan v. CA, G.R. No. 51584, 25 Nov. A donor or testator may prohibit partition for a
1992) period which shall not exceed 20 years. (in relation
to Art. 1083, NCC)
Q: What is the remedy available to the co-
owners whose shares were alienated without Neither shall there be any partition when it is
their consent? prohibited by law. (Art. 494, NCC)
A: The appropriate remedy is not a nullification of Share of the co-owners in the benefits and
the sale or for the recovery of the thing owned in Charges Arising from the Co-ownership
common but a division of the common property.
Neither recovery of possession nor restitution can The share of the co-owners in the benefits and
be granted since the defendant buyers are charges arising from the co-ownership shall be
legitimate proprietors and possessors in joint proportional to their respective interests and any
ownership of the common properly claimed. (Reyes stipulation in a contract to the contrary shall be
v. Spouses Garcia, G.R. No. 225159, 21 Mar. 2022, as void. (Art. 485(1), NCC) Consequently, to determine
penned by J. Hernando) the share of the co-owners in the benefits and
charges, we must first determine their respective
Q: Is there such a thing as perpetual co- interests in the co-ownership.
ownership?
Interests are presumed equal, unless the contrary is
A: NO. Any of the co-owners may demand partition proved. (Art. 485(2), NCC)
any time. No co-owner ought to be compelled to stay
in a co-ownership indefinitely. He may insist the
partition of the property any time. Such action to
demand for partition does not prescribe. (Patricio v.
Dario, G.R. No. 170829, 20 Nov. 2006)
2023 GOLDEN NOTES
Sources of Co-ownership (L-O-S-T-C²) complaint on the ground that it is in the nature

of a collateral attack on the certificates of title
1. Law constitutes a bar to a subsequent petition under
Sec. 108 of P.D. 1529?
e.g., Easement of party walls; (Art. 658, NCC) co-
ownership between a man and a woman A: NO. Sec. 108 of P.D. 1529 is used only for
capacitated to marry each other; (Art. 147, FC) contemplating corrections or insertions of mistakes
between a man and a woman not capacitated to which are only clerical but certainly not
marry each other; (Art. 148, FC) controversial issues. Although Hilaria Bagayas was
able to prove that she is a legally adoptive child, the
2. Occupancy action is not proper as her petition was of an
annulment of sale and partition. She must first
e.g., When two persons gather forest products prove that she is a co-owner of the estate and
or catch a wild animal; conveyance of her lawful shares. However, she
failed to do so. As regards to her citing of Sec. 108 of
3. Succession P.D. 1529, it was improper as her intent for using it
is as a mode of directly attacking the certificates of
e.g., Heirs of undivided property before title issued to the Bagayas brothers. It was ruled
partition; that it was not a direct attack, therefore cannot be
used. The complaint is not covered by the intention
4. Testamentary (or mortis causa) or Donation of the decree. (Bagayas v. Bagas, G.R. Nos. 187308 &
inter vivos; 187517, 18 Sept. 2013)
e.g., Where the donor prohibits partition of the Right of Co-owners

property for a certain period of time;
Each co-owner may use the thing owned in
5. Contract; or common, provided he does so in accordance with
the purpose for which it is intended and in such a
6. By Chance or fortuitous event way as not to injure the interest of the co-
ownership or prevent the other co-owners from
e.g., Hidden treasure. (Paras, 2008) using it according to their rights. The purpose of
the co-ownership may be changed by agreement,
NOTE: One who is merely related by affinity to the express or implied. (Art. 486, NCC)
decedent does not become a co-owner of the latter’s
property. General Rights of Each Co-owner as to the Thing
Owned in Common
Q: Hilaria Bagayas, an adoptive child, filed a
complaint against her siblings who excluded her The following the general rights of each co-owner as
from inheriting from the estate of their parents. to the thing owned in common
She asked to include her as a registered owner (U-S-E-C-O-P-E-P-E-R-F-A-P-A-P)
to the extent of one-third of the lands covered
therein; citing Sec. 108 of P.D. 1529 or the 1. To Use the thing according to the purpose
Property Registration Decree. In an earlier intended provided that:
complaint, she asked for the annulment of a
Deed of Absolute Sale in favor of her brothers a. It is without prejudice to the interest of the
wherein the RTC found otherwise. They found co-ownership; and
that the lands were transferred to the brothers b. Without preventing the use of other co-
by the father’s execution of the deed of sale owners. (Art. 486, NCC)
before he died. Is the dismissal of the earlier
CIVIL LAW
NOTE: The purpose of the co-ownership may be 7. To Exercise legal redemption;

changed by an agreement, express or implied.
8. To ask for Partition; (Art. 494, NCC)
2. To Share in the benefits in proportion to his
interest, provided the charges are borne in the 9. Right to Exempt himself from obligation of
same proportion (Art. 485, NCC); paying necessary expenses and taxes by
renouncing his share in the pro-indiviso
NOTE: A contrary stipulation is void. Hence, interest; but cannot be made if prejudicial to co-
benefits cannot be stipulated upon by the co- ownership; (Art. 488, NCC)
owners.
10. Right to make Repairs for preservation of things
3. Each co-owner may bring an action for can be made at will of one co-owner; receive
Ejectment (Art. 487, NCC) reimbursement therefrom; notice of necessity
of such repairs must be given to co- owners, if
NOTE: Action for ejectment covers forcible practicable; (Art. 489, NCC)
entry, unlawful detainer, accion publiciana, 11. Right to full ownership of his part and Fruits;
quieting of title, accion reivindicatoria, and (Art. 493, NCC)
replevin.
12. Right to Alienate, assign or mortgage own part;
Q: What is the exception to this rule that each except personal rights like right to use and
co-owner may bring an action for the benefit habitation; (Ibid.)
of all co-owners?
13. Right of Pre-emption;
A: Where the suit is brought by a co-owner,
without repudiating the co-ownership, then the 14. Right to be Adjudicated thing (subject to right of
suit is presumed to be filed for the benefit of the others to be indemnified); and
other co-owners and may proceed without
impleading the other co-owners. However, 15. Right to share in Proceeds of sale of thing if
where the co-owner repudiates the co- thing is indivisible and they cannot agree that it
ownership by claiming sole ownership of the be allotted to one of them. (Art. 498, NCC)
property or where the suit is brought against a
co-owner, his co-owners are indispensable Duties/Liabilities of Co-Owners
parties and must be impleaded as party-
defendants, as the suit affects the rights and The following are the duties and liabilities of co-
interests of these other co-owners. (Heirs of owners: (P-A-P-A-N-C-U-M)
Eñano v. San Pedro Cineplex Properties, Inc., G.R.
No. 236619, 6 Apr. 2022, as penned by J. 1. Share in Charges proportional to respective
Hernando) interest; stipulation to contrary is void;
4. To Compel other co-owners to contribute to 2. Pay Necessary expenses and taxes – May be
expenses for preservation of the thing (Art. 488, exercised by only one co-owner;
NCC) and to the taxes;
3. Pay Useful and luxurious expenses – If
5. To Oppose to any act of alteration; (Art. 491, determined by majority;
NCC) even if beneficial to the co-owners;
4. Duty to obtain consent of All if thing is to be
6. To Protect against acts of majority which are altered even if beneficial; resort to court if non-
prejudicial to the minority; (Art. 492(3), NCC) consent is manifestly prejudicial;
2023 GOLDEN NOTES
5. Duty to obtain consent of Majority with regards benefit of all co-owners of the property. (Resuena v.
to administration and better enjoyment of the CA, G.R. No. 128338, 28 Mar. 2005)
thing; controlling interest; court intervention if
prejudicial – Appointment of administrator; Consent of the Co-owners is Not Required to
Bring an Action for Ejectment
6. No Prescription to run in favor of a co-owner as
long as he recognizes co-ownership; The law does not require that consent of all the co-
owners must be first secured before one of them can
Requisites for acquisition through prescription: bring an action for ejectment. If the case does not
prosper:
a. He has repudiated through unequivocal
acts; GR: The other co-owners are NOT bound by the
b. Such act of repudiation is made known to judgment.
other co-owners; and
c. Evidence must be clear and convincing. XPN: If they were also served with summons, even
as unwilling plaintiffs.
7. Co-owners cannot ask for Physical division if it
would render thing unserviceable; but can A suit for ejectment CANNOT be brought by one co-
terminate co-ownership; and owner against another co-owner, since the latter
also has a right of possession; the only effect of the
8. After partition, duty to render mutual action will be to obtain recognition of the co-
Accounting of benefits and reimbursements for ownership.
expenses.
1. DISTINCTIONS BETWEEN RIGHT TO
Rights of a Co-owner to third parties PROPERTY OWNED IN COMMON AND FULL
OWNERSHIP OVER THE IDEAL SHARE
1. GR: Assignees or creditors of the co-owners
may take part in the division of the thing owned
1. Right to property owned in common;
in common and object to it being effected
without their concurrence, but they cannot
NOTE: Each co-owner is granted the right to use
impugn any partition already executed; and
the property owned in common for the purpose
for which it is intended.
XPN: If there has been fraud or it was made
notwithstanding their formal opposition
Restrictions in the enjoyment of this right:
presented to prevent it, without prejudice to the
right of the debtor or assignor to maintain its
a. The co- ownership shall not be injured;
validity. (Art. 497, NCC)
and
2. Non-intervenors – Retain rights of mortgage
b. The exercise of such right shall not
and servitude and other real rights and personal
prevent the other co-owners from using
rights belonging to them before partition was
the property according to their own
made.
rights. (Rabuya, 2008; Aguilar v. CA, G.R.
No. 76351, 29 Oct. 1993)
Any of the Co-owners May Bring an Action in
Ejectment
2. Full ownership over his/her ideal share
One of the co-owner’s actions for ejectment against
a defendant is deemed to be instituted for the
CIVIL LAW
NOTE: A co-owner has full ownership of his share Bobby Tan. Thereafter, she sold the lands to
(undivided interest) and the fruits and benefits him. The children of Vda. Rosario said they are
arising therefrom. Being the full owner thereof, he co-owners as they are inheritors of their
may alienate, assign, or mortgage it. He can also deceased father, whose approval was needed to
substitute another person in the enjoyment of his dispose the subject properties. Are the subject
share, except only when personal rights are properties of conjugal in nature, thus making
involved. (Art. 493, NCC) the children of Vda. Rosario co-owners?
Q: Melecio heirs inherited a residential lot, A: NO. The SC ruled that Vda. Rosario is the sole
ancestral house and two other structures owner of the parcel of lands. Other than their bare
erected thereon, the administration and allegation, no evidence was adduced by the heirs to
management of which were left to the care of establish that the subject properties were procured
Erna who was then residing in their ancestral during the coverture of their parents or that the
home. The Melecio heirs purportedly executed a same were bought with conjugal funds. Conjugal
notarized Special Power of Attorney authorizing partnership terminates upon the death of one
Erna to apply for a loan with RBCI and mortgage spouse. Vda. Rosario was already a widow when she
the subject properties. Erna defaulted in the sold the subjected lands to Bobby Tan. Therefore, at
loan payment causing RBCI to extrajudicially the time of the sale, Vda. Rosario, a widow, can now
foreclose the mortgaged properties. Melecio dispose of the properties on her own volition. (Tan
heirs demanded RBCI to release the subject v. Andrade, G.R. No. 171904, 07 Aug. 2013)
properties from the coverage of Erna's loan
obligation to the extent of their shares and Q: Sps. Roque Magsano and Susana Capelo (Sps.
refused to vacate the premises. RBCI applied for Magsano), the parents of Norma, et. al., executed
and was issued a writ of possession. The Melecio in favor of PSLB a Real Estate Mortgage (REM)
heirs filed a complaint in court alleging that the over their parcel of land as security for their
SPA submitted by Erna was spurious and their loan. Sps. Magsano defaulted in their obligation,
signatures appearing thereon were falsified. Is causing the extra-judicial foreclose of the
the mortgage of the entire property valid? mortgaged property in which PSLB emerged as
the highest bidder. It subsequently sold the
A: NO. Erna did not validly mortgage the entire subject land to Sps. Manuel. Thereafter, Sps.
property. While Erna, as herself, a co-owner, by Magsano refused to vacate the premises despite
virtue of Art. 493 of the NCC, had the right to PSLB’s demands; hence, the latter applied for
mortgage or even sell her undivided interest in the and was granted a writ of possession and
said properties, she, could not, however, dispose of demolition. Norma et. al. sought to annul the
or mortgage the subject properties in their entirety Real Estate Mortgage. They averred that Roque
without the consent of the other co-owners. The Magsano passed away prior to the execution of
settled rule is that persons constituting a mortgage the Real Estate Mortgage; hence, the mortgage
must be legally authorized for the purpose. In the was void, and could not have conferred any right
present case, while Erna appears to be a co-owner to PSLB which it could pass to Sps. Manuel. PSLB
of the mortgaged properties, she made it appear and the heirs of Sps. Manuel denied knowledge
that she was duly authorized to sell the entire of the death of Roque, and averred that
properties by virtue of the notarized SPA. (Rural petitioners have no cause of action to seek the
Bank of Cabadbaran, Inc. v. Melecio-Yap, G.R. No. annulment of the Real Estate Mortgage since
178451, 30 July 2014) they were not parties thereto.
Q: Vda. Rosario is the registered owner of four 1. Is the Real Estate Mortgage void?
(4) parcels of land, which she mortgaged to and
foreclosed. Upon the expiration of the
redemption period, she asked the assistance of
2023 GOLDEN NOTES
A: NO. The validity of the mortgage in favor of PSLD Alteration (2008 BAR)
should be limited only to the Susana’s portion. At
the time the mortgage was constituted, Roque was It is a change which is more or less permanent,
already deceased. Upon Roque’s death, the conjugal which changes the use of the thing, and which
partnership between him and Susana was prejudices the condition of the thing or its
dissolved. Thus, an implied co-ownership arose enjoyment by the others. (Paras, 2008)
among Susana and the other heirs of Roque with
respect to his share in the assets of the conjugal Alteration includes the act by virtue of which a co-
partnership pending liquidation. owner changes the thing from the state in which the
others believe it should remain. It is not limited to
While she herself as co-owner had the right to material changes. (Rabuya, 2008; 3 Manresa 447)
mortgage or even sell her undivided interest in the
subject property, she could not mortgage or Acts of Administration vs. Acts of Alteration
otherwise dispose of the same in its entirety
without the consent of the other co-owners. ACTS OF ACTS OF
ADMINISTRATION ALTERATION
2. Are Sps. Manuel purchasers in good faith? As to definition
Acts, by virtue of
A: NO. While the rule is that every person dealing which, a co-owner, in
with registered land may safely rely on the opposition to the
correctness of the certificate of title issued therefor expressed or tacit
and the law will in no way oblige him to go beyond Refers to the agreement of all the
the certificate to determine the condition of the enjoyment, co- owners, and in
property, where the land sold is in the possession of exploitation, violation of their will,
a person other than the vendor, as in this case, the alteration of the thing changes the thing
purchaser must go beyond the certificate of title and which do not affect its from the state in
make inquiries concerning the actual possessor. substance, form, or which the others
(Norma C. Magsano, v. Pangasinan Savings & Loan purpose. believe it would
Bank, G.R. No. 215038, 17 Oct. 2016) remain, or withdraws
it from the use to
NOTE: If one co-owner alone occupies the entire which they believe it
house without opposition from the other co- is intended.
owners, and there is no lease agreement, the other
As to its character
co-owners cannot demand the payment of rent.
Transitory in
(Rabuya, 2008; De Guia v. CA, G.R. No. 120864, 08 Oct. Permanent. (Rabuya,
character. (Rabuya,
2003) 2008)
2008)
Affects or relates to
Rules on determination of the purpose of the Does not affect the
the substance or
property substance or form.
essence of the thing.
1. Purpose stipulated in the agreement, express or As to consent of co-owners
implied; In relation to the right
2. In default thereof, its purpose ordinarily of a co-owner, they
adapted based on its nature; or require the consent of Require the consent
3. In default thereof, the use for which it was the majority who of all co-owners. (Art.
formerly intended. represents the 491, NCC)
controlling interest.
(Art. 492, NCC)
CIVIL LAW
As to who may exercise Necessary Expenses, Useful Expenses, and

Expenses of Pure Luxury defined
Can be exercised by
Must be exercised by
the co-owners
the co-owners 1. Necessary Expenses – Made for the
through other
themselves. preservation of the thing, or those without
persons.
which the thing would deteriorate or be lost, or
those that augment the income of the things
Effect of alteration without the express or upon which are expended, or those incurred
implied consent of co-owners (Lo-De-Pay) for cultivation, production, upkeep, etc.
(Mendoza v. De Guzman, G.R. No. L-28721, 05
The co-owner who makes the alteration shall: Oct. 1928)
1. Lose what he has spent; 2. Useful Expenses – Incurred to give greater

2. Be obliged to Demolish the improvements utility or productivity to the property. These
done; and expenses increase the value of the thing and
3. Pay for the loss and damages the community result in improvements. (Rabuya, 2008)
property or other co-owners may have
suffered. (Paras, 2008) 3. Ornamental Expenses – Adds value to the
thing only for certain persons in view of their
NOTE: Estoppel will operate against the co-owners particular whims, neither essential for
who were aware of the execution of the acts of preservation nor useful to everybody in
alteration, but did not object thereto. They are general. (Paras, 2008)
deemed to have given their implied consent.
(Pineda, 2009; 3 Manresa 469-470) Acts of Preservation (Art.489, NCC)
Conversion Acts of preservation may be made in the property

of the co-owners at the will of one of the co-owners,
It is the act of using or disposing of another’s but he must, if practicable, first notify the others of
property without lawful authority to do so in a the necessity of such repairs.
manner different from that with which a property
is held by the trustees to whom the owner had Acts Requiring the Majority Consent of the Co-
entrusted the same. It is not necessary that the use owners
for which the property is given be directly to the
advantage of the person misappropriating or 1. Management;
converting the property of another. 2. Enjoyment; and
3. Improvement or embellishment.
2. CONTRIBUTIONS FOR EXPENSES
Remedy of the minority who opposes the
Expenses which the co-owners can be decision of the majority in Co-ownership
compelled to contribute
Minority may appeal to the court against the
Only necessary expenses. Useful expenses and majority’s decision if the same is seriously
those for pure luxury are not included. prejudicial.
There is no majority unless the resolution is

approved by the co-owners who represent the
controlling interest in the object of the co-
ownership. (Art. 492(2), NCC)
2023 GOLDEN NOTES
Q: May a co-owner opt not to contribute to the Effect of redemption by a Co-owner

expenses for the preservation of the property?
Redemption of the whole property by a co-owner
A: YES, by renouncing his undivided interest equal does not vest in him sole ownership over said
to the amount of contribution. property.
XPN: If the waiver or renunciation is prejudicial to Redemption within the period prescribed by law
the co-ownership, otherwise he cannot exempt will inure to the benefit of all co-owners. Hence, it
himself from the contribution. (Art. 488, NCC) will not put an end to existing co-ownership.
(Mariano v. CA, GR. No. 101522, 28 May 1993)
NOTE: The value of the property at the time of the
renunciation will be the basis of the portion to be Right of Legal Redemption Cannot be Exercised
renounced. When There is No Co-ownership
Failure or refusal of a co-owner to contribute Once the property is subdivided and distributed
pro rata to his share in expenses NOT among the co-owners, the community ceases to
tantamount to renunciation exist and there is no more reason to sustain any
right of legal redemption. The exercise of this right
There must be an express renunciation, otherwise presupposes the existence of a co-ownership at the
he is required to reimburse the others for the time the conveyance is made by a co-owner and
expenses they incurred. (De Leon, 2006) when it is demanded by the other co-owners. (Vda.
de Ape v. CA, G.R. No. 133638, 15 Apr. 2005)
Effect of Renunciation
A Co-owner Cannot Alienate the Shares of Their
Since renunciation is intended as payment for Other Co-owners
expenses already made, it is in nature of dacion en
pago - there is a change in the object of the While a co-owner has the right to freely sell and
obligation (i.e., from sum of money to interest in the dispose of his undivided interest, nevertheless, as a
co-ownership). Consequently, the consent of the co-owner, he cannot alienate the shares of his other
other co-owner who made the advances is co-owners. The disposition made by Villaner
necessary. (Tolentino, 2013) affects only his share pro indiviso, and the
transferee gets only what corresponds to his
Renunciation CANNOT be made without the grantor's share in the partition of the property
consent of any unpaid creditor. This is because it is owned in common.
in effect a novation by substitution. It will prejudice
the rights of the unpaid creditor. The property being conjugal, Villaner's interest in
it is the undivided one-half portion. When his wife
3. REDEMPTION died, her rights to the other half was vested to her
heirs including Villaner and their 8 legitimate
children. (Acabal v. Acabal, G.R. No. 148376, 31 Mar.
The shares of all or any other co-owner if sold to a
2005)
third person may be redeemed by a co-owner.
Status of the sale by a co-owner
If two or more co-owners want to redeem, they
may do so in proportion to the shares they
A sale of the entire property by one co-owner
respectively have. (Art. 1620, NCC)
without the consent of the other co-owners is valid.
However, it will only affect the interest or share in
the undivided property of the co-owner who sold
the same. The remedy is an action for partition
CIVIL LAW
under Rule 69 of the ROC, the division of the not to do. (Paras, 2008)
common property. (Acabal v. Acabal, G.R. No.
148376, 31 Mar. 2005) Right to Demand Partition (2000, 2002, 2008
BAR)
Extinguishment of Co-Ownership
GR: Every co-owner has the right to demand
The following extinguishes Co-Ownership: partition. (Art. 494, NCC)
(C-P-A-S-T-E-L)
XPNs: (E-A-S-I-P-A-U-L)
1. Consolidation or merger of the rights in one co-
owner; 1. When partition would render the thing
2. Acquisitive prescription in favor of a third Unserviceable;
person or a co-owner who repudiates; 2. When the thing is essentially Indivisible;
3. Loss or destruction of thing co-owned;
4. Sale of thing co-owned; 3. When partition is prohibited by Law by reason
5. Termination of period agreed upon; of their origin or juridical nature - e.g., party
6. Expropriation; or walls and fences;
7. Judicial or extra-judicial Partition. (De Leon,
2006) 4. When the co-owners Agree to keep the
property undivided for a period of time but not
4. PARTITION more than ten (10) years;
5. When partition is Prohibited by the transferor

Rights of co-owners as to the ideal share of each
(donor/testator) but not more than 20 years;
(F-A-R-T-S)
(Art. 1083, NCC);
1. Each has Full ownership of his part and of his

6. When a co-owner possessed the property as an
share of the fruits and benefits;
Exclusive owner for a period sufficient to
acquire it through prescription (acquisitive
2. Right to Alienate, dispose, or encumber;
prescription);
3. Right to Renounce part of his interest to

NOTE: Ten (10) years ordinary prescription, 30
reimburse necessary expenses incurred by
years extraordinary partition.
another co-owner;
7. When co-owners may agree that it be Allotted
4. Right to enter into Transaction affecting his
to one of them reimbursing the others; and
ideal share; and
8. If they cannot agree, they may Sell the thing
NOTE: The transaction affects only his ideal
and distribute the proceeds.
share and not that of the other co-owners.
NOTE: An action to demand partition is
5. Right to Substitute another person in its
imprescriptible or cannot be barred by laches,
enjoyment, except when personal rights are
absent a clear repudiation of the co-ownership by a
involved.
co-owner clearly communicated to the other co-
owners. (De Leon, 2006)
NOTE: Personal rights or jus in personam is the
power belonging to one person to demand from
another, as a definite passive subject-debtor,
the fulfillment of a prestation to give, to do, or
2023 GOLDEN NOTES
Q: X, Y, Z are siblings who inherited a 10-storey them. Acts considered adverse to strangers may
building from their parents. They agreed in not be considered adverse insofar as co-owners are
writing to maintain it as a co-owned property for concerned. (Salvador v. CA, G.R. No. 109910, 05 Apr.
leasing out and to divide the net profits among 1995)
themselves equally for a period of 20 years. On
the 9th year, X wanted to get out of the co- XPNs: Co-owner's possession may be deemed
ownership so he could get his 1/3 share in the adverse to the cestui que trust or the other co-
property. Y and Z refused, saying X is bound by owners provided the following elements must
their agreement to keep the co-ownership for 20 concur:
years. Are Y and Z correct? Explain. (2015 BAR)
1. That he has performed unequivocal acts of
A: Y and Z ARE PARTLY CORRECT. If the co- repudiation amounting to an ouster of the
owners agree to keep the thing undivided, such cestui que trust or the other co-owners;
agreement shall govern provided the period shall
not exceed 10 years. In this case, the agreement to 2. That such positive acts of repudiation have
keep the thing undivided shall be valid at the most been made known to the cestui que trust or the
for 10 years. (Art. 494, NCC) other co-owners; and
When Partition is NOT Allowed (C-I-P-U-N) 3. That the evidence thereon must be clear and
convincing. (Salvador v. CA, G.R. No. 109910, 05
1. When Indivision within 10 years is stipulated Apr. 1995)
by the co-owners;
NOTE: Prescription begins to run from the time of
2. When co-ownership is imposed as a Condition repudiation. (De Leon, 2006)
in a donation or in a last will and testament;
Examples of Acts of Repudiation
3. When from the Nature of the property in
common, it cannot just be divided (without Filing of an action to:
following the requisites of the law) such as 1. Quiet title; or
conjugal property and party walls; 2. Recovery of ownership. (De Leon, 2006)
4. When partition will render the property XPN to XPN: Constructive trusts can prescribe.
Unserviceable for the use and purpose for Express trust cannot prescribe as long as the
which it is intended; and relationship between trustor and trustee is
recognized. (Paras, 2008)
5. When the issue of ownership had not been
definitely resolved, it is Premature to effect a Q: The two lots owned by Alipio were inherited
partition of the properties. (Pineda, 2009) by his nine (9) children, including Maria, upon
his death. Pastor, Maria’s husband, filed a
Q: May prescription run against a co-owner? complaint for quieting of title and annulment of
(2000, 2002, 2008 BAR) documents against the Sps. Yabo, alleging that
he owned a total of eight (8) shares of the
A: NO. As long as the co-owner expressly or subject lots, having purchased the shares of
impliedly recognizes the co-ownership, seven (7) of Alipio's children and inherited the
prescription cannot run in favor of or against him. share of his wife, Maria, and that he occupied,
cultivated, and possessed continuously, openly,
Reason: Possession of a co-owner is like that of a peacefully, and exclusively the parcels of land.
trustee and shall not be regarded as adverse to the He prayed that he be declared the absolute
other co-owners but in fact is beneficial to all of owner of 8/9 of the lots. His co-heirs then
CIVIL LAW
instituted an action to partition the lots. Did 2. In case partition was made over their objection
Pastor acquire by prescription the shares of his even in absence of fraud. (Art. 497, NCC)
other co-heirs or co-owners?
Remedies available to co-owners where the co-
A: NO. The only act which may be deemed as owned property cannot be physically divided
repudiation by Pastor of the co-ownership over the without rendering it useless or unserviceable
lots is his filing of an action to quiet title. The period
of prescription started to run only from this 1. Agree on the allotment of the entire property
repudiation. However, this was tolled when his co- to one of them who in turn will indemnify the
heirs, instituted an action for partition of the lots. others for their respective interests; or
Hence, the adverse possession by Pastor being for
only about 6 months would not vest in him 2. Sell the property and distribute the proceeds to
exclusive ownership of his wife's estate, and absent the co-owners. (Art. 498, NCC; Pineda, 2009)
acquisitive prescription of ownership, laches, and
prescription of the action for partition will not lie Rights of third persons that are NOT affected by
in favor of Pastor. (Salvador v. CA, G.R. No. 109910, partition (Mo-R-Se-P)
05 Apr. 1995)
1. Rights of:
Notice of the Proposed Partition to Creditors a. Mortgage;
and/or Assignees b. Servitude; and
c. Any other Real rights existing before
The law does not require that a notification be partition.
given but:
2. Personal rights pertaining to third persons
1. If notice is given – it is their duty to appear to against the co-ownership. (Art. 499, NCC)
concur or oppose, otherwise creditor’s claims
are deemed waived; and Illustration: A, B and C were co-owners of parcel
of land mortgaged to M. If A, B, and C should
2. If no notice is given – creditors and/or physically partition the property, the mortgage in
assignees may still question the partition made M’s favor still covers all the three lots, which,
on ground of fraud or for being prejudicial to together, formerly constituted one single parcel. If
existing rights. A alone had contracted an unsecured obligation, he
would of course be the only one responsible.
NOTE: Third persons who have rights attached to (Paras, 2008)
the community property before its partition, shall
retain such rights even after the partition of the Rights of Third Persons in Case of Partition
property. The protection granted by law applies to
both real and personal rights. (Pineda, 2009) 1. The partition of a thing owned in common shall
not prejudice third persons, who shall retain
Impugning Partition Already Implemented the rights of mortgage, servitude or any other
real rights belonging to them before the
GR: A partition already executed or implemented division was made; and
cannot be impugned.
2. Personal rights pertaining to them against the
XPNs: co-ownership shall also remain in force,
notwithstanding the partition. (Art. 499, NCC)
1. In case of fraud, regardless of notification and
opposition; or
2023 GOLDEN NOTES
Effects of Partition 4. Reciprocal Warranty for defects of title and

quality of the portion assigned to the co-owner.
1. It confers upon the co-owner exclusive title (Arts. 500 & 501, NCC)
over the property adjudicated to him; (Art.
1091, NCC) and How Partition is Effected (1998 BAR)
2. Possession of the co-owner over the property 1. By agreement between the parties; or
adjudicated to him shall be deemed exclusive 2. By judicial proceedings. (Art. 496, NCC)
for the period during which the co-possession
lasted. (Art. 543, NCC) In other words, it is
deemed continuous. E. POSSESSION
Rule in case the Co-owners cannot agree in the

partition
Possession (2007 BAR)
1. If realty is involved, an action for partition

It refers to the holding of a thing or the enjoyment
(Rule 69, ROC) against the co-owners may be
of a right. (Art. 523, NCC)
filed; and
Requisites of Possession (V-A-P-E)

2. In case of personalty and actual partition could
not be made, it may be sold under the
1. Existence of the thing or right;
discretion of the court and the proceeds be
2. Possession in fact or holding or control of a
divided among the owners after deducting the
thing or right;
necessary expenses.
3. Animus possidendi or the deliberate intention
to possess; and
Acts of Co-ownership (A2- P-I-E)
4. Possession is by Virtue of one’s own right,

1. Ejectment – any of the co-owners may file such
either as an owner or as a holder. (Pineda,
action;
2009)
2. Administration – majority of the co-owners
shall decide;
Right to Possession vs. Right of Possession
3. Improvements – majority of the co-owners
shall take part;
RIGHT TO RIGHT OF
4. Alteration – all of the co-owners must agree;
POSSESSION POSSESSION
and
5. Preservation – any of the co-owners can do so. Jus possidendi Jus possessionis
Obligations of Co-Owners Upon Partition An incident or

An independent right,
attribute of
(D-R-A-W) separate from
ownership over a
ownership.
thing.
1. Mutual Accounting for benefits received, fruits
and other benefits; (in relation to Art. 1087 of e.g., The lessee of a
NCC); property, who is not
e.g., The owner of a
the owner thereof, is
house is entitled to
2. Mutual Reimbursements for expenses; entitled to possess it
possess it.
for the period of the
3. Indemnity for Damages caused by reason of lease.
negligence/fraud; and (Pineda, 2009)
CIVIL LAW
Object of Possession i. Voluntary – by virtue of an

agreement (e.g., possession of an
GR: All things and rights susceptible of being agent); and
appropriated. (Art. 530, NCC)
ii. Legal – by virtue of law (e.g.,
XPNs: possession in behalf of
incapacitated).
1. Res communes;
2. Property of Public Dominion; 2. According to the concept of possession
3. Easement; and
4. Prohibited by law. a. In the concept of an owner (en concepto de
dueno) – possessor, by his actions, is believed
Degrees of Possession by others as the owner, whether he is in good
or bad faith. (Art. 525, NCC) Such possessor is
1. Possession with no right or title presumed to possess just title. (Art. 540, NCC)
(Grammatical Degree) – Possessor knows that
his possession is wrongful; (e.g., Possession by b. In the concept of a holder – possessor holds
a thief) it merely to keep or enjoy it, the ownership
pertaining to another (e.g., usufructuary with
2. With Juridical title (Juridical Possession) – respect to the thing itself). (Art. 525, NCC)
Title is not one of ownership. Possession
peaceably acquired and will not ripen into full NOTE: None of these holders may assert a
ownership as long as there is no repudiation of claim of ownership for himself over the thing
the concept under which property is held; (e.g., but they may be considered as possessors in
Possession of a tenant, depositary) the concept of an owner, or under a claim of
ownership, with respect to the right they
3. With just title sufficient to transfer respectively exercise over the thing. There can
ownership, but not from the true owner (Real be possession in concept of both owner and
Possessory Right) – ripens to full ownership by holder or in either.
the lapse of time. (e.g., Possession of a buyer of
a car purchased from one who pretends to be 3. According to the condition of the mind
the owner); and
a. Possession in good faith – possessor is not
4. With a title in fee simple (Dominium aware that there is in his title or mode of
Possession) – Arises from ownership; highest acquisition a defect that invalidates it.; (Art.
degree of possession; perfect possession. 526, NCC); and
(Paras, 2008)
b. Possession in bad faith – possessor is
Kinds of Possession (2008 BAR) aware of the invalidating defect in his own
title. (Art. 526, NCC)
1. According to the name used as to its existence;
NOTE: Only personal knowledge of the flaw in
a. In one’s own name – possessor claims the one’s title or mode of acquisition can make him
thing for himself. (Art. 524, NCC) possessor in bad faith. It is not transmissible
even to an heir. Possession in good faith ceases
b. In the name of another – held by the from the moment defects in his title are made
possessor for another; agent, subject to known to the possessor. (Rabuya, 2008;
authority and ratification; if not authorized, Escritor, Jr. v. IAC, G.R. No. 7183, 12 Nov. 1987)
negotiorum gestio. (Art. 524, NCC)
2023 GOLDEN NOTES
4. According to extent of possession As to existence
a. Actual possession – occupancy in fact of There can be There can be no

the whole or at least substantially the possession without occupation without
whole property; and ownership. ownership.
b. Constructive possession – occupancy of

part, in the name of the whole, under such Person declared as the owner of a certain
circumstances that the law extends the property may still not be entitled to its
occupancy to the possession of the whole. possession
(De Leon, 2006)
Possession and ownership are distinct legal
Q: What is the Doctrine of Constructive concepts. Ownership confers certain rights to the
Possession? owner among which are the right to enjoy the thing
owned and the right to exclude other persons from
A: The possession of a part is a possession of the possession thereof. On the other hand, possession
whole. To be considered in possession, one need is defined as the holding of a thing or the enjoyment
not have actual or physical occupation of every of a right. Literally, to possess means to actually
square inch of the property at all times. (Habagat and physically occupy a thing with or without a
Grill v. DMC-Urban Property Developer, Inc., G.R. No. right. Thus, a person may be declared an owner but
155110, 31 Mar. 2005) not entitled to possession. (Heirs of Roman Soriano
v. CA, G.R. No. 128177, 15 Aug. 2001)
Requisites of Constructive Possession
(Cl-A-R-A) Tax Declarations are Not Conclusive Evidence
of Ownership
1. Possessor was in Actual possession of a portion
or part of the property; Although tax declarations or realty tax payment of
2. Claim of ownership of the whole area; property are not conclusive evidence of ownership,
3. Remainder of the area must not be in the nevertheless, they are good indicia of possession in
Adverse possession of another person; and the concept of owner for no one in his right mind
4. Area claimed must be Reasonable. (Rabuya, would be paying taxes for a property that is not in
2008) his actual or at least constructive possession. They
constitute at least proof that the holder has a claim
Possession vs. Occupation (2007 BAR) of title over the property. The voluntary
declaration of a piece of property for taxation
purposes manifests not only one’s sincere and
POSSESSION OCCUPATION
honest desire to obtain title to the property and
As to applicability announces his adverse claim against the State and
all other interested parties, but also the intention
Applies to properties Applies only to to contribute needed revenues to the Government.
whether with or property without an Such an act strengthens one’s bona fide claim of
without an owner. owner. acquisition of ownership. (Ganila v. CA, G.R. No.
150755, 28 June 2005)
As to conferring of ownership
Possession does not Occupation confers

confer ownership. ownership.
CIVIL LAW
Real Right of Possession vs. Personal Right to As to Enforceability

Possess
Enforceable only
REAL RIGHT PERSONAL RIGHT against the original
(RIGHT OF (RIGHT TO Enforceable against debtor or his
POSSESSION; POSSESS; the whole world. transferee charged
POSSESSIONIS) POSSIDENDI) with notice of the
As to Creation personal rights.
Created by title Limit

alone.
Limited by usefulness,
It is not directly value, or productivity No such limitation.
Created by both title
created over a thing of the thing.
and mode directly
but is exercised
over a thing.
through another Extinguishment
against whom the
action is to be
Not so extinguished.
brought.
Claim for damages
Extinguished by loss
As to Object may still be pursued-
or destruction of the
in case of loss or
thing.
Generally corporeal Incorporeal or destruction of the
or tangible. intangible. thing.
Object covers all the (Paras, 2008)

present and future
Object is specific Modes of Acquiring Possession
property of the
property or thing.
debtor. (Art. 2236,
NCC) 1. By material occupation (detention) of a
thing or the exercise of a right (quasi-
As to Subjects possession); (Rabuya, 2008)
a. One definite This includes:

active subject
(e.g., owner); and a. Constitutum possessorium – when the
possessor who is the owner of the property
b. One indefinite continues his possession no longer under a
a. An active subject title of ownership but under a title less than
passive subject
(creditor); and ownership, (i.e., lessee, depositary, etc.).
which is the
whole world.
b. A definite passive b. Traditio brevi manu – when the possessor
subject (debtor). who is possessing the thing by a title other
Right of pursuit is
therefore available. than ownership, continues to possess it
Real right follows its under a new title, now of ownership.
object in the hands of (Pineda, 2009)
any possessor.
2023 GOLDEN NOTES
2. By subjection of the thing or right to our will Bank of Sta. Barbara, Inc. is entitled to a writ of
which does not require actual physical possession over the subject lots?
detention or seizure; and
A: YES. It is well-established that after
This includes: consolidation of title in the purchasers’ name for
failure of the mortgagor to redeem the property,
a. Traditio longa manu – delivery by consent the purchasers right to possession ripens into the
or mere pointing. absolute right of a confirmed owner. At that point,
the issuance of a writ of possession, upon proper
b. Traditio symbolica – delivery of a mere application and proof of title, to a purchaser in an
symbol (e.g., key) placing the thing under extrajudicial foreclosure sale becomes merely a
the control of the transferee. (Ibid.) ministerial function, unless it appears that the
property is in possession of a third party claiming
3. By constructive possession or proper acts a right adverse to that of the mortgagor.
and legal formalities established by law such
as succession, donation, execution of public Gerry Centeno acquired the subject lots from his
instruments. (Art. 531, NCC) parents, Sps. Centeno, on 14 Mar. 1988 after they
were purchased by Rural Bank of Sta. Barbara, Inc.
Q: Sps. Gregorio and Rosario Centeno previously and its Certificate of Sale at Public Auction was
owned the subject lots, which they mortgaged in registered with the Register of Deeds of Iloilo City
favor of Rural Bank of Sta. Barbara, Inc. as in 1971. It cannot therefore be disputed that Gerry
security for a P1,753.65 loan. Sps. Centeno, is a mere successor-in- interest of Sps. Centeno.
however, defaulted on the loan, prompting the Consequently, he cannot be deemed as a third
bank to cause the extrajudicial foreclosure of party who is holding the property adversely to the
the mortgage. Consequently, the subject lots judgment obligor under legal contemplation.
were sold to the bank, being the highest bidder (Rural Bank of Sta. Barbara, Inc. v. Centeno, G.R. No.
at the auction sale. Sps. Centeno failed to redeem 200667, 11 Mar. 2013)
the subject lots within the one-year redemption
period pursuant to Sec. 6 of Act No. 3135. Yet, Essential elements of acquiring possession
they still continued with the possession and
cultivation of the aforesaid properties. 1. Corpus – Refers to the existence of the thing
and its holding; and
Gerry Centeno, son of Sps. Centeno, later on 2. Animus – Refers to the intent to possess the
purchased the said lots from his parents. thing. (Pineda, 2009)
Accordingly, Rosario paid the capital gains
taxes on the sale transaction and tax Acquisition of possession according to person
declarations were eventually issued in the of possessor
name of Gerry.
1. Personal – The possession acquired by the
On 19 Mar. 1998, Rural Bank of Sta. Barbara, same person who is to enjoy it, either the
Inc. filed a petition for the issuance of a writ of owner or a mere holder.
possession before the trial court, claiming
entitlement to the said writ by virtue of the Requisites:
Final Deed of Sale covering the subject lots.
Gerry opposed the petition, arguing that he a. Capacity to possess;
purchased and has, in fact, been in actual, open b. Intent to possess; and
and exclusive possession of the same c. Object must be capable of being possessed.
properties for at least 15 years. Is the Rural
CIVIL LAW
2. Through an authorized person – Acquisition Effects

of possession through a legal representative as
provided by law or by appointing an agent. If the father or decedent was in bad faith, it does
not necessarily mean that the son was also in bad
Requisites: faith. The son is presumed to be in good faith.
(Arriola v. De la Serna, G.R. No. L-5397, 17 Dec. 1909)
a. Capacity to possess of the representative However, since the father was in bad faith, the
or agent; consequences of the good faith of the son should be
b. Authority to possess (for another) of the counted only from the date of the decedent’s death.
representative or agent;
c. Intent to possess for principal; and NOTE: If the father had been in good faith, the
d. Principal has intent and capacity to article is not applicable, for the son would not
possess. ‘‘suffer.” In such a case, the possession of the father
in good faith is added to the possession of the son
3. Through a person without authority (but in good faith, and we cannot say that the effects of
only if subsequently ratified) – Acquisition of possession in good faith shall commence only from
possession through a person who is not the decedent’s death. (Paras, 2008)
clothed with authority by the supposed
“principal.” (Art. 532, NCC) Acquisition of minors or incapacitated persons
Requisites: Minors or incapacitated persons may acquire the

possession of things; but they need the assistance
a. Intent to possess (for another) of the of their legal representatives for them to be able to
“principal;” exercise the rights arising from the possession.
b. Capacity of the “principal” to possess; and (Art. 535, NCC)
c. Ratification by “principal”.
NOTE: Minors and incapacitated persons may
NOTE: The ratification does not suppress the acquire property or rights by prescription, either
consequences of negotiorum gestio. (Art. 2144, personally or through their parents, guardians, or
NCC) The principal is deemed to have acquired legal representatives. (Art. 1107, NCC)
possession from the time the gestor had voluntarily
took the management of the affairs of the former. Nature of minors or incapacitated persons’
(Pineda, 2009) If the stranger (gestor) had possession
possessed it in his own name, it is he who had
possession, and not the so-called “principal”. Possession is allowed only in those matters where
(Paras, 2008) they have capacity to act (as in the case of physical
seizure of res nullius or donation of personal
Acquisition of Possession Through Succession property simultaneously delivered to them) and
NOT possession where juridical acts are imperative
One who succeeds by hereditary title shall not like the possession of land the ownership of which
suffer the consequences of the wrongful possession he desires to test in court, for in such a case, and in
of the decedent, if it is not shown that he was aware similar ones, the intervention of the legal
of the flaws affecting it; but the effects of representatives or guardians is needed. (Paras,
possession in good faith shall not benefit him 2008)
except from the date of death of the decedent. (Art.
534, NCC)
2023 GOLDEN NOTES
Acts which do not give rise to Possession is possible that although there was permission at
(F-A-T-V) (2006 BAR) first, the permission was subsequently withdrawn,
and abandonment has resulted. But this must be
1. Through Force or intimidation as long as there is proved by clear and convincing evidence. (Paras,
a possessor who objects thereto (Art. 536, NCC); 2008)
2. Through Acts executed clandestinely and How to recover possession

without the knowledge of the possessor which
means that: First, he should request the usurper to give up the
thing and if the latter refuses, the former should
a. Acts are not public; and invoke the aid of the proper and competent court
b. Unknown to the owner or possessor. (that which has jurisdiction over the subject matter
and the parties). (Repide v. Astuar, G.R. No. 505, 08
3. Acts merely Tolerated by the owner or the Apr. 1902) Otherwise, the owner can be made the
lawful possessor; and defendant in a forcible entry case with all its
repercussions. (Santiago v. Cruz, G.R. No. 6276. 21
4. Acts executed by Violence. (Art. 537, NCC) Mar. 1911) (Paras, 2008)
Through force or intimidation as long as there is Possession by Force or Violence

a possessor who objects thereto (Art. 536, NCC)
The force may be:
Impliedly, if at first there was objection but later on
such objection ceases, the possession begun by 1. Actual or merely threatened;
force or intimidation may be acquired. (Paras,
2008) 2. Done by possessor himself or by his agent;
Through acts executed clandestinely and 3. Done against the owner or against any other
without the knowledge of the possessor (Art. possessor or against the owner’s
537, NCC) representative, such as a capataz; or
Clandestine possession by itself is hidden or 4. Done to oust possessor; or if occupied during

disguised possession and may be with or without the latter’s absence, done to prevent his getting
the owner’s knowledge. (Paras, 2008) back the premises. (Paras, 2008)
Acts merely tolerated by the owner or the Rule when two or more persons claim
lawful possessor possession over the same property
“Tolerance” is permission, as distinguished from GR: Possession as a fact cannot be recognized at the
abandonment. If an owner abandons, as when same time in two different personalities.
within the proper period for prescription, he brings
no action, the possession of another will ripen into XPN:
ownership. As a matter of fact, silence or inaction is
negligence, not tolerance. But where a person 1. Co-possessors (since here, there is no conflict
occupies another’s land with the latter’s of interest, both of them acting as co-owners, as
permission (or tolerance), the occupier, no matter in the case of property owned or possessed in
how long he may remain, can never acquire common); or
ownership, because he never had possession.
Whether there was permission, or there has been
an abandonment, is a question of fact. Of course, it
CIVIL LAW
2. Possession in different concepts or different No. 30240, 23 Aug. 1929)

degrees (e.g., both owner and tenant are
possessors as a fact at the same time; the first, Effect of cessation of possession in good faith
in the concept of owner; the second, in the
concept of holder; other examples: principal Possessor is now considered as a possessor in bad
and agent; depositor and depositary; owner faith and he may be required to pay rent or vacate
and administrator). (Paras, 2008) the property. In both cases, he is required to pay
damages to the lawful owner or possessor of the
Rules to follow in case there is a dispute of property.
possession of two or more persons
Q: A Deed of Sale was executed between Jose
1. Present/actual possessor shall be preferred; (seller) and Rosario (buyer). However, later on,
2. If there are two possessors, the one longer in Jose could not continue the sale because he sold
possession; the lot to Emma with whom he executed a formal
3. If the dates of possession are the same, the one deed of sale. Informed that the sale in favor of
with a title; or Emma was not registered, Rosario registered
4. If both claimants have titles, the competent her adverse claim. Later, Emma registered her
court will determine the rightful possessor, deed of sale and a TCT was issued to her but with
and in the meantime, the thing shall be placed Rosario’s adverse claim. Emma then took
in judicial deposit. (Art. 538, NCC) possession of the lot.
Only the possession acquired and enjoyed in the a. Who has a better right to the land?
concept of owner can serve as a title for acquiring
dominion. (Art. 540, NCC) A: ROSARIO has a better right. Rosario’s prior
purchase of the land was made in good faith; she
NOTE: Art. 538 of the NCC applies to preference of was the only buyer at that time. Her good faith did
possession (whether real or personal property is not cease after Jose told him of the second sale to
involved). It also applies whether the possession Emma. In order to protect her right, Rosario
was longer or shorter than one year. Art. 1544 of registered her adverse claim. Said recording is
the NCC applies to preference of ownership in case deemed to be in good faith and emphasized
of double sale or a double donation. (Art. 744, NCC; Emma’s bad faith. (Carbonell v. CA G.R. No. L-29972,
Paras, 2008) 26 Jan. 1976)
Cessation of Possession in Good Faith b. Is Emma entitled to the improvements

she introduced in the lot?
Possession in good faith ceases from the moment
defects in his title are made known to the possessor A: NO. The possessor in bad faith has neither the
by: right of retention of useful improvements nor the
right to demand refund for useful expenses. (Art.
1. extraneous evidence; or 546 & 547; Carbonell v. CA G.R. No. L-29972, 26 Jan.
2. suit for recovery by the true owner. (Rabuya, 1976)
2008; Ortiz v. Kayanan, G.R. No. L-32974, 30 July
1979) Mistake upon a doubtful or difficult question of
law (2008 BAR)
This interruption of good faith may take place:
Mistake upon a doubtful or difficult question of law
1. At the date of summons; or may be the basis of good faith provided that such
2. That of the answer if the date of summons does ignorance is not gross and therefore inexcusable.
not appear. (Rabuya, 2008; Tacas v. Tobon, G.R. (Art. 526, NCC) Ignorance of the law may be based
2023 GOLDEN NOTES
on an error of fact. Legal means for restoration of possession
Right to be respected in possession A. Reasons for requiring legal means:
Every possessor has a right to be respected in his 1. To prevent spoliation or a disregard of

possession; and should he be disturbed therein he public order;
shall be protected in or restored to said possession
by the means established by the laws and the ROC. 2. To prevent deprivation of property
without due process of law; and
A possessor deprived of his possession through 3. To prevent a person from taking the law
forcible entry may within 10 days from the filing of into his own hand.
the complaint present a motion to secure from the
competent court, in the action for forcible entry, a B. Thus:
Writ of Preliminary Mandatory Injunction to
restore him in his possession. The court shall 1. The owner should go to court, and not eject
decide the motion within 30 days from the filing the unlawful possessor by force;
2. A tenant illegally forced out by the owner-
Rights of a Possessor landlord may institute an action for forcible
entry even if he had not been paying rent
1. To be respected in his possession; regularly;
2. To be protected in said possession by legal
means; 3. The proper actions are forcible entry or
3. To secure in an action for forcible entry the unlawful detainer (summary action or
proper writ to restore him in his possession; accion interdictal, accion publiciana, accion
and reivindicatoria, replevin, injunction, to
4. To secure from a competent court in an action prevent further acts of dispossession).
for forcible entry the Writ of Preliminary However, injunction is generally not the
Mandatory Injunction to restore him in his proper remedy to recover possession,
possession. (Art. 539, NCC) particularly when there are conflicting
claims of ownership. An accion
Possession contemplated by law is legal reivindicatoria would be better. A final
possession; a thief cannot exercise possession. judgment in an unlawful detainer case may
Such possession is exercised by every possessor be executed even if there is still pending an
whether in good faith or bad faith. accion reivindicatoria, for the two actions
can co-exist. A mere trespasser, even if
Every possessor is protected under Art. 539 of the ejected, has no right to institute an action of
NCC, whether in the concept of owner or in the forcible entry; and (Paras, 2008)
concept of holder
4. Writ of Preliminary Mandatory Injunction.
NOTE: An adverse possession of property by
another is not an encumbrance in law and does not Writ of preliminary mandatory injunction
contradict the condition that the property be free
from encumbrance. Likewise, the adverse As a rule, injunction cannot substitute for the other
possession is not a lien for a lien signifies a security actions to recover possession. This is because in
for a claim. (Ozaeta v. Palanca, L-17455, 31 Aug. the meantime, the possessor has in his favor, the
1964) presumption of rightful possession, at least, until
the case is finally decided. The exception, of course,
is a very clear case of usurpation. Similarly, a
CIVIL LAW
receiver should not ordinarily be appointed to ownership. Lot A was the subject of a cadastral case.
deprive a party who is in possession of the The OCT was issued to Sacluti and Obial who sold
property in litigation of such possession. (Paras, the same to Artemio. From the date of sale, until
2008) Artemio’s death, he was in continuous possession of
the land.
Requisites for the issuance of the Writ of
Preliminary Injunction: b. Has the action already prescribed?
1. In forcible entry cases (in the original court) A: NO. The remedy of accion publiciana prescribes
- file within 10 days from the time the after the lapse of 10 years. The action was filed with
complaint for forcible entry is filed (not from the RTC in 1991. Sps. Padilla dispossessed the heirs
the time the dispossession took place) (Art. of Velasco of the property in 1987. At the time of the
538, NCC); and filing of the complaint, only four years had elapsed
from the time of dispossession. (Sps. Padilla v.
2. In ejectment (unlawful detainer cases) in the Velasco, G.R. No. 169956, 19 Jan. 2009)
CFI (RTC) or appellate court - file within 10
days from the time the appeal is perfected (that Acquisitive Prescription
is, from the time the attorneys are notified by
the Court of the perfection of the appeal), only Only the possession acquired and enjoyed in the
if: concept of owner can serve as a title for acquiring
dominion. (Art. 540, NCC)
a. The lessee’s appeal is frivolous or
dilatory; or 1. POSSESSION IN THE CONCEPT OF A HOLDER
b. The lessor’s appeal is prima facie
meritorious. (Art. 1674, NCC)
Possession in the Concept of a Holder
(T-A-C-A-D-A-L)
Q: During his lifetime, Velasco acquired Lot A
from Sps. Sacluti and Obial evidenced by a deed
1. Lessees or those merely permitted to occupy;
of sale. In 1987, Sps. Padilla entered the said
property as trustees by virtue of a deed of sale
2. Trustees (including parents over the properties
executed by the Rural Bank. The Padillas
of their unemancipated minor children or
averred that the Sps. Solomon owned the
insane children; (Art. 1109, NCC) and husband
property which was identified as Lot B.
and wife over each other’s properties, as long as
However, it was proved during trial that the land
the marriage lasts, and even if there be a
occupied by Sps. Padilla was Lot A in the name of
separation of property which had been agreed
Velasco, whereas the land sold by the bank to the
upon in a marriage settlement or by judicial
Sps. Padilla was Lot B. The heirs of Velasco
decree; (Art. 1109, NCC)
demanded that Sps. Padilla vacate the property,
but they refused. Thus, the heirs filed a
3. Antichretic creditors;
complaint for accion publiciana.
4. Agents;
5. Attorneys (regarding their client’s properties);
a. Who has the better right of possession?
6. Depositaries; and
7. Co-owners (unless the co-ownership is clearly
A: The Heirs of Velasco have the better right.
repudiated by unequivocal acts communicated
Accion publiciana, the recovery of the right to
to the other co-owners).
possess, is an action filed in the RTC to determine
the better right to possession of realty independent
of the title. The objective of the plaintiffs in accion
publiciana is to recover possession only, not
2023 GOLDEN NOTES
Presumption that Possessor has a Just Title 2. POSSESSION IN THE CONCEPT OF AN OWNER
A possessor in the concept of owner has in his favor

1. If a person possesses en concepto de dueño, he
the legal presumption that he possesses with a just
may eventually become the owner by
title and he cannot be obliged to show or prove it.
prescription; and
(Art. 541)
2. Thus, a possessor merely in the concept of

Requirements to Raise the Disputable
holder cannot acquire property by acquisitive
Presumption of Ownership
prescription. This is because here the
possession, far from being adverse, recognizes
1. One must be in possession (actual or
right of ownership in others. One cannot
constructive)
recognize the right of another and at the same
2. The possession must be in the concept of owner
time claim adverse possession which can ripen
(not mere holder). (Art. 541, NCC)
to ownership through acquisitive prescription.
For prescription to set in, the possession must
NOTE: A tenant cannot avail himself of the
be adverse, public and to the exclusion of all.
presumption of just title because he is not a
(Paras, 2008)
possessor in the concept of owner). (Paras, 2008)
Presumption that possessor has a Just Title

The Article can apply to both real and personal
property. Thus, if a person possesses the key to a
A possessor in the concept of owner has in his favor
car over which he claims ownership, he can be
the legal presumption that he possesses with a just
presumed to be the owner. But such presumption
title and he cannot be obliged to show or prove it.
may be overcome by documentary evidence
(Art. 541, NCC)
concerning the car’s ownership. (Paras, 2008)
Requirements to Raise the Disputable

Presumptions in favor of a possessor
Presumption of Ownership
(G-C-E-N-C-E)
1. One must be in possession (actual or

1. Good faith;
constructive); and
2. Continuity of initial good faith;
2. The possession must be in the concept of
3. Enjoyment in the same character in which
owner (not mere holder). (Art. 541, NCC)
possession was acquired until the contrary is
proved;
NOTE: A tenant cannot avail himself of the
4. Non-interruption in favor of the present
presumption of just title because he is not a
possessor;
possessor in the concept of owner. (Paras, 2008)
5. Continuous possession by the one who
recovers possession of which he was
Art. 541 can apply to both real and personal
wrongfully deprived; and
property. Thus, if a person possesses the key to a
6. Extension of possession of real property to all
car over which he claims ownership, he can be
movables contained therein.
presumed to be the owner. But such presumption
may be overcome by documentary evidence
concerning the car’s ownership. (Paras, 2008)
CIVIL LAW
Presumptions in favor of a possessor who needs them is supposed to have been the
(P-H-L-E-G-M-C-J) one who introduced the movables into the
building. (Paras, 2008)
1. Good faith; (Art. 527, NCC)
NOTE: By “real property’’ and “movables’’, the law
2. Continuity of character of possession whether means only real or personal things, not rights.
in good faith or bad faith; (Art. 529, NCC) (Ibid.)
3. Non-interruption of possession of the Heir Exclusive possession by a previous co-owner

from the moment of the death of the decedent
in case the inheritance is accepted; (Art. 533, Each one of the participants of a thing possessed in
NCC) common shall be deemed to have exclusively
possessed the part which may be allotted to him
4. Presumption of Just title; (Art. 541, NCC) upon the division thereof, for the entire period
during which the co-possession lasted.
5. Non-interruption of possession of property Interruption in the possession of the whole or a
unjustly Lost but legally recovered; (Art. 561, part of a thing possessed in common shall be to the
NCC) prejudice of all the possessors. However, in case of
civil interruption, the ROC shall apply. (Art. 543,
6. Possession of Present possessor who was also NCC)
the possessor at previous time; (Art. 1138(2),
NCC) Example of interruption in possession of the
whole thing
7. Possession of Movables with real property
(Art. 542, NCC); and A, B, and C have been co-possessors of a piece of
land since 2002. If in 2006, A, B, and C lose
8. Exclusive possession of common property (Art. possession over the whole land, it can be said that
543, NCC; Paras, 2008). the three of them were in possession for only 4
years. (Art. 543, NCC)
Presumption of Possession of Movables Found
in an Immovable (2008 BAR) Example of interruption in possession of part of
the thing
The possession of real property presumes that of
the movables therein, as long as it is not shown or A and B have been co-possessors of a piece of land
proved that they should be excluded. (Art. 542, since 2002 through a mutual agent X. In 2006, X lost
NCC) possession of one-fifth of the land. A and B’s
possession over the remaining 4/5 continues, the
Applicability of the Article: interruption being limited only to 1/5. (Art. 543,
NCC)
1. Whether the possessor be in good faith or bad
faith; NOTE: If A and B had co-possessed the land in
equal shares, the co-possession of the remaining
2. Whether the possession be in one’s own name four-fifths will also be in equal shares. If A and B
or in another; and had co-possessed in the proportion of 3 to 1, their
shares in the remaining four-fifths would also be in
3. Whether the possession be in concepto de the proportion of 3 to 1. In other words, there is a
dueno or in the concept of holder. Thus, the proportionate losing in the area possessed. (Paras,
lessee of a building is presumed to be the 2008)
possessor of the movables found therein, for he
2023 GOLDEN NOTES
Rules to apply for Civil Interruption a. Reason for the law: Justice demands that the
fruits be retained by the possessor who
The ROC applies (Art. 543, NCC): thought that he was really the owner of the
property, and who, because of such thought
1. Civil interruption is produced by judicial had regulated his daily life, income, and
summons to the possessor (Art. 1123, NCC); expenses by virtue of such fruits. Moreover, the
and possessor should be rewarded for having
contributed to the industrial wealth, unlike the
2. Judicial summons shall be deemed not to have owner, who by his presumed negligence, had
been issued, and shall not give rise to virtually discarded his property.
interruption:
b. Fruits refer to natural, industrial, and civil
a. If it should be void for lack of legal fruits, not to other things. (If no actual fruits
solemnities; are produced, reasonable rents-civil fruits-
must be given)
b. If the plaintiff should desist from the
complaint or should allow the c. Legal interruption happens when a complaint
proceedings to lapse; or is filed against him and he receives the proper
judicial summons. (Art. 1123, NCC) All fruits
c. If the possessor should be absolved from accrued and received since said date must be
the complaint. In all these cases, the turned over to the winner, that is, either the
period of the interruption shall be owner or the lawful possessor adjudged as
counted FOR the prescription. (Art. 1124, such by the court. Before legal interruption, the
NCC) fruits received are his own. After the receipt of
the judicial summons, the right to get the fruits
3. RELEVANCE OF GOOD FAITH AND BAD FAITH not yet gathered ceases.
d. The reason why fruits should be returned from

Rights of possessor to fruits
the time of legal interruption is that it is
ordinarily only from said date that the
Possessor in good faith is entitled to the fruits
possessor should be considered in bad faith.
received before the possession is legally
Therefore, should there be proof that bad faith
interrupted.
had not set in even before legal interruption,
fruits should be returned from that date of
Natural and industrial fruits are considered
conversion are not entitled to the fruits. As a
received from the time they are gathered or
matter of fact, the law provides that “the
severed. Civil fruits are deemed to accrue daily and
possessor in bad faith shall reimburse the
belong to the possessor in good faith in that
fruits received and those which the legitimate
proportion. (Art. 544, NCC)
possessor (or owner) could have received”.
(Art. 549, NCC) This is true whether the
Right of a possessor in good faith to fruits
possession in bad faith was legally interrupted
already received
or not. It is understood of course that he is
entitled to the fruits received before the
First Paragraph: “A possessor in good faith is
conversion into bad faith, for then, he would
entitled to the fruits received before the possession
still be in good faith. (Paras, 2008)
is legally interrupted.’’
CIVIL LAW
When Natural and Industrial Fruits are refuse to accept this concession, shall lose the right
Considered Received to be indemnified in any other manner. (Art. 545,
NCC)
Second Paragraph: “Natural and industrial fruits
are considered received from the time they are NOTE: This article applies to pending fruits,
gathered or severed.” natural or industrial. (Paras, 2008)
a. If at the time of legal interruption, the crops are Q: What if there are natural or industrial fruits
still growing, the rule on pending crops, not at the time good faith ceases? (2000, 2008 Bar)
that on gathered crops, should apply. (Art. 545,
NCC); and A: The possessor shall have the right to a part of the
expenses of cultivation, and to a part in the net
b. If at the time of legal interruption, the crops harvest both in proportion to the time of
have already been gathered, but are sold only possession. (Art. 545, NCC)
after such interruption, the sale is immaterial,
for the law requires only a gathering or Q: A possessed in good faith a parcel of land. At
severance, so Art. 544 applies. (Paras, 2008) the time he received judicial summons to
answer a complaint filed by B, the crops still
When Civil Fruits are Deemed to Accrue growing had been there for two months.
Harvest was made only after four (4) more
Third Paragraph: “Civil fruits are deemed to months (for his crop needed a total of six (6)
accrue daily and belong to the possessor in good months from planting to harvesting). How
faith in that proportion.’’ should said crops be divided between A and B?
a. If civil fruits (like rents) are accrued daily, Art. A: In the proportion of 2 to 4 (or 1 to 2), 2 for A and
545 does not apply; and 4 for B. This is what the law means when it says that
the net harvest shall be divided in proportion to the
b. Actual receipt of the rents is immaterial; hence, time of possession. (Paras, 2008)
even if received only, for example, on the 30th
of a month, all rents accrued before the 21st of Sharing of Expenses and Charges (Paras, 2008)
the month (date for example of legal
interruption) should belong to the possessor in 1. The expenses for cultivation shall also be
good faith. (Paras, 2008) divided pro rata (2 to 4). The law says “the
possessor shall have a right to a part of the
Right to Pending Fruits expenses for cultivation in proportion to the
time of possession (This may in certain cases
If at the time the good faith ceases, there should be be unfair because although he may have spent
any natural or industrial fruits, the possessor shall more than the owner, still he will be entitled to
have a right to a part of the expenses of cultivation, a reimbursement of less since his possession is
and to a part of the net harvest, both in proportion shorter. The better rule would be for the
to the time of the possession. The charges shall be expenses to be borne in proportion to what
divided on the same basis by the two possessors. each receives from the harvest). (Art. 443, NCC)
Otherwise, unjust enrichment would result.
The owner of the thing may, should he so desires,
give the possessor in good faith the right to finish 2. The charges (those incurred because of the
the cultivation and gathering of the growing fruits, land and the fruits, like taxes, or interest on
as an indemnity for his part of the expenses of mortgages are what are referred to as charges,
cultivation and the net proceeds; the possessor in and not those incurred on or in them, such as
good faith who for any reason whatever should improvements) are also to be divided in
2023 GOLDEN NOTES
proportion to the time of possession. (Art. 545 the possessor in good faith with the same right of
(2), NCC) retention, the person who has defeated him in the
possession having the option of refunding the
Options of the Owner in Case There are Pending amount of the expenses or of paying the increase in
Fruits at the Time Good Faith Ceases value which the thing may have acquired by reason
1. To pay the possessor in good faith indemnity
for his cultivation expenses and charges and Necessary Expenses (1992, 1996, 2000 BAR)
his share in the net harvest; or
Necessary expenses are expenses incurred to
2. To allow the possessor in good faith to finish preserve the property, without which, said
the cultivation and gathering of the growing property will physically deteriorate or be lost.
crops, as an indemnity for his part of the These expenses are not improvements but are
expenses of cultivation and the net proceeds. incurred merely to protect the thing from
(Paras, 2008) becoming useless.
NOTE: If the possessor refuses, for any reason, to Sample of Necessary Expenses
finish the cultivation and gathering, he forfeits the
right to be indemnified in any other manner. (Art. 1. Those incurred for cultivation, production, and
545(3), NCC) upkeep; or
2. Those made for necessary repairs of a house.
Art. 545 applies only to a possessor in good faith
for a possessor in bad faith has no right whatsoever Ordinary repairs are understood such as are
to fruits already gathered nor to fruits still pending, required by the wear and tear due to the natural
except that in the former case (gathered fruits), he use of the thing and are indispensable for its
gets back the necessary expenses for production, preservation. (Art. 592, NCC) They do not increase
gathering, and preservation of fruits. (Art. 443, the thing’s value; rather, they merely prevent the
NCC) In the case of pending fruits, the Principle of things from becoming useless. (Paras, 2008)
Accession applies, and the law clearly states that he
who plants or sows in bad faith on the land of Urgent repairs (reparacion urgentisima) are also
another, loses whatever is planted or sown without necessary expenses.
right to indemnity.
The following are NOT necessary expenses
Crops not yet manifest
1. Those incurred for the filling up with soil of a
Art. 545 applies to pending crops. Suppose the vacant or deep lot. This is not a repair since the
crops have already been planted but are not yet term “repair” implies the putting back into the
manifest at the time there is a transfer of condition in which it was originally, and not an
possession, should the article also apply? It is improvement in the condition thereof by
submitted that the answer is YES, by the adding something new thereto. The expenses
application of the general rules stated in Art. 443, are indeed in the nature of useful
NCC. (Paras, 2008) improvements;
Necessary and Useful Expenses 2. A house constructed on land possessed by a

stranger (not the owner), because the house
Necessary expenses shall be refunded to every cannot be said to preserve the land (the house
possessor; but only the possessor in good faith may is useful);
retain the thing until he has been reimbursed
therefor. Useful expenses shall be refunded only to
CIVIL LAW
3. Land taxes are, for the purposes of the Article, Useful Expenses
not necessary expenses, for they are needed,
not for preservation of the land itself; but for Those which increase the value or productivity of
its continued possession. Failure to pay said the property. (Ibid.)
taxes results not in destruction, but forfeiture,
therefore they should be merely considered Examples of Useful Expenses
charges. Consequently, Art. 545 of the NCC
regarding pro rating of charges should apply; 1. Those incurred for an irrigation system;
and
2. Those incurred for the erection of a chapel,
4. Unnecessary improvements on a parcel of land because aside from its possibility of conversion
purchased at a sheriff’s auction sale, made just into such materialistic things as a warehouse
to prevent redemption from taking place. or a residence, the chapel satisfied spiritual
(Ibid.) and religious aspirations and the attainment of
man’s higher destinies. “To uphold the
Rights of a possessor (in the concept of owner) opposite view would be to reduce life to a mere
as to the necessary expenses (Paras, 2008) conglomeration of desires and lust, when, as a
matter of fact, life is also a beautiful aggregate
1. If in good faith - entitled to: of noble impulses and lofty ideals”;
a. Refund; or
b. Retain premises until paid. 3. Those incurred for the making of artificial
fishponds;
2. If in bad faith - entitled only to a refund (No
Right of Retention, as penalty) 4. Those incurred for the construction of
additional rooms in a house, for use as kitchen,
NOTE: If the owner sues the possessor for the bathroom, stable, etc; or
recovery of the property, the possessor in good
faith (who is thus entitled to a refund) must file a 5. Those incurred for clearing up land formerly
counterclaim for the refund of necessary and useful thickly covered with trees and shrubbery.
expenses, otherwise the judgment in the case for (Ibid.)
possession will be a bar to a subsequent suit
brought solely for the recovery of such expenses. Rights of a possessor (in the concept of owner)
The purpose is clearly to avoid the multiplicity of as to the useful expenses
suits.
A. If in good faith
Right of Removal of Necessary Expenses
1. Right to Reimbursement (of either the
There is no right of removal of necessary expenses amount spent or the increase in value —
whether in good faith or bad faith. Necessary “plus value” — at the owner’s option)
expenses affect the existence or substance of the (Art. 546, NCC)
property itself.
2. Right of Retention (until paid) (Art. 546,
Ratio: Improvements are so incorporated to the NCC)
principal thing that their separation must
necessarily reduce the value of the thing not 3. Right of Removal (provided no
curable by ordinary repairs. substantial damage or injury is caused to
the principal, reducing its value) — unless
the winner (owner or lawful possessor)
exercises the option in (1) (Art. 547, NCC)
2023 GOLDEN NOTES
NOTE: The possessor in good faith is entitled NOTE: This right of removal is subordinate to the
to both the fruits and expenses (necessary or owner’s right to keep the improvements himself by
useful), hence they do not compensate each paying the expenses incurred or the concomitant
other. increase in the value of the property caused by the
improvements. (Pineda, 2009; Javier v. Concepcion,
B. If in bad faith Jr., G.R. No. L-36566, 07 Nov. 1979)
The possessor in bad faith is not entitled to any Expenses for Pure Luxury
right regarding the useful expenses. However,
in Angeles v. Guevara, L-15697, 31 Oct. 1960, the Expenses for pure luxury or mere pleasure shall
Supreme Court, through Justice Gutierrez not be refunded to the possessor in good faith; but
David, made the statement that although a he may remove the ornaments with which he has
possessor in bad faith is not entitled to embellished the principal thing if it suffers no
reimbursements for expenses incurred, he injury thereby, and if his successor in the
may nevertheless remove the objects (repairs possession does not prefer to refund the amount
on buildings) provided the things suffer no expended. (Art. 548, NCC)
injury thereby, and that the lawful possessor
does not prefer to retain them by paying the Examples of Ornamental Expenses
value they may have at the time he enters into
possession. Evidently, here, the Court was a. Hand paintings on the wall of a house;
thinking not of useful improvement, but of b. A garage made of platinum; and
expenses for pure luxury or mere pleasure. c. Water fountains in gardens. (Paras, 2008)
(Art. 549, NCC; Paras, 2008)
Rights of a possessor (in the concept of owner)
Effect of Voluntary Surrender of Property as to luxurious or ornamental expenses
GR: The voluntary surrender of property is a 1. If in good faith

waiver of the possessor’s right of retention but his
right to be refunded may still be enforced. In general, no right of refund or retention but
can remove if no substantial injury is caused.
XPN: If he also waived the same. However, owner has option to allow:
Removal of useful improvements introduced by a. Possessor to remove; or

the possessor b. Retain for himself (the owner) the
ornament by refunding the amount spent.
Only a possessor in good faith is allowed to remove (Art. 548, NCC)
the useful improvements he introduced provided
that the useful improvements can be removed 2. In bad faith
without damage to the principal thing. (Art. 547,
NCC) In general, no right of refund or retention but
can remove if no substantial injury is caused.
“Damage” here means a substantial one that However, owner has option to allow:
reduces the value of the property, thus a slight
injury curable by an ordinary repair does not a. Possessor to remove; or
defeat the right of removal, but the repairs should b. Retain for himself (the owner) the
be chargeable to the possessor, for it is he who ornament by refunding the value it has at
benefits by the removal and the object removed. the time owner enters into possession. (Art.
(Paras, 2008) 549, NCC; Paras, 2008)
CIVIL LAW
Possessor in Bad Faith “Every possessor’’ refers to one in good faith or bad
faith, in the concept of owner or in the concept of
The possessor in bad faith shall reimburse the holder, in one’s own name or in that of another, and
fruits received and those which the legitimate not to the owner or the person adjudged by the
possessor could have received and shall have a court to be lawfully entitled to possess.
right only to the expenses mentioned in Art. 546(1)
and Art. 443, of the NCC. The expenses incurred in Improvements caused by nature or time
improvements for pure luxury or mere pleasure
shall not be refunded to the possessor in bad faith; Neither the possessor in good faith nor in bad faith
but he may remove the objects for which such is entitled to:
expenses have been incurred, provided that the
thing suffers no injury thereby, and that the lawful 1. Improvements caused by nature (e.g.,
possessor does not prefer to retain them by paying alluvium, etc.); and
the value they may have at the time he enters into 2. Improvements caused by time (e.g., like the
possession. (Art. 549, NCC) improved flavor of wine). (Paras, 2008)
Right of the possessor (in the concept of owner) Liability for Loss or Deterioration
as to fruits
A possessor in good faith shall not be liable for the
1. If in good faith: deterioration or loss of the thing possessed, except
in cases in which it is proved that he has acted with
a. Gathered or severed or harvested fruits are fraudulent intent or negligence, after the judicial
his own (Art. 544, NCC); summons.
b. Pending or ungathered fruits — (pro- A possessor in bad faith shall be liable for
rating between possessor and owner of deterioration or loss in every case, even if caused
expenses, net harvest, and charges) (Art. by a fortuitous event. (Art. 552, NCC)
545, NCC)
Rules Applicable
2. If in bad faith:
A. Possessor in good faith:
a. Gathered fruits — must return value of
fruits already received as well as value of 1. Before receipt of judicial summons - not
fruits which the owner or legitimate liable; or
possessor (not the possessor in bad faith)
could have received with due care or 2. After judicial summons:
diligence, minus necessary expenses for
cultivation, gathering, and harvesting, to i. Loss or deterioration through
prevent the owner from being unjustly fortuitous event - not liable; and
enriched. (Arts. 549 and 443, NCC) ii. Through fraudulent intent or
negligence - liable.
b. Pending or ungathered fruits — no rights
at all, not even to expenses for cultivation B. Possessor in bad faith:
because by accession, all should belong to
the owner, without indemnity. (Art. 449, Whether before or after judicial summons, and
NCC; Paras, 2008) whether due to fortuitous event or not, such
possessor is liable. (Paras, 2008)
NOTE: The costs of litigation over the property
shall be borne by every possessor. (Art. 550, NCC)
2023 GOLDEN NOTES
Summary of rights of a possessor As to Ornamental Expenses
GOOD FAITH BAD FAITH Shall not be refunded

Shall not be refunded
but he has a limited
As to fruits received but he has a limited
right of removal, i.e., he
right of removal, i.e., he
may remove if the
Shall reimburse the may remove if the
principal thing suffers
fruits received and principal thing suffers
no injury thereby, and
those which the no injury thereby, and
if the lawful possessor
legitimate possessor if the lawful possessor
does not prefer to
Entitled to the fruits could have received does not prefer to
retain them by paying
received before the and shall have the a refund the amount
its value at the time he
possession is legally right only to necessary expended. (Paras,
enters into possession.
interrupted. (Art. 544, expenses (Art. 546(1), 2008)
(Ibid.)
NCC) NCC) and expenses in
the production, As to liability in case of deterioration or loss
gathering and GR: No liability.
preservation of such
fruits. (Art. 443, NCC) XPN: If due to his
Always liable.
fraudulent act or
As to pending fruits negligence, or after
service of summons.
Liable with legitimate
possessor for expenses Possessor in Good Faith has the Right of
of cultivation and shall Retention Until He Has Been Fully Reimbursed
share in the net harvest
None.
in proportion to the A possessor in good faith has the right of retention
time of their of the property until he has been fully reimbursed
Possession. (Art. 545, for all the necessary and useful expenses made by
NCC) him on the property. Its object is to guarantee the
reimbursement for the expenses, such as those for
As to Necessary Expenses the preservation of the property, or for the
enhancement of its utility or productivity. It
Right of permits the actual possessor to remain in
Right of reimbursement only. possession while he has not been reimbursed by
reimbursement and (Paras, 2008; Director the person who defeated him in the possession for
retention. (Paras, of Lands v. Abagat, G.R. those necessary expenses and useful
2008) No. 30515, 27 Mar. improvements made by him on the thing
1929) possessed. (Ortiz v. Kayanan, G.R. No. L-32974, 30
July 1979)
As to Useful Expenses
Presumption of possession during the
Right of intervening period
reimbursement,
retention and limited None. A present possessor who shows his possession at
right of removal. (Art. some previous time is presumed to have held
546, NCC) possession also during the intermediate period, in
the absence of proof to the contrary. (Art. 554, NCC)
CIVIL LAW
Possession is lost through: (P-R-A-D-A) Requisites (C-A-P-O)
1. Possession of another; (Art. 555 in relation to 1. The abandoner must have been a possessor in
Art. 537, NCC) the concept of Owner (either an owner or
mere possessor may respectively abandon
2. Recovery of the thing by the legitimate owner; either ownership or possession);
3. Abandonment; (Art. 555, NCC) 2. The abandoner must have the Capacity to
renounce or to alienate (for abandonment is
4. Destruction or total loss of the thing – a thing is the repudiation of property right);
lost when it perishes or goes out of commerce,
or disappears in such a way that its existence is 3. There must be Physical relinquishment of the
unknown, or it cannot be recovered (Art. 1189; thing or object; and
Art. 555, NCC); or
4. There must be no spes recuperandi
5. Assignment – complete transmission of the (expectation to recover) and no more Animus
thing/right to another by any lawful manner. revertendi (intention to return or get back).
(Art. 555, NCC) (Paras, 2008)
Possession of Another (2001, 2009 BAR) Additional Doctrines
Possession of another subject to the provision of 1. A property owner cannot be held to have
Art. 537 of the NCC (possession by tolerance), if a abandoned the same until at least he has some
person is not in possession for more than 1 year but knowledge of the loss of its possession or the
less than 10 years, he loses possession de facto. He thing;
can no longer bring an action of forcible entry or
unlawful detainer, since the prescriptive period is 1 2. There is no real intention to abandon property
year for such actions. But he may still institute an when as in the case of a shipwreck or a fire,
accion publiciana to recover possession de jure, things are thrown into the sea or upon the
possession as a legal right or the real right of highway;
possession. (Art. 555, NCC; Paras, 2008)
3. An owner may abandon possession merely,
An accion publiciana or reivindicatoria is still leaving ownership in force, but a mere
possible unless prescription, either ordinary or possessor cannot abandon ownership since he
extraordinary, has set in. (Paras, 2008) never had the same;
NOTE: Acts merely tolerated, and those executed 4. If an owner has not lost possession because
clandestinely and without the knowledge of the there has been no abandonment, it surely
possessor of a thing, or by violence, do not affect cannot be acquired by another through
possession. (Art. 537, NCC) acquisitive prescription. Thus, the mere fact
that land is covered by the sea completely
Abandonment during high tide for failure in the meantime of
the owner to dam the water off, does not
Abandonment involves a voluntary renunciation of indicate an abandonment of the land in favor
all rights over a thing. There must be an intention of public dominion. Moreover, abandonment
to lose the thing. (Pineda, 2009) can hardly refer to land much less to
registered land;
2023 GOLDEN NOTES
5. There is no abandonment if an owner merely 556 of the NCC.

tolerated (permitted) another’s possession,
nor if the latter was done by stealth or effected Loss or Unlawful Depravation of Movable
through force and intimidation.; (Arts. 537 and
558, NCC); A thing is lost when it perishes, or goes out of
commerce, or disappears in such a way that its
6. There is no abandonment of movables even if existence is unknown, or it cannot be recovered.
there is temporary ignorance of their (Art. 1189, NCC)
whereabouts, so long as they remain under
the control of the possessor (that is, so long as When possession of Movables is lost or not lost
another has not obtained control of them).;
(Art. 556, NCC); If the possessor has no idea at all about the
whereabouts of the movable, possession is lost, but
7. In true abandonment, both possession de facto not when he more or less knows its general
and de jure are lost; and location, though he may not know its precise or
definite location. In the former, he has lost juridical
8. Abandonment which converts the thing into control; in the latter, the object remains within his
res nullius (ownership of which may ordinarily patrimony and not in the patrimony of another.
be obtained by occupation), does not apply to (Paras, 2008)
land (Art. 714, NCC) much less does
abandonment apply to registered land. (Sec. Loss of Immovables with respect to third
46, Act 496) (Paras, 2008) person
Assignment The possession of immovables and of real rights is

not deemed lost or transferred for purposes of
Refers to a total transfer of ownership of property prescription to the prejudice of third persons,
by the owner to another person either gratuitously except in accordance with the provisions of the
or onerously. Mortgage Law and the Land Registration Laws.
(Art. 557, NCC)
While in assignment, at no time did the thing not
have a possessor (for possession merely changed NOTE: Art. 557 of the NCC refers to possession of
hands or control), in abandonment, there was a real property, and other real rights over real
time, no matter how short, when the object did not property such as easement and usufruct
have any possessor at all. Moreover, while
assignment may in some cases be by onerous title, Acts of mere holder
abandonment is always gratuitous, otherwise it
becomes a virtual assignment. Moreover, in GR: Acts relating to possession of a mere holder do
assignment, both possession de facto and de jure not bind or prejudice the possessor in the concept
are lost, and no action will allow recovery. (Paras, of owner unless said acts were previously
2008) authorized or subsequently ratified by the latter.
(De Leon, 2006)
Q: Does Art. 555, NCC refer to both real and
personal property? XPNs:
A: YES. The law does not distinguish, except in the 1. Unless he gave said holder express authority to
case of paragraph 4 where it is evident that the do such acts; or
reference to possession of more than one (1) year
concerns only real property – the rule as to 2. Ratifies them subsequently. (Art. 558, NCC)
movable property being explicitly stated in Art.
CIVIL LAW
4. RULES FOR MOVABLES Duty of a finder of a lost movable
Whoever finds a lost movable, which is not a

Rule regarding the right of a possessor who
treasure, must return it to its previous possessor. If
acquires a movable claimed by another
the latter is unknown, the finder shall immediately
deposit it with the mayor of the city or municipality
If the possessor is in:
where the finding has taken place. The mayor in
turn must publicly announce the finding of the
1. Bad faith – He has no right; or
property for two (2) consecutive weeks. (Art.
2. Good faith – He has presumed ownership. It is
719(1) and (2), NCC)
equivalent to title.
Authorized public auction of lost movable

Requisites:
If the movable cannot be kept without

a. Owner has voluntarily parted with the
deterioration, or without expenses which
possession of the thing;
considerably diminish its value, it shall be sold at
b. Subsequent possessor is in the concept of an
public auction eight (8) days after the publication.
owner; and
(Art. 719(3), NCC)
c. Possession in good faith. (Pineda, 2009)
Awarding of the lost movable to the finder

Possession of movable property acquired in
good faith
If the owner or previous possessor did not appear
after 6 months from the publication, the thing
GR: Doctrine of Irrevindicability – The possession
found or its value or proceeds if there was a sale,
of movable property acquired in good faith is
shall be awarded to the finder. The finder, however,
equivalent to title and the true owner cannot
shall pay for the expenses incurred for the
recover such movable. (Art. 559(1), NCC)
publication. (Art. 719(4), NCC)
NOTE: This is merely presumptive as it can be

Duty of the owner who appeared
defeated by the true owner. (Ibid.)
1. Give a reward to the finder equivalent to 1/10

XPNs:
of the sum or of the price of the thing found;
(Art. 720, NCC)
1. When the owner has lost a movable; or
2. Has been unlawfully deprived of a movable.
2. Reimburse to the finder for the latter’s
(Art. 559(2), NCC)
expenses incurred for the preservation of the
thing; (Art. 546, NCC) and expenses spent for
In which case the possessor cannot retain the thing
the location of the owner; and
as against the owner, who may recover it without
paying any indemnity
3. Reimburse the expenses for publication if there
was a public auction sale. (Pineda, 2009)
XPN to the XPNs: Where the movable is acquired
in good faith at a public sale, the owner must
reimburse to recover. (Ibid.)
2023 GOLDEN NOTES
Summary of Recovery or Non-Recovery Q: Suppose a recently stolen property is found in

Principle possession of A, is A presumed to be the thief?
OWNER MAY RECOVER WITHOUT A: YES. It is a disputable presumption “that a

REIMBURSEMENT person found in possession of a thing taken in the
doing of a recent wrongful act is the taker and doer
1. From possessor in bad faith; or of the whole act.’’ (Sec. 3(j), Rule 131, ROC) It is true
that one who possesses a movable, acquired in
2. From possessor in good faith (if owner good faith, has what is called an equivalent of title,
had lost the property or been but this is destroyed when it is proved that said
unlawfully deprived of it) (the movable belongs to somebody else who has lost it,
acquisition being from a private or has been unlawfully deprived of its possession.
person). (Art. 559, NCC) (Art. 559, NCC) (Paras, 2008)
Q: In order to contest the title of the possessor

OWNER MAY RECOVER BUT SHOULD in good faith, what should the true owner do?
REIMBURSE
If possessor acquired the object in good faith A: The true owner should present sufficient proof
at a public sale or auction. (Art. 559, NCC) of the identity of the object and that he had either
Because the publicity attendant to a public lost it or has been illegally deprived of it. This proof
sale should have been sufficient warning for is an indispensable requisite a condition sine qua
the owner to come forward and claim the non in order that the owner of the chattel may
property. contest the apparent title of its possessor. Without
adequate proof of such loss or illegal deprivation,
OWNER CANNOT RECOVER, EVEN IF HE the present holder cannot be put on his defense,
OFFERS TO REIMBURSE even if as possessor he has no actual proprietary
(WHETHER OR NOT THE OWNER HAD title to the movable property in question. (Paras,
LOST OR BEEN UNLAWFULLY DEPRIVED) 2008)
1. If possessor had acquired it in good faith Rule When Possessor has Already Become the
by purchase from a merchant’s store, or Owner
in fairs, or markets in accordance with
the Code of Commerce and special laws; Art. 559 of the NCC in fact assumes that the
(Art. 1505, NCC and Arts. 85 and 86, Code possessor is not the owner, for it is obvious that
of Commerce) where the possessor has come to acquire
indefeasible title, let us say adverse possession for
2. If owner “is by his conduct precluded the necessary period, no proof of loss, or illegal
from denying the seller’s authority to deprivation could avail the former owner of the
sell.” (estopped); (Art. 1505, NCC) and chattel. He would no longer be entitled to recover
it under any condition. (Paras, 2008)
3. If possessor had obtained the goods
because he was an innocent purchaser Estafa is considered as unlawful deprivation
for value and holder of a negotiable
document of title to the goods. (Art. Q: Using a falsified manager's check, Justine, as
1518, NCC) (Paras, 2008) the buyer, was able to take delivery of a
secondhand car which she had just bought from
United Car Sales Inc. The sale was registered
with the Land Transportation Office (LTO). A
week later, the seller learned that the check
CIVIL LAW
had been dishonored, but by that time, Justine

was nowhere to be seen. It turned out that F. USUFRUCT
Justine had sold the car to Jerico, the present
possessor who knew nothing about the falsified
check. In a suit by United Car Sales, Inc. against
Usufruct is the right of a person called
Jerico for recovery of the car, plaintiff alleges it
usufructuary, to enjoy the property of another
had been unlawfully deprived of its property
called the owner, with the obligation of returning it
through fraud and should, consequently, be
at the designated time and preserving its form and
allowed to recover it without having to
substance, unless the title constituting it, or the law
reimburse the defendant for the price the latter
provides otherwise. (Pineda, 2009)
had paid. Should the suit prosper? (1998 BAR)
NOTE: A usufruct can be constituted in favor of a

A: YES. The criminal act of Estafa should be
town, corporation, or association, but it cannot be
deemed to come within the meaning of unlawful
for more than 50 years. (Art. 605, NCC)
deprivation under Art. 559 of the NCC as without it,
United Car Sales would not have parted with the
Characteristics of Usufruct (E-N-A)
possession of its car. Thus, it was allowed to
recover the property without having to reimburse
1. Essential – Those without which it cannot be
the defendant.
termed as usufruct:
Possession of wild animals

a. Real right (whether registered in the
registry of property or not);
Wild animals are possessed only while they are
under one’s control; domesticated or tamed
b. Constituted on property
animals are considered domestic or tame, if they
i. Real;
retain the habit of returning to the premises of the
ii. Personal;
possessor. (Art. 560, NCC)
iii. Consumable;
iv. Non-consumable;
Lawful Recovery of Possession that had been
v. Tangible; or
Unjustly Lost
vi. Intangible.
One who recovers, according to law, possession

c. Temporary duration; and
unjustly lost, shall be deemed for all purposes
which may redound to his benefit, to have enjoyed
d. Purpose is to enjoy the benefits and
it without interruption. (Art. 561, NCC)
derive all advantages from the object as a
consequence of normal use or
Requisites
exploitation.
1. Possession was lost unlawfully or unjustly;

2. Natural – That which ordinarily is present, but
2. Possessor lawfully recovers possession; and
a contrary stipulation can eliminate it because
3. Uninterrupted possession is beneficial to him.
it is not essential:
(Pineda, 2009)
a. The obligation of conserving or

preserving the form and substance
(value) of the thing; and
b. It is transmissible.
2023 GOLDEN NOTES
3. Accidental – Those which may be present or 1. RIGHTS AND OBLIGATIONS OF

absent depending upon the stipulation of USUFRUCTUARY
parties:
Rights of the usufructuary as to the thing and its

a. Whether it be pure or a conditional
fruits (R-I-R-I-C-R-E-S)
usufruct;
b. The number of years it will exist; and
1. To Receive the fruits of the property in
c. Whether it is in favor of one person or
usufruct and half of the hidden treasure he
several, etc. (Paras, 2008)
accidentally finds on the property; (Arts. 566
Obligation to preserve the Form and Substance
and 438, NCC)
of the Thing in Usufruct
NOTE: The usufructuary is entitled to the

GR: The usufructuary is bound to preserve the
natural, industrial, and civil fruits that will
form and substance of the thing in usufruct. This is
accrue during the existence of the usufruct.
to prevent extraordinary exploitation, prevent
(Paras, 2008)
abuse of property and prevent impairment. (De
Leon, 2006; Paras, 2008)
2. To enjoy any Increase which the thing in
usufruct may acquire through accession; (Art.
XPN: The law or the will of the parties may allow
571, NCC)
the modification of the substance of the thing. (De
Leon, 2006)
3. To Retain the thing until he is reimbursed for
advances for extraordinary expenses and taxes
Q: Chayong owned a parcel of land which she
on the capital; (Art. 612, NCC)
mortgaged to Michael. Upon the OCT was an
annotation of usufructuary rights in favor of
4. To make such Improvements or expenses on
Cheddy. Is Michael obliged to investigate
the property he may deem proper and to
Chayong’s title?
remove the improvements provided no
damage is caused to the property; (Art. 579,
A: NO. The annotation is not sufficient cause to
NCC)
require Michael to investigate Chayong’s title
because the latter’s ownership over the property
5. To Collect reimbursements from the owner for
remains unimpaired despite such encumbrance.
indispensable extraordinary repairs, taxes on
Only the jus utendi and jus fruendi over the
the capital he advanced, and damages caused
property are transferred to the usufructuary. The
to him; (Art. 597, NCC)
owner of the property maintains the jus disponendi
or the power to alienate, encumber, transform, and
6. To Remove improvements made by him if the
even destroy the same. (Hemedes v. CA, G.R. Nos.
same will not injure the property; (Art. 579,
107132 & 108472, 08 Oct. 1999)
NCC)
7. To personally Enjoy the thing or lease it to

another (Arts. 572-577, NCC) generally for the
same or shorter period as the usufruct; and
NOTE: As to the thing itself, the usufructuary

may lease the thing to another, even without
the consent of the owner. (Paras, 2008)
8. To Set-off the improvements he may have
CIVIL LAW
made on the property against any damage to Rights of a Usufructuary on Pending Natural
the same. (Art. 580, NCC) and Industrial Fruits
Rule as to Certain Rights (rent, pension, benefits, RIGHTS OF THE USUFRUCTUARY

etc.) Fruits growing
at the beginning of the Usufruct
Whenever a usufruct is constituted on the right to
a. Belong to the usufructuary; and
receive a rent or periodical pension, whether in
money or in fruits, or in the interest on bonds or
b. Not bound to refund to the owner the
securities payable to bearer, each payment due
expenses of cultivation and production but
shall be considered as the proceeds of fruits of such
without prejudice to the right of third
right. Whenever it consists in the enjoyment of
persons;
benefits accruing from a participation in any
industrial or commercial enterprise, the date of the
Thus, if the fruits had been planted by a possessor
distribution of which is not fixed, such benefits
in good faith, the pending crop expenses and
shall have the same character. In either case they
charges shall be pro-rated between said
shall be distributed as civil fruits, and shall be
possessor and the usufructuary
applied in the manner prescribed in the preceding
article. (Paras, 2008) Fruits growing
at the termination of the Usufruct
The things referred to in Art. 570, NCC Art. 570 of
the NCC are considered civil fruits and shall be Belong to the owner but he is bound to reimburse
deemed to accrue proportionately to the naked the usufructuary of the ordinary cultivation
owner and usufructuary, for the time the usufruct expenses (Art. 545, NCC) out of the fruits
lasts. received. (Art. 443, NCC) The right of innocent
third parties should not be prejudiced.
Rules If the Finder of a Hidden Treasure is a
(Art. 567, NCC)
Usufructuary
NOTE: Civil fruits accrue daily; (Art. 544, NCC); stock

If the finder is a usufructuary and he discovers it by
dividends and cash dividends are considered civil
chance, the usufructuary shall be entitled to one
fruits (Orozco v. Araneta, L-3691, 21 Nov. 1951).
half of the value thereof. The other half belongs to
the naked owner.
Increases in the thing held in usufruct
If the finder is a third person and he found hidden
Aside from the right to the fruits, the usufructuary
treasure by chance in the property under usufruct
has the right to the enjoyment (use, not ownership)
the usufructuary shall be considered a stranger.
of:
The finder gets half, and the other half shall belong
to the naked owner. (Paras, 2008)
a. Accessions (whether artificial or natural);
b. Servitudes and easements; and
c. All benefits inherent in the property (e.g., the
right to hunt and fish therein, the right to
construct rainwater receptacles, etc.). (Paras,
2008)
2023 GOLDEN NOTES
Reason: The usufructuary, as a rule, is entitled to XPN: If there is an express prohibition to that
the entire: effect.
a. jus fruendi (including fruits of accessions); and 2. Limitation: the usufructuary cannot alter its
b. jus utendi (so he can make use for example of form and substance;
an easement)
3. Removal: usufructuary may generally remove
When the expenses of cultivation and provided no injury is made on the principal
production exceeds the proceeds of the growing even against the will of the naked owner. If he
fruits has chosen not to remove he cannot be
compelled to remove them; and
If the expenses exceed the proceeds of the growing
fruits, the owner has no obligation to reimburse the 4. Indemnity: no right to be indemnified if the
difference. (Art. 567, NCC) improvements cannot be removed. He may
however set-off the value of the improvements
Limitations to Usufructuary Rights against the amount of damage he had caused to
the property. (Pineda, 2009)
The usufructuary cannot:
NOTE: If the right of the usufructuary to remove
1. Sell, pledge or mortgage the property itself improvements is not registered in the registration
because he is not the owner; proceedings of the land in usufruct, an innocent
purchaser for value of the property is not bound to
2. Sell future crops (growing crops at the respect the right. (Ibid.)
termination of the usufruct belong to the
owner); and Offsetting of damages and improvements
introduced by the usufructuary
3. Lease the thing for a period longer than the
term of the usufruct without the consent of Requisites before set-off can be made:
owner. (Pineda, 2009)
1. Damage must have been caused by the
XPN: In lease of rural lands, it may exceed the usufructuary;
lifetime of the usufruct and shall subsist during the 2. Improvements must have augmented the value
agricultural year. (Art. 572, NCC) of the property; and
Q: Can a usufruct be constituted on an 3. Notice of intention to set-off. (Pineda, 2009)

encumbered or mortgaged land?
If the damages exceed the value of the
A: YES. The mortgage remains inactive until the improvements, the usufructuary is liable for the
debt is not paid, and the mortgage is not for the difference as indemnity.
purpose of limiting the use of the fruits.
If the improvements exceed the amount of damages,
Right of usufructuary to make useful or the usufructuary may remove the portion of the
luxurious improvements improvements representing the excess in value if it
can be done without injury; otherwise, the excess in
1. The usufructuary may construct and make value accrues to the owner. (Paras, 2008)
improvements on the property as he may deem
proper; Q: Why do improvements accrue to the owner?
A: Because there is no indemnity for improvements.
CIVIL LAW
Rights of the usufructuary as to the usufruct 2. Rights with reference to the usufructuary right
itself (A-R-C) itself - The usufructuary may alienate (sell,
donate, bequeath, or devise) the usufructuary
1. To Alienate, pledge or mortgage the right of right (except a legal usufruct, i.e., the usufruct
usufruct, even by gratuitous title; (Art. 572, which parents have over the properties of their
NCC) unemancipated children, because said usufruct
is to be used for certain obligations towards
2. Recover property/real right, to bring the children); or a usufruct granted a usufructuary
action and to oblige the owner thereof to give in consideration of his person; or a usufruct
him the proper authority and the necessary acquired through a caucion juratoria, where the
proof to bring the action (Art. 578, NCC); and need of the usufructuary himself is the reason for
the enjoyment. (Art. 587, NCC)
3. In a usufruct of part of a Common property, to
exercise all the rights pertaining to the co- The usufructuary may pledge or mortgage the
owner with respect to the administration and usufructuary right (because he OWNS said right)
collection of fruits or interests. (Art.582, NCC) but he cannot pledge or mortgage the thing itself
(De Leon, 2006) because he does not own the thing (Art. 2085(2),
NCC). Neither can he sell or in any way alienate
Lease, Alienation and Encumbrance of the the thing itself, or future crops, for crops pending
property subject to usufruct at the termination of the usufruct belong to the
naked owner. (Arts. 567 and 572, NCC; Art. 106,
1. Rights with reference to the thing itself (in Mortgage Law)
addition to the usufruct) - The usufructuary,
not being the owner of the thing subject to Q: 120 hectares of land from the NHA property
usufruct, cannot alienate, pledge or mortgage were reserved for the site of the National
the thing itself. However, the usufructuary may Government Center. Seven (7) hectares from
lease the thing to another (This can be done even which were withdrawn from the operation.
without the owner’s consent; moreover, These revoked lands were reserved (MSBF)
ordinarily the lease must not extend to a period However, MSBF occupied approximately 16
longer than that of the usufruct, unless the hectares and leased a portion thereof to Bulacan
owner consents. Thus, the lease ends at the time Garden Corporation (BGC). BGC occupies 4,590
the usufruct ends, except in the case of rural sqm. Implementing such revocation, NHA
leases). ordered BGC to vacate its occupied area. BGC
then filed a complaint for injunction. Has BGC
NOTE: If the lessee should damage the property, any right over the leased premises?
the usufructuary shall answer to the owner. (Art.
590, NCC) The relation between the owner and A: A usufructuary may lease the object held in
the usufructuary, does not end just because a usufruct. The owner of the property must respect
lease has been made. The usufructuary, the lease entered into by the usufructuary so long as
however, can demand reimbursement from the the usufruct exists. MSBF was given a usufruct over
lessee, because of the latter’s breach of the only a 7-hectare area. NHA cannot evict BGC if the
contract of lease. If the usufructuary cannot pay 4,590 square meter portion MSBF leased to BGC is
the damage to the naked owner, his bond shall within the 7-hectare area held in usufruct by MSBF.
be liable. This is precisely one reason for the However, the NHA has the right to evict BGC if BGC
requirement of a bond. ((Art. 583, NCC) occupied a portion outside of the 7-hectare area
covered by MSBF's usufructuary rights. (NHA v. CA,
G.R. No. 148830, 13 Apr. 2005)
2023 GOLDEN NOTES
Transfer of the usufruct Rules for Quasi-Usufruct
The transferee can enjoy the rights transferred to 1. The usufructuary can use them, as if he is the
him by the usufructuary until the expiration of the owner; and
usufruct. Transfer of usufructuary rights,
gratuitous or onerous, is co-terminus with the term 2. At the end of the usufruct, he must:
of usufruct.
a. Pay the appraised value (if appraised when
Exercise of Acts of Ownership by a usufructuary first delivered); or
GR: A usufructuary cannot exercise acts of b. If there was no appraisal, return the same
ownership such as alienation or conveyance. kind, quality, and quantity or pay price
current at the termination of the usufruct.
XPNs: When what is to be alienated or conveyed is (Ibid.)
a:
Usufruct on fruit-bearing trees and shrubs
1. Consumable;
2. Property intended for sale; or The usufructuary of fruit-bearing trees and shrubs
3. Property which has been appraised when may make use of the dead trunks, and even of those
delivered. (Art. 574, NCC) cut off or uprooted by accident, under the
obligation to replace them with new plants. (Art.
NOTE: If it has not yet been appraised or if it is not 575, NCC)
a consumable, return the same quality (mutuum).
NOTE: This is a special usufruct. (Paras, 2008)
Normal and Abnormal Usufruct
Rights
A normal usufruct is when the usufructuary shall
preserve the property and return it intact in the The usufructuary can use (even for firewood,
same condition. An abnormal usufruct is when the though he is not the naked owner) the following:
usufructuary, at the end of the usufruct, will not
return the same object in the same condition as a. Dead trunks; and
received but in the condition with all its b. Those cut off or uprooted by accident.
deterioration as a result of the normal wear and
tear on the property. (Sta. Maria, 2021) However, he must replace them with new plants
(for indeed, he was not the naked owner). (Ibid.)
Abnormal Usufruct on Consumable Things
Other Special Usufructs
This is another instance of abnormal usufruct and
is sometimes referred to as a “quasi-usufruct” 1. Of periodical pension, income, dividends; (Art.
because the form and substance is not really 570, NCC)
preserved. Thus, this is really a simple loan. It has 2. Of woodland; (Art. 577, NCC)
been included however in the title on usufructs 3. Of right of action to recover real property, real
because in universal usufructs, both non- right, or movable property; (Art. 578, NCC)
consumable and consumable properties are 4. Of part of property owned in common;
included. While we seldom find usufructs on (Art. 582, NCC)
consumable properties alone, it is a fact that they 5. Of the entire patrimony of a person; (Art. 598,
indeed exist. Thus, the Supreme Court has held that NCC)
even money may be the object of a usufruct. (Paras, 6. On a mortgaged immovable; (Art. 600, NCC)
2008) and
CIVIL LAW
7. On a flock or herd of livestock. (Art. 591, NCC) the timber, or unless he needs the money to do
some repairs but in the last case, the owner
Special Usufruct over a woodland must be informed. (Paras, 2008)
This is not a common or frequent usufruct because: Rights of usufructuary to recover the property
held in usufruct
1. Natural resources (including forest or timber
lands) belong to the State (Regalian Doctrine To bring the action, the usufructuary can demand
under Art. XII (3), 1987 Constitution); and from the owner:
2. A license is generally essential if one desires to 1. Authority to bring the action (usually a special
gather forest products. (Sec. 47, Revised power of attorney); and
Administrative Code) 2. Proof needed for a recovery.
Obligations of the usufructuary over a woodland The action may be instituted in the usufructuary’s
name, for being the owner of the usufruct, he is
In the enjoyment of the usufruct, the usufructuary: properly deemed a real party in interest. (Rule 3(2),
ROC)
1. Must bear in mind that he is not the owner, and
therefore, in the exercise of the diligence in a. If the purpose is the recovery of the property
caring for the property required under 589 of or right, he is still required under Art. 578, NCC
the NCC, he must see to it that the woodland is to obtain the naked owner’s authority.; or
preserved, either by development or by
replanting, thus he cannot consume all, b. If the purpose is to object to or prevent
otherwise nothing would be left for the owner; disturbance over the property (once the
property is given him), no special authority
2. In the cutting or felling of trees, he must: from the naked owner is needed.
a. Follow the owner’s habit or practices; Usufructuary of a Part of Common Property
b. In default thereof, follow the customs of The usufructuary of a part of a thing held in
the place (as to manner, amount and common shall exercise all the rights pertaining to
season) (Art. 577, NCC) and all without the owner thereof with respect to the
prejudice to the owner; administration and the collection of fruits or
NOTE: The rule above is applicable if the interest. Should the co-ownership cease by reason
woodland: of the division of the thing held in common, the
usufruct of the part allotted to the co-owner shall
i. Is a copse (thicket of small trees); or belong to the usufructuary. (Art. 582, NCC)
ii. Consists of timber for building.
A co-owner may give the usufruct of his share to
If there be no customs, the only time the another, even without the consent of the others,
usufructuary can cut down trees will be for unless personal considerations are present. (Art.
repair or improvement, provided that the 493, NCC)
owner was informed first.
The usufructuary in such a case takes the owner’s
3. Cannot alienate the trees (for the trees are not place as to:
considered fruits) unless he is permitted,
expressly or impliedly by the owner as when a. Administration (management); and
the purpose of the usufruct was really to sell
2023 GOLDEN NOTES
b. Collection of fruits or interest (Art. 582, This article speaks of two obligations – inventory
NCC) but not as to alienation, disposition, and security. They are not necessary however
or creation of any real right over the before the right to the usufruct begins; they are
property, since these are strict acts of merely necessary before physical possession and
ownership, unless of course he is enjoyment of the property can be had, thus if the
authorized by the naked owner. (Paras, usufructuary fails to give security, the usufruct still
2008) begins but the naked owner will have the rights
granted him under Art. 586 of the NCC unless
Rights of usufructuary at the expiration of the exempted. (Paras, 2008)
usufruct
NOTE: The purpose of giving security is to ensure
1. To collect reimbursement from the owner: fulfillment by the usufruct of the obligation
imposed upon him.
a. For indispensable extraordinary repairs
made by the usufructuary; (Art. 593, NCC) After the security has been given by the
usufructuary, he shall have a right to all the
b. For taxes on the capital advanced by the proceeds and benefits from the day on which, in
usufructuary; (Art. 597, NCC) accordance with the title constituting the usufruct,
he should have commenced to receive them
c. For damages caused by the naked owner; (retroactive effect of security). (Art. 588, NCC)
and
Requirement for the Inventory
d. For payment of increase in value of the
immovable by reason of repairs provided 1. The naked owner or representative must be
the owner is notified of the urgency of previously notified;
such repairs but the latter failed to make
said repairs despite the notification, and NOTE: The purpose is to enable him to correct
the repair is necessary for the errors in the inventory if he desires. His absence
preservation of the property. (Art. 594, is a waiver for corrections. If there is non-
NCC) notification, the inventory can go on but the
naked owner may later on point out
2. To retain the thing until reimbursement is discrepancies and omissions in the inventory.
made. (Art. 612, NCC)
2. Conditions of immovables must be described;
Obligations of the Usufructuary and
1. Before the usufruct – such as making of 3. Movables must be appraised.

inventory and give security;
2. During the usufruct – such as taking due care NOTE: As a rule, no form is required, except
of property; and when there are real properties. Expenses are to
3. After the usufruct or at the termination - such be borne by the usufructuary. (Paras, 2008)
as the duty to return and indemnify in the
proper cases. (De Leon, 2006) When inventory is not required (D-A-W-N)
Before the Usufruct 1. Waived by the naked owner; (Paras, 2008)

2. No one will be injured by the lack of inventory;
a. Make an inventory; and (Art. 585, NCC)
b. Give security. (Art. 583, NCC) 3. When the Donor has reserved to himself the
usufruct of the property donated; or
CIVIL LAW
4. Agreement of both parties (Paras, 2008) Exemption of usufructuary from the obligation
to give security
Effects of failure to post a bond or security
Usufructuary may be exempt from the obligation to
1. The owner shall have the following options give security when:
(Art. 586, NCC):
1. No one will be injured by the lack of the bond;
a. Receivership of realty; (Art. 585, NCC)
b. Sale of movables; 2. The donor (or parent) reserved the usufruct of
c. Deposit of securities; the property donated; (Art. 584, NCC)
d. Investment of money; or 3. When there is waiver by the naked owner;
e. Retention of the property as 4. When there is parental usufruct (Art. 225, FC);
administrator. and
5. The usufruct is subject to caucion juratoria
2. The net product shall be delivered to the where:
usufructuary; and
a. The usufructuary takes an oath to take
3. The usufructuary cannot collect credit due or care of the things and restore them to its
make investments of the capital without the previous state before the usufruct is
consent of the owner or of the court until the constituted; and
bond is given.
b. The property subject to such cannot be
Effects of failure to give security alienated or encumbered or leased.
1. On the rights of the naked owner: Caucion Juratoria
a. May deliver the property to the The usufructuary, being unable to file the required
usufructuary; bond or security, may file a verified petition in the
b. May choose retention of the property as proper court asking for the delivery of the house
administrator; and and furniture necessary for himself and his family
c. May demand receivership or so that he and his family be allowed to live in a house
administration of the real property, sale included in the usufruct and retain it until the
of movable, conversion or deposit of termination of the usufruct without any bond or
credit instruments or investment of cash security.
or profits.
The same rule shall be observed with respect to
2. On the rights of the usufructuary: implements, tools and other movable property
necessary for an industry or vocation in which he is
a. Cannot possess the property until he engaged. (Art. 587, NCC)
gives security;
b. Cannot administer property; However, if the movable property has sentimental
c. Cannot collect credits that have matured or artistic value, he can demand its delivery to him.
nor invest them; and The owner has to put up a security. This security
will answer for the legal interest on the appraised
XPN: if the court or naked owner value which is due to the usufructuary once he is
consents; allowed to enjoy the movable property. (Sta. Maria,
2021)
d. May alienate his right to usufruct. (Paras,
2008)
2023 GOLDEN NOTES
Requisites before the caucion juratoria is Usufructuary’s liability for ordinary repairs
allowed
The usufructuary is obliged to make the ordinary
1. Proper court petition; repairs needed by the thing given in usufruct. It
2. Necessity for delivery of furniture, implements includes such as are required by the wear and tear
or house included in the usufruct; due to the natural use of the thing and are
3. Approval of the court; and indispensable for its preservation. (Art. 592, NCC)
4. Sworn promise. (Paras, 2008)
NOTE: If the naked owner demanded the repair
During the Usufruct and the usufructuary still fails to do so, the owner
may make them personally or through another, at
a. Take care of property; (Art. 589, NCC) the expense of the usufructuary. (Art. 592, NCC)
b. Replace the young of animals that die or are Extraordinary Repairs

lost or become prey when the usufruct is
constituted on a flock or herd of livestock; It includes:
(Art. 591, NCC)
1. Those required by the wear and tear due to the
c. Make ordinary repairs; (Art. 592, NCC) natural use of the thing but not indispensable
for its preservation;
d. Notify the owner of urgent extraordinary
repairs; (Art. 593, NCC) Liabilities:
e. Permit works & improvements by the a. The naked owner should be held liable,
naked owner not prejudicial to the whether or not he is notified by the
usufruct; (Art. 595, NCC) usufructuary; and
f. Pay annual taxes and charges on the fruits; b. The law does not require the naked owner
(Art. 596, NCC) to make them; what is important is that he
will bear the expenses made by the
g. Pay interest on taxes on capital paid by the usufructuary. (Paras, 2008)
naked owner; (Art. 597, NCC)
2. Those caused by exceptional circumstances
h. Pay debts when usufruct is constituted on and are indispensable for its preservation; and
the whole patrimony; (Art. 598, NCC)
Liabilities:
i. Secure the naked owner’s/court's approval
to collect credits in certain cases; (Art. 599, a. The naked owner shall be held liable; and
NCC) b. The usufructuary is allowed to make them
with the right to get the increase in value
j. Notify the owner of any prejudicial act and the right of retention at the termination
committed by third persons; (Art. 601, NCC) of usufruct, provided there was notification
and by the usufructuary and failure to repair by
the naked owner. (Ibid.)
k. Pay for court expenses and costs. (Art. 602,
NCC)
CIVIL LAW
3. Those caused by exceptional circumstances b. Pay legal interest for the time that the usufruct
but are not needed for its preservation. lasts; and
c. Indemnify the naked owner for any losses due
Liabilities: to his negligence or of his transferees. (Art. 573,
NCC)
a. The naked owner is liable; and
b. The usufructuary cannot compel the naked NOTE: The usufructuary may be liable for the
owner to make such repairs and he is not damages suffered by the naked owner on account of
allowed to make them even if the naked fraud committed by him or through his negligence.
owner has failed to make them. (Ibid.)
XPN: the usufructuary is not liable for deterioration
NOTE: Extraordinary repairs shall be at the expense due to:
of the owner. The usufructuary is obliged to notify
the owner when the need for such repairs is urgent. 1. Wear and tear; or
(Art. 593, NCC) 2. Fortuitous event. (Ibid.)
Right of Retention of the usufructuary Rights of a Naked Owner and the Limitations
imposed upon him
The usufructuary shall have a right of retention over
the property at the time of the termination of the 1. Alienation - can alienate the thing in usufruct;
usufruct until he is reimbursed of the extraordinary 2. Alteration – Cannot alter the form and
expenses and taxes which he has advanced. (Sta. substance;
Maria, 2021; Art. 612, NCC) 3. Enjoyment - Cannot do anything prejudicial
to the usufructuary; and
Charges or taxes which the usufructuary must 4. Construction and Improvement - Can
pay construct any works and make any
improvement provided it does not diminish
1. The annual charges (in the fruits); and the value or the usufruct or prejudice the
2. The annual taxes on the fruits. rights of the usufructuary.
Taxes imposed directly on the capital Alienation by naked owner
These shall be at the expense of the owner provided Since the jus disponendi and the title (dominium
they are not annual. (Paras, 2008) directum) reside with the naked owner, he retains
the right to alienate the property but:
Rules:
1. He cannot alter its form or substance; or
1. If paid by the naked owner, he can demand
legal interest on the sum paid; or 2. Do anything prejudicial to the usufructuary (as
2. If advanced by the usufructuary, he shall when he should illegally lease the property to
recover the amount thereof at the termination another, since this right ordinarily pertains to
of the usufruct. (Art. 597(2), NCC) the usufructuary). (Paras, 2008)
After the Usufruct Improper use of the thing by the usufructuary
a. Return the thing in usufruct to the naked The owner may demand the delivery of and
owner unless there is a right of retention; (Art. administration of the thing with responsibility to
612, NCC) deliver net fruits to usufructuary.
2023 GOLDEN NOTES
Q: On 01 Jan. 1980, Minerva, the owner of a 2. To cancel the security, upon discharge of the
building granted Petronila a usufruct over the usufructuary’s obligations (Art. 612, NCC); and
property until 01 June 1998 when Manuel, a
son of Petronila, would have reached his 30th 3. To respect leases of rural lands by the
birthday. Manuel, however, died on 01 June usufructuary for the balance of the agricultural
1990 when he was only 26 years old. year. (Art. 572, NCC)
Minerva notified Petronila that the usufruct 2. CLASSES OF USUFRUCT

had been extinguished by the death of Manuel
and demanded that the latter vacate the
1. As to origin:
premises and deliver the same to the former.
Petronila refused to vacate the place on the
a. Legal – Created by law such as usufruct of
ground that the usufruct in her favor would
the parents over the property of their
expire only on 01 June 1998 when Manuel
unemancipated children;
would have reached his 30th birthday and that
the death of Manuel before his 30th birthday
NOTE: The right of the parents over the
did not extinguish the usufruct. Whose
fruits and income of the child’s property
contention should be accepted? (1997 BAR)
shall be limited primarily to the child’s
support and secondarily to the collective
A: PETRONILA’S contention should be accepted. A
daily needs of the family. (Art. 226. FC)
usufruct granted for the time that may elapse
before a third person reaches a certain age shall
b. Voluntary – Created by will of the parties
subsist for the number of years specified even if the
either by act inter vivos (e.g., donation) or
third person should die unless there is an express
by act mortis causa (e.g., in a last will and
stipulation in the contract that states otherwise.
testament); and
(Art. 606, NCC) There is no express stipulation that
the consideration for the usufruct is the existence
c. Mixed/ Prescriptive – Created by both
of Petronila’s son. Thus, the general rule and not
law and act of the person (e.g., acquired by
the exception should apply in this case.
prescription: I possessed in good faith a
parcel of land which really belonged to
When buyer must respect the usufruct
another. Still in good faith, I gave in my
will to X, the naked ownership of land and
A purchaser of the property must respect the
to Y, the usufruct. In due time, Y may
usufruct in case it is registered or known to him
acquire the ownership of the usufruct by
(Art. 709, NCC), otherwise, he can oust the
acquisitive prescription).
usufructuary, who can then look to the naked
owner for damages. (Art. 581, NCC)
2. As to the number of beneficiaries:
Effect of the death of the naked owner on the
a. Simple – If only one usufructuary enjoys
usufruct
the usufruct; or
It does not terminate the usufruct. The naked
b. Multiple – If several usufructuaries
owner’s rights are transmitted to his heirs.
enjoy the usufruct;
Obligations of the Owner
i. Simultaneous –At the same time
ii. Successive –One after the other
1. To make reimbursement for advances of the
usufructuary (Art. 597, NCC);
CIVIL LAW
NOTE: In case usufructuary is created by GR: No form is required in constituting a usufruct.

donation, apply Art. 756 of the NCC. If the Even an oral usufruct may be constituted.
usufruct is testamentary, apply Rules on
Fideicommissary Substitution under Arts. 863 XPNs:
and 869 of the NCC.
1. Usufruct over real property must be registered
3. As to the extent of object: to bind third person;
a. Total –Constituted on the whole thing 2. Statute of Frauds apply in case Real Property is
b. Partial –Constituted only on a part. involved. If personal property, Statute of
Frauds will apply where the value is P500.00
4. As to the subject matter: or higher and in case the agreement is not to be
performed in 1 year; or
a. Over things; or
3. A usufruct by donation or by will must comply
i. Normal (or perfect or regular) – with formalities of a donation or will
Involves non-consumable things
where the form and substance are Rules governing Usufruct
preserved; or
1. The agreement of the parties or the title giving
ii. Abnormal (or imperfect or the usufruct; and
irregular) –Involves consumable 2. In case of deficiency, the provisions of the Civil
things – that which involves things Code. (Art. 565, NCC)
which would be useless to the
usufructuary unless they are Usufruct vs. Lease
consumed or expanded.
USUFRUCT LEASE
b. Over rights – Involves intangible
Nature of the Right
property; rights must not be personal or
intransmissible in character so present
or future support cannot be an object of
usufruct. Real right only if, as in
the case of a lease over
5. As to the effectivity or extinguishment: real property, the lease
Always a real right. is registered, or is for
a. Pure –No term or condition; more than one (1) year,
otherwise it is a
b. With a term –There is a period which personal right.
may be either suspensive or resolutory; or
i. Ex die –From a certain day; Creator of Right

ii. In diem –Up to a certain day; or
iii. Ex die in diem – From a certain day
up to a certain day. May not be the owner,
as in the case of a sub-
Owner or his agent.
c. Conditional – Subject to a condition lessor or a
which may be either suspensive or usufructuary.
resolutory.
2023 GOLDEN NOTES
Origin 3. EXTINGUISHMENT OF THE USUFRUCT
Usufruct is extinguished by: (P-L-D-T-E-R-M)

By contract, by way of
exception by law (as in
1. Acquisitive Prescription;
the case of an implied
new lease under Art.
NOTE: The use by a third person and not the
1670, NCC), or when a
By law, contract, will of non-use by the usufructuary. Mere non-use of
builder has built in
testator or by the usufructuary does not terminate the
good faith on the land
prescription. usufruct.
of another a building,
when the land is
XPN: Unless it constitutes renunciation.
considerably worth
more in value than the (Pineda, 2009)
building.
2. Total Loss of the thing;
Extent of Enjoyment NOTE: If the loss is only partial, the usufruct

continues with the remaining part. (Art. 604,
All fruits, uses and Only those particular NCC)
benefits. or specific use.
3. Death of the usufructuary;
Cause
GR: Death of the usufructuary generally ends
A passive owner who the usufruct since a usufruct is constituted
allows the An active owner who essentially as a lifetime benefit for the
usufructuary to enjoy makes the lessee enjoy usufructuary or in consideration of his person.
the object of usufruct
XPNs:
Repairs and Taxes
a. In the case of multiple usufructs, it ends
Usufructuary pays for on the death of the last survivor; (Art. 611,
ordinary repairs and Lessee cannot NCC)
pays for annual constitute a usufruct
charges and taxes on on the property leased. b. In case there is a period fixed based on the
the fruits. number of years that would elapse before
a person would reach a certain age, unless
the period was expressly granted only in
Limitation on the use of property
consideration of the existence of such
person, in which case it ends at the death
Usufructuary may
The lessee cannot of said person; (Art. 606, NCC) or
lease the property to
constitute a usufruct
another but cannot
on the property leased. c. In case the contrary intention clearly
alienate the thing itself.
appears.
(Paras, 2008)
4. Termination of right of the person constituting
the usufruct;
CIVIL LAW
5. Expiration of the period or fulfilment of the extended indefinitely. The usufruct would then be
resolutory condition; perpetual. This is especially invidious in cases
where the usufruct given to a corporation or
NOTE: If the usufructuary is a juridical person, association covers public land. (NHA v. CA, G.R. No.
the term should not exceed 50 years. (Art. 605, 148830, 13 Apr. 2005)
NCC)
Usufruct on a building and/or land concerned
6. Renunciation by the usufructuary; (Art. 603,
NCC) and Rules:
NOTE: It partakes the nature of a condonation 1. If the usufruct is both on the building and the
or donation. It can be made expressly or land but the building is destroyed in any
impliedly as long as done clearly. If done manner whatsoever before the expiration of
expressly, it must conform with forms of the period of usufruct:
donation. Renunciation of usufructuary’s
rights is NOT an assignment of right. It is really a. The usufruct on the building ends, but the
abandonment by the usufructuary of his right usufruct on the land continues
and does not require the consent of the naked (usufructuary is still entitled to the use of
owner but it is subject to the rights of creditors. the land and remaining materials of the
There can be a partial waiver except if it is a building); and
universal usufruct. (De Leon, 2006)
b. If the naked owner wants to rebuild but
7. Merger of the usufruct and ownership in the the usufructuary refuses, the latter
same person who becomes the absolute owner prevails but the use of the land is still his
thereof. (Art. 1275, NCC) for the remainder of the period. (Paras,
2008)
Other causes of termination of usufruct
2. The usufruct is on the building alone (but the
a. Annulment of the act or title constituting building is destroyed before the termination of
the usufruct; the period):
b. Rescission;
c. Expropriation; a. The usufruct on the building ends, but the
d. Mutual withdrawal; usufructuary can still make use of
e. Legal causes for terminating legal whatever materials of the building
usufruct; or remain; and
f. Abandonment or dissolution of juridical
entity (e.g., corporation) granted with b. The usufructuary is entitled to the use of
usufruct before the lapse of the period. the land but the naked owner enjoys
(Pineda, 2009; Paras, 2008) preferential right to its use. (Ibid.)
Usufruct cannot be constituted in favor of a NOTE: While the usufruct on a building does not
town, corporation or association for more than expressly include the land on which it is
50 years constructed, the land should be deemed included,
because there can be no building without land. (De
Any usufruct constituted in favor of a corporation Leon, 2006)
or association cannot be constituted for more than
fifty years. (Art. 605, NCC) A usufruct is meant only
as a lifetime grant. Unlike a natural person, a
corporation or association's lifetime may be
2023 GOLDEN NOTES
Payment of insurance on a building held in 3. If the naked owner alone paid for the
usufruct insurance but there is failure or omission on
the part of the usufructuary to share:
1. If the naked owner and usufructuary share in
the premiums and the property is destroyed: a. The effect is the same as if there was a
sharing, but the usufructuary must
a. If the owner constructs a new building, the reimburse the owner of the usufructuary’s
usufruct continues on the new building: share in the insurance premium.
i. If the cost of the new building is less than 4. If the usufructuary alone pays the insurance
the insurance indemnity, the premium:
usufructuary should get legal interests on
the difference; or a. The insurance indemnity goes to the
usufructuary alone, with no obligation to
ii. If the cost is more than the insurance share it with, nor to give legal interest
indemnity, the usufructuary enjoys the thereon to, the naked owner; but
new building completely with no
obligation to give interest on the b. The usufruct continues on the land for the
additional cost of the naked owner. remaining period (unless usufruct has been
constituted on the building alone). (Art. 608,
b. If the naked owner does not construct a new NCC; Paras, 2008)
building or rebuild, the naked owner gets the
insurance indemnity but he should pay the Rule in case of expropriation of the property
interest thereon to the usufructuary. (Paras,
2008) In case the property held in usufruct is expropriated
for public use:
2. If the naked owner alone pays the insurance
indemnity and the usufructuary refused to 1. If the naked owner alone was given the
share: indemnity, he has the option to:
a. The naked owner gets the whole indemnity a. Replace it with another thing of the same
(with no obligation to give the interest value and of similar condition; or
thereon to the usufructuary);
b. Pay legal interest to usufructuary on the
b. If the usufruct was on the building and the amount of indemnity for the whole period
land, the usufruct continues on the land and of the usufruct, not just the unexpired
the material; or period.
c. If the usufruct was on the building alone, the NOTE: If the owner chooses the latter
naked owner may rebuild, with or without alternative, he shall give security for the
the approval of the usufructuary, but he must payment of interest. (Art. 609, NCC)
pay interest on the value of the land and the
old materials that may have been used. (Art. 2. If both the naked owner and the usufructuary
607, NCC) were separately given indemnity, each owns
the indemnity given to him, the usufruct being
totally extinguished; or
CIVIL LAW
3. If the usufructuary alone was given the

indemnity, he must give it to the naked owner G. EASEMENTS
and compel the latter to return either the
interest or to replace the property. He may
deduct the interest himself if the naked owner
Easements (1995 BAR)
fails to object. (Art. 609, NCC; Paras, 2008)
It is an encumbrance imposed upon an immovable

Effect of bad use of the property held in usufruct
for the benefit of:
GR: Usufruct is not extinguished by bad use of the

1. Another immovable belonging to a different
thing in usufruct which does not cause considerable
owner; or
injury to the naked owner.
2. For the benefit of a community or 1) or more

XPN: If the abuse should cause considerable injury
persons to whom the encumbered estate does
to the owner, the latter may demand delivery to and
not belong by virtue of which the owner is
administration by him, but he will be obliged to pay
obliged to abstain from doing or to permit a
net proceeds to the usufructuary. (Art. 610, NCC)
certain thing to be done on his estate. (Arts. 613
(Paras, 2008)
& 614, NCC)
Rules in case of Multiple Usufructs

Where the easement may be established on any of
several tenements surrounding the dominant
1. If constituted simultaneously, all the
estate, the one where the way is shortest and will
usufructuaries must be alive at the time of the
cause the least damage should be chosen. However,
constitution. The death of the last survivor
if these two circumstances do not concur in a single
extinguishes the usufruct; (Art. 611, NCC)
tenement, the way which will cause the least
damage should be used, even if it will not be the
2. If constituted successively by virtue of a
shortest.
donation, all the donee-usufructuaries must be
living at the time of the constitution- donation
There can be no easement over another easement
of the usufruct; (Art. 756, NCC) and
for the reason that an easement may be constituted
only on a corporeal immovable property. An
3. If constituted successively by virtue of a last
easement, although it is real right over an
will, there should only be two (2) successive
immovable, is not a corporeal right.
usufructuaries, and both must have been alive
at the time of testator’s death. (Paras, 2008)
Easement vs. Servitude
EASEMENT SERVITUDE
Used in civil law
An English law term
countries
Real or personal
Real easement
easement
Burden imposed upon

The right enjoyed
another
(De Leon, 2006)
2023 GOLDEN NOTES
1. CHARACTERISTICS Easement vs. Usufruct
Characteristics of Easements (N-I-C-E-L-I-A-R) EASEMENT USUFRUCT

(2001, 2010 BAR) Where it is constituted
On real property Real or personal
1. A right limited by the Needs of the dominant
owner or estate, without possession; Use granted
Limited to a
2. Inseparable from the estate to which it is
particular or specific Includes all uses and
attached – cannot be alienated independently
use of the servient fruits.
of the estate; (Art. 617, NCC)
estate.
3. Cannot consist in the doing of an act unless the As to right of possession

act is accessory in relation to a real easement; Involves a right of
No possessory right
possession in an
4. Involves two (2) neighboring Estates: the over an immovable.
immovable or movable.
dominant estate to which the right belongs and
As to effect of death
the servient estate upon which an obligation
rests; Not extinguished by
Extinguished by death of
death of dominant
usufructuary.
5. A Limitation on the servient owner’s rights of owner.
ownership; Nature of right
6. Indivisible or not affected by the division of the Real right whether or Real right whether or not
estate between two or more persons; (Art. 618, not registered. registered.
NCC)
As to transmissibility
7. It is enjoyed over Another immovable never on
Transmissible Transmissible
one’s own property; and
How it may be constituted
8. A Real right but will affect third persons only Cannot be constituted on
when registered. (De Leon, 2006) May be constituted in
an easement but it may
favor, or, burdening,
be constituted on the
Essential Qualities of Easements a piece of land held in
land burdened by an
usufruct.
easement.
1. Incorporeal;
2. Imposed upon corporeal property;
Q: Can there be an easement over a usufruct?
3. Confers no right to a participation in the profits
arising from it;
A: NO. There can be no easement over a usufruct.
4. Imposed for the benefit of corporeal property;
Since an easement may be constituted only on a
5. Has two distinct tenements: dominant and
corporeal immovable property, no easement may
servient estate; and
be constituted on a usufruct which is not a
6. Cause must be perpetual.
corporeal right.
Q: Can there be a usufruct over an easement?
CIVIL LAW
A: NO. There can be no usufruct over an easement. 2. As to the manner of exercise

While a usufruct may be created over a right, such
right must have an existence of its own a. Continuous – Their use may or may not
independent of the property. A servitude cannot be be incessant, without the intervention of
the object of a usufruct because it has no existence any act of man. (e.g., easement of
independent of the property to which it attaches. drainage); (Art. 615, NCC) and
Q: Is there such thing as judicial easement? NOTE: For acquisitive prescription, the
easement of aqueduct and easement of
A: NO. When the court says that an easement exists, light and view are considered continuous.
it is not creating one. For, even an injunction cannot
be used to create one as there is no such thing as a b. Discontinuous – Used at intervals and
judicial easement. The court merely declares the depend upon the acts of man. (e.g.,
existence of an easement created by the parties. (La easement of right of way). (Ibid.)
Vista Association v. CA, G.R. No. 95252, 05 Sept. 1997)
3. As to whether their existence is indicated
Parties to an Easement
a. Apparent – Made known and continually
1. Dominant estate – Refers to the immovable kept in view by external signs that reveal
for which the easement was established; and the use and enjoyment of the same; (Art.
2. Servient estate – the estate which provides the 615, NCC) and
service or benefit. (Pineda, 2009)
NOTE: By way of exception, the easement
2. KINDS OF EASEMENTS of aqueduct is always apparent, whether
or not it can be seen. (Art. 646, NCC)
1. As to recipient of the benefit

b. Non-apparent – They show no external
indication of their existence. (Art. 615,
a. Real (or predial) – The easement is in
NCC)
favor of another immovable (Art. 613,
NCC); and
4. As to the right given
NOTE: It requires two distinct

a. Right to partially use the servient estate;
immovables belonging to different
owners to which it relates. (Pineda, 2009)
b. Right to get specific materials or objects
from the servient estate;
b. Personal – The easement is in favor of a
community, or of one or more persons to
c. Right to participate in ownership; and
whom the encumbered estate does not
(e.g., easement of right of way for passage
d. Right to impede or prevent the
of livestock). (Art. 614, NCC)
neighboring estate from performing a
specific act of ownership. (Paras, 2008)
NOTE: In personal servitude, the person
in whose favor the easement is
5. As to source
constituted need not to be the owner of
any estate and does not require a
a. Legal – Those created by law for public
dominant estate because the person in
use or private interests; (Arts. 619, 637-
whose favor the easement is constituted
687, NCC)
need not to be the property owner.
2023 GOLDEN NOTES
b. Voluntary - constituted by will or Legal Easements

agreement of the parties or by testator;
(Art. 619, NCC) and Legal easements are those imposed by law having
for their object either public use or the interest of
NOTE: Like any other contract, a private persons. (Art. 634, NCC) They shall be
voluntary easement (of right of way) governed by the special laws and regulations
could be extinguished only by mutual relating thereto, and in the absence thereof, by the
agreement or by renunciation of the Civil Code.
owner of the dominant estate. (La Vista
Association v. CA, G.R. No. 95252, 05 Sept. Kinds of Legal Easements
1997)
1. Public legal easement is for public or
c. Mixed – Created partly by agreement and communal use, primarily governed by special
partly by law. laws and regulations, and Arts. 634 to 687 of
the NCC; and
6. As to the duty of the servient owner:
2. Private legal easement is for the interest of
a. Positive – Imposes upon the owner of the private persons or for private use, primarily
servient estate the obligation of allowing governed by:
something to be done or doing it himself;
(e.g., right of way – imposes the duty to a. Agreement of the parties provided they
allow the use of said way); and are neither prohibited by law nor
prejudicial to third persons;
b. Negative – Prohibits the owner of the
servient estate from doing something b. In default, general or local laws and
which he could lawfully do if the easement ordinances for the general welfare; or
did not exist. (e.g., easement of light and
view – where the owner is prohibited from c. In default of a and b, Title VII, Arts. 613-
obstructing the passage of light). (Art. 616, 687 of the NCC. (De Leon, 2006)
NCC)
Legal Easement Not Dependent Upon Consent
Q: How is an easement of light and view
classified? Is it a positive or a negative The existence of a legal easement does not depend
easement? upon the consent of the servient owner or owners.
A: The answer is it may be both; an easement of light Easements established by law in the interest of
and view may either be positive or negative. As a private persons or for private use shall be
general rule, an easement of light and view is a governed by the provisions of this Title, without
positive one if the window or opening is situated in prejudice to the provisions of general or local laws
a party wall, while it is a negative one if the window and ordinances for the general welfare.
or opening is thru one's own wall, i.e., thru a wall of
the dominant estate. However, even if the window These easements may be modified by agreement of
is on one's own wall, still the easement would be the interested parties, whenever the law does not
positive if the window is on a balcony or projection prohibit it, or no injury is suffered by a third
extending over into the adjoining land. (Sps. Garcia person. (Art. 636, NCC)
v. Santos, G.R. No. 228334, 17 June 2019)
CIVIL LAW
Voluntary Easement When consent is necessary
An easement is voluntary when it is established by The owner of a property in usufruct may create
the will of the owners. (Art. 619, NCC) easements thereon without the consent of the
usufructuary provided the rights of the latter are
Persons Who May Constitute Voluntary not impaired. (Art. 689, NCC)
Easement
NOTE: Consent of both the naked owner and the
Voluntary easements may be constituted by the beneficial owner is necessary for the creation of
owner possessing the capacity to encumber perpetual voluntary easement. (Art. 690, NCC)
property. If there are various owners, all must
consent; but consent once given is not revocable. Expenses for Work Required for Use and
Preservation of the Easement
NOTE: Third persons are not bound by a voluntary
easement unless the same is duly recorded with the If the owner of the servient estate has bound
proper authorities. himself to pay for the cost of the work needed for
the use and preservation of the easement, and
Q: For whose favor are voluntary easements wants to free himself from such obligations, he may
established? simply renounce or abandon his property in favor
of the owner of the dominant state.
A:
1. Praedial servitudes: Q: Mr. Bong owns several properties in Pasig
City. He decided to build a condominium named
a. For the owner of the dominant estate (Art. Flores de Manila in one of his lots. To fund the
613, NCC); and project, he obtained a loan from the National
Bank (NB) secured by a real estate mortgage
b. For any other person having any juridical over the adjoining property which he also
relation with the dominant estate, if the owned.
owner ratifies it.
During construction, he built three pumps on
2. Personal servitudes: the mortgaged property to supply water to the
condominium. After one year, the project was
a. For anyone capacitated to accept. completed, and the condominium was turned
over to the buyers. However, Mr. Bong failed to
Q: How are voluntary easements created and pay his loan obligation to NB. Thus, NB
what are the governing rules for such? foreclosed the mortgaged property where the
pumps were installed. During the sale on public
A: auction of the mortgaged property, Mr. Simon
1. If created by title (contract, will, etc.), the title won in the bidding. When Mr. Simon attempted
governs; and to take possession of the property, the
2. If acquired by prescription, it is governed by condominium owners, who in the meantime
the manner or form of possession. constituted themselves into Flores de Manila
Inc. (FMI), claimed that they have earlier filed a
NOTE: In both cases, the NCC will only apply case for the declaration of the existence of an
suppletorily. easement before the RTC of Pasig City and
prayed that the easement be annotated in the
title of the property foreclosed by NB. FMI
further claimed that when Mr. Bong installed
the pumps in his adjoining property, a
2023 GOLDEN NOTES
voluntary easement was constituted in favor of 4. Easement of Light and view;

FMI. Will the action prosper? (2014 BAR)
A: NO. There was no voluntary easement in this

case because at the time the water pumps were
constructed, the subject lot and the condominium
belong to the same person. No one can have an
easement over his own property. Even of the
assumption that an easement was created in favor
of FMI that alone will not defeat the right of the
mortgagee to enforce the security if the debtor
defaults. (Bogo- Medellin v. CA, G.R. No. 124699, 31
July 2003)
Different Legal Easements (W-I-N-D-P-L-W-S)

5. Drainage of Building;
1. Easement relating to Waters;
2. Easement relating to right of Way;
6. Intermediate distances and works for certain

construction and plantings;
3. Easement of Party wall;
7. Easement against Nuisance; and
CIVIL LAW
8. Easement relating to lateral and Subjacent NOTE: Art. 637 has already been superseded by Art.
support. 50 of P.D. 1067 otherwise known as the Water Code
of the Philippines.
Lateral Support
Q: Spouses Ermino are residents of Alco Homes,
a subdivision located beside Golden Village
Subdivision (Golden Village) in Barangay
Carmen, Cagayan de Oro City. On days prior to
12 Aug. 1995 and 10 Sept. 1995, there was
continuous heavy rain which caused a large
volume of water to fall from the hilltop
subdivision to the subdivisions below. The
Subjacent Support volume of water directly hit Spouses Ermino's
house and damaged their fence, furniture,
appliances and car. Spouses Ermino filed a
complaint for damages against E.B. Villarosa, the
developer of Hilltop City Subdivision, and
GVHAI. Spouses Ermino blamed E.B. Villarosa
for negligently failing to observe Department of
Environment and Natural Resources rules and
regulations and to provide retaining walls and
other flood control devices which could have
prevented the softening of the earth and
EASEMENTS RELATING TO WATERS consequent inundation. They likewise claimed
Arts. 637-648 that GVHAI committed a wrongful act in
constructing the concrete fence which diverted
1. Natural drainage; (Art. 637, NCC) the flow of water to Alco Homes, hence, making
2. Drainage of buildings; (Art. 674, NCC) it equally liable to Spouses Ermino.
3. Easement on riparian banks for navigation,
floatage, fishing, salvage, and tow path; (Art. On the other hand, E.B. Villarosa argued that the
638, NCC) location of the house of Spouses Ermino is
4. Easement of a dam; (Art. 639 and 647, NCC) located at the lower portion of the Dagong Creek
5. Easement for drawing water or for watering and is indeed flooded every time there is a heavy
animals; (Art. 640-641, NCC) downpour, and that the damage was further
6. Easement of aqueduct; (Art. 642- 646, NCC) and aggravated by GVHAI's construction of the
7. Easement for the construction of a stop lock or concrete fence. It contended, however, that the
sluice gate. (Art. 647, NCC) damage was due to a fortuitous event.
Meanwhile, GVHAI averred that the
EASEMENT OF NATURAL DRAINAGE construction of the concrete fence was in the
Art. 637. NCC exercise of its proprietary rights and that it was
done in order to prevent outsiders from using
Scope (2002 BAR) the steel grille from entering the subdivision. It
likewise asserted that they "should not be made
Lower estates are obliged to receive the waters inutile and lame-duck recipients of whatever
which naturally and without the intervention of waters and/or garbage" that come from Alco
man descend from higher estates, as well as the Homes. GVHAI attributed sole liability on E.B.
stones or earth which they carry with them. (Art. Villarosa for having denuded Hilltop City
637, NCC) Subdivision and for its failure to provide
2023 GOLDEN NOTES
precautionary measures. Is GVHAI responsible Duties of Servient Estate

for the damage to spouses Ermino’s properties?
The owner cannot construct works that would
A: YES. Based on the ocular inspection conducted impede the easement (Art. 637, NCC) but he may
by the RTC of the Hilltop City Subdivision, the area regulate or control the descent of water.
was bulldozed and the hills were flattened. There
were no retaining walls constructed to prevent the Duties of Dominant Estate
water from flowing down and the soil was soft. This
flattening of the area due to bulldozing changed the 1. He cannot construct works which will increase
course of water, which ultimately led to the passing the burden, but he may construct works
of said water to the house of Sps. Ermino. preventing erosion; and
Thus, the bulldozing and construction works done 2. They must compensate the owners of the
by E.B. Villarosa, not to mention the denudation of servient estates if the waters are result of an
the vegetation at the Hilltop City Subdivision, made overflow from irrigation dams, or the result of
Alco Homes and Golden Village's obligation, as artificial descent done by man and damages
lower estates, more burdensome than what the law caused by reason thereof. (Paras, 2008)
contemplated. Lower estates are only obliged to
receive water naturally flowing from higher estates Prescription of easement of natural drainage
and such should be free from any human
intervention. In the instant case, what flowed from The easement of natural drainage prescribes by
Hilltop City Subdivision was not water that non-use for ten (10) years. (Paras, 2008)
naturally flowed from a higher estate. The
bulldozing and flattening of the hills led to the Indemnity in easement of natural drainage
softening of the soil that could then be easily carried
by the current of water whenever it rained. Thus, Art. 637 of the NCC, which provides for the easement
Alco Homes and Golden Village are not anymore of natural drainage, does not speak of any
obligated to receive such waters and earth coming indemnity. It follows that no indemnity is required
from Hilltop City Subdivision. as long as the conditions laid down in the article are
complied with. (Paras, 2008)
Therefore, it is ineluctably clear that E.B. Villarosa is
responsible for the damage suffered by Sps. Ermino. EASEMENT ON RIPARIAN BANKS FOR
E.B. Villarosa should have provided for the NAVIGATION, FLOATAGE, FISHING, SALVAGE,
necessary measures such as retaining walls and AND TOW PATH
drainage so that the large volume of water ART. 638, NCC
emanating from it would not unduly cause
inconvenience, if not injury, to the lower estates. The banks of rivers and streams and the shores of
E.B. Villarosa's negligence is the proximate cause of the seas and lakes throughout their entire length
the injury. Had it only exercised prudence, and within a zone of three meters in urban areas, 20
reasonable care and caution in the construction of meters in agricultural areas, and 40 meters in forest
Hilltop City Subdivision, then Spouses Ermino areas along their margins are subject to the
would not have experienced the injury that they easement of public use in the interest of recreation,
suffered. (Sps. Ermino v. Golden Village Homeowners navigation, floatage, fishing and salvage.
Association, Inc., G.R. No. 180808, 15 Aug. 2018)
No person shall be allowed to stay in this zone
bigger than what is necessary for recreation,
navigation, floatage, fishing or salvage or to build
structures of any kind. (Art. 51, P.D. 1067)
CIVIL LAW
Q: Are “foreshore lands” included in the term Requisites for drawing water or for watering of
“seashores” which are subject to the easement of animals
public use in the interest of recreation,
navigation, floatage, fishing and salvage? 1. Owner of the dominant estate has the capacity
to dispose of the water;
A: Yes. Foreshore land is that “strip of land that lies 2. The water is sufficient for the use intended;
between the high and low water marks and that is 3. Proposed right of way is the most convenient
alternatively wet and dry according to the flow of and the least onerous to third persons; and
the tide.” Foreshore land must be within the three- 4. Pay indemnity to the owner of the servient
meter seashore provided under Article 51 of PD estate. (Art. 643, NCC)
1067 as it is logically adjacent to the sea since it lies
between the high and low water marks. (People v. NOTE: The absence of any one of these
Constantino, G.R. No. 251636, 14 Feb. 2022, as requirements will prevent the imposition of the
penned by J. Hernando) easement of aqueduct on the intervening estates.
(Pineda, 2009)
EASEMENT OF A DAM
ARTS. 639 & 647, NCC Easement of right of way does not necessarily
include easement of aqueduct
A person may establish the easement of abutment
or of a dam provided that: If A was granted a right of way by B which he (A)
uses in entering and exiting from his tenement, A
1. The purpose is to divert or take water from a has no presumed right to dig trenches and lay
river or brook, or to use any other continuous pipelines for conducting water to his tenement. (San
or discontinuous stream; Rafael Ranch Co. v. Rogers, Co., 154 C 76, 21 July 1908)
2. It is necessary to build a dam;
3. The person to construct it is not the owner of EASEMENT OF AQUEDUCT
the banks or lots which must support it; and Arts. 642-646, NCC
4. Payment of proper indemnity is made.
The easement of aqueduct, for legal purposes, is
He must seek the permission of the owner and in considered continuous and apparent even though
case of latter’s refusal, he must secure authority the flow of water may not be continuous, or its use
from the proper administrative agency. depends upon the needs of the dominant estate or
upon a schedule of alternate days or hours. (Art. 646,
EASEMENT FOR DRAWING WATER OR FOR NCC)
WATERING ANIMALS
Arts. 640-641, NCC NOTE: Easement of aqueduct is not acquirable by
prescription after 10 years because although it is
This is a combined easement for drawing of water continuous and apparent in character, under the
and right of way. Water Code of the Philippines (P.D. 1067), all waters
belong to the State; therefore, they cannot be the
Requisites for easement for watering cattle subject of acquisitive prescription. (Jurado, 2011)
1. It must be imposed for reasons of public use; It is an easement which gives right to make water
2. It must be in favor of a town or village; and flow through intervening estates in order that one
3. Indemnity must be paid. (Art. 640, NCC) may make use of said water. However, unlike the
easement for drawing water or for watering
NOTE: The right to make the water flow through or animals, the existence of the latter does not
under intervening or lower estates. necessarily include the easement of aqueduct.
2023 GOLDEN NOTES
Requisites for easement of aqueduct stopgap or sluice gate can be undertaken. (Sta.
Maria, 2021)
1. Indemnity must be paid to the owners of
intervening estates and to the owners of lower Q: The original developer of Happy Glen Loop
estates upon which waters may filter or (HGL) loaned from T. P. Marcelo Realty
descend; Corporation. HGL failed to settle its debts so he
assigned all his rights to Marcelo over several
NOTE: The amount usually depends on parcels of land in the subdivision. Marcelo
duration and inconvenience caused. represented to lot buyers that a water facility is
available in the subdivision. Marcelo sold the lot
2. If for private interests, the easement cannot be to Liwag who subsequently died. The wife of
imposed on existing buildings, courtyards, Liwag demanded the removal of the overhead
annexes, out- houses, orchards or gardens but water tank over the parcel of land contending
can be on other things, like road, provided no that its existence is merely tolerated. HGL
injury is caused to said properties; and Homeowners Association refused the demand
contending that they have used continuously the
3. There must be a proof: facility for more than 30 years. Is there an
established easement for water facility in the
a. That the owner of the dominant estate can lot?
dispose of the water;
A: YES. The water facility is an encumbrance on the
b. That the water is sufficient for the use lot of the subdivision for the benefit of the
which it is intended; community. It is continuous and apparent, because
it is used incessantly without human intervention,
c. That the proposed course is the most and because it is continually kept in view by the
convenient and least onerous to third overhead water tank, which reveals its use to the
persons and the servient estate; and public. The easement of water facility has been
voluntarily established either by Marcelo, the
d. That a proper administrative permission subdivision owner and the original developer of the
has been obtained. (Paras, 2008) subdivision. For more than 30 years, the facility was
continuously used as the residents’ sole source of
Right of the owner of the servient estate to fence water. (Liwag v. Happy Glen Loop Homeowners
Association, Inc., G.R. No. 189755, 04 July 2012)
The easement of aqueduct does not prevent the
owner of the servient estate from closing or fencing EASEMENT OF RIGHT OF WAY
it, or from building over the aqueduct in such Arts. 649-657
manner as not to cause the owner of the dominant
estate any damage or render necessary repairs and Right of Way (1996, 2005, 2010, 2022 BAR)
cleanings impossible. (Art. 645, NCC)
Easement of right of way is the right granted to a
EASEMENT FOR THE CONSTRUCTION OF A person or class of persons to pass over the land of
STOP LOCK OR SLUICE GATE another by using a particular pathway therein, to
ART. 647, NCC reach the former’s estates, which have no adequate
outlet to a public highway subject, however, to
The owner of the dominant estate may demand that payment of indemnity to the owner of the land
owner of the bank permit its construction. Damages burdened by the right. (Pineda, 2009)
must first be paid to the owners of the banks and to
the other irrigators before the construction of the It may refer either to the easement itself, or simply,
to the strip of land over which passage can be done.
CIVIL LAW
(Paras, 2008) NOTE: If the easement is not pre-existing and is

sought to be imposed only after the land has been
Q: How is title over the use of an easement of registered under the Land Registration Act, proper
right of way acquired? expropriation proceedings should be had, and just
compensation paid to the registered owner.
A: Generally, title over the use an easement of right (Eslaban v. Vda. De Onorio, G.R. No. 146062, 28 June
of way is acquired voluntarily (by contract 2001)
between the two estates) or legally (by filing a case
in court for its conferment). (Spouses Fernandez v. Requisites for Easement on Right of Way
Spouses Delfin, G.R. No. 227917, 17 Mar. 2021). (P-O-O-N-D-I) (1996, 2005, 2010, 2022 BAR)
Q: May the easement of right of way be acquired 1. The easement must be established at the point
by prescription? least Prejudicial to the servient estate; (Art.
649, NCC)
A: NO. Easement of right of way cannot be acquired 2. Claimant must be an Owner of enclosed;
by prescription because it is discontinuous or 3. There must be no adequate Outlet to a public
intermittent. (Ronquillo v. Roco, G.R. No. L- 10619, highway; (Art. 649, (1), NCC)
28 Feb. 1958) 4. The right of way must be absolutely Necessary
not mere convenience;
Q: Should easement be first annotated on the 5. The isolation must not be Due to the claimant’s
title before it may be acknowledged to exist? own act; (Art. 649, NCC) and
6. There must be payment of proper Indemnity.
A: NO. An easement need not be annotated on the
title before it may be acknowledged to exist. In one Least prejudicial to the servient estate (1996,
case, the properties had previously belonged to one 2000, 2005, 2010 BAR)
owner before being divided among the owner's
heirs. A portion of one of the properties was used “Least prejudicial” in determining the right of way
as an easement for another property, and the means it is the shortest way and the one which will
successors-in-interest were aware of the easement cause the least damage to the property to the
even if there was no annotation on the title. This servient estate in favor of the dominant estate.
Court held that the successors-in-interest were
bound by the easement of right of way. It is an Q: Lots A and B are owned by Demit while Lot C
established principle that actual notice or is owned by Dayum. Lot C has an existing right
knowledge is as binding as registration. (Sps. of way. After inspection of the area, it has been
Fernandez v. Sps. Delfin, G.R. No. 227917, 17 Mar. found out that a fence and portion of the
2021). residential house owned by Demit have
encroached a part of Dayum’s right of way.
Q: What kind of servitude in favor of the Dayum demanded that Demit pay for the area
government is a private owner required to encroached or demolish the wall fence and
recognize? portion of the house which have been
encroaching. Demit contends that as owner of
A: The only servitude which he is required to Lots A and B, he is equally entitled to the road
recognize in favor of the government are: of right of way and proposed to buy the portion.
Is the contention of Demit correct?
1. The easement of a public highway;
2. Private way established by law; or A: NO. As the owner of the servient estate, Dayum
3. Any government canal or lateral that has been retained ownership of the road right of way even
pre-existing at the time of the registration of assuming that said encumbrance was for the
the land. benefit of lots of Demit. The latter could not claim
2023 GOLDEN NOTES
to own even a portion of the road right of way Adequate outlet

because Art. 630 of the NCC expressly provides that
the owner of the servient estate retains ownership The convenience of the dominant estate has never
of the portion on which the easement is established been the gauge for the grant of compulsory right of
and may use the same in such manner as not to way. To be sure, the true standard for the grant of
affect the exercise of the easement. (Sps. Mercader the legal right is "adequacy." Hence, when there is
v. Sps. Bardilas, G.R. No. 163157, 27 June 2016) already an existing adequate outlet from the
dominant estate to a public highway, as in this case,
Q: What if the property is not the shortest way even when the said outlet, for one reason or
but will cause the least damage to the servient another, be inconvenient, the need to open up
estate? another servitude is entirely unjustified. (Dichoso v.
Marcos, G.R. No. 180282, 11 Apr. 2011)
A: The way which will cause the least damage
should be used even if it will not be the shortest. Q: The coconut farm of Federico is surrounded
The easement of right of way shall be established by the lands of Romulo. Federico seeks a right
at the point least prejudicial to the servient estate of way through a portion of the land of Romulo
and where the distance from the dominant estate to bring his coconut products to the market. He
to a public highway is the shortest. In case of has chosen a point where he will pass through a
conflict, the criterion of least prejudice prevails housing project of Romulo. The latter wants
over the criterion of shortest distance. him to pass another way which is 1 km longer.
Who should prevail? (2000 BAR)
Mere Inconvenience is Not a Justification for a
Right of Way A: Romulo should prevail. Under Art. 650 of the
NCC, the easement of right of way shall be
Thus, it was held that where the petitioner could established at the point least prejudicial to the
have access to Sucat Road (Parañaque) through the servient estate and where the distance from the
Lombos Subdivision from which he acquired his lot dominant estate to a public highway is the shortest.
and not from Gatchalian Realty Inc., he cannot In case of conflict, the criterion of least prejudice
claim any right of way from the latter. (Ramos v. prevails over the criterion of shortest distance.
Gatchalian Realty, Inc., G.R. 75905, 12 Oct. 1987) Since the route chosen by Federico will prejudice
the housing project of Romulo, Romulo has the
Claimant Must be an Owner of Enclosed right to demand that Federico pass another way
Immovable or With Real Right even though it will be longer.
Easement is a real right which may be availed Q: David owns a subdivision which does not
against every person who may happen, for the time have access to the highway. When he applied
being, to have any interest in the thing, or, as for a license to establish the subdivision, he
adverse possessor, to exercise a right of dominion represented that he will purchase a rice field
over it. located between his land and the highway, and
develop it into an access road. However, when
Since easement is constituted on the corporeal the license was granted, he did not buy the rice
immovable property of another person, an field, which remained unutilized. Instead, he
acknowledgment of the easement by the servient chose to connect his subdivision with the
estate is an admission that the property belongs to neighboring subdivision of Nestor, which has
another. (Rabuya, 2008) access to the highway. When Nestor and David
failed to arrive at an agreement as to
compensation, Nestor built a wall across the
road connecting with David’s subdivision. Is
David entitled to an easement of right of way
CIVIL LAW
through the subdivision of Nestor which he to grant a right of way without indemnity. (Art.
claims to be the most adequate and practical 653 (2), NCC)
outlet to the highway?
NOTE: If it is the land donated that is surrounded by
A: NO. The isolation of his subdivision was due to the estate of the donor or grantor, although the
his own act or omission because he did not develop latter is obliged to grant a right of way, he can
an access road to the rice fields which he was demand the required indemnity. (Art. 652, NCC)
supposed to purchase according to his own
representation when he applied for a license to Granting of Right of Way Without Indemnity
establish the subdivision. (Floro v. Llenado, G.R. No.
75723, 02 June 1995) When the vendor sells a parcel of land and this land
is surrounded by other estates of said vendor and
When adequate outlet to a public highway is is without access to a public highway, the vendor is
available through water obliged to grant a right of way without demanding
an indemnity.
If the outlet to a highway is through water, like a
river, lake, or sea, and the same is not dangerous to This rule equally applies to an exchange of
cross nor do they pose grave inconvenience, the property, or partition of property in co- ownership.
right of way should not be granted. (Paras, 2008) The exchanger, or the co-owner shall have the
same obligation as the vendor. (Pineda, 2009)
If the waterway is dangerous and to construct a
bridge over it is too expensive, it is as if there is no Measurement for the Easement of Right of Way
available outlet to the highway. In which case, right
of way is grantable. The width of the easement shall be that which is
sufficient for the needs of the dominant estate. (Art.
Determination of proper indemnity to the 651, NCC)
servient estate
Q: Can a dominant owner demand a driveway
If the passage is: for his automobile?
1. Continuous and permanent – The indemnity A: YES, due to necessity of motor vehicles in the
consists of the value of the land occupied present age.
plus the amount of damages caused to the
servient estate; and Liability for Repairs and Taxes
2. Temporary – Indemnity consists in the 1. As to repairs, the dominant owner is liable for
payment of the damage caused. (De Leon, 2006) necessary repairs; and
When indemnity is not required 2. As to proportionate share of the taxes, it shall

be reimbursed by said owner to the proprietor
1. When a piece of land acquired by sale, of the servient estate. This applies only to
exchange or partition is surrounded by other permanent easements. (Art. 654, NCC)
estates of the vendor, exchanger or co-owner.
In such case he shall be obliged to grant a right Special Causes of Extinguishment of Right of
of way without indemnity (Art. 652, NCC); or Way
2. When a piece of land acquired by donation 1. The opening of a public road giving access to
surround the estate of the donor or grantor. In isolated estate; or
such case, the donee or grantee shall be obliged
2023 GOLDEN NOTES
2. When the dominant estate is joined to another receiving payment of the proper indemnity for the
estate (such as when the dominant owner damage caused him. (Art. 656, NCC)
bought an adjacent estate) which is abutting a
public road, the access being adequate and Q: A commercial and residential building project
convenient. (Art. 655, NCC) located at EDSA corner Fordham Street in Wack
Wack Village, Mandaluyong City, was proposed
Both cases must substantially meet the needs of the by AMALI. AMALI notified WWRAI (a registered
dominant estate. Otherwise, the easement may not homeowners' association of Wack Wack Village)
be extinguished. of its intention to use Fordham Street as an
access road and staging area of the project. As
NOTE: Said extinguishment is NOT automatic. AMALI received no response from WWRAI, the
There must be a demand for extinguishment former temporarily enclosed the job site and set
coupled with tender of indemnity by the servient up a field office along Fordham Street. WWRAI
owner. (Paras, 2008) claimed, however, that AMALI already
converted part of the said street as barrack site
Q: Emma bought a parcel of land from and staging area. All subsequent attempts of
Equitable-PCI Bank, which acquired the same WWRAI to remove the said field office proved
from Felisa, the original owner. Thereafter, futile. AMALI then filed a petition before the
Emma discovered that Felisa had granted a RTC, wherein it seeks the temporary use of
right of way over the land in favor of the land of Fordham Street belonging to WWRAI as an
Georgina, which had no outlet to a public access road to AMALI's construction site of its
highway, but the easement was not annotated AMA Tower project pursuant to Art. 656 of the
when the servient estate was registered under NCC, and to establish a permanent easement of
the Torrens system. Emma then filed a right of way in its favor over a portion of
complaint for cancellation of the right of way, Fordham Street pursuant to Art. 649 of the NCC.
on the ground that it had been extinguished by
such failure to annotate. How would you decide The RTC granted the writ of preliminary
the controversy? (2001 BAR) mandatory injunction "directing WWRAI to
allow AMALI to use Fordham Street through a
A: THE COMPLAINT FOR CANCELLATION OF temporary easement of right of way." The CA
EASEMENT OF RIGHT OF WAY MUST FAIL. The granted WWRAI's application for a temporary
failure to annotate the easement upon the title of restraining order, and, accordingly, AMALI was
the servient estate is not among the grounds for commanded to cease and desist from further
extinguishing an easement. (Art. 631, NCC). committing the act complained of, which is the
Easements are inseparable from the estate to construction of the commercial and residential
which they actively or passively belong. Once it condominium project located along EDSA
attaches, it can only be extinguished under Art. corner Fordham Street in Wack Wack Village. Is
631, and they exist even if they are not stated or AMALI entitled to a temporary easement of right
annotated as an encumbrance on the Torrens title of way?
of the servient estate. (Art. 617, NCC)
A: NO. Art. 656 of the NCC provides that it can be
Temporary Easement of Right of Way granted only after the payment of the proper
indemnity by AMALI, the owner of the dominant
If it be indispensable for the construction, repair, estate; and only if AMALI has established that the
improvement, alteration, or beautification of a easement is indispensable for the construction of its
building, to carry materials through the estate of AMA Tower Project. Art. 656 of the NCC requires
another, or to raise thereon scaffolding or other proof of indispensability and receipt of payment of
objects necessary for the work, the owner of such the proper indemnity for the damage caused by the
estate shall be obliged to permit the act, after owner of the dominant estate before the owner of
CIVIL LAW
the servient estate can be compelled to grant a Q: Is the easement of party wall really an
temporary easement of right of way. AMALI easement or is it a case of co-ownership?
presented no witnesses to establish these
prerequisites. The temporary easement of right of A: CO-OWNERSHIP. While it is called an easement
way under Art. 656, similar to the permanent by the law, the law in some articles refers to it as a
easement of right of way pursuant to its Arts. 649 case of co-ownership or part-ownership. (Arts. 662,
and 650 of the NCC, can only be granted after proof 665, and 666, NCC) The truth is that, it is a
of compliance with the prerequisites set forth in the compulsory kind of co-ownership (FORGED
articles duly adduced during a full-blown trial (AMA INDIVISION) where the shares of each owner
Land, Inc. v. Wack Wack Residents' Association, Inc., cannot be separated physically (otherwise the wall
G.R. No. 202342, 19 July 2017) would be destroyed), although said shares may in a
sense be materially pointed out. Thus, each co-
Easement of Right of Way for the Passage of owner owns the half nearest to him. (Paras, 2008)
Livestock or sevidumbres pecurias
Presumption of the Existence of an Easement of
Governed by the ordinances and regulations Party Wall
relating thereto and, in their absence, by the usages
and customs of the place. GR: The existence of an easement of party wall is
presumed.
Maximum width:
XPN: unless there is a title, or exterior sign, or proof
1. Animal path – 75 meters; to the contrary:
2. Animal trail – 37 meters and 50 centimeters;
and 1. In dividing walls of adjoining buildings up to
3. Cattle – 10 meters (unless to the old Civil Code, the point of common elevation;
vested rights has been acquired to a greater 2. In dividing walls of gardens or yards situated
width). (Paras, 2008; Art. 657, NCC) in cities, towns, or in rural communities; or
3. In fences, walls and live hedges dividing rural
EASEMENT OF PARTY WALL lands. (NCC, Art. 659)
Arts. 658-666
Q: When is there an exterior sign contrary to the
The easement of party wall is also called existence of easement of a party wall?
servidumbre de medianera.
It is understood that there is an exterior sign,
Party wall defined contrary to the existence of easement of a party wall
whenever
Is a wall erected on the line between the adjoining
properties belonging to different persons, for the 1. There is a window or opening in the dividing
use of both estates. (Pineda, 2009) wall of the buildings;
Q: What governs easement of party wall? 2. Dividing wall is on one side straight and plumb
on all its facement, and on the other, it has
A: the following governs easement of party wall: similar conditions on the upper part but the
lower part slants or projects outward;
1. NCC;
2. Local ordinances and customs; and 3. Entire wall is built within the boundaries of one
3. The rules co-ownership. (NCC, 658) of the estates;
2023 GOLDEN NOTES
4. The dividing walls bears the burden of the XPN: If a part owner renounces his part ownership
binding beams, floors and roof frame of one of on the party wall. The renunciation must be
the buildings, but not those of the others; absolute and total because the easement of party
wall is indivisible.
5. The dividing wall between courtyards, gardens
and tenements is constructed in such a way that NOTE: The owner of the building or structure
the coping sheds the water upon only one of supported by a party wall who desires to demolish
the estates; such building or structure, may RENOUNCE his part
ownership of the wall. The cost of all repairs and
6. The dividing wall, being built by masonry, had works necessary to prevent any damage which the
stepping stones, which at certain intervals demolition may cause to the party wall on this
project from the surface of one side only, but occasion shall be borne by him.
not on the other; or
EASEMENT OF LIGHT AND VIEW
7. The lands enclosed by fences or live hedges Arts. 667-673
adjoin others which are not enclosed.
Light and View (2022 BAR)
NOTE: In all these cases, the ownership is deemed
to belong exclusively to the owner of the property No part-owner may, without the consent of the
which has in its favor the presumption based on others, open through the party wall any window or
any of these signs. (NCC, 660) aperture of any kind. (Art. 667, NCC)
Right to Increase Height of Party Wall A window or opening in the dividing wall of
buildings is an exterior sign which rebuts the
Every part-owner of a party has the right to presumption that the wall is a party wall ; one part-
increase the height of the party wall subject to the owner may not, therefore, make any window or
following conditions: opening of any kind through a party wall without
the consent of others. (De Leon, 2006)
1. The same shall be done at his expense;
1. Easement of light — “Jus luminum” The
2. He shall pay for any damage which may be opening is for the purpose of admitting light
caused by his work, even though such damage and not for viewing as in the case of small
may be temporary; and windows, not more than 30 cm. square, at the
height of the ceiling joist, the purpose of which
3. If the party wall cannot bear the increased is to admit light, and a little air, but not view;
height, the owner desiring to raise it shall be and (Paras, 2008)
obliged to reconstruct it at his own expense, if
it be necessary to make it thicker, he shall give 2. Easement of view — “Servidumbre prospectus”
space required from his own land. (664, NCC) The opening is for the purpose of viewing as in
the case of full or regular windows overlooking
Repairs and Maintenance of a Party Wall the adjoining estate. Incidentally, although the
principal purpose here is view, the easement of
GR: The expenses for construction and repairs of light is necessarily included, as well as the
party walls shall be shouldered by all the owners of easement of altius non tollendi not to build
the party wall. higher for the purpose of obstruction. (Ibid.)
CIVIL LAW
When easement of light and view is positive and Restrictions for Making an Opening for Light and
when negative Air
1. Positive — If the window is through a party 1. The size must not exceed 30-centimeter
wall. (Art. 668(1), NCC) Therefore, the period of square;
prescription commences from the time the 2. The opening must be at the height of the ceiling
window is opened; and joists or immediately under the ceiling;
3. There must be an iron grating imbedded in the
NOTE: The mere opening of the window does wall; and
not create the easement; it is only when after a 4. There must be a wire screen. (Art. 669, NCC)
sufficient lapse of time the window still remains
open, that the easement of light and view is If the wall becomes a party wall a part owner can
created. (Art. 668(1), NCC) Moreover, even if the order the closure of the opening because no part
window is on one’s own wall, still the easement owner may make an opening through a party wall
would be positive if the window is on a balcony without the consent of the others; it can also
or projection extending over into the adjoining obstruct the opening unless an easement.
land. (Paras, 2008) The openings allowed by Art. 669 of the NCC are for
the purpose of admitting light; hence they can be
2. Negative — If the window is through one’s own made only in the walls of buildings.
wall, that is, through a wall of the dominant
estate. (Art. 668(2), NCC) Therefore, the time for NOTE: Art. 669 refers to restricted windows.
the period of prescription should begin from
the time of notarial prohibition upon the Direct and Oblique Views
adjoining owner. (Cid v. Javier, G.R. No. L-14116,
30 June 1960) Arts. 670 and 671 deal with regular, full windows.
XPN: Even if the window is on the wall of the Direct view is the gaining of direct sight from an
dominant estate, still easement of light and opening in a wall parallel to the boundary line
view would be positive if the window is on the without having to extend out or turn one’s head to
balcony or extension extending over the land of see the adjoining tenement. (Pineda, 2009)
the servient estate.
NOTE: When windows are opened at a distance
Thus, the period of prescription for the acquisition less than that prescribed by Art. 670 of the NCC
shall be counted from the time of: from the boundary lines, they constitute unlawful
openings (Rabuya, 2006), however, it is not
1. Opening of the window, if through a party wall; necessary always that the wall sustaining the
or opening and the dividing line be exactly and
2. The formal prohibition upon the proprietor of geometrically parallel. (Pineda, 2009)
the adjoining land, if window is through a wall
on the dominant estate. (Art. 668, NCC) Oblique view is the gaining of sight of the other
tenement from an opening made at an angle with
Openings to admit light and air but not view the boundary line, such that to be able to see the
adjoining tenement, there is necessity for putting
When the distances in Art. 670 of the NCC are not out or turning one’s head either to the left of right.
observed, the owner of a wall which is not a party (Ibid.)
wall can make an opening for the purpose of
admitting light and air, but not for view. (Art. 669,
NCC)
2023 GOLDEN NOTES
Restrictions as to Easement of Views NOTE: The title used in Art. 673 of the NCC refers
to any modes of acquiring easements:
1. Direct Views - The distance of two (2) meters
between the wall and the boundary must be 1. Contract;
observed; and 2. Will;
3. Donation; or
2. Oblique Views - (Walls perpendicular or at an 4. Prescription.
angle to the boundary line) must not be 60 cm
to the nearest edge of the window. (Art. 670, The distance may be increased or decreased by
NCC) stipulation of the parties provided that in case of
decrease, the minimum distance of 2 meters or 60
Any stipulation to the contrary is void. (Art. 673, centimeters prescribed in Art. 670 of the NCC must
NCC) The owner who opened them may be ordered be observed, otherwise it is void. The said
by the court to close them. Prescription may still be distances involve considerations of public policy
acquired as a negative easement after ten years and the general welfare. Hence, they should not be
from the time of notarial prohibition. rendered ineffective by stipulation.
The distance referred to in Art. 670 of the NCC shall Q: A Complaint for easements of light, air and
be measured in cases of direct views from the outer view, was filed by the Sps. Garcia against the Sps.
line of the wall when the openings do not project, Santos. Petitioners alleged that they are the
from the outer line of the latter when they do, and registered owners of Lot 2, which has been
in cases of oblique view from the dividing line occupied by them for 11 years, has a one-storey
between the two properties. (Art. 671, NCC) residential house erected thereon and was
purchased by them from the Sps. Santos in
Where buildings are separated by a public way October 1998. At the time of the purchase of the
or alley subject property from the Sps. Santos, the one-
storey house was already constructed. Also, at
The distance provided in Art. 670 of the NCC is not the time of the acquisition of the subject
compulsory where there is a public way or alley property, the adjoining lot, Lot 1, which is owned
provided that it is not less than three meters wide, by the Sps. Santos, was an idle land without any
the minimum width is necessary for the sake of improvements. Lot 1 remained empty until the
privacy and safety. (Art. 672, NCC) Sps. Santos started the construction of a two-
storey residential house therein on January 24,
NOTE: The width of the alley is subject to special 2009. The building constructed on Lot 1 is taller
regulations and ordinances. (De Leon, 2006) than the Sps. Garcia's one-storey residential
house. As such, the Sps. Santos' building
A private alley opened to the use of the general allegedly obstructed the Sps. Garcia's right to
public falls within the provision of Art. 672 of the light, air, and view. Are Sps. Garcia entitled to
NCC. the easements of light, air and view?
Where easement of direct view had been A: YES. According to Art. 624 of the NCC, there
acquired arises a title to an easement of light and view, even
in the absence of any formal act undertaken by the
Whenever the easement of direct view has been owner of the dominant estate, if this apparent
acquired by any such title, there is created a true visible sign, such as the existence of a door and
easement. The owner of the servient estate cannot windows, continues to remain and subsist, unless, at
build thereon at less than a distance of 3 meters the time the ownership of the two estates is divided:
from the boundary line. (Art. 673, NCC) (1) the contrary should be provided in the title of
conveyance of either of them, or (2) the sign
CIVIL LAW
aforesaid should be removed before the execution should fall on his own land, the owner shall be
of the deed. obliged to collect the water in such a way as not to
cause damage to the adjacent land or tenement.
Art. 624 of the NCC applies since, prior to the (Art. 674, NCC)
purchase of the subject property by the Sps. Garcia
in 1998, the subject property and its adjoining lot The easement is created when the owner receives
(i.e., Lot 1, were both owned by singular owners, the water upon his own roof or gives it another
the Sps. Santos). On the subject property, a one- outlet so as not to cause any nuisance or damage to
storey house laden with several windows and the dominant estate. (Art. 675, NCC)
openings was built and the windows and openings
remained open. Then in October 1998, the subject If the collection of water through the house itself is
property, together with the one-storey structure, impossible, the establishment of an easement of
was alienated in favor of the Sps. Garcia, while the drainage may be demanded giving an outlet to the
Sps. Santos retained the adjoining Lot 1. (Sps. water at the point of the contiguous lands or
Garcia v. Santos, G.R. No. 228334, 17 June 2017) tenements where its egress may be easiest and
establishing a conduit for the drainage to cause the
Q: What are the two components of an least damage to the servient estate, after payment of
easement of light and view? the property indemnity. (Art. 676, NCC)
A: The easement of light and view has two The easement of drainage of buildings is the right to
components. The easement of light or jus luminum divert or empty the rain waters from one’s own roof
has the purpose of admitting light and a little air, as or shed to the neighbor’s estate either drop by drop
in the case of small windows, not more than 30 or through conduits. (Rabuya, 2008)
centimeters square, at the height of the ceiling
joists or immediately under the ceiling. On the Ownership of Rain Waters
other hand, the easement of view or servidumbre
prospectus has the principal purpose of affording Rain waters falling on private lands shall belong to
view, as in the case of full or regular windows the State. (Art. 6(c), Water Code of the Philippines).
overlooking the adjoining estate. (Sps. Garcia v. However, any person who captures or collects
Santos, G.R. No. 228334, 17 June 2019) water by means of cisterns, tanks or pools shall have
exclusive control over such water and he shall also
NOTE: The easement of light and view is have the right to dispose of the same. (Art. 7, Ibid.)
intrinsically intertwined with the easement of the The owner of the land where the rain waters fall
servient estate not to build higher or altius non may use the same even without securing a permit
tollendi. These two necessarily go together from the National Water Resources Council (NWRC,
“because an easement of light and view requires now NWRB) but only for domestic purposes. (Art. 6,
that the owner of the servient estate shall not build Ibid.; Rabuya, 2008)
to a height that will obstruct the window.” (Sps.
Garcia v. Santos, G.R. No. 228334, 17 June 2019). Obligations of the Owner of a Building
DRAINAGE OF BUILDINGS In cases where the owner of a building does not

Arts. 674-676, NCC intend to collect the rain waters falling on the roof
or covering of his building, he has the obligation to
The owner of a building shall construct its roof or construct the roof or covering of his building in such
covering in such manner that the rainwater shall fall manner that the rain waters shall fall on his own
on his own land or on a street or public place, and land or on street or public place, and not on the land
not on the land of his neighbor, even though the of his neighbor, even though the adjacent land may
adjacent land may belong to two or more persons, belong to two or more persons, one of whom is the
one of whom is the owner of the roof. Even if it owner of the roof. (Art. 674, NCC) And even if it
2023 GOLDEN NOTES
should fall on his own land, he is also obligated to Nuisance (2005, 2006 BAR)
collect the water in such a way that it will not cause
damage to the adjacent land or tenement. (Ibid.; A nuisance is any act, omission, establishment,
Rabuya, 2008) business, condition of property, or anything else
which:
Legal Easement of Drainage
1. Injures or endangers the health or safety of
An easement of drainage may be demanded subject others;
to compliance with the following requisites: 2. Annoys or offends the senses;
3. Shocks, defies or disregards decency or
1. The yard or court of a house must be morality;
surrounded by other houses (“the dominant 4. Obstructs or interferes with the free passage of
estate”) and it is not possible to give an outlet any public highway or street, or any body of
through the house itself to the rain collected water; or
therefrom; 5. Hinders or impairs the use of property. (Art.
694, NCC)
2. The outlet to the water must be at the point of
the contiguous lands or tenements (“the Nuisance vs. Trespass
servient estate”) where its egress may be
easiest; NUISANCE TRESPASS
Use of one’s own
3. The conduit for the drainage must be property which causes
established in such manner as to cause the least injury to another the
damage to the servient estate; and property, right or Direct infringement of
interest of another, and another’s right or
4. Proper indemnity must be paid to the owner of generally results from property.
the servient estate. (Art. 676, NCC) the commission of an
act beyond the limits of
EASEMENT AGAINST NUISANCE the property affected.
Arts. 682-683
Injury is direct and
Injury is consequential.
Every building or piece of land is subject to the immediate.
easement which prohibits the proprietor or
possessor from committing nuisance through (De Leon, 2006)
noise, jarring, offensive odor, smoke, heat, dust,
water, glare and other causes. (Art. 682, NCC) NOTE: An encroachment upon the space of
another’s land, but not upon the land itself is
Subject to zoning, health, police and other laws and considered a nuisance, and not trespass. (Ibid.)
regulations, factories and shops may be maintained
provided the least possible annoyance is caused to Nuisance vs. Negligence
the neighborhood. (Art. 683, NCC)
NEGLIGENCE NUISANCE
As to their Concepts
Berame, Julius Ernhest P. Liability attaches
Liability is based on
regardless of the degree
lack of proper care or
of care or skill exercised
diligence.
to avoid the injury.
CIVIL LAW
Condition of the act 2. Other classifications (C-A-P-I-T-P-P)
There is a continuing a. Nuisance Per se – That kind of nuisance

harm being suffered by which is always a nuisance. By its nature,
Act complained of is
the aggrieved party by it is always a nuisance all the time under
already done which
the maintenance of the any circumstances regardless of location
caused the injury to
act or thing which or surroundings It is an act, occupation, or
plaintiff.
constitutes the structure which unquestionably is a
nuisance. nuisance at all times and under any
circumstances, regardless of its location
Abatement
or surroundings; (Pineda, 2009)
Abatement is not Abatement without
b. Nuisance Per accidens – That kind of
available as a remedy. judicial proceedings is
nuisance by reason of location,
The remedy is action allowed to suppress the
surrounding or in a manner it is
for damages. nuisance.
conducted or managed. (Ibid.) It is an act,
(Pineda, 2009) occupation, or structure that may become
a nuisance by reason of circumstances,
NOTE: Nuisance is wrongful in itself due to the location, or surroundings; (De Leon, 2006)
injury caused, regardless of the presence or absence
of care, while negligence creates liability due to NOTE: The above classification is no longer useful,
want of proper care resulting to another’s injury. since there are very few nuisances per se. (Paras,
(Ibid.) 2008)
c. Temporary – That kind which if properly
Kinds of Nuisance (2005 BAR) attended does not constitute a nuisance;
1. As to the number of persons affected d. Permanent – That kind which by nature

of structure creates a permanent
a. Public (or common) – One that affects a inconvenience;
community or neighborhood or any
considerable number of persons although e. Continuing – That kind which by its
the extent of the annoyance, danger or nature will continue to exist indefinitely
damage upon individuals may be unless abated;E
unequal; (Suarez, 2011) and
f. Intermittent – That kind which recurs off
b. Private – one which affects an individual and on and may be discontinued anytime;
or few persons only. (Rabuya, 2008) and
c. Mixed - both public and private in its g. Attractive Nuisance – One who
effects, public because it injures many maintains on his premises dangerous
persons or all the community, and private instrumentalities or appliances of a
in that it also produces special injuries to character likely to attract children in play,
private rights. (Ibid.) and who fails to exercise ordinary care to
prevent children from playing therewith
or resorting thereto, is liable to a child of
tender years who is injured thereby, even
if the child is technically a trespasser in
the premises. (Rabuya, 2006)
2023 GOLDEN NOTES
Nuisance per se vs. Nuisance per accidens merely the hotel’s particular incident – its location–
and not its inherent qualities that rendered it a
PER SE PER ACCIDENS nuisance. Otherwise stated, had it not been
constructed in the no build zone, Boracay West
As a matter of law. As a matter of fact. Cove could have secured the necessary permits
Depends upon its without issue. (Aquino v. Mun. of Malay Aklan, G.R.
location and No. 211356, 29 Sept. 2014)
Need only be proved in surroundings, the
any locality. manner of its conduct Attractive Nuisance
or other
circumstances. One who maintains on his premises dangerous
instrumentalities or appliances of a character likely
May be abated only
to attract children in play, and who fails to exercise
May be summarily with reasonable notice
ordinary care to prevent children from playing
abated under the law to the person alleged to
therewith or resorting thereto, is liable to a child of
of necessity. be maintaining or
tender years who is injured thereby, even if the
doing such nuisance.
child is technically a trespasser in the premises.
(De Leon, 2006) (Jarco Marketing Corp. v. CA, G.R. No. 129792, 21
Dec. 1999)
NOTE: The abatement of a nuisance without
judicial proceedings is possible only if it is a Basis for liability
nuisance per se. A gas station is not a nuisance per
se or one affecting the immediate safety of persons The attractiveness is an invitation to children.
or property. Hence, it cannot be closed down or Safeguards to prevent danger must therefore be set
transferred summarily to another location. up. (Paras, 2008)
(Parayno v. Jovellanos, G.R. No. 148408, 14 July
2006) Elements of Attractive Nuisance
Q: Boracay West Cove, applied for a zoning 1. It must be attractive; and

compliance covering the construction of a 2. Dangerous to children of tender years.
three-storey hotel over a parcel of land in
Malay. The Zoning Administrator denied the Q: Is a swimming pool an attractive nuisance?
application on the ground that the proposed
construction site was within the “no build A: GR: A swimming pool or water tank is not an
zone”. The Office of the Mayor issued E.O. 10, attractive nuisance, for while it is attractive, it is
ordering the closure and demolition of Boracay merely an imitation of the work of nature. Hence, if
West Cove’s hotel. Boracay West Cove small children are drowned in an attractive water
countered that the hotel cannot summarily be tank of another, the owner is not liable even if there
abated because it is not a nuisance per se. Is the be no guards in the premises. (Hidalgo Enterprises v.
hotel classified as a nuisance per se? Balandan, G.R. No. L-3422, 13 June 1952)
A: NO. The litmus test in determining if it’s a XPN: Swimming pool with dangerous slide
nuisance is the property’s nature and conditions. characteristics
The hotel cannot be considered as a nuisance per se
since this type of nuisance is generally defined as NOTE: The Doctrine of Attractive Nuisance does
an act, occupation, or structure, which is a nuisance not generally apply to bodies of water, artificial as
at all times and under any circumstances, well as natural, in the absence of some unusual
regardless of location or surrounding. Here, it is condition or artificial feature other than the mere
water and its location. (Hidalgo Enterprises v.
CIVIL LAW
Balandan, G.R. No. L-3422, 13 June 1952) However, it is indispensable that the procedure for
extrajudicial abatement of a public nuisance by a
NOTE: In Aleta v. Sofitel Philippine Plaza Manila private person be followed. (Art. 706, NCC) Every
(G.R. No. 228150, 11 Jan. 2023), the Court held that successive owner or possessor of property who
although the swimming pool alone may not be fails or refuses to abate a nuisance in that property
considered as an attractive nuisance, the kiddie started by a former owner or possessor is liable
pool's close proximity to the slides formed an therefor in the same manner as the one who
unusual condition or artificial feature intended to created it. (Art. 696, NCC)
attract children. In other words, the installation of
the slides with slopes ending over the swimming Extrajudicial Abatement Requisites (2002
pool's waters makes it an attractive nuisance. BAR) (B-A-R-V-I-D)
Hence, the respondent was duty bound to
undertake protective measures to ensure the 1. The nuisance must be especially Injurious
children's safety. It was respondent's to the person affected;
responsibility to guarantee that appropriate 2. No Breach of peace or unnecessary injury
safeguards were in place within the attractive must be committed;
nuisance in order to protect children against the 3. Demand must first be made upon the
injury from unknown or unseen dangers. owner or possessor of the property to
abate the nuisance;
NOTE: This case is beyond the cutoff date provided 4. Demand is Rejected;
in the 2023 syllabus. 5. Abatement is Approved by the district
health officer and executed with the
Remedies Against Public Nuisances assistance of the local police; and
6. Value of the destruction does not exceed
1. Prosecution under the RPC or any local Php 3,000.00 (Rabuya. 2008)
ordinance;
2. Civil action; or NOTE: Abatement is the exercise of police power
3. Abatement, summarily and without judicial which includes the right to destroy property
proceeding. (Art. 699, NCC) regarded as a public health or safety, and there is
no obligation to give compensation. (De Leon,
NOTE: A private person may file for a civil action 2006)
against a public nuisance if the latter is injurious to
him. Thus, insofar as he is concerned, the nuisance An extrajudicial abatement can only be applied for
becomes a private nuisance which affects him in a if what is abated is a nuisance per se and not
special way, different from that sustained by the nuisance per accidens. (Rabuya, 2008)
public in general.
Liability for damages in case of extrajudicial
Remedies against private nuisances abatement of nuisance
1. Civil action; or The private person or a public official

2. Abatement, summarily and without judicial extrajudicially abating a nuisance is liable for
proceedings. (Art. 705, NCC) damages to the owner of the thing abated if he
causes unnecessary injury or if an alleged nuisance
NOTE: Any person injured by a private nuisance is later declared by courts to be not a real nuisance.
may abate it by removing, or if necessary, by (Art. 707, NCC)
destroying the thing which constitutes the
nuisance, without committing a breach of the peace NOTE: The right to question the existence of a
or doing unnecessary injury. nuisance does not prescribe; it is imprescriptible.
2023 GOLDEN NOTES
Q: Respondent Ernesto Lardizabal (Ernesto) Any stipulation or testamentary provision allowing

filed a complaint for demolition, before the City excavations that cause danger to an adjacent land or
Engineer's Office of Baguio City (City Engineer's building shall be void. (Art. 685, NCC)
Office), questioning the ongoing construction of
a residential structure and garage extension by The legal easement of lateral and subjacent support
petitioners on a parcel of land. Upon is not only for buildings standing at the time the
investigation, the City Engineer's Office found excavations are made but also for constructions that
out that the construction had no building may be erected. (Art. 686, NCC)
permit. Consequently, the City Mayor issued
Demolition Order No. 5 (D.O. 5). Aggrieved, Any proprietor intending to make any excavation
petitioners moved for a reconsideration of D.O. contemplated in the three preceding articles shall
5, but was denied by the City Mayor. Thus, they notify all owners of adjacent lands. (Art. 687, NCC)
were prompted to file a complaint for
injunction and prohibition with the RTC. Concept
Should D.O. 5 be enjoined?
The right of lateral and subjacent support is the
A: YES. The following shall be subject for summary right to have land supported by the adjoining land
eviction: (1) New squatter families whose or the soil beneath. Each of two adjoining
structures were built after the effectivity of R.A. No. landowners is entitled to the support of the other’s
7279; and (2) Squatter families identified by the land. (Rabuya, 2008)
LGU in cooperation with the Presidential
Commission of the Urban Poor (PCUP), Philippine When Support is Lateral and When Subjacent
National Police (PNP) and accredited Urban Poor Support is lateral when the supported and the
Organization (UPO) as professional squatters or supporting lands are divided by a vertical plane.
members of squatting syndicates as defined in the (Rabuya, 2008)
Act.
Support is subjacent when the supported land is
In this case, petitioners cannot be considered as above and the supporting land is beneath it.
new squatters, since, although their structures were (Rabuya, 2008)
built after March 28, 1992, they or their
predecessors-in-interest had occupied and were 3. MODES OF ACQUIRING EASEMENTS
claimants of the subject property long before the
said date. Neither have they been identified by the
The following are modes of acquiring easements:
LGU as professional squatters nor members of a
(P-R-A-F-T) (2005, 2009 BAR)
squatting syndicate. Thus, since petitioners do not
fall under the coverage of the said IRR, the issuance
1. By Title (Art. 620, NCC) – The following
of D.O. 5 had no legal basis at the onset. (Vergara v.
easements may be acquired only by title:
City Mayor of Baguio, G.R. No. 206423, 01 July 2015)
a. Continuous non-apparent easements;

LATERAL AND SUBJACENT SUPPORT
b. Discontinuous apparent easements; and
Arts. 684-687
c. Discontinuous non-apparent easements.
(Art. 622, NCC)
No proprietor shall make such excavations upon his
land as to deprive any adjacent land or building of
NOTE: Title does not necessarily mean
sufficient lateral or subjacent support. (Art. 684,
document. It is a juridical act or law sufficient
NCC)
to create the encumbrance (e.g., law, donation,
testamentary, succession, contract). Intestate
succession does not create an easement, for
CIVIL LAW
no act is involved; and prescription is not because of the making of the notarial prohibition
considered as a title under Art. 620 of the NCC. which makes it apparent. (De Leon, 2006)
2. By Prescription of 10 years; NOTE: In negative easement there is a need of a

formal act. (Art. 621, NCC)
NOTE: Prescription runs irrespective of good
faith or bad faith of the possessor and whether Doctrine of Apparent Sign
or not he has just title. The only requirement is
adverse possession. Only continuous and Easements are inseparable from the estate to which
apparent easements can be acquired by they actively or passively pertain. The existence of
prescription; (Art. 620, NCC) apparent sign under Art. 624 of the NCC is equivalent
to a title. It is as if there is an implied contract
3. By deed of Recognition, in the absence of proof between the two new owners that the easement
of prescription; should be constituted, since no one objected to the
continued existence of the windows.
4. By Final judgment, if owner denies existence of
easement or refuses to execute deed of NOTE: It is understood that there is an exterior sign
recognition; (Rabuya, 2008) or contrary to the easement of party wall whenever:
NOTE: If the owner of the servient estate 1. There is a window or opening in the dividing
refuses to execute the deed of recognition, the wall of buildings;
court may, in its judgment, declare the
existence of the easement. 2. Whenever the dividing wall is, on one side,
straight and plumb on all its facement, and on
5. By Apparent sign established by the owner of the other, it has similar conditions on the
the two adjoining estates. upper part, but the lower part slants or
projects outward;
XPN: unless at the time the ownership of the
two estates is divided: 3. Entire wall is built within the boundaries of
a. There are contrary stipulations; or one of the estates;
b. The sign is removed before the
execution of the deed. (Art. 624, NCC) 4. The dividing wall bears the burden of the
binding beams, floors and roof frame of one of
Prescriptive Period the buildings, but not those of the others;
1. Positive easement – The 10-year period is 5. Whenever the dividing wall between
counted from the day when the owner of the courtyards, gardens, and tenements is
dominant estate begins to exercise it; and constructed in such a way that the coping
sheds the water upon only one of the estates;
2. Negative easement – from the day a notarial
prohibition is made on the servient estate. (Art. 6. Whenever the dividing wall, being built of
621, NCC) masonry, has stepping stones, which at certain
intervals project from the surface on one side
Negative easement cannot be acquired by only, but not on the other; and
prescription since they are non-apparent. However,
for purposes of prescription, there are negative 7. The lands enclosed by fences or live hedges
easement that can be considered “apparent” not adjoin others which are not enclosed.
because there are visible signs or their existence but
2023 GOLDEN NOTES
In all these cases, ownership is deemed to belong properties to give the back properties access to the
exclusively to the owner of the property which has national highway; and (2) they had it annotated on
in its favor the presumption based on any of these the front properties' titles as an easement of right of
signs. (Art. 660, NCC) way in favor of the back properties. When the front
properties were eventually transferred to the PNB,
Q: Sps. Fernandez once owned five (5) the bank did not raise any qualms or stipulated
contiguous parcels of land in Dagupan City. Two against the easement of right of way or the
(2) of their properties were located in front of annotations. Thus, when the front properties were
their three (3) other properties. These front sold, Sps. Delfin’s titles bore the same annotations
properties provided the other properties sole as those of petitioners. To clarify, the easement of
access to the national highway. They annotated right of way was not constituted when petitioners
on the transfer certificates of title of the front annotated it on their titles. However, when the front
properties an easement of right of way in favor properties were transferred to the PNB, the
of the back properties an easement of road of apparent signs of the easement — the path and the
right of way. The Sps. Fernandez later obtained annotations — served as a title over the easement.
a loan from the PNB and mortgaged the front (Sps. Fernandez v. Sps. Delfin, G.R. No. 227917, 17
properties. When they failed to pay their loan, Mar. 2021)
the bank foreclosed and eventually acquired the
front properties. Later on, the Sps. Delfin 4. EFFECTS OF EASEMENT
purchased the front properties from the PNB.
They were issued TCT, which bore the same
Inseparable
annotations as those in the Sps. Fernandez.
However, they refused to recognize the
Easements are inseparable from the estate to which
annotated right of way, enclosing the properties
they actively or passively belong. (Art. 617, NCC)
to prevent the Sps. Fernandez from accessing
the national highway through the front
Servitudes are merely accessories to the tenements
properties. Thus, Sps. Fernandez filed before the
of which they form part. Although they are
RTC a Complaint for specific performance, right
possessed of a separate juridical existence, as mere
of way, and damages, arguing that they were
accessories, they cannot, however, be alienated
entitled to use the right of way to access the
from the tenement, or mortgaged separately. (Solid
national highway. Sps. Delfin countered that
Bank Corporation v. Bio Hong Trading Co., Inc., G.R.
they acted within their rights as the properties'
No. 90596, 08 Apr. 1991)
owners. They claimed that despite the
annotations, the right of way was invalid as it
Indivisible
was constituted by the Sps. Fernandez for their
own sake. They alleged that the easement had
Easements are indivisible. If the servient estate is
already been extinguished when the PNB
divided between two or more persons, the
acquired the properties after foreclosure.
easement is not modified, and each of them must
bear it on the part which corresponds to him.
Is there a valid easement of right of way
constituted on the front properties formerly
If it is the dominant estate that is divided between
owned by Sps. Fernandez, and now owned by
two or more persons, each of them may use the
Sps. Delfin?
easement in its entirety, without changing the place
of its use, or making it more burdensome in any
A: YES. Art. 624 of the NCC applies in this case. The
other way. (Art. 618, NCC)
front properties and the back properties were all
previously owned by Sps. Fernandez, who created
an apparent sign of an easement on the front
properties when: (1) they used a portion of the front
CIVIL LAW
Acknowledgement of an easement in one who Obligations of the Dominant Owner

owns property (C-O-C-A-N-E)
An acknowledgement of the easement is an 1. He cannot Exercise the easement in any other

admission that the property belongs to another. manner than that previously established; (Art.
(BOMEDCO v. Heirs of Valdez, G.R. No. 124669, 31 July 626, NCC)
2003)
Rights and obligations of the owners of the 2. He cannot Alter the easement or render it more
dominant and the servient estates burdensome; (Art. 627(1), NCC)
NOTE: The necessity of the works for the use and 3. He shall Notify the servient owner of works
preservation of the easement is the basis and the necessary for the use and preservation of the
determining factor for the extent of such works. servitude; (Art. 627(2), NCC)
The works must be executed in the manner least 4. He must Choose the most convenient time and
inconvenient to the servient owner, who cannot manner of making the necessary works as to
recover indemnity for the inevitable damages or cause the least inconvenience to the servient
inconveniences which may be caused thereby. owner;
But if the work is done badly, the dominant owner 5. If there are several dominant estates, he must
will be liable for damages that may be suffered by Contribute to the necessary expenses in
the servient owner. (Tolentino, 1992) proportion to the benefits derived from the
works; (Art. 628(1), NCC; and
Rights of the Dominant Owner (M-A-R-E)
6. He may make, at his Own expense, on the
1. Make on the servient estate all works necessary servient estate, any works necessary for the
for the use and preservation of the servitude; use of servitude, provided it will not alter or
(Art. 627, NCC) make it more burdensome. (Art.627(1), NCC)
2. Ask for mandatory injunction to prevent Servient Owner

impairment of his right; (Resolme v. Lazo, G.R.
No. L-8654, 30 Mar. 1914) The owner of the immovable whose property is
subject to easement for the benefit of the dominant
3. Renounce the easement if he desires to be owner. (Pineda. 2009)
exempt from contributing necessary expenses;
(Art. 628, NCC) and Rights of the Servient Owner (Cha-R-M)
4. Exercise all rights necessary for the use of the 1. Retain the ownership of the portion of the
easement. (Art. 625, NCC) estate on which easement is imposed;
2. Make use of the easement unless there is an

agreement to the contrary; (Art. 628(2), NCC);
and
3. Change the place or manner of the use of the

easement, provided it be equally convenient.
(Art. 629(2), NCC)
2023 GOLDEN NOTES
Obligations or limitations imposed on the 5. By the Renunciation of the owner of the

Servient Owner dominant estate; and
1. GR: He cannot impair the use of the servitude; 6. By the Redemption agreed upon between the
and owners of the dominant and servient estates.
(Art. 631, NCC)
XPN:
a. When the easement has become very NOTE: The grounds under Art. 631 of the NCC are
inconvenient to the said servient not exclusive.
owner; or
In addition to the foregoing causes enumerated in
b. If it prevents him from making any Art. 631 of the NCC, the following may be added:
important works, repairs, or
improvements thereon. (Art. 629(1), 1. Annulment or rescission of title constituting
NCC) easement;
2. Termination of the right of the grantor;
2. He must contribute to the necessary expenses 3. Abandonment of the servient estate; and
in case he uses the easement, unless otherwise 4. Eminent domain. (4 Manresa 590)
agreed upon. (Art. 628(2), NCC)
Merger
5. EXTINGUISHMENT OF EASEMENTS
It is not necessary, however, that the merger takes
place to the full extent of the property, it being
Extinguishment of Easements (2001, 2010 BAR)
sufficient that the merger takes place with regard to
(MEN-ARE-CaRAT)
that part affected by the servitude or that part for
the benefit of which the servitude was established.
1. By Merger in the same person of the ownership
(Rabuya, 2006)
of the dominant and servient estates;
Where the merger is temporary or under resolutory
2. By Non-user for 10 years; with respect to
condition, there is at most a suspension, but not an
discontinuous easements, this period shall be
extinguishment of the servitude. (De Leon, 2006; 4
computed from the day on which they ceased
Manresa 657-658)
to be used; and, with respect to continuous
easements from the day on which an act
Non-user
contrary to the same took place;
Non-use must be due to voluntary abstention by the
3. When either or both of the estates fall into such
dominant owner, and not to fortuitous event,
condition that the easement Cannot be used;
because the basis of this cause of extinguishment is
but it shall revive if the subsequent condition
a presumptive renunciation. (Rabuya, 2008)
of the estates or either of them should again
permit its use, unless when the use becomes
NOTE: Reckoning point:
possible, sufficient time for prescription has
elapsed, in accordance with the provisions of
1. Discontinuous – Counted from the day they
the preceding number;
ceased to be used; and
4. By the Expiration of the term or the fulfillment

2. Continuous – Counted from the day an act
of the condition, if the easement is temporary
adverse to the exercise takes place. (Art.
or conditional;
631(2), NCC)
CIVIL LAW
Non-user presupposes that the easement has been

used before but it was abandoned for ten (10) years.
Thus, it cannot apply to easements which have not
been used. (Pineda, 2009)
Impossibility of use
The impossibility of use only suspends the servitude

until such time when it can be used again. (Rabuya,
2008)
Expiration
E.g., An easement was agreed upon to last till the

owner of the dominant easement becomes a lawyer.
When the condition is fulfilled, the easement ceases.
(Paras, 2008)
Renunciation
Renunciation must be express, definite, clear,

specific (otherwise it might be confused with non-
user). This is particularly true for discontinuous
easements. (Ibid.) Renunciation of a real right must
be reflected in a public instrument. (Pineda, 2009)
Redemption
This is voluntary redemption, existing because of an

express stipulation. The stipulation may provide
conditions under which the easement would be
extinguished. (Paras, 2008)
2023 GOLDEN NOTES
III. DIFFERENT MODES OF ACQUIRING OWNERSHIP
NOTE: Registration of a property is not a mode of

III. DIFFERENT MODES OF ACQUIRING acquiring ownership. It merely confirms the
OWNERSHIP existence of one’s ownership over a property with
notice to the whole world. (Bautista v. Dy Bun Chin,
CA-L-6983-R, 30 Oct. 1953)
The following are the different modes of acquiring

Classification of modes of acquiring ownership
ownership:
1. Original – those which do not arise or

1. Occupation;
depend upon any pre-existing right or title
2. Tradition;
of another person:
3. Donation;
4. Prescription.
a. Occupation; (Art. 713, NCC)
b. Intellectual Creation; (Art. 721,
Mode vs. Title
NCC) and
c. Acquisitive Prescription. (Art.
MODE TITLE
1106, NCC).
Serves merely to give
Directly and
the occasion for its
immediately produces 2. Derivative – those which arise or depend
acquisition or
a real right. upon a pre-existing or preceding right or
existence.
title of another person:
Cause Means
Proximate cause Remote cause a. Law (e.g., hidden treasure (Art.
Essence of the right 438, NCC), improvements on the
Means whereby that
which is to be created land of another (Art. 445, NCC),
essence is transmitted.
or transmitted. alluvium. (Art. 457, NCC),
abandoned riverbeds (Art. 461,
NCC), falling fruits into the
Mode – it is a way or process of acquiring or
tenement of another; (Art. 681,
transferring ownership. The process may either be
NCC))
original or derivative.
Title – is a jural act or deed which is not sufficient b. Donation; (Art. 725, NCC)
by itself to transfer ownership. (Pineda, 2009)
c. Succession mortis causa; (Art.
774, NCC); and
Modes of acquiring ownership (O-L-D-T-I-P-S)
(2007 BAR)
d. Tradition (delivery) as a
consequence of certain contracts
1. Occupation; (Art. 713, NCC)
like sale, agency, partnership,
2. Law;
mutuum, assignment barter. Pure
3. Donation; (Art. 725, NCC)
tradition does not transfer
4. Tradition; (Arts. 1962, 1935, NCC)
ownership such as in deposit or
5. Intellectual creation; (Art. 721, NCC)
commodatum. (Pineda, 2009)
6. Acquisitive Prescription; (Art. 1106, NCC)
and
7. Succession. (Art. 774, NCC)
CIVIL LAW
As regards the Intent to Acquire

A. OCCUPATION
There must be an May be had in the
intent to acquire concept of a mere
ownership holder
Occupation (1997, 2007 BAR)
As regards Possession
is the acquisition of ownership by seizing corporeal
May not take place
thing that have no owner, made with the intention May exist without
without some form of
of acquiring them, and accomplished according to occupation
possession
legal rules. (Paras, 2008)
As to Period
Only movables can be the object of occupation for
purposes of acquiring ownership. Immovables are Short duration Generally, longer
not included. (Sta. Maria, 2021) As to Leading to Another Mode of Acquisition
Requisites of Occupation Cannot lead to another May lead to another

mode of acquisition mode- prescription
1. There must be seizure of a thing; (De Leon, 2006)
2. Which must be a corporeal personal
property; Things susceptible of occupation
3. Which must be susceptible of
appropriation by nature; 1. Things that are without an owner – (res
4. The thing must be without an owner; nullius) abandoned;
5. There must be an intention to acquire
ownership; and NOTE: Stolen property cannot be subject of
6. The requisites laid down by law must be occupation.
complied with. (De Leon, 2006)
2. Animals that are the object of hunting
Occupation vs. Possession and fishing; (Art. 713, NCC)
OCCUPATION POSSESSION 3. Hidden treasures – Only if there is no

known owner thereof. This is possible only
As regards Acquisition of Ownership
if the treasure is found in places or things
Merely raises the without owners; (Art 718, NCC)
presumption of
Mode of acquiring
ownership when 4. Abandoned movables – A thing is
ownership.
exercised in the concept abandoned when:
of owner.
a. The expectation to recover is gone
As to Property Involved
(spes recuperandi); and
Involves only corporeal b. The intent to return or have it
Any kind of property
personal property returned is given up (spes
rivertandi). (Paras, 2008)
As regards Ownership of Thing by Another
Requires that the 5. Swarm of bees that has escaped from its
The property may be owner, under certain conditions; (Art. 716,
object be without an
owned by somebody. NCC)
owner
2023 GOLDEN NOTES
NOTE: Whoever catches a swarm of bees Q: When can land be the object of occupation?
shall own them. Being the owner already,
if the swarm flies to another property, the A:
owner of the bees can pursue them. If the 1. If without an owner, it pertains to the
owner of the bees does not make the State (Regalian Doctrine);
pursuit within two (2) days, the possessor 2. If abandoned and the property is private,
of the land may retain the bees. (Sta. Maria, it can be the object of occupation; or
2021) 3. If the land does not belong to anyone, it is
presumed to be public.
6. Domesticated animals that have escaped
from their owners, under certain Ownership of Land Cannot be Acquired by
conditions; (Art. 716, NCC) Occupation
7. Transfer of pigeons to another breeding When the land is without owner, it pertains to the
place without fraud or artifice; (Art. 717, State. The State need not acquire abandoned lands
NCC); and by occupation because once the requisites of
abandonment have been fulfilled automatically, the
8. Transfer of fish to another breeding place reversion operates. (Pineda, 2009)
without fraud or artifice. (Art. 717, NCC)
Abandoned land (one with an owner before)
Acquisition of ownership over a wild animal by becomes patrimonial land of the State susceptible
occupation of acquisition through acquisitive prescription.
(Paras, 2008)
Wild animals are considered res nullius when not
yet captured. After its capture, animals that Prescription vs. Occupation
escaped become res nullius again. (Pineda, 2009)
PRESCRIPTION OCCUPATION
Straying Domesticated Animals
As to Mode
Domesticated animals, if they strayed and were Derivative mode –
Original mode – No
caught by another, the owner may still claim them Somebody else was the
previous owner
from the captor within 20 days reckoned from the owner
date of occupation by the latter. Failure to do so, As to Period
they shall belong to the captor who kept them. (Art.
716, NCC) Longer period of
Shorter period.
possession is required
Domesticated as distinguish from Domestic (Paras, 2008)
Animals
Domesticated or tamed animals are those which

were formerly wild but which have been subdued
and retained the habit of returning to the premises
of the possessor or owner. Domestic or tame
animals are those which are born or reared under
the control and care of man. (Rabuya, 2008)
CIVIL LAW
the case of a lessee who had purchased

B. TRADITION the property leased to him and thereafter
continues to possess it as the owner
thereof
Meaning of Tradition
e. Traditio Constitutum Possessorium – It
consists in the owner’s continuous
Tradition, or delivery, is a mode of acquiring
possession of the property he had sold to
ownership, as a consequence of certain contracts,
another person, and his present
such as sale, by virtue of which, actually or
possession thereof is no longer that of an
constructively, the object is placed I the control and
owner but under another capacity like a
possession of the vendee. (Paras, 2021)
lessee, pledgee, depository, etc. It is the
opposite of Tradicion Brevi Manu.
Classes of Tradition
f. Tradition By Operation of Law – It

1. Real or Actual Tradition – This contemplates
consists in the delivery of the thing by
the actual delivery of the thing from the hand
operation of law such as the intestate
of the grantor to the hand of the grantee if the
succession where inheritance is
thing is a personality. If it is a realty, it is
transferred upon death of the decedent.
manifested by certain possessory acts
executed by the grantee with the consent of the
g. Quasi-Tradition – It consists in the
grantor such as by taking over the property; by
delivery of incorporeal property like
entering it and occupying it.
rights and credits done through the (a)
placing titles of ownership in the hands of
2. Constructive Tradition – The delivery of the
the grantee or his representative; or (b)
thing is not actual but representative or
by allowing the grantee to make use of the
symbolical in essence. But must be the
rights with the consent of the grantor.
intention to deliver the ownership.
a. Traditio symbolica – it consists in the

delivery of certain symbols or things C. DONATION
representing the thing being delivered
such as keys or titles
Donation is an act of pure liberality whereby a
b. Traditio Instrumental – It consists in the person disposes gratuitously of a thing or right in
delivery of the instrument of conveyance favor of another who accepts it. (Art. 725, NCC)
to the grantee by the grantor
Requisites of Donation (A-C-I-D)
c. Traditio Longa Manu – It consists in the
pointing of the thing (movable property) 1. Donor must have Capacity to make the
within sight, by the grantor to the grantee donation;
but which at the time of the transaction, 2. He must have donative Intent (animus
the thing could not be placed yet in the donandi);
possession of the grantee. 3. There must be Delivery in certain cases;
and
d. Traditio Brevi Manu – It consists in the 4. Donee must Accept or consent to the
grantee’s continuation of his possession donation during the lifetime of the donor
over the thing delivered but now under a and of the donee in case of donation inter
title of ownership. This is exemplified in vivos (Art. 746, NCC); whereas in case of
2023 GOLDEN NOTES
donation mortis causa, acceptance is made had already prescribed since 10 years had
after donor’s death because they partake lapsed from the execution of the Deed of
of a will. (Art. 728, NCC) (De Leon, 2006) Donation, a written contract.
Q: What are the three indispensable elements of Is the contention of the children of Valentin
donations? correct?
A: Donation has three indispensable elements: A: NO. Donation is an act of liberality whereby a
person disposes gratuitously of a thing or right in
1. the reduction of the patrimony of the donor; favor of another, who accepts it. An agreement
2. the increase in the patrimony of the donee; between the donor and the donee is essential like in
and any other contract. As such, the requisites of a valid
3. The intent to do an act of liberality or animus contract under Art. 1318 of the NCC must concur,
donandi. (Bacala v. Heirs of Poliño, G.R. No. namely: (1) consent of the contracting parties, that
200608, 10 Feb. 2021, as penned by J. is consent to donate the subject land to petitioners;
Hernando) (2) object certain which is the subject matter of the
contract; (3) cause of the obligation which is
Q: The late Simeona owned a parcel of land established.
which was inherited by her sons, Prudencio,
Florentino, and Valentin. They divided it equally Consent is absent in the instant case. Consent, to be
among themselves and a TCT was issued in the valid, must have the following requisites: (1)
name of the brothers as co-owners. In 1994, intelligent or with an exact notion of the matter to
Valentin requested Prudencio to donate the ten- which it refers; (2) free; and (3) spontaneous. The
square meter portion of his land being parties' intention should be clear; otherwise, the
encroached by the former's balcony. Prudencio donation is rendered void in the absence thereof or
agreed to Valentin's request out of his love and voidable if there exists a vice of consent.
trust for his brother. Valentin then asked
Prudencio and his wife Cresencia to sign a In this case, the spouses did not give their consent
document that was written in English. to the donation of their land to petitioners. Hence,
Prudencio and Cresencia were unable to no valid donation had transpired between the
understand the contents. Fourteen years later, parties. Further, the Deed of Donation is an absolute
Prudencio found out that a survey of the land nullity hence it is subject to attack at any time. Its
was being conducted. He was informed by the defect, i.e., the absence of consent of respondents, is
children of Valentin that he already donated his permanent and incurable by ratification or
inherited portion to them through the document prescription. In other words, the action is
that he allegedly executed with Cresencia. imprescriptible. This is in accord with Article 1410
of the Civil Code which states that an action to
Subsequently, Sps. Prudencio and Cresencia declare the inexistence of a void contract does not
filed a complaint for Annulment of Document prescribe. (Cardinez v. Sps. Cardinez, G.R. No.
with Recovery of Possession and Damages. They 213001, 04 Aug. 2021, as penned by J. Hernando)
averred that Valentin used machinations and
misrepresentations to induce them to sign the
document which turned out to be a Deed of
Donation. The children of Valentin on the other
hand denied the allegations of the Spouses. They
averred that Prudencio purchased the subject
land sometime in 1972 and then donated it to
the children of Valentin as evidenced by the
Deed of Donation. They contend that the action
CIVIL LAW
1. FEATURES A: YES, because once the condition is fulfilled, it

retroacts to the day the contract is constituted.
(Art. 1187(1), NCC)
Essential features or elements of a true donation
Donation of ownership and usufruct

1. Consent, subject matter, cause (as in other
contracts);
Ownership and usufruct of a property may be
2. The necessary form (including delivery in
donated to different persons separately. However,
some cases);
all the donees are required to be living at the time
3. Consent or acceptance by donee during
of donation. Art. 756, NCC)
donor’s lifetime;
4. Irrevocability (except for legal causes);
Limitation on the Amount that Can be Donated
5. Intent to benefit the donee (animus
donandi); and
1. If the donor has forced heirs, he cannot give
6. Resultant decrease in the assets or
or receive by donation more than what he
patrimony of the donor. (Paras, 2008)
can give or receive by will; or
Extent to which donor may donate property

2. If the donor has no forced heirs, donation
may include all present property provided
It may comprehend all the present property of the
he reserves in full ownership or in usufruct:
donor, or part thereof, provided he reserves, in full
ownership or in usufruct, sufficient means for the
a. The amount necessary to support
support of himself, and of all relatives who, at the
him and those relatives entitled to
time of the acceptance of the donation, are by law
support from him; and
entitled to be supported by the donor. (Art. 750,
NCC)
b. Property sufficient to pay the
donor’s debt contracted prior to
Future Properties as Subject of Donation (2003,
the donation.
2009 BAR)
NOTE: The limitation applies only to simple,

Future properties cannot be subject of donations.
remunerative, and modal donations but not to
onerous ones, which are governed by the law on
NOTE: Future property means anything which the
contracts. (De Leon, 2006)
donor cannot dispose of at the time of the donation.
(Art. 751, NCC)
Effect if the donor violates the requirement for
reservation under Art. 750 of the NCC
XPN: In donation propter nuptias, however, the
Family Code allows a donation of future property
A donation where the donor did not reserve
between future spouses.
property or assets for himself in full ownership or
in usufruct sufficient for his support and all
Donation of Future Inheritance or the Inchoate
relatives legally dependent upon him is not void. It
Right to Inherit
is merely reducible to the extent that the support
to himself and his relatives is impaired or
Future inheritance or the inchoate right to inherit
prejudiced. (Pineda, 2009)
cannot be donated because it is future property.
Q: May a property, the acquisition of which is

subject to suspensive condition, be donated?
2023 GOLDEN NOTES
Reversion in Donation Kinds of Donation According to Motive or Cause

(2007 BAR)
It is a condition established in the deed of donation
which has for its effect the restoration or return of PURPOSE FORM
the property donated to the donor or his estate or Simple
in favor of other persons who must be living at the Same to that of forms
time of the donation for any cause or Pure liberality.
in donations.
circumstances. (Art. 757, NCC)
Remuneratory (First kind)
To reward past merits,
NOTE: If the reversion is in favor of other persons
services rendered by
who are not all living at the time of the donation,
the donee to the donor Same to that of forms
the reversion stipulated shall be void, but the
provided the same do in donations.
donation shall remain valid. (Ibid.)
not constitute a
demandable debt.
2. CLASSIFICATIONS Remuneratory (Second kind)
1. Consideration for
1. According to motive or cause: future services;
or
a. Simple; 1. Onerous – Same
b. Remuneratory (first kind); 2. Donor imposes form of that of
c. Remuneratory (second kind): certain contracts.
Conditional or Modal donations; or conditions,
d. Onerous donations. limitations or 2. Gratuitous– Same
charges upon the form of that of
2. As to perfection or extinguishment: donee, whose donations.
value is inferior
a. Pure; to the donation
b. With a condition; or given.
c. With a term. Onerous
Imposes upon the
3. According to effectivity: donee a reciprocal
obligation; Burdens,
a. Inter vivos; (Art. 729, NCC) Same as that of
charges or services are
b. Mortis causa; (Art. 728, NCC) or contracts.
equal or greater in
c. Propter nuptias. (Paras, 2008) value to that of the
donation.
Kinds of donation according to perfection or

extinguishment
1. Pure donation – It is one which is not

subject to any condition;
2. Conditional – It is one wherein the donor

imposes on the donee a condition
dependent on the happening of a future
event or past event unknown to the parties;
and (Arts. 730 and 731, NCC) or
CIVIL LAW
3. With a term – It is one wherein the donor Rules of Contract govern the onerous portion of
imposes on the donee a condition donation; Rules of Donation only apply to the
dependent upon the happening of a future excess, if any. Since the donation imposed on the
and certain event. (Art. 730, NCC) donee the burden of redeeming the property for
value, the donation was onerous. As an endowment
Effect of illegal or impossible conditions for a valuable consideration, it partakes of the
nature of an ordinary contract; hence, the Rules of
Like in testamentary dispositions, (Art. 873, NCC), Contract will govern, and Art. 765 of the NCC finds
only the illegal or impossible conditions are no application with respect to the onerous portion
disregarded. The donation itself remains valid (as of the donation. Insofar as the value of the land
a simple donation). (Art. 727, NCC) exceeds the redemption price paid for by the
donee, a donation exists, and the legal provisions
Onerous Donations on donation apply. (Calanasan v. Sps. Dolorito, G.R.
No. 171937, 15 Nov. 2013)
Onerous donation is a donation given for which the
donor received a valuable consideration which is Persons who must accept the donation (2010
the equivalent of the property so donated. (Ibid.) BAR)
Samples of Onerous Donations The donee must accept the donation personally, or
through an authorized person with a special power
Where the condition is to take care of the donor’s for the purpose, or with a general and sufficient
family in the future; (Carlos v. Ramil, G.R. No. 6736, power, otherwise, the donation shall be void. (Art.
05 Sept. 1911); or where the donee must take care 745, NCC)
of the donor’s funeral expenses. Thus, even if real
property is involved, it is not essential to have a Reason for the need for an acceptance
public instrument. (Manalo v. De Mesa, G.R. No. L-
9449, 12 Feb. 1915) Because the donee may not want to accept the
donor’s liberality or if donation is onerous, he may
Kinds of Onerous Donations not agree with the burden imposed.
1. Totally onerous – When the burden is Rule Prior to Knowledge of Acceptance

equal to or greater than the value of the
property donated; and Prior to learning of the acceptance, there is no
perfected donation yet (no donation at all), hence,
2. Partially onerous – When the burden is the donor may give the property to somebody else,
less than the value of the donation. for he has not really parted with the disposition of
(Pineda, 2009) the property. (Paras, 2008)
Laws that apply to Onerous Donations When the donation and the acceptance are in
the same instrument
1. Totally onerous – Rules on Contracts.
If the donation and the acceptance are in the same
2. Partially onerous instrument, containing the signatures of both
donor and donee, it is understood that there is
a. Portion exceeding the value of the burden – already knowledge of the acceptance, hence, the
simple donations; and donation is already perfected. (Ibid.)
b. Portion equivalent to the burden – Law on
Contracts. (Ibid.)
2023 GOLDEN NOTES
Donations Made to Incapacitated Persons On Formalities
Donations made to incapacitated persons shall be

Must comply with the Must comply with the
void, though simulated under the guise of another
formalities of formalities of a will.
contract or through a person who is interposed.
donations.
(Art. 743, NCC)
On When Acceptance is Made
Persons who must accept the donation made in Acceptance during
favor of a minor After donor’s death.
donor’s lifetime.
If the donation is pure and simple and does not On When Property is Conveyed to the Donee
require written acceptance, the minors can accept Property retained by
the donation by themselves. Property completely
the donor while he is
conveyed to the done.
still alive.
If the donation needs written acceptance, it may be
accepted by their guardian or legal On Tax Payable
representatives. (Art. 741, NCC) Donor’s tax Estate tax
3. DISTINCTIONS BETWEEN MORTIS CAUSA AND Donation Inter Vivos

INTER VIVOS DONATIONS
It is a donation which takes effect during the
Donation inter vivos vs. Donation mortis causa lifetime of the donor.
INTER VIVOS MORTIS CAUSA Limitations imposed by law in making

donations inter vivos
As to When it Takes Effect
During the lifetime of 1. Donor must reserve sufficient means for his
the donor, support and for his relatives who are
Upon donor’s death.
independently of his entitled to be supported by him; (Art. 750,
death. NCC)
As to Cause or Consideration 2. Donation cannot comprehend future

In contemplation of property except donations between future
donor’s death without husband and wife; (Art. 84, FC); and
Donor’s pure
intention to dispose of
generosity. 3. No person may give by way of donation
the thing in case of
survival. more than he may give by will.
On Predecease
Some inter vivos Donations
Valid if donor survives
Void if donor survives.
the done. The following donations have been held to be inter
On Revocability vivos:
Always revocable at 1. A donation where the causes of revocation

Generally irrevocable
any time and for any have been specified;
except for grounds
reason before the 2. A donation where the donor reserved for
provided for by law.
donor’s death. himself a lifetime usufruct of the property,
for if he were still the owner, there would
CIVIL LAW
be no need of said reservation; two separate provisions of the NCC (Arts. 805 and
806, respectively) indicate that the law
3. A donation where the donor warrants the contemplates two distinct acts that serve different
title to the thing which he is donating – purposes. An acknowledgment is made by one
there would be no need of warranty if he is executing a deed, declaring before a competent
not transferring the title; officer or court that the deed or act is his own.
4. Where the donor immediately transferred On the other hand, the attestation of a will refers to
the ownership, possession and the act of the instrumental witnesses themselves
administration of the property to the donee, who certify to the execution of the instrument
but stipulated that the right of the donee to before them and to the manner of its execution.
harvest and alienate the fruits would begin (Echavez v. DCDC, G.R. No. 192916, 11 Oct. 2010)
only after the donor’s death. (But if what
had been transferred in the meantime was Some mortis causa donations
only the administration of the property, the
donation is mortis causa); The following have been held to be mortis causa:
5. Where the donor stated that while he is 1. Where the donor has reserved (expressly or
alive, he would not dispose of the property impliedly) the option to revoke the donation
or take away the land “because I am at any time before death, even without the
reserving it to him (the donee) upon my consent of the donee;
death.” (The Court held this to be inter vivos
because in effect, he had already renounced 2. Where the donation will be void if the
the right to dispose of his property); and transferee dies ahead of the transferor;
6. A donation where the donees “should not 3. If before the donor’s death, it is revocable at
yet get the possession until our demise,” the his will;
administration remaining with the donor
spouses, or either one surviving. (Paras, 4. If the donor retains full or naked ownership
2008) and control over the property while he is still
alive;
Donation mortis causa
5. If what was in the meantime transferred to
These are donations which are to take effect upon the done was merely the administration of
the death of the donor. the property; and
NOTE: It partakes of the nature of testamentary 6. If title will pass only after donor’s death.
provisions and governed by the Rules on (Paras, 2008)
Succession. (Art. 728, NCC)
Test in determining whether the donation is
Donation mortis causa must comply with the mortis causa or inter vivos
formalities prescribed by law for the validity of
wills What is controlling is the nature of the act and its
effectivity. If the act is one of disposition, and
Donation mortis causa must comply with the effective independently of the donor’s death, it is a
formalities prescribed by law for the validity of donation inter vivos. If it is one of deposition, but its
wills, otherwise, the donation is void and would effectivity is dependent upon the death of the
produce no effect. That the requirements of donor, it is a mortis causa donation. (Pineda, 2009)
attestation and acknowledgment are embodied in
2023 GOLDEN NOTES
NOTE: The title given to a deed of donation is NOT ii. The burdens assumed by the done.
a determinative factor which makes the donation
inter vivos or mortis causa. What is controlling is b. Acceptance may be made:
the provision stated in the deed and must be read i. In the same instrument; or
in its entirety. ii. In another public instrument,
notified to the donor in authentic
If there is doubt on the nature of the donation, the form, and noted in both deeds.
doubt should be resolved in favor of donation inter Otherwise, donation is void. (De
vivos, rather than mortis causa to avoid uncertainty Leon, 2006)
as to the ownership of the property subject of the
deed of donation. Q: The Roman Catholic Church accepted a
donation of a real property located in Lipa City.
4. FORM A deed of donation was executed, signed by the
donor, Don Mariano, and the donee, the Church,
as represented by Fr. Damian. Before the deed
Perfection of donation
could be notarized, Don Mariano died. Is the
donation valid? (2014 BAR)
The donation is perfected, not from the time of
acceptance, but from the time of knowledge by the
A: NO, the donation is void. The donation of an
donor that the donee has accepted (the knowledge
immovable property must be in a public
may of course be actual or constructive). If there is
instrument for it to be valid. In this case, the donor
no acceptance, the donation will be null and void.
died even before the notarization of the deed of
(Art. 734, NCC) (Paras, 2008)
donation. Hence, it does not satisfy the
requirement of being in a public instrument for the
Formalities of donation (1993, 1998, 2000,
donation to be valid.
2007, 2010 BAR)
Persons who may give or receive a donation

1. As regards movable property
1. Donor; and
a. With simultaneous delivery of property
2. Donee
donated:
Donor
i. For P5,000.00 or less – May be
oral/written
Any person who has capacity to contract and
ii. For more than P5,000.00 – Written
capacity to dispose of his property may make a
in public or private document
donation. (Art. 735, NCC) His capacity shall be
determined as of the time of the making of
b. Without simultaneous delivery:
donation. (Art. 737, NCC)
i. The donation and acceptance must

The term “person” who could make donations
be written in a public or private
refers to natural and artificial persons with legal
instrument (Statute of Frauds),
personalities. With respect to artificial persons,
regardless of value. Otherwise,
they must be authorized by their Articles to donate.
donation is unenforceable.
(Pineda, 2009)
2. As regards immovable property

NOTE: “Making of donation” shall be construed to
mean perfection of the donation, otherwise if
a. Must be in a public instrument specifying
“making” means “giving,” Art. 737 of the NCC would
i. The property donated; and
in some cases be inconsistent with Art. 734 of the
CIVIL LAW
NCC which states that “the donation is perfected Donee

from the moment the donor knows of the
acceptance by the donee.” To avoid a contradiction, All those who are not specially disqualified by law.
the rule may be stated thus: “at the time the
donation is perfected, both the donor and the Q: May an unborn child be a donee or a donor?
donee must be capacitated.”
A: An unborn child may be a donee but not a donor.
Status of a donation made by an incapacitated As a donee, donations made to conceived and
person unborn children may be accepted by those persons
who would legally represent them if they were
Following the laws in contracts (which are of already born. (Art. 742, NCC)
suppletory application to simple donations) said
donations should be merely considered voidable. NOTE: If the conceived child did not become a
The same answer should be given in case there was person, the donation is null and void. An unborn
vitiated consent (as in the case of fraud or child cannot be a donor because it is essential for a
intimidation). (Paras, 2008) person to be able to make a donation, he must have
full civil capacity a donor to a have full civil
Q: May an emancipated minor by himself make capacity.
donation mortis causa?
When a Person is “Specially Disqualified’’ to
A: YES, because at the age of 17, a person of sound Accept a Donation
mind can already make a valid will.
“Specially disqualified’’ does not refer to those
Donation by a guardian or trustee incapacitated to contract like minors or those of
unsound mind, but to people such as those
Guardians and trustees may of course donate their mentioned in Art. 739 of the NCC and husbands and
own properties, unless otherwise disqualified by wives with respect to immoderate donations from
the law, but not the property entrusted to them, for each other (donations of spouses inter se). (Paras,
the simple reason that they are not the owners 2008)
thereof. (Ibid.)
Void Donations Under Art. 739 of the NCC
Status of a donation of ward’s property by a
guardian a. Those made between persons who were
guilty of adultery or concubinage at the
It is believed that such a donation, if made in the time of the donation;
guardian’s name, is null and void. On the other
hand, if made by the guardian in the name of, and b. Those made between persons found guilty
with the consent of the ward, it would be valid of the same criminal offense, in
provided judicial permission is obtained. This is consideration thereof;
particularly true if the donation benefits, in some
way, the ward. (Ibid.) c. Those made to a public officer or his wife,
descendants, and ascendants, by reason of
NOTE: When the donation is clearly in the interest his office. (Art. 739, NCC)
of the beneficiaries, it would be contrary to the
spirit and intent of the law to say it cannot be done.
(De Leon, 2006; Araneta v. Perez, G.R. No. L-18872,
15 July 1966)
2023 GOLDEN NOTES
Natural and Juridical Persons May be Donees unless the contrary is intended.
Since the law does not distinguish, both natural and 2. Where there is no stipulation regarding
juridical persons may become donees. An the payment of debts; (Art. 759, NCC):
unregistered partnership may become a donee
because it is a juridical or artificial person despite a. Donee is generally not liable to pay
its non-registration. But the conjugal partnership donor’s debts;
itself, not being natural or juridical, cannot be a
donee. Instead, the donation should be given by the b. Donee is responsible only if donation
stranger to the husband and wife, the share of the has been made in fraud of creditors; and
husband being credited to his capital, and that of
the wife being considered part of her paraphernal NOTE: The presumption that the
property. (Ibid.) donations was made in fraud of
creditors arises when the donor has not
5. LIMITATIONS left sufficient assets to pay his debts, at
the time of donation.
Rights and Actions the Donee Acquires

c. The donee shall not be liable beyond the
value of donation received. (Paras,
The donee is subrogated to the rights and actions
2008)
which in case of eviction would pertain to the
donor. (Art. 754, NCC)
Double Donation
Liability of Donors for Eviction of Hidden

There is double donation when the same thing has
Defects
been donated to two or more persons. The rule on
double sale under Art. 1544 of the NCC shall be
1. If the donation is simple or remunerative
applicable.
- donor is not liable for eviction or hidden
defects because the donation is gratuitous,
Rule: “First in time, stronger in right.”
unless the donor acted in bad faith; and
1. Movable property - Preference in ownership is

2. If the donation is onerous - the donor is
given to the person who first possessed it in
liable on his warranty against eviction and
good faith.; (Art. 1544 (1), NCC).; and
hidden defects but only to the extent of the
burden. (Arts. 754 and 726, NCC)
2. Immovable property - Preference in ownership
is given:
Rules regarding the liability of the donee to pay
the debts of donor
a. to the first who registered his right in good
faith in the Registry of Property;
1. Where donor imposes obligation upon the
donee, the donee is liable: (Art. 758, NCC)
b. if there was no registration, to the person
who first possessed in good faith; or
a. To pay only debts previously contracted;
and
c. if there was no possession, to the person
b. For debts subsequently contracted only
who presents the oldest title, provided that
when there is an agreement to that effect.
the title had been acquired in good faith.
(Paras, 2008)
NOTE: But he is not liable for debts in
excess of the value of donation received,
CIVIL LAW
In case of an Excessive, Inofficious Donation NOTE: The phrase “found guilty of same
offense” does NOT refer only to
1. A donor may not donate more than what he concubinage and adultery.
can give by will. If he donates more than what
he cannot give by will, the donation will 3. Those made to a public Officer or his wife,
become excessive and to insist on it, the descendants and ascendants, by reason of
legitime of the compulsory heirs will be his office;
impaired. Legitime is reserved for the
compulsory heirs and the same cannot be 4. Relative incapacity to succeed;
impaired or disposed of by the testator; and
5. By individuals, associations or
2. The donee cannot receive by way of donation corporations not permitted by Law to make
more than what he may receive by will. If the donations; (Art. 1027, NCC);
donee can receive by donation (devise or
legacy) more than what the testator is allowed 6. By a Ward to the guardian before the
by law to give, the donation is inofficious and approval of accounts; (Art. 1027, NCC)
it may be suppressed totally or reduced as to
its excess. 7. By Spouses to each other during the
marriage or to persons of whom the other
Remedy in case of Donations Executed in Fraud spouse is a presumptive heir; (Art. 87, FC)
of Creditors
8. To Relatives of such priest, etc. within the
The creditors may rescind the donation to the fourth degree, or to the church to which
extent of their credits. The action is known as such priest belongs;
accion pauliana. (Art. 1381, NCC)
9. To an Attesting witness to the execution of
NOTE: The law establishes a presumption when the donation, if there is any, or to the spouse,
donation is apparently in fraud of creditors, namely parents or children or anyone claiming
failure to reserve sufficient property (at time of under them;
donation) to pay previous debts. (Paras, 2008)
10. To the Priest who heard the confession of
Donations prohibited by law (1990, 2000 BAR) the donor during the latter’s last illness, or
(L-A-W-S-C-R-A-P-O-P) the minister of the gospel who extended
spiritual aid to him during the same
1. By persons guilty of Adultery or period); or
concubinage at the time of donation;
11. To a Physician, surgeon, nurse, health
NOTE: The action for declaration of nullity officer or druggist who took care of the
may be brought by the spouse of the donor donor during his/her last illness. (Art. 1027,
or donee; and the guilt of the donor and NCC)
donee may be proved by preponderance of
evidence.
2. Those made between persons found guilty

of the same Criminal offense, in
consideration thereof; (Art. 739, NCC)
2023 GOLDEN NOTES
6. REDUCTION AND REVOCATION Grounds for Reduction of Donation
The same grounds for revocation under Art. 760 of

Grounds for Revocation of Donation (2022 BAR)
the NCC. The donation shall be reduced insofar as it
exceeds the portion that may be freely disposed of
1. Under Art. 760, NCC
by will, considering the whole estate of the donor at
the time of the birth, appearance, or adoption of a
a. Birth of a donor’s child or children
child. (Art. 761, NCC)
(legitimate, legitimated, or
illegitimate) after the donation, even
Revocation of perfected donations
though born after his death;
Once a donation is perfected, it cannot be revoked

b. Appearance of a donor’s child who is
without the consent of the donee except on grounds
missing and thought to be dead by the
provided by law. (Arts. 760, 764 & 765, NCC)
donor; or
Revocation or reduction is NOT automatic.

c. Subsequent adoption by the donor of a
minor child.
The emergence of the circumstances enumerated
2. Under Art. 764, NCC – When the donee fails
in Art. 760 of the NCC does not automatically
to comply with any of the conditions which
revoke or reduce the donation. The revocation or
the donor imposed upon the donee; or
reduction is authorized only if the amount or value
of the property donated exceeds the disposable
3. Under Art. 765, NCC – By reason of
free portion.
ingratitude
Q: For purposes of prescription of action, what

a. If the donee should commit some
is the rule in case of concurrence of two or more
offense against the person, the honor
grounds for revocation or reduction?
or the property of the donor, or of his
wife or children under his parental
A: If two or more causes are present, the earliest
authority;
among them shall be the starting point in the
reckoning of the period of prescription of the
b. If the donee imputes to the donor any
action. (Pineda, 2009)
criminal offense, or any act involving
moral turpitude, even though he
Execution of a donation subject to a condition
should prove it, unless the crime or act
has been committed against the donee
A donor may execute a donation subject to a
himself, his wife or children under his
condition, the non-fulfilment of which authorizes
authority; or
the donor to go to court to seek its revocation (not
reduction).
c. If he unduly refuses him support when
the donee is legally or morally bound
Revocation of donation in a conditional
to give support to the donor.
donation
NOTE: The list of grounds for

A donor cannot revoke a conditional donation
revocation by reason of ingratitude
unilaterally, that is, without going to court, even if
under Art. 765, NCC of the NCC is
the donee had breached any of the obligations
exclusive.
imposed in the donation. A judicial action is
essential if the donee refuses to return the property
or pay its value to the donor or to latter’s heirs or
CIVIL LAW
assigns. However, the action must be filed within A: NO. Only compulsory heirs or their heirs, and
the prescriptive period fixed by law, otherwise, it successors-in-interest may sue for reduction of
will be barred. (De Luna v. Abrigo, GR No. L-57455, inofficious donations. The remedy of the creditor is
18 Jan. 1990) to sue during the lifetime of the donor for the
annulment of inofficious donation made in fraud of
The breach of the condition in the donation causes creditors, (Art. 1387, NCC) or they can go against
the automatic revocation. All the donor has to do is the estate of the deceased and not against the
to formally inform the donee of the revocation. donees.
Judicial intervention only becomes necessary if the
donee questions the propriety of the revocation. Obligations of the donee upon the revocation or
Even then, judicial intervention is required to reduction of donation
merely confirm and not order the revocation.
Hence, there can be no 10-year prescriptive period 1. Return the thing or the object of the
to file an action to speak of. When the donee does donation;
not contest the revocation, no court action is
necessary. (Province of Camarines Sur v. Bodega 2. If the property had already been alienated
Glassware, G.R. No. 194199, 22 Mar. 2017) and could not be recovered anymore, its
value shall be paid to the donor. The value
NOTE: If the deed of conditional donation expressly shall be the price of the property
provided for the automatic revocation and/or estimated at the time of the perfection of
reversion in case of breach of any of the conditions the donation; and
therein and the donee fails to comply with or violate
any of the conditions stated in the donation, the title 3. If the property had been mortgaged, the
over the subject property shall ipso facto revert to donor may pay the mortgage obligations,
the donor, his heirs, successors or assigns and all subject to reimbursement by the donee.
improvements, structures or buildings thereon (Art. 762, NCC)
shall be forfeited in favor of the donor. (Estate of
Rodriguez v. Republic, G.R. No. 214590, 27 Apr. 2022, Obligation of the Donee to Return the Fruits
as penned by J. Hernando).
1. If due to non-compliance with any
Q: What if the donee challenges the propriety of condition imposed on the donation –
the revocation of the donation? Can the Court Fruits acquired after non-compliance shall
settle whether the resolution of the donation is be returned; and
proper or not?
2. If due to causes stated under Art. 760,
A: If the donee challenges the propriety thereof, the NCC ingratitude, or inofficious
Court can conclusively settle whether the resolution donations – fruits acquired from the time
is proper or not. The judicial intervention is not for the complaint is filed shall be returned.
the purpose of obtaining a judicial declaration (Art. 768, NCC)
rescinding a contract already deemed rescinded by
reason of the parties' agreement but to determine
whether or not the rescission was proper. (Estate of
Rodriguez v. Republic, G.R. No. 214590, 27 Apr. 2022,
as penned by J. Hernando)
Q: Can the creditors of the deceased file an

action for reduction of inofficious donation?
2023 GOLDEN NOTES
Period of prescription of action for revocation Act of Ingratitude

or reduction of donation
From the time the
PRESCRIPTIVE donor had learned of
RECKONING PERIOD the donee’s act of
PERIOD
One (1) year ingratitude, it was
Birth of Child
possible for him to file
From the birth of the an action. (Art. 769,
Four (4) years
first child. NCC)
Legitimation (Pineda, 2009)
From birth of the Q: What if the donor dies within the four-year
legitimated child, not prescriptive period?
Four (4) years from the date of
marriage of the A: The right of action to revoke or reduce is
parents. transmitted to his heirs. (Pineda, 2009)
Recognition of an Illegitimate Child Q: Jose, single, donated a house and lot to his
only niece, Maria, who was of legal age and who
From the date the
accepted the donation. The donation and
recognition of the child
Maria's acceptance thereof were evidenced by
Four (4) years by any means
a Deed of Donation. Maria then lived in the
enumerated in Art. 712
house and lot donated to her, religiously paying
of the FC.
real estate taxes thereon. Twelve years later,
when Jose had already passed away, a woman
Adoption
claiming to be an illegitimate daughter of Jose
filed a complaint against Maria. Claiming rights
From the date of filing
as an heir, the woman prayed that Maria be
of the original petition
ordered to reconvey the house and lot to Jose's
Four (4) years for adoption, provided
estate. In her complaint she alleged that the
a decree of adoption is
notary public who notarized the Deed of
issued thereafter.
Donation had an expired notarial commission
Appearance of a Child Believed to be Dead when the Deed of Donation was executed by
Jose. Can Maria be made to reconvey the
From the date an property? What can she put up as a defense?
information was (2015 BAR)
received as to the
Four (4) years
existence or survival of A: NO. Maria cannot be compelled to reconvey the
the child believed to be property. The Deed of Donation was void because
dead it was not considered a public document. However,
a void donation can trigger acquisitive
Non-compliance with Any Condition Imposed prescription. (Solis v. CA, G.R. Nos. 46753-54, 25 Aug.
1989) The void donation has a quality of titulo
From the non- colorado enough for acquisitive prescription
compliance with the especially since 12 years had lapsed from the deed
Four (4) years
condition (Art. 764, of donation.
NCC)
CIVIL LAW
Maria can set up the defense that the action has Remedy of the Donor
prescribed. An action for revocation of the
donation on the ground that it impaired the If the property is already transferred in the name
legitime of a compulsory heir may only be filed of the buyer or mortgagee, the remedy of the donor
within ten (10) years from the time the cause of is to recover the value of the property determined
action accrues which is at the time of the death of as of the time of the donation. (Art. 766, NCC)
Jose. The facts are not clear as to when Jose died,
but on the assumption that he died 10 years prior Waiver of Actions to Revoke Donations
to the filing of the action, the same has clearly
prescribed. The donor cannot make a renunciation of actions to
revoke in advance. Such waiver is void. (Art. 772(2),
Ingratitude NCC) However, the donor may renounce an action
to revoke if the act of ingratitude had already been
Q: Are there any other grounds for revocation done.
of donation by reason of ingratitude other than
those enumerated under Art. 765 of the NCC?
D. PRESCRIPTION
A: NONE. The grounds under Art. 765 of the NCC are
exclusive.
It is a means of acquiring ownership and other real

NOTE: The rationale behind the article is that a
rights or losing rights or actions to enforce such
person who has been favored with kindness and
rights through the lapse of time. Thus, prescription
generosity has the moral obligation to be and
applies to ownership and other real rights as well as
remain grateful to the benefactor. It is a matter of
to rights and actions of any kind whatsoever. (De
tradition that generosity must not be reciprocated
Leon, 2006)
with ungratefulness.
NOTE: The applicability of prescription is a

Q: Suppose the husband of the donee had
question of fact. It is evidentiary and must be
maligned the donor, is there a ground for
established by clear and convincing evidence.
revocation by reason of ingratitude?
Who may acquire by prescription (P-S-M)

A: NONE. The act must be imputable to the donee
himself and not to another. (Pineda, 2009)
1. Persons who are capable of acquiring
property by other legal modes;
Mortgages and Alienations Effected Before the
2. State; and
Notation of the Action for Revocation
3. Minors through guardians or personally.
(Art. 1107, NCC)
If there are mortgages and alienations effected
before the notation of the complaint for revocation
Persons Against Whom Prescription May Run
in the Registry of Property, such alienations and
mortgages shall remain valid and must be
1. Minors and other incapacitated persons
respected. (Art. 766, NCC)
who have parents, guardians or other legal
representatives;
NOTE: Alienations and mortgages after the
registration of the pendency of the complaint shall
2. Absentees who have administrators, either
be void.
appointed by them before their
disappearance, or appointed by the courts;
2023 GOLDEN NOTES
3. Persons living abroad, who have managers 1. DISTINCTIONS BETWEEN ACQUISITIVE AND
or administrators; EXTINCTIVE PRESCRIPTION
4. Juridical persons, except the State and its

Two Concepts of Prescription
subdivisions; (Art. 1108, NCC) and
1. Acquisitive prescription or Adverse

5. Prescription, acquisitive and extinctive,
Possession - It is the acquisition of ownership
runs in favor of or against a married
and other real rights through possession of a
woman. (Art. 1110, NCC) This presupposes
thing in the manner and under the conditions
a situation where the parties involved are
provided for by law:
a married woman and another person not
her husband.
a. Ordinary acquisitive prescription -
Requires possession of things in good
Persons who are disqualified from administering
faith and with just title for the time fixed
their property have a right to claim damages from
by law which is 10 years; and
their legal representatives whose negligence has
been the cause of prescription.
b. Extraordinary acquisitive prescription -
The acquisition of ownership and other
Things Subject to Prescription
real rights without the need of title or of
good faith or any other condition and
All things within the commerce of men:
would prescribe in 30 years. (De Leon,
2011)
a. Private property; and
b. Patrimonial property of the State. (Art. Requisites of Prescription as a Mode of
1113, NCC) Acquiring Ownership
NOTE: Patrimonial property of the State is the 1. Capacity to acquire by prescription;

property it owns but which is not devoted to public 2. A thing capable of acquisition by
use, public service, or the development of national prescription;
wealth. It is wealth owned by the state in its 3. Possession of the thing under certain
private, as distinguished from its public, capacity. conditions; and
(Paras, 2008) 4. Lapse of time provided by law.
Things Not Subject to Prescription Mere possession with a juridical title, such as by a
usufructuary, a trustee, a lessee, an agent, or a
1. Public domain; pledge, not being in the concept of an owner, cannot
2. Intransmissible rights; ripen into ownership by acquisitive prescription
3. Movables possessed through a crime; and unless the juridical relation is just expressly
4. Registered land. repudiated as such repudiation has been
communicated to the other party. (Esguerra v.
Rights Not Extinguished by Prescription Manantan, G.R. No. 158328, 23 Feb. 2007)
1. Demand right of way; NOTE: The first two requisites apply to both
2. Abate public /private nuisance; ordinary and extraordinary prescription, but the
3. To declare a contract void; last two requisites vary for each kind.
4. Recover property subject to expressed
trust;
5. Probate of a will; and
6. Quiet title.
CIVIL LAW
2. Extinctive prescription or limitation of Requisites of Ordinary Prescription (C-L-A-S-G)

actions – It involves loss of property rights or
actions through the possession by another of a 1. Capacity of the possessor to acquire by
thing for the period provided by law or failure prescription (Art. 1107, NCC);
to bring the necessary action to enforce one’s 2. Susceptibility of object to prescription
right with in the period fixed by law. Rights and (Art. 1113, NCC);
actions are lost by the lapse of time. (Arts. 1106 3. Adverse possession of the character
and 1139, NCC) prescribed by law (Arts. 1118 and 1119,
NCC)
NOTE: It is also referred to as prescription of 4. Lapse of time required by law (1139, NCC);
actions, statute of limitations, and statute of repose. and
(De Leon, 2006) 5. Good faith of possessor or proof of just
title. (Art. 1127, NCC)
Basis of Acquisitive Prescription
Q: When is a possessor in good faith?
It is based on the assertion of a usurper of an
adverse right for such a long period of time, A: If he is not aware of the existence of any flaw or
uncontested by the true owner of the right, as to defect in his title or mode of acquisition which
give rise to the presumption that the latter has invalidates it (Art. 526 in relation to Art. 1128, NCC)
given up such right in favor of the former. and has reasonable belief that the person from
(Tolentino, 1992) whom he received the thing was the owner thereof,
and could transmit his ownership. (Art. 1127, NCC)
Q: What are the basic requirements of
prescription as a mode of acquiring ownership? Q: When must good faith exist?
A: The following are the basic requirements of A: It must exist not only from the beginning but
prescription as a mode of acquiring ownership: throughout the entire period of possession fixed by
law. (Pineda, 2009)
1. Actual possession of a property, which is
susceptible of prescription; Just title
2. Possession must be in the concept of an
owner and not that of a mere holder; (Art. It means that the possessor obtained the
1118, NCC) possession of the property through one of the
3. Possession must be public or open; (Art. modes recognized by law for acquiring ownership,
1118, NCC) but the transferor or grantor was not the owner of
4. Possession must be peaceful; (Art. 1118, the property, or he has no power to transmit the
NCC) right. (Art. 1129, NCC)
5. Possession must be continuous and not
interrupted; (Art. 1118, NCC) NOTE: Just title is never presumed, it must be
6. Possession must be adverse, that is, proved. (Art. 1131, NCC) The title for prescription
exclusive and not merely tolerated; and must be true and valid. (Art. 1130, NCC)
7. Possession must satisfy the full period
required by law. (Pineda, 2009) True title
Ordinary Prescription One which actually exists and is not just a

pretended one.
It requires possession of things in good faith and
with just title for the time fixed by law (Arts. 1127-
1130, NCC)
2023 GOLDEN NOTES
NOTE: An absolutely simulated or fictitious title is A: Through uninterrupted possession for eight (8)
void and cannot be a basis for ordinary years, without need of any other condition. (Art.
prescription. (Pineda, 2009) 1132, NCC)
Valid title Q: How about ownership and other real rights

over immovables?
A title which by itself is sufficient to transfer
ownership without the necessity of letting the A: They prescribe through uninterrupted adverse
prescriptive period elapse. (Paras, 2008) possession for 30 years, without need of title or of
good faith. (Art. 1137, NCC)
Extraordinary Prescription
Q: What are the rules for the computation of
Prescription where the possessor is in bad faith. It time necessary for prescription?
does not require good faith or just title but
possession for a period longer than ordinary A:
acquisitive prescription. (Pineda, 2009) 1. The present possessor may complete the
period necessary for prescription by
Requisites of Extraordinary Prescription tacking his possession to that of his
(A-Su-Ca-L) grantor or predecessor-in-interest;
1. Capacity of the possessor to acquire by 2. It is presumed that the present possessor

prescription; (Art. 1107, NCC); who was also the possessor at a previous
2. Susceptibility of object to prescription time, has continued to be in possession
(Art. 1113, NCC); during the intervening time, unless there
3. Adverse possession of the character is proof to the contrary; and
prescribed by law; (Arts. 1118 and 1119,
NCC) and 3. The first day shall be excluded and the last
4. Lapse of time required by law. (1139, NCC). day included. (Art 1138, NCC)
Q: What are the periods as regards prescription Q: Emilio died, leaving eight (8) children. In
as a mode of acquisition of ownership? 1960, his eldest child, Flores, took possession of
and cultivated the land, caused the cancellation
A: of the tax declaration in Emilio’s name covering
1. Movables a parcel of land and caused the issuance of
a. 4 years ‐ If in good faith (Art. 1132, another in his own name. The co‐heirs of Flores
NCC); and discovered the cancellation. Upon Flores’ death,
b. 8 years ‐ If in bad faith. (Art. 1140, the heirs of his sisters together with his
NCC) surviving sisters filed a complaint in 1999
against the heirs of Flores for partition of the lot
2. Immovables and declaration of nullity of the documents. Did
a. 10 years ‐ If in good faith (Art. 1134, the heirs of Flores acquire ownership over the
NCC); and lot by extraordinary acquisitive prescription?
b. 30 years ‐ If in bad faith. (Art. 1141,
NCC) A: YES. While the action to demand partition of a
co‐owned property does not prescribe, a co‐owner
Q: How does ownership of personal property may acquire ownership thereof by prescription,
prescribe? where there exists a clear repudiation of the co‐
ownership, and the co‐owners are apprised of the
claim of adverse and exclusive ownership. In this
CIVIL LAW
case, the respondents never possessed the lot, (Calicdan v. Cendeña, G.R. No. 155080, 5 Feb. 2004)
much less asserted their claim thereto until 1999
when they filed the complaint for partition. In Q: Anthony bought a piece of untitled
contrast, Flores took possession of the lot after agricultural land from Bert. Bert, in turn,
Emilio’s death and exercised acts of dominion acquired the property by forging Carlo’s
thereon‐ tilling and cultivating the land, signature in a deed of sale over the property.
introducing improvements, and enjoying the Carlo had been in possession of the property for
produce thereof. The statutory period of eight (8) years, declared it for tax purposes, and
prescription commenced in 1960 when Flores, religiously paid all taxes due on the property.
who had neither title nor good faith, secured a tax Anthony is not aware of the defect in Bert’s title
declaration in his name and may, therefore, be said but has been in actual physical possession of
to have adversely claimed ownership of the lot. On the property from the time he bought it from
said date, respondents were also deemed to have Bert, who had never been in possession.
become aware of the adverse claim. Flores’s Anthony has since then been in possession of
possession thus ripened into ownership through the property for one year.
acquisitive prescription after the lapse of 30 years.
(Heirs of Restar v. Heirs of Cichon, G.R. No. 161720, Can Anthony acquire ownership of the property
22 Nov. 2005) by acquisitive prescription?
Q: Sixto, owner of a parcel of land, died. He was A: NO. Anthony could acquire ownership of the
survived by his wife and three children. The property by ordinary acquisitive prescription
subject land was donated by his wife to Silverio, which requires just title and good faith (Art. 1117,
who immediately entered into possession of NCC). There was just title because a deed of sale
the land, built a fence around it, constructed a was issued in his favor even though it was forged,
residential house, declared it for tax purposes which fact he was not aware of. Moreover, he needs
and paid the taxes thereon, and resided there to possess the land in good faith and in the concept
until his death. After 45 years from the time of of owner for a total of ten (10) years to acquire
donation, Soledad, one of Sixto’s children, filed ownership. However, since Anthony possessed the
a complaint for recovery of ownership, and land for only one (1) year, he has not completed the
possession against Silverio. Who is the rightful ten‐year period. Even if Anthony lacks the 8‐year
owner of the land? period of possession by Carlo who in the deed of
sale is supposed to be his grantor or predecessor-
A: Silverio became the rightful owner of the land by in-interest (Art. 1138(1), NCC), the period is still
extraordinary acquisitive prescription. In short of 10 years.
extraordinary prescription ownership and other
real rights over immovable property are acquired Q: If Carlo is able to legally recover his property,
through uninterrupted adverse possession thereof can he require Anthony to account for all the
for 30 years without need of title or of good faith. fruits he has harvested from the property while
When Soledad filed the case, Silverio was in in possession?
possession of the land for 45 years counted from
the time of the donation. This is more than the A: NO. Since Anthony is a possessor in good faith,
required 30 years of uninterrupted adverse Anthony cannot be made to account for the fruits
possession without just title and good faith. Such he gathered before he was served with summons. A
possession was public, adverse and in the concept possessor in good faith is entitled to the fruits
of an owner. He declared the land for taxation received before the possession was legally
purposes and religiously paid the realty taxes interrupted by the service of summons. (Art. 544,
thereon. Together with his actual possession of the NCC) After Anthony was served with summons, he
land, these tax declarations constitute strong became a possessor in bad faith and a builder,
evidence of ownership of the land occupied by him. planter, sower in bad faith. He can also be made to
2023 GOLDEN NOTES
account for the fruits but he may deduct expenses Acquisitive Prescription vs. Extinctive
for the production gathering and preservation of Prescription
the fruits. (Art. 443, NCC)
ACQUISITIVE EXTINCTIVE
Q: If there are standing crops on the property PRESCRIPTION PRESCRIPTION
when Carlo recovers possession, can Carlo As to Applicability
appropriate them? (2008 BAR)
Applicable to Applicable to all kinds
A: YES. The value of the standing crops must be
ownership and other of rights, whether real
prorated depending upon the period of possession
real rights. or personal.
and the period of growing and producing the fruits.
Anthony is entitled to a part of the net harvest and
a part of the expenses of cultivation in proportion As to Legal Effect
to his period of possession. However, Carlo may
allow Anthony to gather these growing fruits as an Expressly vests the
indemnity for the expenses of cultivation. If Produces extinction of
property and raises a
Anthony refuses to accept this concession, he shall rights or bars a right of
new title in the
lose the right to indemnity under Art. 443, NCC. action. Results in the
occupant. The
(Art. 545(3), NCC) loss of a real or
relationship between
personal right or bars
the occupant and the
Extinctive Prescription the cause of action to
land in terms of
enforce said right. One
possession is capable
It is based on the probability, born of experience, does not look to the act
of producing legal
that the alleged right which accrued in the past of the possessor but to
consequences. It is the
never existed or has already been extinguished; or the neglect of the
possessor who is the
if it exists, the inconvenience caused by the lapse of owner.
actor.
time should be borne by the party negligent in the
assertion of his right. (Tolentino, 1992)
As to requisite
Requisites
Possession of a Inaction by the owner
claimant who is not the or neglect of one with a
1. Capacity to acquire by prescription;
owner. right to bring his action.
2. A thing capable of acquisition by
prescription;
As a defense
3. Possession of the thing under certain
conditions; and
Can be proven under Should be affirmatively
4. Lapse of time provided by law.
the general issue pleaded and proved to
without it being bar the action or claim
affirmatively pleaded. of the adverse party.
(De Leon, 2006)
CIVIL LAW
2. DISTINCTIONS BETWEEN EXTINCTIVE As to creation

PRESCRIPTION AND LACHES
Prescription is purely
Prescription vs. Laches statutory in origin and
is founded on ground
A creation of equity
of public policy. Time
PRESCRIPTION LACHES which, as such, is
limit is imposed for a
applied not really to
As to Concept party to enforce his
penalize neglect or
claim so that title to
sleeping upon one's
property and other
right, but rather to
rights will be
avoid recognizing a
stabilized. It protects
right when to do so
the person who is
would result in a
diligent and vigilant in
clearly inequitable
asserting his right,
situation. (Chavez v.
The failure or neglect, and conversely
Bonto-Perez, G.R. No.
for an unreasonable punishes the person
109808, 01 Mar.
and unexplained who sleeps on his
1995)
length of time, to do right. (Fernandez v.
that which by Cuerva, G.R. No. L-
exercising due 21114, 28 Nov. 1967)
diligence could or
should have been As a defense
done earlier; it is GR: Evidentiary in
negligence or nature and requires
One acquires
omission to assert a full blown trial.
ownership and other
right within a
real rights through the
reasonable time, XPNs:
lapse of time in the
warranting a 1. When the
manner and under the
presumption that the plaintiff’s
action laid down by Evidentiary in
party entitled to complaint on its
law. (Art. 1106, NCC) nature and cannot
assert it either has face or the
be established by
abandoned it or evidence he
mere allegations in
declined to assert it. presented
the pleadings. The
(De Leon, 2006) It shows clearly
party alleging laches
applies even to that indeed the
must adduce in court
imprescriptible action has
evidence proving
actions e.g., an action prescribed at
such allegation. (Apo
to annul a void the time it was
v. Sps. Roberto, G.R.
contract may be filed; or
No. 198356, 20 Apr.
barred by laches.
2015)
2. If, before trial, a
party has no
means of
knowing that
opponent’s
claim has
already lapsed,
2023 GOLDEN NOTES
prescription as a Action to Demand a Right of Way

defense may be to Abate a Nuisance
pleaded later as
soon as the true Imprescriptible
nature of the
claim is Action to Quiet Title if Plaintiff in Possession
discovered. (De
Leon, 2011) Imprescriptible
The burden of proof Void Contracts

rests on the part
Applies to both action and defense.
claiming it. Failure to
plead constitutes as a
NOTE: However, an action to annul a voidable
waiver of defense and
contract prescribes after four (4) years.
cannot be raised for
the first time on trial or Action to Demand Partition
appeal.
As long as the co‐ownership is recognized
Instances when prescription is not allowed expressly or impliedly. (Art. 494, NCC)
Property of Public Dominion

NO PRESCRIPTION APPLICABLE
By Offender Right of reversion or reconveyance to the State
of the public properties registered and which
When it is possessed through a crime such as are not capable of private appropriation or
robbery, theft, or estafa. private acquisition does not prescribe.
NOTE: The person who cannot invoke the right of NOTE: In contrast, where private property is
prescription is the offender or person who taken by the Government for public use without
committed the crime or offense, not a subsequent first acquiring title thereto either through
transferee who did not participate in the crime or expropriation or negotiated sale, the owner’s
offense, unless the latter knew the criminal action to recover the land or the value thereof
nature of the acquisition of the property by the does not prescribe. (De Leon, 2006)
transferor. (Art. 1133, NCC; Pineda, 2009)
Registered Lands Prescription and laches cannot apply to registered

land covered by the “Torrens system” because
under the Property Registration Decree, no title to
1. An action to recover a registered land by the registered land in derogation to that of the
owner; and registered owner shall be acquired by prescription
or adverse possession. (Jakosalem v. Barangan, G.R.
2. Right to petition for the issuance for the No. 175025, 15 Feb. 2012)
issuance of a Writ of Possession filed by the
applicant for registered land.
NOTE: Similarly, an action to recover possession

of a registered land never prescribes.
CIVIL LAW
Prescription of actions Defamation
PRESCRIPTIVE PERIOD One (1) year (Art. 1147, NCC)
Action to Recover Movables All Other Actions Not Specified
Eight (8) years (good faith); or Five (5) years (Art .1149, NCC)
four (4) years (bad faith) from the time the

possession is lost. (Art. 1140, NCC; Pineda, 2009) Q: What are the grounds for interruption of
prescriptive period?
Action to Recover Immovables
A:
30 years (Recover ownership). (Art. 1141, NCC) 1. When they are filed before the court;
2. When there is a written extrajudicial
10 years (Recover real right of possession). (Art. demand by the creditors; or
555(4), NCC); Pineda, 2009)
3. When there is any written
Mortgage Action acknowledgment of the debt by the debtor.
(Art. 1155, NCC)
10 years from default of mortgagor. (Art. 1142,
NCC) Prescription where possession in good faith is
converted into possession in bad faith
Action based on Written Contract
If the possession in good faith is later converted into
10 years bad faith, the prescriptive period shall be computed
in the following manner:
NOTE: six (6) years if the contract is oral or
quasi-contract. (Art. 1145, NCC) 1. Movables – The period of ordinary period
is 4 years, while that of extraordinary
Action based on Obligation Created by Law
prescription is 8 years. Since the period of
extraordinary prescription is two times
Ten (10) years from the time the right of action
longer than the ordinary prescription, the
accrues
number of years in ordinary period will be
Action based on Judgment multiplied by two to get the period for
extraordinary prescription.
Ten (10) years from the day judgment became
final and executory. (Art. 1144, NCC) E.g., If after two years of possession in
good faith of a movable property, the
Action based on Injury to Rights of Plaintiff possession was converted in bad faith. The
two years would be equivalent to four
Four (4) years
years possession in bad faith.
Action based on Quasi-Delicts
2. Immovable – The period for ordinary
Four (4) years (Art. 1146, NCC) prescription in good faith is 10 years and
30 years for extraordinary or in bad faith.
Action based on Forcible Entry and Detainer Since the extraordinary prescription is
three times longer than the ordinary
One (1) year prescription it shall be multiplied by three.
(De Leon, 2006)
2023 GOLDEN NOTES
E.g., If after six (6) years of possession in has already set in, if the delay was caused by the
good faith of a real property, the judgment obligor for his or her benefit or advantage.
possession was converted in bad faith, the (Heirs of Simeon Piedad v. Bobilles, G.R. No. 208614,
six (6) years of possession in good faith 27 Nov. 2017)
would be equivalent to 18 years
possession in bad faith.
Q: Sometime in 1974, Simeon Piedad filed a case

for annulment of an absolute deed of sale
against Candelaria and Mariano Bobilles. The
case was docketed as Civil Case No. 435-T. The
trial court ruled in Piedad's favor and declared
the deed of sale as null and void for being a
forgery. On appeal, the Court of Appeals
dismissed the appeal and affirmed the trial
court ruling. The Court of Appeals Decision
became final and executory on 01 Nov. 1998.
Judge Gaviola, upon motion, then issued an
order for the issuance of a writ of demolition on
22 Oct. 2001.
However, the writ of demolition was never

served on respondents due to their dilatory
tactics and the gross ignorance of the law and
undue delay caused by Judges Estrera and
Villarin. The case only began to gain traction on
12 July 2010, when petitioners filed their
motion for the revival of judgment. But by this
time, almost 12 years had passed since the Court
of Appeals 15 Sept. 1998 Decision became final
and executory. This led Branch 29, RTC, Toledo
City, where the case was transferred from
Branch 9, RTC, Cebu City, to deny the motion in
its Order dated 15 May 2012 for being the wrong
remedy.
Whether or not the prescription had already set

in requiring the Piedad’s to file an action for
revival of judgment?
A: YES. Prescription had already set in. However, a

mere motion will suffice for reasons of equity. In one
jurisprudence, the Supreme Court provides that if
manifest wrong or injustice would result with the
strict adherence to the statute of limitations or
doctrine of laches, it would be better for courts to
rule under the principle of equity. The Court, in a
long line of cases, has allowed for the execution of a
final and executory judgment even if prescription
CIVIL LAW
It is settled that a Torrens title is evidence of an

IV. LAND TITLES AND DEEDS indefeasible title to property in favor of the person
in whose name the title appears. It is conclusive
evidence with respect to the ownership of the land
described therein. Hence, titleholders are entitled to
all attributes of ownership of the property including
A. TORRENS SYSTEM possession thereof. (Sps. Liu v. Espinosa, G.R. No.
238513, 21 July 2019, J. Hernando)
1. GENERAL PRINCIPLES NOTE: Registration is not a mode of acquiring

ownership but is merely a procedure to establish
evidence of title over realty. It does not give the
It is a fundamental principle in land registration that
holder any better title than what he actually has.
the certificate of title serves as evidence of an
(Solid State Multi-Products Corp. v. Development
indefeasible and incontrovertible title to the
Bank of the Philippines, G.R. No. 83383, 06 May 1991)
property in favor of the person whose name appears
therein. It is conclusive evidence with respect to the
However, this system frowns upon those who
ownership of the land described therein. Moreover,
fraudulently secure a certificate of title to the
the age-old rule is that the person who has a Torrens
prejudice of the real owner of the land. Hence
title over a land is entitled to possession thereof. In
usurpers who intend to enrich themselves cannot
addition, as the registered owner, the right to evict
hide under the mantle of the Torrens System. (Heirs
any person illegally occupying the property is
of Latoja v. Heirs of Latoja, G.R. No. 195500, 17 Mar.
imprescriptible. (Catindig v. Vda. de Meneses, G.R. No.
2021, J. Hernando) Registration merely creates a
165851, 02 Feb. 2011)
prima facie presumption of the validity of the
registration and must give way to evidence to the
In this system, title by registration takes the place of
contrary. (Vagilidad v. Vagilidad, G.R. No. 161136, 16
“title by deeds” of the system under the “general”
Nov. 2006)
law. A sale of land is effected by a registered
transfer, upon which a certificate of title is issued.
The imprescriptible right to evict ostensibly
The certificate is guaranteed by statute, and, with
proceeds from Article 1126(2) of the NCC in relation
certain exceptions, constitutes indefeasible title to
to Sec. 47 of PD 1529, which provides: “No title to
the land mentioned therein. (Agcaoili, 2011)
registered land in derogation of the title of the
registered owner shall be acquired by prescription
The system generally means those systems of
or adverse possession.” (Heirs of Cullado v.
registration of transactions with interest in land
Gutierrez, G.R. No. 212938, 30 July 2019)
whose declared object, under governmental
authority, to establish and certify to the ownership
Indeed, the bedrock of the Torrens system is the
of an absolute and indefeasible title to realty and
indefeasibility and incontrovertibility of a land title
simplify the transfer. (Agcaoili, 2011)
where there can be full faith reliance thereon.
Verily, the Government has adopted the Torrens
Under the old system the same sale would be
system due to its being the most effective measure
effected by a conveyance, depending for its validity,
to guarantee the integrity of land titles and to
apart from intrinsic flaws, on the correctness of a
protect their indefeasibility once the claim of
long series of prior deeds, wills, etc. The object of the
ownership is established and recognized. To the
Torrens system, then, is to do away with the delay,
registered owner, the Torrens system gives him
uncertainty, and expense of the old conveyancing
complete peace of mind, in order that he will be
system. (Alba v. Dela Cruz, G.R. No. 5246, 16 Sept.
secured in his ownership as long as he has not
1920)
voluntarily disposed of any right over the covered
land. On the part of a person transacting with a
2023 GOLDEN NOTES
IV. LAND TITLES AND DEEDS
registered land, like a purchaser, he can rely on the Advantages of Torrens System
registered owner's title and he should not run the
risk of being told later that his acquisition or 1. It has substituted security for insecurity;
transaction was ineffectual after all, which will not
only be unfair to him, but will also erode public 2. It has reduced the cost of conveyances from
confidence in the system and will force land pounds to shillings, and the time occupied
transactions to be attended by complicated and not from months to days;
necessarily conclusive investigations and proof of
ownership. (Heirs of Cullado v. Gutierrez, G.R. No. 3. It has exchanged brevity and clearness for
212938, 30 July 2019) obscurity and verbiage;
Purposes of Registration 4. It has so simplified ordinary dealings that

he who has mastered the “three R’s” can
The following are the purposes of Registration transact his own conveyancing
under Torrens System:
5. It affords protection against fraud;
1. To quiet title to land;
6. It has restored to their just value many
2. To establish and certify to the ownership of estates, held under good holding titles, but
an absolute and indefeasible title to realty, depreciated in consequence of some blur or
and to simply its transfer; technical defect, and has barred the
reoccurrence of any similar faults.
3. To guarantee the integrity of land titles, and (Agcaoili, 2018)
to protect their indefeasibility once the
claim of ownership is established and Nature of Land Registration Proceedings under
recognized; the Torrens System
4. To put a stop forever to any question of the The Torrens system is judicial in character and not
legality of the title; merely administrative. Judicial proceedings for the
registration of lands throughout the Philippines
5. To minimize conflicting claims and stabilize shall be in rem and shall be based on the generally
land ownership; accepted principles underlying the Torrens system.
(Sec. 2, P.D. 1529, Property Registration Decree)
6. To relieve the land of burden of known, as
well as unknown claims; and Registration being a proceeding in rem requires
constructive seizure of the res as against all persons
7. To decree land titles that shall be final, including the State, through publication, posting,
irrevocable, and indisputable. (Agcaoili, and service of notice. (Agcaoili, 2018)
2017)
Accordingly, all other interested persons are
NOTE: The government has adopted the Torrens notified of the proceedings by publication of the
system due to its being the most effective measure notice of initial hearing. They also have the right to
to guarantee the integrity of land titles and to appear in opposition to such an application. A
protect their indefeasibility once the claim of decree of registration that has become final shall be
ownership is established and recognized. (Casimiro deemed conclusive, not only on the questions
Development Corporation v. Mateo, G.R. No. 175485, actually contested and determined, but also upon all
27 July 2011) matters that might be litigated or decided in the
land registration proceedings.
CIVIL LAW
Q: In the application for registration of title filed The arguments of petitioners that CA allowed a
by Sps. Franco over three (3) parcels of land collateral attack on their Torrens titles, created a
situated at Almanza, Las Piñas City. Republic of cloud thereon and deprived them thereof without
the Philippines, through the OSG filed a Notice of due process are sheer speculations. The RTC as well
Appearance authorizing the City Prosecutor of as the CA did not make any categorical ruling on the
Las Piñas to appear in its behalf. Oppositors- validity of petitioners' Torrens titles. Nor did they
appellants Phil-Estate Management, Inc., declare that the areas covered by petitioners'
Peaksun Enterprises and Export Corporation, Torrens titles are inalienable lands of the public
Megatop Realty Development, Inc., Arturo Dy domain. (Fil-Estate Management, Inc. v. Republic,
and Elena Dy Jao entered their Opposition. G.R. No. 192393, 27 Mar. 2019)
Despite the opposition, the application for title Constructive notice upon registration
was granted by the court a quo. CA held that
spouses Franco failed to prove (1) that the land Every conveyance, mortgage, lease, lien,
applied for is alienable public land; and (2) they attachment, order, judgment, instrument, or entry
openly, continuously, exclusively, and affecting registered land shall, if registered, filed, or
notoriously possessed and occupied the same entered in the office of the Register of Deeds for the
since 12 June 1945 or earlier. CA noted that the province or city where the land to which it relates
tax declarations presented by them show that lies, be constructive notice to all persons from the
the earliest payment was made only in 1991. time of such registering, filing, or entering. (Sec. 52,
Petitioners claim that the CA ruling which P.D. 1529)
categorized the lands applied for by Sps. Go as
public lands, effectively took away portions of NOTE: A Torrens title issued without prior
the property covered by their titles without due presentation and cancellation of the existing
notice and hearing. Petitioners further argue owner’s duplicate title does not bind the property to
that CA unwittingly sanctioned a collateral which it pertains. The title so issued does not
attack on their TCTs when the CA ruled that all produce the effects of a Torrens title contemplated
lands applied for by Sps. Go belonged to the under P.D. 1529, including the effects of
public domain. Accordingly, to petitioners, the constructive notice. It is literally a scrap of paper. On
CA Decision has raised a cloud over their this basis, coupled with the fact of always being in
Torrens titles. Did the CA err in its ruling? possession of the owner’s duplicate copy of the TCT,
the petitioners cannot be deemed to have been
A: NO. Sec. 25 of P.D. No. 1529 provides that “if the constructively notified of the issuance of the subject
opposition or the adverse claim of any person TCT. (Gatmaytan v. Misibis Land Inc., G.R. No.
covers only a portion of the lot and said portion is 222166, 10 June 2020, citing Levin v. Bass, G.R. No. L-
not properly delimited on the plan attached to the 4340, 28 May 1952)
application, conflicting claims of ownership or
possession, or overlapping of boundaries, the court Judicial and Quasi-Judicial Bodies covering Land
may require the parties to submit a subdivision plan Registration under the Torrens System
duly approved by the Director of Lands.” It is
discretionary on the part of the land registration 1. Courts;
court to require the parties to submit a subdivision
plan duly approved by the appropriate government GR: RTCs have plenary jurisdiction over
agency. Regardless of how the said court exercises land registration cases. RTCs have
its discretion, the burden remains with the exclusive jurisdiction over land
oppositor or adverse claimant to convince by registration cases and all petitions after
preponderance of evidence the land registration original registration of title, with the power
court that there is an overlapping of boundaries. In to hear and determine all questions arising
this case, petitioners failed.
2023 GOLDEN NOTES
upon such applications or petitions. (Sec. 2, file with the Register of Deeds of Quezon City,
P.D. 1529) was destroyed as it was gutted by fire.
NOTE: The court can now hear and decide The said original TCT, which has not been
not only non-controversial cases but even reconstructed, may be reconstituted on the
contentious issues which before were basis of the owner's copy thereof. However, the
beyond its competence. (Lopez v. Querubin, said owner's copy of the TCT is presently in the
G.R. No. 155405, 18 Mar. 2015) possession of Privatization and Management
Office (PMO). PMO got hold of the said owner's
XPN: MeTCs, MTCCs, MTCs, and MCTCs copy of the TCT because it was delivered in 1983
have delegated jurisdiction to hear and to Golden Country Farms, a defunct private
determine cadastral or land registration corporation, to secure the performance by the
cases in the following instances: Quesadas' predecessors-in-interest of their
obligation in a Growership Agreement.
a. Where the lot sought to be registered
is not the subject of controversy or Several demands were made to PMO to
opposition; or surrender the said title but the same were not
favorably acted upon by the said office. The
b. Where the lot is contested but the Quesadas were constrained to file the instant
value thereof does not exceed petition to surrender the withheld duplicate
P100,000.00, (Republic v. Bantigue, certificates pursuant to Sec. 107 of P.D. No. 1529.
G.R. No. 162322, 14 Mar. 2012) such
value to be ascertained by the affidavit 1. Does the RTC, as a land registration court,
of the claimant or by the agreement of have jurisdiction to hear and decide
the respective claimants, if there be contentious and substantial issues over the
more than one, or from the original petition for surrender of withheld
corresponding tax declaration of the duplicate certificate of title?
real property. (Sec. 34, B.P. Blg. 129, as
amended by Sec. 4, R.A. No. 7691) A: YES. Sec. 107 contemplates only two situations
when a petition for surrender of withheld duplicate
NOTE: Appeal is taken to the CA. certificate of title may be availed of. These are:
2. Department of Environment and Natural 1. where it is necessary to issue a new

Resources (DENR); certificate of title pursuant to any
3. Department of Justice (DOJ) through the involuntary instrument which divests the
Land Registration Authority (LRA) and its title of the registered owner against his
Register of Deeds; consent; and
4. Department of Land Reform (DLR); and
5. Department of Agriculture (DA) 2. where a voluntary instrument cannot be
registered by reason of the refusal or
Q: The Quesadas filed a Petition to Surrender failure of the holder to surrender the
TCT No. 27090 pursuant to Sec. 107 of P.D. No. owner's duplicate certificate of title
1529. The Quesadas are the owners of a parcel (ODCT).
of land situated in Quezon City under TCT No.
27090. TCT No. 27090 was originally registered Inasmuch as the original petition before the RTC
in the name of the Quesadas' predecessors-in- seeks the surrender of the owner's duplicate copy of
interest, and it was donated to them sometime TCT No. 27090 in the possession of PMO so that a
in 1997. The original copy of TCT No. 27090, on voluntary instrument—a Deed of Donation—can be
registered but the registration cannot be made by
CIVIL LAW
reason of the refusal of PMO, the holder, to remedy from an adverse decision therefrom was
surrender the same, a cause of action under Sec. 107 to file an original action for judicial
of P.D. No. 1529 has been sufficiently alleged in the determination of just compensation with an RTC
original petition. sitting as a Special Agrarian Court. Is the DARAB
correct?
Sec. 2 of P.D. 1529 confers a broad jurisdiction upon
the RTC with power to hear and determine all A: YES. There is nothing contradictory between the
questions arising upon such petition. RTCs now provision of Sec. 50 granting the DAR primary
have the power to hear and determine all questions, jurisdiction to determine and adjudicate "agrarian
even contentious and substantial ones, arising from reform matters" and exclusive original jurisdiction
applications for original registration of titles to over "all matters involving the implementation of
lands and petitions filed after such registration. The agrarian reform," which includes the determination
matter of whether the RTC resolves an issue in the of questions of just compensation, and the provision
exercise of its general jurisdiction or of its limited of Sec. 57 granting RTCs "original and exclusive
jurisdiction as a special court is only a matter of jurisdiction" over (1) all petitions for the
procedure and has nothing to do with the question determination of just compensation to landowner,
of jurisdiction. Indeed, the land registration court and (2) prosecutions of criminal offenses under R.A.
can now hear and decide controversial and No. 6657. The first refers to administrative
contentious cases and those involving substantial proceedings, while the second refers to judicial
issues. (Privatization and Management Office v. proceedings. Under R.A. No. 6657, Land Bank of the
Quesada, G.R. No. 224507, 20 Sept. 2017) Philippines is charged with the preliminary
determination of the value of lands placed under
Q: The DAR placed portions of two lots owned by land reform program and the compensation to be
Ella under the coverage of the CARP and R.A. No. paid for their taking. Within 30 days from receipt of
6657. Land Bank of the Philippines notice, the landowner shall inform the DAR of his
subsequently valued said portions accordingly. acceptance or rejection of the offer.
DAR offered to pay the LBP-assessed amounts to
petitioner, but the latter rejected the same. After In the event the landowner rejects the offer, a
Ella failed to reply to DAR's Notice of Land summary administrative proceeding is held by the
Valuation and Acquisition within the prescribed provincial (PARAD), the regional (RARAD) or the
period, the DAR instituted before the Provincial central (DARAB) adjudicator, as the case may be,
Agrarian Reform Adjudication Board (PARAD) depending on the value of the land, for the purpose
two summary administrative proceedings for of determining the compensation for the land. The
the determination of just compensation. The landowner, the Land Bank, and other interested
PARAD found the LBP's basis for its assessment parties are then required to submit evidence as to
of just compensation for the subject lots proper. the just compensation for the land. The DAR
adjudicator decides the case within 30 days after it
Aggrieved, Ella appealed before the DARAB. is submitted for decision. If the landowner finds the
Petitioner mainly alleged that the PARO erred price unsatisfactory, he may bring the matter
(1) since the subject property should not have directly to the appropriate Regional Trial Court.
been placed under the CARP coverage, and (2) (Marasigan, Jr. v. Provincial Agrarian Reform Officer,
grave abuse of discretion was committed when G.R. No. 222882, 02 Dec. 2020)
the two summary proceedings were heard and
decided despite the fact that the subject Q: On 05 Sept. 1980, the Republic of the
property was not yet clearly and particularly Philippines (RP), through the OSG, filed a
identified. DARAB denied the appeal for lack of Complaint for Expropriation before the CFI (now
jurisdiction. It held that since the action filed by RTC) of Dagupan City against respondents Jorge
the DAR with the PARO was for the preliminary Castillo (Jorge), Sofia Solis Achacoso (Sofia),
determination of just compensation, Ella’s Alipio Fernandez, Sr. (Alipio), Emiliana
2023 GOLDEN NOTES
Fernandez, Casimera Fernandez, Concepcion original Complaint, that is, on 05 Sept. 1980.
Fernandez, Benjamin Fernandez (Benjamin), Evidently, there was no actual taking in this case
Juana Galvan (Juana), Estela Corpuz Fernandez prior to the filing of the Complaint, thus, the time of
(Estela) and Germana Suarez, who are co- taking should be reckoned from the filing of the
owners of the subject property located in Complaint. Hence, the value of the property at the
Dagupan City. The parties were ordered to file time of filing of the original Complaint on 05 Sept.
their respective pre-trial briefs. However, only 1980, and not the filing of the Amended Complaint
petitioner RP filed a pre-trial brief on 18 Jan. in 1989, should be considered in determining the
1989. Also, on 02 Feb. 1989, petitioner RP filed just compensation due to the respondents. Since the
an Amended Complaint alleging that the expropriation proceedings in this case was initiated
Dagupan City National High School (the school) by petitioner RP on 05 Sept. 1980, property values
has been in continuous possession of the subject on such month and year should be the basis for the
property since 1947 and that the market value proper determination of just compensation. With
of the said properties during that time was 50 the aforementioned principles in mind, the case
centavos per sqm. The RTC rendered its should be remanded to the lower court for the
Decision fixing the just compensation in the proper determination of just compensation, that is,
amount of P15,000 per sqm which was the the full and fair equivalent of the property taken
current fair market value as of 02 Feb. 1989, that from its owner by the expropriator which simply
is, the date of the filing of the Amended means the property's fair market value at the time
Complaint. The CA agreed with the RTC that the of the filing of the complaint, or "that sum of money
just compensation shall be determined based on which a person desirous but not compelled to buy,
the value of the property on 02 Feb. 1989, which and an owner willing but not compelled to sell,
is the date of the filing of the Amended would agree on as a price to be given and received
Complaint and not on the date of taking in 1947 therefor." (Republic v. Castillo, G.R. No. 190453, 20
which had not been proven. Which is the Feb. 2020, as penned by J. Hernando)
reckoning date of the computation of just
compensation:
B. REGALIAN DOCTRINE
(a) date of taking in 1947;
(b) date of the filing of the original Complaint
in 1980; or
All lands of whatever classification and other
(c) date of filing of the Amended Complaint in
natural resources not otherwise appearing to be
1989?
clearly within private ownership are presumed to
belong to the State which is the source of any
A: (b) DATE OF THE FILING OF THE ORIGINAL
asserted right to ownership of land. (Republic v. Sin,
COMPLAINT IN 1980. As correctly observed by the
G.R. No. 157485, 26 Mar. 2014)
CA, other than the testimonial evidence of Perla, no
other evidence was presented by the petitioner RP
Jura regalia means that the State is the original
to establish that the taking of the subject property
proprietor of all lands and the general source of all
was in 1947. On the other hand, the evidence of the
private titles. All claims of private title to land, save
respondents, that is, the tax declaration, clearly
those acquired from native title, must be traced
shows that until the year 1990, they religiously paid
from some grant, whether express or implied, from
the real property tax of the subject property which
the State. Absent a clear showing that the land had
means that they were not dispossessed of the use
been into private ownership through the State’s
thereof. Thus, there is no error in the appreciation
imprimatur, such land is presumed to belong to
of facts by the CA. As between the filing of the
State. (Republic v. Santos, G.R. No. 180027, 18 July
original Complaint and Amended Complaint, we
2012)
rule that the computation of just compensation
should be reckoned from the time of the filing of the
CIVIL LAW
The capacity of the State to own or acquire property Q: Explain the “Public Trust Doctrine” and its
is the State’s power of dominium. (Agcaoili, 2018) obligatory force in our environmental laws and
quality management.
Burden of Proof
A: It aims to put an additional strain upon the duty
The burden of proof in overcoming the presumption of the water industry to comply with the laws and
of state ownership of the lands of the public domain regulations of the land. The doctrine speaks of an
is on the person applying for registration that the imposed duty upon the State and its representative
land subject of the application is alienable or of continuing supervision over the taking and use of
disposable. (Federation of Coron, et al., v. The appropriated water. Thus, parties who acquired
Secretary of DENR, G.R. No. 247866, 15 Sept. 2020) rights in trust property only hold these rights
subject to the trust and, therefore, could assert no
NOTE: To prove that the subject property is vested right to use those rights in a manner harmful
alienable and disposable land of the public domain, to the trust.
applicant must:
The doctrine further holds that certain natural
1. Present a Community Environment and Natural resources belong to all and cannot be privately
Resources Office Certificate (CENRO); owned or controlled because of their inherent
importance to each individual and society as a
2. Prove that the DENR Secretary had approved whole. A clear declaration of public ownership, the
the land classification and released the land of doctrine reaffirms the superiority of public rights
the public domain as alienable and disposable; over private rights for critical resources. It
and impresses upon states the affirmative duties of a
trustee to manage these natural resources for the
3. That the land subject of the application for benefit of present and future generations and
registration falls within the approved area per embodies key principles of environmental
verification through survey by the PENRO or protection: stewardship, communal responsibility,
CENRO. In addition, the applicant for land and sustainability. (Maynilad Water Services, Inc. v.
registration must present a copy of the original Secretary of the Department of Environment and
classification approved by the DENR Secretary Natural Resources, G.R. Nos. 202897, 206823 &
and certified as a true copy by the legal 207969, 06 Aug. 2019, as penned by J. Heranndo)
custodian of the official records. (Republic v.
Malijan-Javier, G.R. No. 214367, 04 Apr. 2018) Q: What kind of relationship is formed under the
framework of the public trust doctrine?
Q: State the constitutional basis for the Regalian
Doctrine. A: In this framework, a relationship is formed —
"the State is the trustee, which manages specific
A: All lands of the public domain, waters, minerals, natural resources — the trust principal — for the
coal, petroleum, and other mineral oils, all forces of trust principal — for the benefit of the current and
potential energy, fisheries, forests or timber, future generations — the beneficiaries… The State
wildlife, flora and fauna, and other natural has an affirmative duty to take the public trust into
resources are owned by the State. With the account in the planning and allocation of water
exception of agricultural lands, all other natural resources, and to protect public trust uses
resources shall not be alienated. The exploration, whenever feasible. (Maynilad Water Services, Inc. v.
development, and utilization of natural resources Secretary of the DENR, G.R. Nos. 202897, 206823 &
shall be under the full control and supervision of the 207969, 06 Aug. 2019, Heranndo, J.)
State. (Sec. 2(1), Art. XII, 1987 Constitution)
2023 GOLDEN NOTES
Q: Can the courts enforce the public trust 2. A certificate of land classification status
doctrine against the government? issued by the CENRO or the Provincial
Environment and Natural Resources Office
A: YES. The doctrine has evolved from a mere (PENRO) based on the land classification
principle to a resource management term and tool approved by the DENR Secretary.
flexible enough to adapt to changing social priorities
and address the correlative and consequent dangers A CENRO or PENRO certification is not enough to
thereof. The public is regarded as the beneficial prove the alienable and disposable nature of the
owner of trust resources, and courts can enforce the property sought to be registered because the only
public trust doctrine even against the government way to prove the classification of the land is through
itself." (Maynilad Water Services, Inc. v. Secretary of the original classification approved by the DENR
the DENR, G.R. Nos. 202897, 206823 & 207969, 6 Aug. Secretary or the President themselves. Given that
2019, as penned by J. Hernando) the proof which Maria and Lourdes presented in
this case to prove the alienable and disposable
Q: Sisters Maria and Lourdes Sicat applied for character of the Subject Land proceed mainly from
registration over a parcel of land with the RTC of a Certification dated issued by the CENRO of
Romblon. Republic of the Philippines through Odiongan, Romblon, which is insufficient, their
the Director of Lands opposed the application second attempt to register the Subject Land under
for registration. Land Registration Court the Torrens system must suffer the same fate as
rendered its judgment granting aforesaid their first. (Buyco v. Republic, G.R. No. 197733, 29
application. The Director of Lands appealed said Aug. 2018)
Decision to the CA on the basis that the trial
court erred in not dismissing the application for Q: The PNP filed an application for land title
registration because of applicants' failure to registration of two parcels of land before the
overthrow the presumption that the land RTC. The PNP presented the following
applied for is public land belonging to the State. witnesses, namely:
CA dismissed for lack of merit the appeal
interposed by the Director of Lands. Supreme (i) Kim, who testified that PNP has been in
Court rendered its judgment and granted the possession of the said lots for more than
petition of the Director of Lands and reaffirmed 30 years and that the subject lots were
the decision of the RTC. Six years after, sisters formerly used as a military reservation of
Maria and Lourdes filed for the second time an the then Philippine Constabulary and was
application for registration of title covering the transferred to the PNP in 1991 when the
same parcel of land and presented a former office was dissolved;
Certification issued by CENRO of Odiongan,
Romblon. (ii) Jim, who testified that as per his
knowledge, the camp belongs to the then
Should the Court grant their petition for Philippine Constabulary and was
registration over the parcel of land? transferred to the PNP when the former
was disbanded; and
A: NO. There are two documents that must be
presented to prove that the land subject of the (iii) Tim, who testified that as a retired
application for registration is alienable and member of the PNP and despite being a
disposable: longtime resident of the camp, he does not
intend to file an opposition to the PNP's
1. A copy of the original classification application for title because he knows
approved by the DENR Secretary and that the PNP owns the camp.
certified as a true copy by the legal
custodian of the official records, and Should the application be granted?
CIVIL LAW
A: NO. Before an applicant can adduce evidence of Q: In 1971, the Bureau of Lands issued Free
open, continuous, exclusive and notorious Patent No. 516197 in favor of Meynardo,
possession and occupation of the property in covering two lots (Roxas properties). On the
question, he must first prove that the land belongs basis of said patent, the ROD issued Original
to the alienable and disposable lands of the public Certificate of Title covering both lots in
domain. Whether an applicant is seeking Meynardo's name. Thereafter, the Roxas
registration under either Secs. 14(1) or 14(2) of P.D. Properties was transferred to other purchasers.
No. 1529, it must satisfy the courts that the land DENR Final Report showed that Free Patent No.
applied for is alienable and disposable. 516197 was declared null and void for having
been issued over land forming part of the public
When the PNP filed its application for land title domain (forest lands).
registration on 06 May 2003 and during the
promulgation of the RTC Decision on 20 Jan. 2006, Republic filed against the Respondents a
the prevailing doctrine then was that a DENR complaint for the annulment and/or
certification that a land subject for registration is cancellation of Free Patent No. 516197, OCT No.
entirely within the alienable and disposable zone RP-132 (P-9193), and TCT No. 16580. The
suffices to establish the nature of the property as Complaint also prayed for the reversion of the
alienable and disposable land of the public domain; Roxas Properties in the State's favor. Is a
the said certification enjoyed the presumption of positive act of the government necessary to
regularity in the absence of a contradictory evince the reclassification of land from alienable
evidence. However, during the pendency of the and disposable to forest?
OSG's appeal with the appellate court and during
the promulgation of its 16 Aug. 2011 Decision, the A: YES. The classification and reclassification of
doctrine enunciated in Republic v. T.A.N. Properties, public lands into alienable or disposable, mineral or
Inc. (G.R. No. 154953, 26 June 2008) was the forest land is the exclusive prerogative of the
prevailing rule. T.A.N. Properties requires that an Executive Department, and is exercised by the latter
application for original registration must be through the President, or such other persons vested
accompanied by (1) a CENRO or Provincial with authority to exercise the same on his behalf.
Environment and Natural Resources Office Since the power to classify and reclassify land are
(PENRO) Certification; and (2) a copy of the original executive in nature, such acts, effected without
classification approved by the DENR Secretary and executive authority, are void, and essentially ultra
certified as a true copy by the legal custodian of the vires.
official records.
Further, owing to the nature of reversion
In the instant case, the PNP did not submit a DENR proceedings (as opposed to land registration
Certification to the effect that the subject lots are proceedings), the State bears the burden to prove
alienable and disposable lands of the public domain, that the land previously decreed or adjudicated in
which was the prevailing requirement when its favor of the defendant constitutes land which
application for land registration was pending with cannot be owned by private individuals.
the RTC. Here, the only evidence presented by
respondents to prove the disposable and alienable The alleged reclassification of the Roxas Properties
character of the subject land was an annotation by a is bereft of basis, as it was done by Engineer Mendez
geodetic engineer in a survey plan. Although this on his sole account, without any prior directive from
was certified by the DENR, it clearly falls short of the the President, or a duly authorized officer from the
requirements for original registration (Republic v. Executive Department. In fact, the annotation
PNP, G.R. No. 198277, 8 Feb 2021, as penned by J. appearing on LC Map 209 upon which the Republic
Hernando) relies does not even state upon whose authority the
alleged reclassification had been made, placing the
annotation’s validity, veracity and worth in serious
2023 GOLDEN NOTES
doubt. Ultimately, the Republic failed to prove that citing a presidential declaration that on June
the Roxas were classified as forest land when they 1980, the subject matter of the application was
were decreed in Meynardo's favor in 1971. declared alienable and disposable agricultural
(Republic v. Heirs of Meynardo Cabrera, G.R. No. land. If you are the judge, will you grant the
218418, 08 Nov. 2017) application for land registration of Cornelio?
(2014 BAR)
Exception to the Regalian Doctrine
A: NO. I will not grant the application. To be entitled
The Regalian Doctrine does not negate native title to to register the parcel of land, the applicant must
lands held in private ownership since time show that the land being applied for is an alienable
immemorial. (Cruz v. Secretary of DENR, G.R. No. land. At the time of the filing of the application, the
135385, 06 Dec. 2000) land has not yet been declared alienable by the
State. (Republic v. CA, G.R. No. 144057, 17 Jan. 2005)
When as far back as testimony or memory goes, the
land has been held by individuals under a claim of Q: Can Cornelio acquire said agricultural land
private ownership, it will be presumed to have been through acquisitive prescription, whether
held in the same way before the Spanish conquest, ordinary or extraordinary? (2014 BAR)
and never to have been public land. (Cariño v.
Insular Government, 212 U.S. 449, 23 Feb. 1909) A: Cornelio may acquire the land by acquisitive
prescription only after it was declared part of
Native Title alienable land by the state by possession for the
required number of years through ordinary
Refers to pre-conquest rights to lands and domains prescription, which requires 10 years of possession
which, as far back as memory reaches, have been in good faith with just title; or extraordinary
held under a claim of private ownership by prescription by possession for 30 years without
Indigenous Cultural Communities (ICCs) or need of any other condition. (Art. 1134, NCC)
Indigenous People (IPs), have never been public
lands and are thus indisputably presumed to have Q: By virtue of Free Patent No. III-12 17306
been held that way since before the Spanish dated 20 May 1987, OCT No. P-22-C was issued
Conquest. (Sec. 3(l), R.A. No. 8371) and registered on 25 May 1987, in the name of
Epifania San Pedro. It covers Lot No. 3070, Cad-
Time Immemorial Possession for Native Title 333 situated in San Juan, Balagtas, Bulacan with
an area of 12,108 sq. m. After the death of
Refers to a period when as far back as memory can Epifania San Pedro, Pelagio Francisco, Sr.
go, certain ICCs or IPs are known to have occupied, executed an Affidavit of Self Adjudication
possessed in the concept of owner, and utilized a declaring that he was the sole surviving heir of
defined territory devolved to them, by operation of the patentee.
customary law or inherited from their ancestors, in
accordance with their customs and traditions. (Sec. As a consequence, OCT No. P-22-C was cancelled
3(p), R.A. No. 8371) and Pelagio Francisco was issued TCT No. T-
7836 on 25 Oct. 1990. Thereafter, Pelagio
Q: On March 1980, Cornelio filed an application Francisco sold the subject property to defendant
for land registration of a parcel of agricultural Tanduay Lumber. Thus, TCT No. T-7836 was
land. During the trial, Cornelio claimed that he cancelled and TCT No. P-8582 was issued in the
and his predecessors-in-interest had been in name of Tanduay Lumber. A certain Arturo and
open, continuous, uninterrupted, public and Teresita Mendoza wrote the OSG a petition to
adverse possession and occupation of the land request the OSG to cause the cancellation of
for more than thirty (30) years. He likewise Patent No. P-22-C issued to Epifania San Pedro,
introduced a certification, dated February 1981 and all subsisting derivative titles. They alleged
CIVIL LAW
that the patentee sold the lot covered by said purposes and paid the realty taxes due thereon.
patent within five (5) years from the issuance of In 1968, Maria Carlos caused the survey of the
the patent, in violation of the provisions of C.A. lot under a conversion plan which was approved
No. 141. A Complaint for Cancellation of by the Bureau of Lands. In 1996, Maria Carlos
Title/Reversion was filed by the Republic of the sold subject lot to Ususan Development
Philippines. RTC dismissed the Complaint for Corporation (now DMCI Project Developers,
Cancellation of Title and Reversion on the Inc.). Wanting to have said land titled in its
grounds of equitable estoppels and laches. Is the name, applicant-appellee filed this instant
complaint already barred? application for registration and confirmation of
title before the RTC asserting that the subject
A: The passage of R.A. No. 11231 or the “Agricultural realty formed part of the alienable and
Free Patent Reform Act” has rendered this issue disposable land of the public. It averred that,
moot and academic. Pursuant to David v. along with its predecessors-in-interest, it has
Macapagal-Arroyo, (G.R. No. 171396, 03 May 2006) a been in open, exclusive, continuous and
moot and academic case is one that ceases to notorious possession and occupation of said
present a justiciable controversy by virtue of realty in the concept of an owner as early as 12
supervening events so that a declaration thereon June 1945. To prove such claim, Maria Carlos'
would have no practical use or value. daughter, Teresita Victoria testified that her
deceased mother used to own and occupy said
Sec. 3 of R.A. No. 11231 provides that “Agricultural lot openly, peacefully, exclusively and
public lands alienated or disposed in favor of continuously since she acquired it from her
qualified public land applicants under Sec. 44 of C.A. father, which realty she devoted to planting rice
No. 141, as amended, shall not be subject to and other crops as well as to her piggery and
restrictions imposed under Secs. 118, 119 and 121 poultry business. In addition, the former
thereof regarding acquisitions, encumbrances, adjacent owner Pilar Guillermo testified that
conveyances, transfers, or dispositions. Agricultural everybody in their community confirmed and
free patent shall now be considered as title in fee recognized Jose and Maria Carlos' successive
simple and shall not be subject to any restriction on ownership and possession of the subject realty.
encumbrance or alienation.” Hence, [applicant-] appellee contended that its
total length of possession of such land, tacked
Clearly, the State's complaint for reversion is based with that of its predecessors-in-interest, add up
solely on Sec. 118 of C.A. 141. Since the restriction to over 60 years already. Is petitioner entitled to
on the conveyance, transfer, or disposition of the the registration of the property?
patented land subject of this case within five years
from and after the issuance of the patent pursuant A: NO. In the present case, petitioner does not claim
to Sec. 118 of C.A. 141 has been removed and the that the subject lot is of private ownership. On the
title of the patentee Epifania San Pedro is, under R.A. contrary, petitioner claims that it is a land of public
No. 11231, now considered as title in fee simple, dominion that has been classified as alienable and
which is not subject to any restriction on alienation disposable. Consequently, the burden to prove its
or encumbrance, the Government no longer has any alienable and disposable classification rests with
legal basis to seek the reversion or reconveyance of petitioner. Unfortunately, petitioner was unable to
the subject land. (Republic v. Tanduay Lumber, Inc., do so. The failure of petitioner to prove the alienable
G.R. No. 223822, 16 Oct. 2019) and disposable status of the subject lot renders the
review of the finding of the CA that it has not
Q: In his lifetime, Jose Carlos owned a 3,975 sq. substantiated its claim that it and its predecessors-
m. parcel of land situated in Ususan, Taguig City. in-interest have possessed the subject lot in the
Upon his death in 1948, Jose's daughter — Maria character and for the duration required under Sec.
Carlos — inherited said property and later 14(1) of PD 1529 superfluous. (Ususan Development
declared the same in her name for taxation Corp. v. Republic, G.R. No. 209462, 15 July 2020)
2023 GOLDEN NOTES
Q: Socorro Orcullo was a grantee of a Free Patent

for a parcel of land in Cebu. Subsequently, the C. NATIONALITY RESTRICTIONS ON LAND
subject lot was sold to SAAD Agro-Industries, OWNERSHIP
Inc. by one of Orcullo’s heirs. Yet, the Solicitor
General, acting on respondent Pedro Urgello’s
letter-complaint, filed a complaint for the
GR: Enshrined under the 1987 Constitution is the
annulment of the title and reversion of the said
prohibition of foreign ownership of lands in the
lot on the ground that the issuance of the free
Philippines and that ownership of lands is reserved
patent and title was irregular and erroneous,
to or for Philippine Nationals or Filipino Citizens.
following the discovery that the lot is allegedly
part of the timberland and forest reserve.
Aliens, whether individuals or corporations are
Decide on the case.
disqualified from acquiring lands of public domain.
Hence they are also disqualified from acquiring
A: In instances where a parcel of land considered to
private lands. The primary purpose of the
be inalienable land of the public domain is found
constitutional provision is the conservation of the
under private ownership, the Government is
national patrimony. (In Re: Petition for Separation of
allowed by law to file an action for reversion in
Property of Muller v. Muller, G.R. No. 149615, 29 Aug.
which the ultimate relief sought is to revert the land
2006)
to the government pursuant to the Regalian
doctrine. Nevertheless, in applying the Regalian
XPNs:
Doctrine, the paramount considerations of fairness
and due process must be observed in every claim of
a) Save in cases of hereditary succession, no
right by the Government against one of its citizens.
private lands shall be transferred or
Respondent Orcullo in this case failed to show that
conveyed except to individuals,
the subject lot is part of timberland or forest reserve
corporations, or associations qualified to
it adverted to. (Saad Agro-Industries, Inc. v. Republic,
acquire or hold lands of the public domain;
G.R. No. 152570, 27 Sept. 2006)
(Sec. 7, Art. XII, 1987Constitution)
Reversion
b) Lands acquired by aliens before enactment
of the 1935 Constitution;
Reversion is the remedy where the State, pursuant
to the Regalian doctrine, seeks to revert land back to
c) Foreigners, formerly Filipino Citizens who
the mass of the public domain. It is proper when
acquire property in the Philippines shall
public land is fraudulently awarded and disposed of
maintain ownership of their property even
to private individuals or corporations. There are
after change of citizenship;
also instances when the Court granted reversion on
grounds other than fraud, such as when a person
d) Natural-Born Filipinos who lost their
obtains a title under the Public Land Act (PLA)
citizenship and acquired foreign
which includes, by oversight, lands which cannot be
citizenship wanting to own property in the
registered under the Torrens system, or when the
Philippines, in accordance with B.P. 185
Director of Lands did not have jurisdiction over the
and R.A. 8179; and
same because it is of the public domain. (Republic v.
Espinosa, G.R. No. 186603, 05 Apr. 2017)
e) Other exceptions analogous to the above
mentioned.
NOTE: Foreigners are prohibited from owning land

but not residences. The latter rather than
purchasing a parcel of land may opt for a
CIVIL LAW
condominium unit so long as the condominium To sustain such a theory would countenance
corporation owning the building is 60% owned by indirect controversion of the constitutional
Filipinos. Thus, not a violation of the constitutional prohibition. If the property were to be declared
prohibition. conjugal, this would accord the alien husband a
substantial interest and right over the land, as he
Q: Benjamin Taylor (Benjamin), a British would then have a decisive vote as to its transfer or
subject, married Joselyn C. Taylor (Taylor), a 17- disposition. This is a right that the Constitution does
year-old Filipina. During their marriage, not permit him to have. (Taina Manigue-Stone v.
Joselyn, as vendee, bought from Diosa Martin a Cattleya Land In., G.R. No. 195975, 05 Sept. 2016)
property in Boracay which sale was allegedly
financed by Benjamin. Using his funds, they also NOTE: A Filipino vendor cannot recover land to an
constructed improvements thereon. All permits alien because the former as in pari delicto with the
and licenses were however obtained in the alien vendee (Rellosa v. Gas Chee Hun, G.R. No. L-
name of Ginna Celestino, Joselyn’s sister. 1411, 29 Sept. 1953).
Later, Benjamin and Joselyn had a falling out. Effect of subsequent naturalization of the
She executed a Special Power of Attorney transferee
authorizing Benjamin to maintain, sell, lease, or
otherwise, enter into contract with third parties If land is invalidly transferred to an alien who
with respect to their Boracay property. In 1992, subsequently becomes a Filipino citizen or transfers
Joselyn as lessor and Philip Matthews (Philip) as it to a Filipino, the flaw in the original transaction is
lessee entered into a lease agreement involving considered cured and title of the transferee is
the Boracay Property. Philip took possession of rendered valid (Borromeo v. Descallar, G.R. No.
the property. 159310, 24 Feb. 2009).
Claiming that the Agreement was null and void Alienation in favor of foreign government to be
since Joselyn did not obtain Benjamin’s consent, used as chancery or residence of diplomatic
the latter instituted an action to declare null and representatives
void the said lease agreement. Is Benjamin
correct? The prohibition in the Constitution against
alienation of lands in favor of aliens does not apply
A: NO. Benjamin being an alien is absolutely to alienation of the same in favor of foreign
prohibited from acquiring private and public lands governments to be used as chancery and residence
in the Philippines. Considering that Joselyn of its diplomatic representatives. As part of the
appeared to be the designated “vendee” in the Deed obligation under international law, the State shall
of Sale of said property, she acquired sole either facilitate the acquisition on its territory, the
ownership thereto. This is true even if we sustain premises necessary for the mission by a sending
Benjamin’s claim that he provided the funds for state or assist the latter in obtaining
such acquisition. By entering into such contract accommodations in the country (Art. 21, Vienna
knowing that it was illegal, no implied trust was Convention on Diplomatic Relations)
created in his favor; no reimbursement for his
expenses can be allowed; and no declaration can be
made that the subject property was part of the
conjugal or community property of the spouses.
(Matthews v. Taylor, G.R. No. 164584, 22 June 2009)
2023 GOLDEN NOTES
substantiate their claim or interest through

D. ORIGINAL REGISTRATION an answer.
(P.D. No. 1529)
1. WHO MAY APPLY
Laws that Govern Land Registration 1. Those who by themselves or through their
predecessors-in-interest have been in Open,
1. Property Registration Decree; (P.D. 1529, as Continuous, Exclusive, and Notorious
amended) Possession and Occupation of alienable and
disposable lands of the public domain under a
NOTE: P.D. 1529 amended and superseded bona fide claim of ownership since June 12,
C.A. 496 or the Land Registration Act. 1945, or earlier. (O-C-E-N-P-O)
2. Cadastral Act; (Act. 2259, as amended) NOTE: Possession is:

3. Public Land Act (PLA); (C.A. 141, as
amended) a) Open – when it is patent, visible,
4. Emancipation Decree; (P.D. 27, as amended) apparent, notorious and not
5. Comprehensive Agrarian Reform Law of clandestine;
1988 (CARL); (R.A. No. 6657) and
6. Indigenous Peoples Rights Act (IPRA). (R.A. b) Continuous – when uninterrupted,
No. 8371). unbroken, and not intermittent or
occasional;
Ordinary Registration
c) Exclusive – when the adverse
A proceeding filed before the following to determine possessor can show exclusive
title or ownership of land on the basis of an dominion over the land and an
application for registration or answer or opposition appropriation of it to his own use and
by a claimant in a cadastral registration: benefit; and
a. In the MTC - where there is no controversy d) Notorious – when it is so conspicuous

or opposition, or contested lots where the that it is generally known and talked of
value of which does not exceed by the public or the people in the
P100,000.00; (Sec. 4, R.A. No. 7691) or neighborhood. (Bienvenido v. Gabriel,
G.R. No. 175763, 11 Apr. 2012)
b. In the RTC - (as a land registration court)
when the value exceeds P100,000 2. Those who have acquired ownership over
private lands by prescription under the
Kinds of Original Registration provisions of existing laws;
1. Judicial/Voluntary/Ordinary – filing with NOTE: Rule on Prescription under the NCC:

the proper court an application by the
private individual himself; and a. Ordinary Prescription – 10 years in good
faith and with just title; and
2. Administrative/Involuntary/Cadastral – b. Extraordinary Prescription – thirty 30
compulsory registration initiated by the years
government, to adjudicate ownership of
land and involuntary on the part of the Only when such land has become patrimonial
claimants, but they are compelled to can the prescriptive period for the acquisition
CIVIL LAW
of the property begin to run. (Malabanan v. Q: Ortigas and Company Limited Partnership is
Republic, G.R. No. 179987, 03 Sept. 2013) the owner of a parcel of land in Pasig City, whose
title was then inscribed with an encumbrance
3. Those who have acquired ownership of private that it was for road widening and subject to Sec.
lands or abandoned riverbeds by right of 50 of P.D. No. 1529 or the Property Registration
accession or accretion under the existing laws; Decree. After the C-5 Ortigas Avenue flyover was
and completed, Ortigas filed a petition for authority
to sell to the government the unutilized portion,
4. Those who have acquired ownership of land by which was granted by the RTC. The Republic
any other manner provided for by law; and contends that Ortigas can only donate the
property to the government in accordance with
5. Where the land is owned in common, all the co- Sec. 50.
owners shall file the application jointly. (Sec. 14,
P.D. 1529) Is the Ortigas not allowed to sell the unutilized
portion of the property to the government in
Ownership of Abandoned Riverbeds by Right of accordance with Sec. 50 of P.D. No. 1529?
Accession
A: NO, Ortigas is still allowed to sell the unutilized
GR: Riverbeds which are abandoned through the portion of the property. Sec. 50 of P.D. No. 1529 does
natural change in the course of waters ipso facto not apply in a case that is the proper subject of an
belong to the owners whose lands are occupied by expropriation proceeding. Respondent Ortigas may
the new course in proportion to the area lost. sell its property to the government. It must be
compensated because its property was taken and
XPN: The owners of the adjoining lands shall have utilized for public road purposes. Sec. 50
the right to acquire the same by paying the value contemplates roads and streets in a subdivided
thereof, otherwise, the alluvial property may be property, not public thoroughfares built on a private
subject to acquisition through prescription by third property that was taken from an owner for public
persons. (Art. 461, NCC; City Mayor of Parañaque City purpose. A public thoroughfare is not a subdivision
v. Ebio, G.R. No. 178411, 23 June 2010) road or street. More importantly, when there is
taking of private property for some public purpose,
Ownership by Right of Accretion along River the owner of the property taken is entitled to be
Banks compensated. (Republic v. Ortigas and Company
Limited Partnership, G.R. No. 171496, 03 Mar. 2014).
The owners of land adjoining the banks of rivers
belong the accretion which they gradually receive Object of Registration
from the effects of the current of the waters. (Art.
457, NCC) Only real property or real rights may be the object
of registration under the existing land registration
A riparian owner does not acquire the additions to laws.
his land caused by special works designed to bring
about accretion. Q: Rosario filed her application for land
registration of a rice land that she had inherited,
Adverse Possession of Land owning and possessing it openly, publicly,
uninterruptedly, adversely against the whole
Possession of land is adverse when it is open and world, and in the concept of owner since then.
notorious. It is open when it is patent, visible, and This was opposed by the Republic opposed
apparent and it is notorious when it is so claiming that Rosario failed to occupy and
conspicuous that it is generally known and talked of possess the land for at least thirty (30) years
by public or the people in the neighborhood. immediately preceding the filing of the
2023 GOLDEN NOTES
application; and that the land applied for, being registration under Sec. 14(1) of the Property
a portion of a river control system, that could Registration Decree. Likewise, the land continues to
not be subject of appropriation or land be ineligible for land registration under Sec. 14(2)
registration. of the Property Registration Decree unless Congress
enacts a law or the President issues a proclamation
Is the land subject of application susceptible of declaring the land as no longer intended for public
private acquisition? service or for the development of the national
wealth. (Malabanan v. Republic, G.R. No. 179987, 03
A: NO. The land of the public domain, to be the Sept. 2013)
subject of appropriation, must be declared alienable
and disposable either by the President or the Q: The AFP-RSBS filed an application for original
Secretary of the DENR. Unless public land is shown registration of parcels of land consisting of 48,
to have been reclassified or alienated to a private 151 sq. m. in Silang, Cavite. The parcels of land
person by the State, it remains part of the were allegedly acquired from Narciso Ambrad,
inalienable public domain. Indeed, occupation Alberto Tibayan, and Restituto Tibayan on 13
thereof in the concept of owner, no matter how long, Mar. 1997. It was also alleged that their
cannot ripen into ownership and be registered as a predecessors-in-interest had been in possession
title. (Republic v. De Joson, G.R. No. 163767, 10 Mar. of the properties since 12 June 1945. Can the
2014) AFP-RSBS acquire the land through acquisitive
prescription?
Q: Mario applied for registration of his land. He
claims that he bought the land from Eduardo A: YES. The period of possession prior to the
who also claims that his great grandfather declaration that land is alienable and disposable
owned the land. Mario submitted a CENRO from agricultural land is included in the computation of
DENR stating that the land is alienable and possession for purposes of acquiring registration
disposable in 1982. However, the Republic rights over a property if the land has already been
appealed claiming that Mario did not adhere to declared as such at the time of the application for
the requirements of time required by the law registration. Petitioner’s right to the original
and he failed to proof that the land is an registration of title over the property is, therefore,
alienable and disposable land. The Court ruled dependent on the existence of:
in favor of the Republic stating that the
possession of the land before it is declared a) a declaration that the land is alienable and
alienable and disposable cannot be included in disposable at the time of the application for
the computation of possession of the land, thus, registration, and
Mario did not adhere to the period required by
law. Can Mario register his land? b) open and continuous possession in the
concept of an owner through itself or
A: NO. Mario failed to present sufficient evidence to through its predecessors-in-interest since
establish that they and their predecessors-in- 12 June 1945 or earlier.
interest had been in possession of the land since 12
June 1945. Without satisfying the requisite In this case, there is no dispute that the properties
character and period of possession—possession were already declared alienable and disposable
and occupation that is open, continuous, exclusive, land on 15 Mar. 1982. Hence, the property was
and notorious since 12 June 1945, or earlier – the already alienable and disposable at the time of
land cannot be considered ipso jure converted to petitioner’s application for registration on 10 July
private property even upon the subsequent 1997. Further, the open, continuous, exclusive,
declaration of it as alienable and disposable. notorious possession of the petitioner was proven
Prescription never began to run against the State, by testimonies and pieces of evidence. (AFP
such that the land has remained ineligible for
CIVIL LAW
Retirement and Separation Benefits System v. Eligibility of Private Corporations to hold

Republic, G.R. No. 180086, 02 July 2014) Alienable Lands of the Public Domain
Persons Qualified for Registration in case the Private corporations may not hold alienable lands of
Land is Subject to: the public domain. The word “persons” refer to are
natural persons who are citizens of the Philippines.
1. Pacto de retro sale Juridical or artificial persons are excluded. The
Constitution prohibits private corporations or
GR: Vendor a retro may apply for registration. associations from holding alienable lands of the
public domain except by lease. (Sec. 3, Art. XII, 1987
XPN: Vendee a retro should the period for Constitution)
redemption expire during pendency of registration
proceedings and ownership to property is GR: Private corporations or associations may not
consolidated in vendee a retro. hold alienable lands of public domain except by
lease, for a period not exceeding 25 years,
2. Trust renewable for not more than 25 years, and not to
exceed 1,000 hectares in area. (Sec. 3, Art. XII, 1987
GR: Trustee may apply for registration. Constitution)
XPN: Unless prohibited by the instrument creating XPN: Where at the time the corporation acquired
the trust. land, its predecessor-in-interest had been in
possession and occupation thereof in the manner
NOTE: Trusteeship or trust is a fiduciary and for the period prescribed by law as to entitle
relationship with respect to property which him to registration in his name, then the
involves the existence of equitable duties imposed proscription against corporation acquiring
upon the holder of the title to the property to deal alienable lands of the public domain except through
with it for the benefit of another. lease does not apply for the land was no longer
public land but private property. (Republic v. Iglesia
3. Reserva troncal ni Cristo. G.R. No. 180067, 30 June 2009)
Reservista has the right to apply for registration but Q: Noynoy, Erap, Manny and Gibo are co-owners
the reservable character of the property will be of a parcel of land. May Manny seek registration
annotated in the title. in his name of the land in its entirety?
NOTE: In reserva troncal, the ascendant who A: NO. Since a co-owner cannot be considered a true
inherits from his descendant any property which owner of a specific portion until division or
the latter may have acquired by gratuitous title from partition is effected, he cannot file an application for
another ascendant, or a brother or sister, is obliged registration of the whole area without joining the
to reserve such property as he may have acquired co-owners as applicants.
by operation of law for the benefit of relatives who
are within the third degree and who belong to the Q: In 1998, Iglesia ni Cristo filed its application
line from which said property came. for Registration of Title before the MCTC which
the Republic opposed. The cadastral court held
that the essential elements for judicial
confirmation of an imperfect title over the
subject lot have been complied with. The CA also
held that the INC has been in continuous, open,
and peaceful possession and occupation of the
2023 GOLDEN NOTES
lot for more than forty (40) years. Is the INC that a CENRO Certification is not sufficient to
entitled to registrable right over the subject lot? prove the land's classification as alienable and
disposable. The MTC and CA ruled in granting
A: YES. In Naguit (G.R. No. 144057, 17 Jan. 2005), the the Application for registration. Whether or not
Court held a less stringent requirement in the Laureana is entitled for the registration of the
application of Sec. 14(1) of P.D. 1529 that the land in her name?
reckoning period for possession is the actual
possession of property and it is sufficient that the A: NO. In this case, although respondents were able
property sought to be registered is already alienable to present a CENRO certification, a DENR-CENRO
and disposable at the time the application for report with the testimony of the DENR officer who
registration of title is filed. made the report, and the survey plan showing that
the property is already considered alienable and
The possession of INC has been established not only disposable, these pieces of evidence are still not
from 1952 and 1959 when it purchased the sufficient to prove that the land sought to be
respective halves of the subject lot but is also tacked registered is alienable and disposable. Absent the
on to the possession of its predecessors-in-interest. DENR Secretary's issuance declaring the land
These possessions and occupation—from Sabuco, alienable and disposable, the land remains part of
including those of his parents, to INC; and from the public domain. Thus, even if respondents have
Sabuco to Badanguio to INC—had been in the shown, through their testimonial evidence, that
concept of owners: open, continuous, exclusive, and they and their predecessors-in-interest have been
notorious possession and occupation under a bona in open, continuous, exclusive, and notorious
fide claim of acquisition of property. These had not possession and occupation of the property since 12
been disturbed as attested to by respondent’s June 1945, they still cannot register the land for
witnesses. (Republic v. Iglesia ni Cristo, G.R. No. failing to establish that the land is alienable and
180067, 30 June 2009) disposable. (Republic v. Malijan-Javier, GR No.
214367, 04 Apr. 2018)
Q: Laureana and Iden's application for
registration of land title over a parcel situated in Q: The applicants sought the registration of their
Barangay Tranca, Talisay, Batangas filed in June titles over the subdivided portions of a land. The
2009 before the Municipal Circuit Trial Court of applicants provided ample evidence to their
Talisay-Laurel, Batangas. The land, regarded as favor. However, the Solicitor General opposed
Lot No. 1591, Cad. 729, Talisay Cadastre, had an the application using a pro forma opposition.
area of 9,629 sq. m. The application of Laureana Does the Solicitor General have to produce
and Iden was docketed as Land Registration evidence that that the land is a public domain
Case No. 09-001 (LRA Record No. N-79691). On despite the theory that all lands belong to the
September 10, 2009, Republic of the Philippines State?
(Republic) filed an Opposition to the application
based on the following grounds: (1) Neither the A: YES. When the State has no effective opposition,
applicants nor their predecessors-in-interest except for a pro forma opposition, to controvert an
have been in open, continuous, exclusive and applicant's convincing evidence of possession and
notorious possession and occupation of the land occupation, presumptions are tilted to this
in question in the concept of an owner since 12 applicant's favor. (Republic v. Sps. Noval, G.R. No.
June 1945 or earlier; (2) The tax declarations 170316, 18 Sept. 2017)
relied upon by appellees do not constitute
competent and sufficient evidence of a bona fide Q: An Emancipation Patent OCT was issued in
acquisition of the land by the appellees; and (3) Remy’s favor. However, Madarieta filed a
The parcel of land applied for is a land of public complaint for annulment and cancellation of the
domain and, as such, not subject to private OCT against Remy before the DARAB, alleging
appropriation. And the Republic further avers that the Department of Agrarian Reform
CIVIL LAW
mistakenly included her husband’s lot as part of Sec. 14(1) v. Sec. 14(2) of P.D. 1529
Luspo’s property where Remy’s house was
constructed. What is the nature of Remy’s In Malabanan v. Republic, (G.R. No. 179987, 03 Sept.
possession of the subject land? 2013), the Court clarified the difference between
Sec. 14(1) and Sec. 14(2) of P.D. 1529.
A: Remy possessed the subject land in the concept
of an owner. No objection was interposed against his SEC. 14(1) SEC. 14(2)
possession of the subject land and Remy did not
employ fraud in the issuance of the emancipation Registration of
Registration of title on
patent and title. In fact, Madarieta faulted the DAR, property on the basis
the basis of possession.
not him. (Rementizo v. Heirs of Vda. De Madarieta, of prescription.
G.R. No. 170318, 15 Jan. 2009)
Deals with possession Involves prescription
NOTE: Jurisdiction over cases for cancellation of and occupation in the as a mode of acquiring
registered emancipation patents. concept of an owner. ownership.
With the enactment of R.A. No. 9700 (An Act

Strengthening the Comprehensive Agrarian Reform Extended under the
Available both by P.D.
Program), the exclusive and original jurisdiction aegis of the P.D. 1529
1529 and the NCC.
over cases for cancellation of registered and the PLA.
emancipation patents now belongs to the
Department of Agrarian Reform Secretary.
Under Sec. 48(b) of the
The 30-year period
In line with this, the Department of Agrarian Reform PLA, as amended by
involves extraordinary
has issued Administrative Order No. 07- 14, which R.A. No. 1472, the 30-
prescription under the
outlines in Article III the procedure for the year period is in
NCC, particularly Art.
cancellation of registered emancipation patents, relation to possession
1113 in relation to Art.
certificates of land ownership awards, and other without regard to the
1137.
agrarian titles. The petition for cancellation shall be NCC.
filed before the Office of the Provincial Agrarian
Reform Adjudicator, which would then undertake
the case build-up before forwarding it to the 2. DECREE OF REGISTRATION
Department of Agrarian Reform Secretary for
decision. It is a well-entrenched rule in this jurisdiction that
no title to registered land in derogation of the rights
Thus, under Administrative Order No. 07-14, the of the registered owner shall be acquired by
Complaint for cancellation of original certificates of prescription or adverse possession.
title and emancipation patents filed by respondents
should be referred to the Office of the Provincial It is issued by LRA after finality of judgment and
Agrarian Reform Adjudicator for case buildup. contains technical description of the land. It is
Then, the case shall be decided by the Department subject only to an appeal. It is conclusive evidence
of Agrarian Reform Secretary. (Secretary of the of the ownership of the land referred to therein and
Department of Agrarian Reform, v. Heirs of Abucay, becomes indefeasible and incontrovertible after one
G.R. No. 186432, 12 Mar. 2019) (1) year from the issuance of the decree.
2023 GOLDEN NOTES
Decree of Confirmation and Registration vs. Effect: It was as if no title was ever issued in this
Decree of Registration case to the petitioner and therefore this is hardly the
occasion to talk of collateral attack against a title.
DECREE OF (Heirs of Leoncio C. Oliveros v. San Miguel Corp., G.R.
DECREE OF No. 173531, 01 Feb. 2012)
CONFIRMATION AND
REGISTRATION OF
REGISTRATION OF
TITLE Q: Is an action for Reconveyance based on fraud
TITLE
a direct attack on Torrens Title?
Issued pursuant to the
Public Land Act, where Issued pursuant to the A: YES, an action for reconveyance based on fraud is
the presumption is that Property Registration a direct attack on a Torrens title. It follows that
the land applied for Decree, where there despite the finality accorded to a Torrens title,
pertains to the State, already exists a title reconveyance may prosper as an equitable remedy
and the occupants and which is confirmed by given to the rightful owner of a land that was
possessors only claim the court. (Limcoma erroneously registered in the name of another. This
an interest in the same Multi-Purpose action recognizes the validity of the registration and
by virtue of their Cooperative v. Republic, its incontrovertible nature; it does not question the
imperfect title or G.R. No. 167652, 10 July indefeasibility of the Torrens title. (Heirs of Latoja v.
continuous, open, and 2007) Heirs of Latoja, G.R. No. 195500, 17 Mar. 2021, as
notorious possession. penned by J. Hernando)
Doctrine of Non-Collateral Attack of a Decree or Q: What is the quantum of proof required in an

Title action for Reconveyance on the ground of fraud?
A decree of registration or a registered title cannot A: CLEAR AND CONVINCING EVIDENCE. Fraud and
be impugned, enlarged, altered, modified, or irregularity are presupposed in an action for
diminished either in collateral or direct proceeding reconveyance of property. The party seeking to
after the lapse of one (1) year from the date of its recover the property must prove, by clear and
entry. convincing evidence, that he or she is entitled to the
property, and that the adverse party has committed
XPN: Fake or non-existent titles. fraud in obtaining his or her title. (Heirs of Latoja v.
Heirs of Latoja, G.R. No. 195500, 17 Mar. 2021, as
NOTE: An oppositor cannot simply invoke the penned by J. Hernando)
nullity of the title as a defense as it partakes the
nature of a collateral attack. The opponent claiming Q: In a case for recovery of possession based on
that the applicant’s OCT is fake must file a ownership, is a third-party complaint to nullify
counterclaim, and that such counterclaim partakes the title of the third-party defendant considered
the nature of a direct attack. a direct attack on the title?
Reason: Fake titles do not enjoy indefeasibility. A: YES. If the object of the third-party complaint is
Well-settled is the rule that the indefeasibility of a to nullify the title of the third-party defendant, the
title does not attach to titles secured by fraud and third-party complaint constitutes a direct-attack on
misrepresentation. However, every certificate of the title because the same is in the nature of an
title is presumed to have been validly issued. If an original complaint for cancellation of title.
opponent claims that it is fake, he has the burden of
proving it. Q: If an attack is made through a counterclaim,
should it be disregarded for being a collateral
attack?
CIVIL LAW
A: NO. A counterclaim is also considered an original The Sps. Gumallaoi built a residential house on
complaint, and as such, the attack on the title is Lot No. 20029 which the Cascayan Heirs alleged
direct and not collateral. encroached on Lot No. 20028 after renovations
and improvements. The Spouses Gumallaoi
Q: Mr. and Mrs. Roman and Mr. and Mrs. Cruz ignored the notifications that they had
filed an application for registration of a parcel of encroached into Lot No. 20028. On 31 May 2001,
land which after due proceedings was granted the Spouses Gumallaoi applied for a Building
by the RTC acting as a land registration court. Permit. Due to renovations on their residential
However, before the decree of registration could house, they further encroached on Lot No.
be issued, the spouses Roman and the spouses 20028. Thus, the Cascayan Heirs prayed that the
Cruz sold the lot to Juan. In the notarized deed of Spouses Gumallaoi be directed to vacate Lot No.
sale, the sellers expressly undertook to submit 20028 and to restore it to their possession. They
the deed of sale to the land registration court so likewise prayed that the municipal engineer of
that the title to the property would be directly Bangui issue the necessary demolition permit as
issued in Juan's name. (2015 BAR) well as cause the demolition of the portion of the
house that encroached on Lot No. 20028. Finally,
a. Is such stipulation valid? they prayed to be paid damages.
A: YES. When one who is not the owner of the In response, and by way of counterclaim, the
property sells or alienates it and later the seller or Sps. Gumallaoi maintained that they were the
grantor acquires title, such title passes by operation true owners of both Lot Nos. 20029 and 20028.
of law to the buyer or grantee. (Art. 1434, NCC) They claimed that the Cascayan Heirs secured a
free patent to Lot No. 20028 through
b. Distinguish a direct attack from a manipulation. They asserted that the
collateral attack on a title. supporting affidavits for the Cascayan Heirs'
free patent application were obtained through
A: A direct attack on a title is one where the action fraud and deception. Were the Spouses
filed is precisely for the purpose of pointing out the Gumallaoi the legal owners of Lot No. 20028?
defects in the title with a prayer that it be declared
void. A collateral attack is one where the action is A: YES. In this case, Sps. Gumallaoi presented
not instituted for the purpose of attacking the title, sufficient evidence to show that the Heirs of
but the nullity of the title is raised as a defense in a Cascayan obtained their title through fraud and
different action. misrepresentation. Moreover, the evidence did not
sufficiently prove the heirs' claims of possession or
c. If the title in (a) is issued in the names of ownership over Lot No. 20028. The only basis for
the original sellers, would a motion filed their claim of possession was tax declarations.
by Juan in the same case to correct or
amend the title to reflect his name as The spouses, on the other hand, sufficiently
owner considered be collateral attack? identified Lot No. 20028 and proved their title
thereto. Hence, considering the foregoing, it is
A: NO. Juan is not attacking the title but merely proper to say that Spouses Gumallaoi are the lawful
invoking his right as transferee. Hence, it does not owners of the subject property. (Heirs of Cayetano
involve a collateral attack on the title. Cascayan v. Sps. Gumallaoi, G.R. No. 211947, 03 July
2017)
Q: The Cascayan Heirs alleged that by virtue of a
free patent application, they were co-owners of Q: Years after the issuance of TCT or CLOA to
a parcel of land denominated as Lot No. 20028. Diopenes and Villanueva, Padillo filed before
The Cascayan Heirs affirmed that the Spouses the Agrarian Reform Regional Office a Petition
Gumallaoi bought Lot No. 20029, an adjacent lot. for Inclusion a Farmer-Beneficiary over the
2023 GOLDEN NOTES
subject lots. The Regional Director granted the title to or possession of real property or any interest
petition and declared Padillo a qualified therein. This falls under the exclusive original
beneficiary. A Writ of Execution was jurisdiction of either the RTC or the MTC, depending
subsequently issued. Thus, Padillo filed a on the assessed value. (Padillo v. Villanueva, G.R. No.
Petition for Cancellation of Diopenes’ and 209661, 03 Oct. 2018)
Villanueva’s Certificates of Land Ownership
Award before the Provincial Adjudicator. The Q: On 02 Sept. 2002, Manuel, through his
Department of Agrarian Reform Adjudication attorney-in-fact, Nelson N. Guevarra (Nelson)
Board ordered the cancellation of the TCT and filed an Application for Original Registration of
CLOA. It ruled that the Regional Director had Title over a 40,000-square meter portion of Lot
jurisdiction to order Padillo's inclusion as 5525, known as Lot No. 5525-B, which is located
farmer-beneficiary. On appeal, the CA annulled at Brgy. San Luis, Sto. Tomas, Batangas. Lot No.
the Decision on the ground of indefeasibility of 5525-B. Manuel alleged that he bought Lot No.
title. 5525-B from Reynaldo S. Navarro (Reynaldo) as
evidenced by a Deed of Absolute Sale dated 25
Is the cancellation of the registered Certificates Sept. 1989. Reynaldo and his predecessors-in-
of Land Ownership Award (CLOA) or Transfer interest had been in open, peaceful, continuous,
Certificate of Title (TCT) four years after their and exclusive possession of the land prior to 12
issuance proper? June 1945 under a bona fide claim of ownership.
Manuel attached the following documents in his
A: NO, under Sec. 48 of P.D. 1529, a registered application: (a) Tax Declaration No. 017-009919
certificate of land ownership award may be altered, in his name; (b) Deed of Absolute Sale dated 25
modified, or canceled only through an action for Sept. 1989 executed by Reynaldo in his favor; (c)
annulment of the certificate itself. The petition Subdivision Plan of Lot No. 5525-B which was
incidentally questioned the validity of the TCT approved on 03 July 2002, together with its blue
issued in Diopenes’ and Villanueva’s favor in an print, showing that it is a portion of Lot No. 5525;
action seeking a different relief—purportedly for (d) Technical Description of Lot 5525-B;12 and
petitioner to be included as farmer-beneficiary in (e) Certification in lieu of Geodetic Engineer's
the subject lots. This is a collateral attack on the title, Certificate for registration purposes.
and as such, prohibited by law. Similar to a
certificate of title issued in registration proceedings, The OSG, representing the Republic of the
the registration of a CLOA places the subject land Philippines, filed its Opposition to the
under the operation of the Torrens system. Once application. It sought the denial of Manuel's
under the Torrens system, a CLOA becomes application based on the following grounds: (a)
indefeasible and incontrovertible upon the the land is inalienable and part of the public
expiration of one year from the date of registration domain owned by the Republic; (b) Manuel and
with the Office of the Registry of Deeds. It may only his predecessors-in-interest were not in
be attacked through a direct proceeding before the continuous, exclusive and notorious possession
court. and occupation of the land since 12 June 1945 or
prior thereto; and (c) the evidence attached to
Moreover, Regional Director has no jurisdiction in a the application insufficiently and incompetently
Petition for Inclusion as farmer-beneficiary over proved his acquisition of the land or his
lots covered by the Certificates of Title or registered continuous, exclusive and notorious possession
Certificates of Land Ownership Award. Thus, all and occupation thereof.
subsequent proceedings are void for lack of
jurisdiction. Under B.P. Blg. 129, or the Judiciary During the trial, Manuel presented the following
Reorganization Act of 1980, an action for annulment witnesses: (a) Nelson; (b) Arcadio Arcillas
of a registered certificate of land ownership award, (Arcadio); (c) Epifanio Guevarra (Epifanio); (d)
like the annulment of a certificate of title, involves Miguel Jaurigue Libot (Miguel); (e) Francisco
CIVIL LAW
Malleon (Francisco); and (f) Fermin Angeles 3. REVIEW OF DECREE OF REGISTRATION;

(Fermin). Did Manuel sufficiently proved that he INNOCENT PURCHASER FOR VALUE (IPV);
and his predecessors-in-interest were in RIGHTS OF IPV
continuous, peaceful, notorious and exclusive
possession in the concept of an owner of the
Review of Decree of Registration
subject land?
In Wee v. Mardo (G.R. No. 202414, 04 June 2014), the

A: YES. Pursuant to the above-mentioned
Court reiterated that “a public land patent, when
provisions, the applicant must prove the following
registered in the corresponding Register of Deeds,
requirements for the application for registration of
is a veritable Torrens title and becomes as
a land under Sec. 14(1) to prosper: (1) that the
indefeasible upon the expiration of one (1) year
subject land forms part of the disposable and
from the date of issuance thereof. Said title, like one
alienable lands of the public domain; (2) that the
issued pursuant to a judicial decree, is subject to
applicants by themselves and their predecessors-in-
review within one (1) year from the date of the
interest have been in open, continuous, exclusive,
issuance of the patent. Since the period of one year
and notorious possession and occupation thereof;
had already lapsed when Cullado questioned the
and (3) that the possession is under a bona fide
OCT's validity on the ground of fraud (i.e., counted
claim of ownership since 12 June 1945, or earlier.
from the issuance on 17 May 1995 of the OCT in the
name of Dominic), via his Answer filed on 18 Aug.
Manuel adequately met all these requirements.
1997, then Dominic's OCT had already become
There is substantial proof that the subject land is
indefeasible and, until cancelled in an appropriate
disposable and alienable. The CENRO Certificates
direct proceeding, remains to be valid. (Heirs of
dated 11 Feb. 2003 and 21 Mar. 2003 sufficiently
Cullado v. Gutierrez, G.R. No. 212938, 30 July 2019)
showed that the government executed a positive act
of declaration that Lot No. 5525-B is alienable and
The State may still bring an action under Sec. 101 of
disposable land of public domain as of 31 Dec 1925.
C.A. 141 for the reversion to the public domain of
Remarkably, the OSG failed to controvert the said
land which has been fraudulently granted to private
act of the government. Hence, the certificates enjoy
individuals and such action is not barred by
the presumption of regularity in the absence of
prescription. The basis of the action for reversion is
contradictory evidence. Thus, with the presentation
Sec. 91 of C.A. 141, which provides that the
of the CENRO certificates as evidence, together with
statements made in the application shall be
the documentary evidence, Manuel substantially
considered as essential conditions and parts of any
complied with the legal requirement that the land
concession, title, or permit issued on the basis of
must be proved to be an alienable and disposable
such application, and any false statement therein or
part of the public domain.
omission of facts altering, changing, or modifying
the consideration of the facts set forth in such
Manuel has likewise proved possession and
statements, and any subsequent modification,
occupation of the property under a bona fide claim
alteration, or change of the material facts set forth
of ownership. Manuel had sufficiently established
in the application shall ipso facto produce the
his possession in the concept of owner of the
cancellation of the concession, title, or permit
property since 12 June 1945, or earlier. The
granted. (Heirs of Cullado v. Gutierrez, G.R. No.
testimonies of the witnesses are credible enough to
212938, 30 July 2019)
support Manuel's claim of possession. Worthy to
note that the witnesses unswervingly declared that
Evaristo, in the concept of an owner, occupied and
possessed Lot No. 5525 even before 12 June 1945.
(Republic v. Caraig, G.R. No. 197389, 12 Oct. 2020, as
penned by J. Hernando)
2023 GOLDEN NOTES
Available Remedies to Question the Validity of faith, and their interest in the subject property must
Judgment in a Registration Case not be disturbed. (Agcaoili, 2018)
1. New trial or reconsideration; (Rule 37, ROC) A purchaser of a registered property can rely on the
2. Appeal to the CA or SC in the manner as guarantee afforded by pertinent laws on
ordinary actions; (Sec. 33, P.D. 1529) registration that he can take and hold it free from
3. Relief of judgment; (Rule 38, ROC) any and all prior liens and claims except those set
4. Annulment of judgment; (Rule 37, ROC) forth in or preserved against the certificate of title.
5. Claim under Assurance Fund; (Sec. 95, P.D. (PCSO v. New Dagupan Metro Gas Corporation, et al.,
1529) G.R. No. 173171, 11 July 2012)
6. Review of Decree of Registration; (Sec. 32,
Ibid. P.D. 1529) NOTE: An innocent purchaser for value includes a
7. Reversion; (Sec. 101, C.A. 141) lessee, mortgagee, or other encumbrances for value.
8. Action for reconveyance;
9. Cancellation of title; Purchaser in good faith and for value is the same as
10. Quieting of Title; and a purchaser for value.
11. Criminal prosecution under the RPC.
Equitable estoppel may be invoked against public
Purchaser in Good Faith and For Value (2022 authorities when the lot was already alienated to
BAR) innocent buyers for value and the government did
not undertake any act to contest the title for an
An innocent purchaser for value is one who buys the unreasonable length of time. Only innocent
property of another without notice that some other purchasers for value (IPV) are afforded the right to
person has a right to or interest in it, and who pays raise the equitable principle of estoppel by laches in
a full and fair price at the time of the purchase or their defense against the government to avoid
before receiving any notice of another person’s injustice to them. (Republic v. Sundiam, G.R. No.
claim. As such, a defective title–or one the 236381, 27 Aug. 2020)
procurement of which is tainted with fraud and
misrepresentation–may be the source of a Determination of Good Faith
completely legal and valid title, provided that the
buyer is an innocent third person who, in good faith, Good faith, or the lack of it, is in its last analysis a
relied on the correctness of the certificate of title, or question of intention; but, in ascertaining the
an innocent purchaser for value. intention by which one is actuated on a given
occasion, we are necessarily controlled by the
The Mirror Doctrine evidence as to the conduct and outward acts by
which alone the inward motive may, with safety, be
Complementing the concept of “purchaser in good determined. So it is that “the honesty of intention,”
faith and for value” is the mirror doctrine which “the honest lawful intent,” which constitutes good
echoes the doctrinal rule that every person dealing faith, implies freedom from knowledge and
with registered land may safely rely on the circumstances which ought to put a person on
correctness of the certificate of title issued therefor inquiry,” and so it is that proof of such knowledge
and is in no way obliged to go beyond the certificate that overcomes the presumption of good faith in
to determine the condition of the property. (Locsin which the courts always indulge in the absence of
v. Hizon, et al., G.R. No. 204369, 17 Sept. 2014) proof to the contrary.
While good faith is presumed, bad faith must be

established by competent proof by the party
alleging the same. Sans such proof, the purchasers
of property are deemed to be purchasers in good
CIVIL LAW
Good Faith is Satisfied with the Concurrence of A Forged Deed may be the Root of a Valid Title
the Following Conditions:
GR: A forged or fraudulent deed is a nullity and
1. The seller is the registered owner of the conveys no title.
land;
XPN: If the certificate of title has already been
2. He is in possession thereof; and transferred from the name of the true owner to the
name of the forger or the name indicated by the
3. At the time of the sale, the buyer was not forger, and while it remained that way, the land was
aware of any claim or interest of some subsequently sold to an innocent purchaser. (Muñoz
other person in the property, or of any v. Yabut, G.R. No. 142676, 06 June 2011)
defect or restriction in the title of the seller
or in his capacity to convey title to the Q: If the land subject of the dispute was not
property. (Agcaoili, 2018) brought under the operation of the Torrens
system, will the concept of an innocent
Q: Sindophil anchors its right to the Tramo purchaser for value apply?
property on Transfer Certificate of Title, which
was purportedly issued by the Register of Deeds A: NO. If the land in question was not brought under
of Pasay City. The Republic alleged that the the operation of Torrens system because the
Tramo property was initially registered under original certificate of title is null and void ab initio,
the name of Teodoro. Despite the issuance of the concept of an innocent purchaser for value does
certificates of title over the Tramo property, the not apply.
Republic claimed that the TCT in the name of
Teodoro was “spurious or of doubtful NOTE: Good faith and bad faith is immaterial in case
authenticity.” Sindophil countered that the of unregistered land. One who purchases an
Republic was estopped from questioning the unregistered land does so at his peril. (Caldito v.
transfers considering that it had allowed the Obado, G.R. No. 181596, 30 Jan. 2017)
series of transfers and even accepted the
"tremendous amounts paid" as capital gains tax. Q: Nestor applied for and was granted a Free
Is Sindophil a purchaser in good faith? Patent over a parcel of agricultural land in
General Santos City. He presented the Free
A: NO, Sandophil is not a purchaser in good faith. Patent to the Register of Deeds, and he was
The presumption of good faith and that a holder of a issued a corresponding Original Certificate of
title is an innocent purchaser for value may be Title (OCT) No. 375. Subsequently, Nestor sold
overcome by contrary evidence. These annotations the land to Eddie. The deed of sale was
show that the Tramo property is controversial and submitted to the Register of Deeds and on the
has been the subject of several adverse claims, basis thereof, OCT No. 375 was cancelled and
belying Sindophil's contention that it acquired the TCT No. 4576 was issued in the name of Eddie. In
property in good faith. With Sindophil failing to 1986, the Director of Lands filed a complaint for
prove that it was a buyer in good faith, it cannot annulment of OCT No. 375 and TCT No. 4576 on
recover damages. (Sindophil Inc. v. Republic, G.R. No. the ground that Nestor obtained the Free Patent
204594, 07 Nov. 2018) through fraud. Eddie filed a motion to dismiss on
the ground that he was an innocent purchaser
for value and in good faith and as such, he has
acquired a title to the property which is valid,
unassailable and indefeasible. Decide the
motion. (2000 BAR)
2023 GOLDEN NOTES
A: Nestor’s motion to dismiss the complaint for A: YES. Certificates of title issued covering
annulment of OCT No. 375 and TCT No. 4576 should inalienable and non-disposable public land, even in
be denied for the following reasons: the hands of an alleged innocent purchaser for
value, should be cancelled. The Heirs of Kusop did
1. Eddie cannot claim protection as an innocent not acquire any right to Lot X. The sales patents over
purchaser for value nor can he interpose the Lot X are null and void, for at the time the sales
defense of indefeasibility of his title, because patents were applied for and granted, the land had
his TCT is rooted on a void title. Under Sec. 91, lost its alienable and disposable character. (Republic
C.A. 141, as amended, otherwise known as the v. AFP Retirement and Separation Benefits System,
Public Land Act, statements of material facts in G.R. No. 180463, 13 Jan. 2013)
the applications for public land must be under
oath. Sec. 91 of the same act provides that such Q: Mahilum entrusted the owner’s duplicate
statements shall be considered as essential copy of her land to Perez, real estate broker,
conditions and parts of the concession, title, or who claimed that she can assist the latter in
permit issued, any false statement therein, or obtaining a loan, with the title serving as
omission of facts shall ipso facto produce the collateral. Mahilum demanded the return of the
cancellation of the concession. The patent title, but Perez failed to produce the same
issued to Nestor in this case is void ab initio alleging that it was lost. Thereafter Mahilum was
not only because it was obtained by fraud but informed by the RD that the title was not lost but
also because it covers 30 hectares which is far was presented by Sps. Ilano who claimed that
beyond the maximum of 24 hectares provided the property was sold to them and showed
by the free patent law. Mahilum a notarized Agreement and a Deed of
Absolute Sale containing Mahilum’s forged
2. The government can seek annulment of the signature. However, the spouses did not register
original and transfer certificates of title and the title in their names. Mahilum then sought the
the reversion of the land to the State. Eddie's annulment of the Agreement and the Deed of
defense is untenable. The protection afforded Absolute Sale. Sps. Ilano prayed for the dismissal
by the Torrens System to an innocent of the complaint arguing that Mahilum failed to
purchaser for value can be availed of only if allege that they were purchasers in bad faith and
the land has been titled thru judicial in the absence of such an allegation, the
proceedings where the issue of fraud becomes presumption that respondents are purchasers
academic after the lapse of one year from the in good faith prevails. Can the Sps. Ilano claim
issuance of the decree of registration. In public that they are purchasers in good faith?
land grants, the action of the government to
annul a title fraudulently obtained does not A: NO. Since the title of the property remained with
prescribe such action and will not be barred Mahilum, there is no new title to annul. Indeed, if the
by the transfer of the title to an innocent agreement and deed of sale are forgeries, then they
purchaser for value. are a nullity and convey no title. The underlying
principle is that no one can give what one does not
Q: Heirs of Kusop, filed for application of sales have. Moreover, in order for the holder of a
patents for Lot X, a lot reserved for recreation certificate for value issued by virtue of the
and health purposes under Proclamation No. registration of a voluntary instrument may be
168. The DENR approved such application and considered a holder in good faith for value, the
conveyed 16 titles to Kusop, who subsequently instrument registered should not be forged. When
transferred it to AFP-RSBS. Republic filed a the instrument presented is forged, even if
complaint for reversion, and annulment of AFP- accompanied by the ODCT, the registered owner
RSBS’ titles since Lot X is classified as does not thereby lose his title, and neither does the
inalienable and non-disposable public land. Is assignee in the forged deed acquire any right or title
the Republic correct?
CIVIL LAW
to the property. (Mahilum v. Sps. Ilano, G.R. No. A: NO. The evidence shows that Sps. Rufloe caused
197923, 22 June 2015) a notice of adverse claim to be annotated on the title
of Delos Reyes as early as 05 Nov. 1979. The
Q: Sps. Rufloe acquired a parcel of land located annotation of an adverse claim is a measure
at Muntinlupa. However, in 1978, Delos Reyes designed to protect the interest of a person over a
forged the signatures of the spouses in a Deed of piece of real property and serves as a notice and
Sale to make it appear that the disputed warning to third parties dealing with said property
property was sold to her by the former. On the that someone is claiming an interest on the same or
basis of the said deed of sale, Delos Reyes may have a better right than the registered owner
succeeded in obtaining title on her name. Hence, thereof. Despite the notice of adverse claim, the
the Sps. Rufloe filed a complaint for damages Burgos siblings still purchased the property in
against Delos Reyes alleging that the Deed of question. Equally significant is the fact that Delos
Sale was falsified as their signatures appearing Reyes was not in possession of the subject property
thereon was forged. when she sold the same to the Burgos siblings.
Leonarda cannot be categorized as a purchaser in
During the pendency of the case, Delos Reyes good faith. Since it was the Sps. Rufloe who
sold the subject property to the Burgos siblings continued to have actual possession of the property,
who then sold the same to their aunt, Leonarda Leonarda should have investigated the nature of
Burgos. However, the sale in favor of Leonarda their possession. (Rufloe v. Burgos G.R. No. 143573,
was not registered. Thus, no title was issued in 30 Jan. 2009)
her name. The subject property remained in the
name of the Burgos siblings who also continued Q: Cipriano, one of Pablo’s heirs, executed an
paying the real estate taxes thereon. extrajudicial settlement of a sole heir and
confirmation of sales, declaring himself as the
a. Are the sales of the subject property by only heir and confirmed the sales made in favor
Delos Reyes to the Burgos siblings and of the Sps. Rodolfo. Consequently, a certificate of
the subsequent sale to Leonarda valid title was issued in the name of the spouses, who
and binding? then sold the property to Guaranteed Homes.
Pablo’s other descendants seek reconveyance of
A: NO, the forged deed of sale was null and void and the property sold to the spouses alleging that the
conveyed no title. It is a well-settled principle that extrajudicial settlement was forged. Who is the
no one can give what one does not have, nemo dat rightful owner of the property?
quod non habet. One can sell only what one owns or
is authorized to sell, and the buyer can acquire no A: GUARANTEED HOMES is the rightful owner,
more right than what the seller can transfer legally. even assuming that the extrajudicial settlement was
Due to the forged deed of sale, Delos Reyes acquired a forgery. Generally, a forged or fraudulent deed is a
no right over the subject property which she could nullity and conveys no title. There are, however,
convey to the Burgos siblings. All the transactions instances when such a fraudulent document may
subsequent to the falsified sale between the Sps. become the root of a valid title. One such instance is
Rufloe and Delos Reyes are likewise void, including where the certificate of title was already transferred
the sale made by the Burgos siblings to their aunt, from the name of the true owner to the forger, and
Leonarda. while it remained that way, the land was
subsequently sold to an innocent purchaser. For
b. Are the respondents considered as then, the vendee had the right to rely upon what
innocent purchasers in good faith and appeared in the certificate.
for value despite the forged deed of sale
of their transferor Delos Reyes? Also, the extrajudicial settlement was recorded in
the Register of Deeds. Registration in the public
registry is notice to the whole world. (Guaranteed
2023 GOLDEN NOTES
Homes, Inc. v. Heirs of Valdez, G.R. No. 171531, 30 Jan. possession of the property, cultivate it, then use
2009) the earnings from the cultivation to pay the loan
and realty taxes. Upon full payment of the loan,
Q: Sps. X and Y mortgaged a piece of registered Amada would return the property to the Revilla
land to A, delivering as well the OCT to the latter, spouses. Unknown to the Revilla spouses,
but they continued to possess and cultivate the Amada presented a fictitious document entitled
land, giving 1/2 of each harvest to A in partial “Kasulatan ng Bilihanng Lupa” before the
payment of their loan to the latter. A, however, Provincial Assessor. This document was
without the knowledge of X and Y, forged a deed executed on with the Revilla spouses as sellers
of sale of the aforesaid land in favor of himself, and Amada as buyer of the property. Amada
got a TCT in his name, and then sold the land to then sold the property. Was there a valid
B. transfer?
B bought the land relying on A's title, and A: NO. Well-settled is the rule that "conveyances by
thereafter got a TCT in his name. It was only then virtue of a forged signature are void ab initio as the
that the Sps. X and Y learned that their land had absence of the essential requisites of consent and
been titled in B's name. May said spouses file an cause or consideration in these cases rendered the
action for reconveyance of the land in question contract inexistent. Doctrines of equity, such as
against B? Reason. (1999 BAR) laches apply only in the absence of statutory law.
The NCC clearly provides that the action or defense
A: The action of X and Y against B for reconveyance for the declaration of the inexistence of a contract
of the land will not prosper because B has acquired does not prescribe. (Zacarias v. Sps. Alfredo, G.R. No.
a clean title to the property being an innocent 190901, 12 Nov. 2014)
purchaser for value.
Q: Gatmaytan purchased a parcel of land from
A forged deed is an absolute nullity and conveys no Garcia covered by a TCT. Armed with the
title. The fact that the forged deed was registered original owner's duplicate copy of the TCT,
and a certificate of title was issued in his name, did Gatmaytan attempted to register the
not operate to vest upon A ownership over the corresponding Deed of Absolute Sale (DOAS)
property of X and Y. The registration of the forged with the Register of Deeds. He was successful in
deed will not cure the infirmity. However, once the having the DOAS annotated, but he was not able
title to the land is registered in the name of the to transfer the Torrens title in his name due to
forger and title to the land thereafter falls into the the lack of a DAR clearance.
hands of an innocent purchaser for value, the latter
acquires a clean title thereto. A buyer of a registered 19 years later, when Gatmaytan resumed
land is not required to explore beyond what the processing the transfer of the title to his name,
record in the registry indicates on its face in quest he discovered that the lot had been consolidated
for any hidden defect or inchoate right which may by Misibis Land, Inc. (MLI) pursuant to a
subsequently defeat his right thereto. This is the purchase from Garcia. He, thus, filed a complaint
“mirror principle” of the Torrens system which with the RTC for the alternative causes of action
makes it possible for a forged deed to be the root of of nullity of the sale to MLI or quieting of title.
a good title. RTC dismissed the complaint on the ground of
prescription stating that the complaint is an
Q: The Revilla spouses faced financial action for reconveyance based on implied
difficulties in raising funds for Alfredo Revilla’s constructive trust, which prescribes in 10 years.
travel to Saudi Arabia. So, Paz Castillo-Revilla Was the dismissal correct?
borrowed money from Amada Cotoner-Zacarias
(Amada). By way of security, the parties verbally
agreed that Amada would take physical
CIVIL LAW
A: NO. Gatmaytan's action should be characterized transferred ownership of the properties of the
primarily as one for reconveyance based on a void deceased, Spouses Roman and Lydia Andres, to
contract, and thus, imprescriptible. The above their only living heir, Reynaldo Andres.
allegations show that the recovery of ownership is
predicated on the nullification of the underlying TCT No. NT-57731 was consequently cancelled,
mode of transfer of title of the disputed lot — the and title was transferred to the Sps. Reynaldo
issuance of the Torrens titles to MLI being merely Andres and Janette de Leon on 27 Dec. 1994. On
the result of the DOAS sought to be nullified. 04 Sept. 1995, the Sps. Reynaldo Andres and
Janette de Leon used this title and mortgaged
In any case, even if the complaint were to be treated the property to PNB for a 1.2 million loan. This
as an action for reconveyance based solely on an was without the consent of Onofre Andres.
implied constructive trust, it should still be allowed
to proceed, having been timely filed. In all cases of Onofre Andres, claiming ownership over the
registration procured by fraud, the owner may property, filed a complaint for cancellation of
pursue all his legal and equitable remedies against title, reconveyance of property and damages,
the parties to such fraud and that registration with prayer for the issuance of a preliminary
procured by the presentation of a forged deed or injunction against his nephew Reynaldo Andres
other instrument shall be null and void. and Reynaldo’s wife, Janette de Leon, PNB, Lydia
Andres, and the Register of Deeds of Nueva Ecija.
A Torrens title issued without prior presentation The complaint alleged that Reynaldo Andres
and cancellation of the existing owner's duplicate was in collusion with his mother, Lydia Andres,
title does not bind the property to which it pertains. in executing a falsified document denominated
The title so issued does not produce the effects of a as “Self-Adjudication of Sole Heir.”
Torrens title contemplated under P.D. No. 1529,
including the effects of constructive notice. PNB denied the material allegations in the
(Gatmaytan v. Misibis Land, Inc., G.R. No. 222166, 10 complaint. It argued that it conducted an
June 2020) investigation on the property. The title
presented to PNB by Reynaldo Andres and his
Reliance on a Title which Appears Valid on its wife was clear and free from adverse claims. Is
Face PNB an innocent mortgagee for value and in
good faith?
Q: The Sps. Victor and Filomena Andres own a
4,634 sq. m. parcel of land. After Victor’s death, A: YES. A bank that accepts a mortgage based upon
Filomena, and six of their children — Onofre, a title which appears valid on its face and after
Roman, Juana, Guillermo, Felisa, and Maxima — exercising the requisite care, prudence, and
agreed in an extrajudicial partition with sale to diligence appropriate to the public interest
adjudicate one half of the land to each of them character of its business can be deemed a
pro indiviso. This document also provides that, mortgagee in good faith. The subsequent
they all sold, transferred, and conveyed to consolidation of title in its name after a valid
Roman Andres their respective rights and foreclosure shall be respected notwithstanding
participation to the one-half (1/2) portion of the later proof showing that the title was based upon a
property. This was annotated on the title. void transaction.
Consequently, a new title was issued in the name
of Roman Andres and his wife, Lydia Andres,
under TCT No. NT-57731. Sps. Roman and Lydia
Andres mortgaged the property to PNB for
3,000.00. PNB alleged that the Nueva Ecija RTC
cancelled the guardianship issued in favor of the
Security Bank and Trust Company (SBTC) and
2023 GOLDEN NOTES
The standard operating practice for banks when A: NO. Under Art. 493 of the NCC, Enrique had no
acting on a loan application is to conduct an ocular right to sell the undivided portions belonging to his
inspection of the property offered for mortgage and siblings or their respective heirs, and the sale to
to verify the genuineness of the title to determine Yabut should be void with respect to the shares of
the real owner(s) thereof. PNB complied with the the other heirs who did not consent thereto.
standard operating practice of banks, which met the
requisite level of diligence, when it sent Gerardo While as a rule, an ordinary buyer may rely on the
Pestano to conduct an ocular inspection of the certificate of title issued in the name of the seller,
property and verify the status of its ownership and and need not look beyond what appears on the face
title. Consequently, PNB is a mortgagee in good of the title, the ordinary buyer will not be
faith. The title resulting from the foreclosure sale, considered an innocent purchaser for value if there
therefore, is to be protected. The bank is an innocent is anything on the certificate of title that arouses
purchaser for value. (Onofre Andres v. PNB, G.R. No. suspicion, and the buyer failed to inquire or take
173548, 15 Oct. 2014) steps to ensure that there is no cloud on the title,
right or ownership of the property being sold.
Q: Gregorio, Enrique, Simplicio and Severino
Lopez inherited a 2734 sq. m. property in Yabut could not be an innocent purchaser for value,
Bustos, Bulacan originally owned by their because there was no certificate of title to rely on
grandmother Gregoria Lopez, over which a tax when she purchased the property from Enrique, at
declaration was issued under the name, “Heirs which time the only available document presented
of Lopez.” On 29 Nov. 1990, Enrique Lopez her was a tax declaration under “Heirs of Lopez.”
executed an affidavit of self-adjudication The defense of having purchased the property in
declaring himself to be the sole heir of Gregoria, good faith may be availed of only where registered
and sold the property to Marietta Yabut land is involved and the buyer had relied in good
(“Yabut”). In 1993, Yabut obtained a loan from faith on the clear title of the registered owner. It
Development Bank of the Philippines (DBP) and does not apply when the land is not yet registered
mortgaged the property to DBP as security. At with the Registry of Deeds.
the time of the loan, the property was covered by
Tax Declaration No. 18727 under Yabut’s name, Similarly, DBP could not be held to be a mortgagee
but subsequently on 26 July 1993, an OCT was in good faith because at the time of the mortgage,
issued in Yabut’s favor and the mortgage was the mortgagor Yabut had yet to register the
annotated thereon. property under her name. The rule on innocent
purchasers or mortgagees for value is applied more
Petitioners filed a complaint with the RTC for strictly when the purchaser or mortgagee is a bank
the annulment of Enrique’s affidavit of self- as banks are expected to exercise higher degree of
adjudication, the deed of sale in favor of Yabut, diligence in their dealings, including those involving
and the deed of real estate mortgage in favor lands. DBP failed to exercise the degree of diligence
DBP, with a prayer for the re-conveyance of required of banks when it accepted the unregistered
their 3/4 share in the property. Meanwhile, property as security for Yabut’s loan despite
foreclosure proceedings were instituted by DBP circumstances that should have aroused its
upon Yabut’s default, and there, DBP became the suspicion. (Heirs of Gregorio Lopez v. Development
highest bidder, eventually resulting in the title Bank of the Philippines, G.R. No. 193551, 19 Nov.
of the property being consolidated in its favor. 2014)
Did Yabut and DBP, acquire valid title to the “Prior est tempore, potior est jure” (2022 BAR)
property under the doctrine of innocent
purchaser or mortgagee for value? The maxim prior est tempore, potior est jure (he who
is first in time is preferred in right) is followed in
land registration. When a mortgagee relies upon
CIVIL LAW
what appears on the face of a Torrens title and lends properties before the proceeds of the secured loan
money in all good faith based on the title in the name are released. Thus, the Mortgage Agreement cannot
of the mortgagor, his or her right or lien upon the have the effect of curtailing Rapanot's right as buyer
land mortgaged must be respected and protected. of Unit 2308-B2, precisely because of the Bank's
(Mahinay v. Hon. Gako, Jr., G.R. No. 165338, 28 Nov. failure to comply with PD 957.
2011)
Moreover, contrary to Prudential Bank's assertions,
Q: Golden Dragon is the developer of Wack- it cannot be considered a mortgagee in good faith. It
Wack Twin Towers Condominium, located in failed to ascertain whether Golden Dragon secured
Mandaluyong City. On 09 May 1995, respondent HLURB's prior written approval as required by PD
Rapanot paid Golden Dragon the amount of 957 before it accepted Golden Dragon's properties
P453,329.64 as reservation fee for a 41.1050 sq. as collateral. It also failed to ascertain whether any
m. unit in said condominium. Later, petitioner of the properties offered as collateral already had
Prudential Bank extended a loan to Golden corresponding buyers at the time the Mortgage
Dragon amounting to P50,000,000.00 to be Agreement was executed. Prudential cannot harp
utilized by the latter as additional working on the fact that the Mortgage Agreement was
capital. To secure the loan, Golden Dragon executed before the Contract to Sell and Deed of
executed a Mortgage Agreement in favor of the Absolute Sale between Rapanot and Golden Dragon
Bank, which had the effect of constituting a real were executed, such that no amount of verification
estate mortgage over several condominium could have revealed Rapanot's right over Unit 2308-
units owned and registered under Golden B2. The Court particularly notes that Rapanot made
Dragon's name. Among the units subject of the his initial payment for Unit 2308-B2 as early as 09
Mortgage Agreement was Unit 2308-B2. On 21 May 1995, four (4) months prior to the execution of
May 1996, Rapanot and Golden Dragon entered the Mortgage Agreement. Surely, the Bank could
into a Contract to Sell covering Unit 2308-B2. On have easily verified such fact if it had simply
23 Apr. 1997, Rapanot completed payment of requested Golden Dragon to confirm if Unit 2308-B2
the full purchase price of said unit and Golden already had a buyer, given that the nature of the
Dragon executed a Deed of Absolute Sale in latter's business inherently involves the sale of
favor of Rapanot. Thereafter, Rapanot made condominium units on a commercial scale.
several verbal demands for the delivery of Unit (Prudential Bank v. Rapanot, G.R. No. 191636, 16 Jan.
2308-B2. Hence, Golden Dragon sent a letter to 2017)
the Bank requesting for a substitution of
collateral for the purpose of replacing Unit Q: The Gonzaga siblings (Marcelo, Eleuteria,
2308-B2 with another unit with the same area. Pantaleona, Ambrosio, and Lucio) are the
However, Prudential Bank denied Golden registered owners of the lot covered by an OCT.
Dragon's request due to the latter's unpaid The mother of Gloria Millonte, Florencia
accounts. Because of this, Golden Dragon failed Gonzaga Arroyo, was the daughter of Lucio.
to comply with Rapanot's verbal demands. Is the Hence, Millonte is Lucio's granddaughter and
Mortgage Agreement between Prudential Bank direct descendant. Millonte filed a Complaint
and Golden Dragon valid as against Rapanot? against petitioner City of Tanauan, praying for
May it be enforced against the latter? the declaration of nullity of the Deed of Absolute
Sale, among others. The contested property is
A: NO, the mortgage agreement is null and void as presently occupied by the Tanauan Water
against Rapanot. First, under PD 957, no mortgage District. Supposedly, the City of Tanauan
on any condominium unit may be constituted by a acquired the lot for P30,000.00 pursuant to a
developer without prior written approval of the Deed of Absolute Sale allegedly signed by the
National Housing Authority (NHA), now HLURB. PD Gonzagas, as vendors, and the then Municipality
957 further requires developers to notify buyers of of Tanauan, represented by then Mayor
the loan value of their corresponding mortgaged Sebastian Carandang, as vendee. In her
2023 GOLDEN NOTES
Complaint, Millonte asserted that by virtue of As long as one contracting party to the contract is
the Deed of Absolute Sale, the OCT was cancelled proven with evidence to be dead at the time of the
and a TCT was subsequently issued in favor of execution of the contract - in this case, Ambrosio -
the Municipality of Tanauan on 16 July 1993 or the Deed of Absolute Sale should be considered as
23 years after the alleged sale. Upon definitely simulated. Thus, it produced no legal
examination of the Deed of Absolute Sale, effect. (City of Tanauan v. Millonte, G.R. No. 219292,
however, Millonte realized that the Gonzaga June 28, 2021, as penned by J. Hernando)
siblings were already dead when the said deed
was executed. Hence, they could not have signed Q: X bought a property from Y as evidenced by
the document. Thus, there was no valid DOAS and Agreement which contain all the three
agreement, and the Deed of Absolute Sale was requisites of a contract of sale (by virtue of the
void. City of Tanauan countered that, among Agreement being a contract of sale, the subject
others, Millonte did not show that Lucio was property was constructively delivered to X, even
already dead when the deed was executed. Is the if Y remained in possession under a different
Deed of Absolute Sale is null and void. capacity). However, after a year from said sale, Y
sold again the same property to Z, whom have
A: YES. Case law provides that forgery cannot be the property immediately registered under his
presumed and must be proved by clear, positive, name despite knowing of its previous sale. Does
and convincing evidence by the party alleging the X have a better right over the said property
same. Hence, Millonte bears the burden to prove between X and Z?
that the signatures of the Gonzagas were forgeries
because they had died prior to the execution of the A: YES. X has a better right to the subject property
Deed of Absolute Sale. since Z was a buyer and registrant in bad faith. One
is considered a purchaser in good faith if he or she
Millonte submitted a Certification indicating the fact buys the property of another without notice that
of death of Ambrosio, one of the purported vendors. some other person has a right to or interest in such
Likewise, she presented Certifications stating that property and pays its full and fair price before he or
the death certificates of Pantaleona, Lucio, Marcelo, she has notice of the adverse claims and interest of
and Eleuteria could not be produced or located due another person in the same property. Conversely,
to the fire during the war, which burned the records one is considered a buyer in bad faith when he or
of the Local Civil Registrar of Tanauan. Moreover, she purchases a property despite knowledge of a
the testimonies of Rolando and Florentino, and even defect or lack of title in his or her seller or when he
Millonte herself, established that Lucio, Ambrosio, or she has knowledge of facts which should have
and Eleuteria passed away many years before 1970, cautioned him or her to conduct further inquiry or
when the Deed of Absolute Sale was allegedly investigation. Furthermore, purchasers must
executed. continuously possess their status as buyers in good
faith from the time they acquired the property until
As relatives of the deceased, their information was they register the property under their name. Prior
derived from their personal experiences or registration of the disputed property by the second
conversations with those who knew or were buyer does not by itself confer ownership or a better
familiar with the Gonzaga siblings. In view of these, right over the property. Art. 1544 requires that such
Millonte's resort to secondary evidence was proper, registration must be coupled with good faith. (Heirs
as the original documents (the death certificates of of Gonzales v. Sps. Basas, G.R. No. 206847, 15 June
the other Gonzaga siblings) were unavailable 2022, as penned by J. Hernando)
because these were destroyed by the fire. Hence, the
deaths of the Gonzagas, the supposed contracting
parties, prior to the execution of the Deed of
Absolute Sale were sufficiently established.
CIVIL LAW
3. In the interest of substantial justice, the RTC

E. AN ACT IMPROVING THE CONFIRMATION and CA are hereby directed, upon proper
PROCESS FOR IMPERFECT LAND TITLES motion or motu proprio, to permit the
(R.A. No. 11573, amending C.A. No. 141 and presentation of additional evidence on land
PD 1529) classification status based on the parameters
set forth in Sec. 7 of R.A. 11573.
a) Such additional evidence shall consist

R.A. 11573, which took effect on July 2021, was
of a certification issued by the DENR
signed into law as a measure to simplify and hasten
geodetic engineer which
the procedure of granting titles to our farmer
beneficiaries.
i. states that the land subject of
the application for registration
A few of the key provisions under this law are (a)
has been classified as alienable
the removal of the deadline for agricultural free
and disposable land of the
patents, as well as (b) the shortening of the required
public domain;
period of possession for confirmation of imperfect
titles. Effectively amending some of the provisions
ii. bears reference to the
of the C.A. No. 141, as amended by R.A. 6940.
applicable
Republic v. Pasig Rizal Co., Inc.,

1. Forestry A.O.,
G.R. No. 213207, 15 Feb. 2022
2. DENR A.O., E.O. or
proclamation classifying
Guidelines for Application of R.A. 11573
the land as such; and
1. R.A. No. 11573 shall apply retroactively to all
iii. Indicates the number of the
applications for judicial confirmation of title
Land Classification Map
which remain pending when it took effect on
covering the land.
01 Sept. 2021. These include all applications
pending resolution at the first instance
b) In the absence of a copy of the relevant
before all RTC’s, and applications pending
issuance classifying the land as
appeal before the CA.
alienable and disposable, the
certification must additionally state
2. Applications for judicial confirmation of title
filed on the basis of the old Sec. 14(1) and
i. the release date of the LC Map;
14(2) of P.D. 1529 and which remain pending
and
before the RTC or CA as of 01 Sept. 2021 shall
ii. the Project Number.
be resolved following the period and manner
of possession required under the new Sec.
NOTE: The certification must confirm
14(1). Thus, beginning 01 Sept. 2021, proof
that the Land Classification Map forms
of “OCENPO and occupation of alienable and
part of the records of NAMRIA and is
disposable lands of the public domain not
precisely being used by the DENR as a
covered by existing certificates of title or
land classification map.
patents under a bona fide claim of ownership
for at least 20 years immediately preceding
c) The DENR geodetic engineer must be
the filing of the application for confirmation”
presented as witness for proper
shall be sufficient for purposes of judicial
authentication of the certification in
confirmation of title, and shall entitle the
accordance with the Rules of Court.
applicant to a decree of registration.
(Republic v. Pasig Rizal Co., Inc., G.R. No.
2023 GOLDEN NOTES
213207, 15 Feb. 2022) requires proof of possession at least 20 years

immediately preceding the filing of the application
Q: In 1958, Manuel caused the survey of a for confirmation of title except when prevented by
property. It was approved and the property was war of force majeure.”
declared in Manuel’s name for tax purposes.
Manuel died in 1961. Consequently, the said The final proviso of Sec. 14(1) unequivocally
property was inherited by his surviving wife confirms that the classification of land as alienable
Esperanza, and their children, who then and disposable immediately places it within the
collectively transferred beneficial ownership to commerce of man, and renders it susceptible to
the family corporation, PRCI. private acquisition through prescription.
In 2010, Esperanza filed with the RTC an The final proviso clarifies that for purposes of
application for original registration of title over confirmation of title under PD 1529, no further
the property, on behalf of PRCI. Asserting that “express government manifestation that said law
PRCI is owner of the property, and its constitutes patrimonial property, or is no longer
predecessors in interest have been in OCENPO retained by the State for public use, public service or
for more than 50 years. RTC and CA ruled in the development of national wealth” shall
their favor. henceforth be required.
Is PRCI entitled to a decree of registration over Hence, at present, the presentation of the approved
the subject property ? survey plan bearing a certification signed by duly
designated DENR geodetic engineer stating that the
A: YES. When PRCI file dits application for land subject of application for registration forms
registration, ordinary registration proceedings part of the alienable and disposable agricultural
were governed by Sec. 14 of PD 1529. Since PRCI land of the public domain shall be sufficient proof of
only hinged its application on the allegation at it and its classification as such, provided that the
its predecessors in interest have been in open, certification bears references to the relevant
continuous, exclusive and notorious possession of issuance (such as Forestry Administrative Order,
the property for more than 50 years, particularly DENR Administrative Order, Executive Order or
since 1956, the inevitable conclusion is that PRCI’s Proclamation) and the land classification map
application for registration falls within the rubric of number covering the subject land.
what was then Sec. 14(2) of PD 1529 which covered
the registration of land acquired through The amendment implemented through Section 6 of
prescription under existing laws. The provisions RA 11573 effectively created a new right in favor of
governing prescription under Sec. 14(2) of P.D. No. those who have been in possession of alienable and
1529 only permits the acquisition of private disposable land for the shortened periods provided.
unregistered lands. The retroactive application of this shortened period
does not impair versed rights, as RA 11573 simply
Notably, in a serendipitous turn of events, R.A. No. operates to confirm the title of applicants whose
11573 took effect on 01 Sept. 2021 or days after the ownership already existed prior to its enactment
Court directed the parties to file their memoranda. (Republic v. Pasig Rizal Co., Inc. G.R. No. 213207, 15
RA 11573 was passed with the intention of Feb. 2022).
improving the confirmation process for imperfect
land titles. NOTE: The curative nature of RA 11573 can refer to
said law as a means “to simplify, update and
Sec. 6 of RA 11653 shortens the period of possession harmonize similar and related provisions of land
required under then old Sec. 14(1). Instead of laws in order to simplify and remove ambiguity in
requiring applicants to establish their possession its interpretation and implementation.
from 12 June 1945 or earlier, the new Sec.14(1) only
CIVIL LAW
Act Improving the Confirmation Process for ownership, for at least 20 years immediately
Land Titles (R.A. No. 11573) vs. C.A. No. 141, as preceding the filing of the application for
amended by R.A. No. 6940 confirmation of title;
AN ACT IMPROVING XPN: When prevented by war or force majeure;

THE CONFIRMATION
C.A. No. 141, 2) Those who have acquired ownership of private
PROCESS FOR
as amended by lands or abandoned riverbeds by right of
IMPERFECT LAND
R.A. No. 6940 accession or accretion under the provision of
TITLES
R.A. NO. 11573 existing laws; and
1. Any natural-born 3) Those who have acquired ownership of land in

citizen of the 1. Any natural-born any other manner provided by law. (Sec. 5, R.A.
Philippines who is citizen of the 11573)
not the owner of Philippines who is
more than 12 not the owner of Q: HCCDI, a domestic corporation, applied for
hectares of land, more than 12 land registration. It claimed ownership and
and hectares and, actual possession of the subject lot on the
ground of its continuous, adverse, public and
2. who, for at least 20 2. for at least 30 uninterrupted possession in the concept of an
years prior to the years prior to the owner since 1976 by virtue of a Deed of
filing of an effectivity of this Assignment executed by the Heirs of Chunaco
application for amendatory Act, who, in turn, had been in continuous, adverse,
agricultural free has continuously public, and uninterrupted possession of the
patent, has occupied and subject lot in the concept of an owner since 1945
continuously cultivated, either or earlier. Petitioner Republic, through the OSG,
occupied and by himself or opposed HCCDI's application and alleged that
cultivated, either through his neither HCCDI nor its predecessors-in-interest,
personally or predecessors-in- the Heirs of Chunaco, had been in open,
through a interest shall be continuous, exclusive and notorious possession
predecessor-in- entitled, to have a and occupation of the subject lot for a period of
interest shall be free patent issued not less than 30 years. Lot No. 3246 has not been
entitled, to have a to him for such classified as alienable and disposable land of the
free patent issued tract or tracts of public domain for at least 30 years prior to the
for such tract or such land not to filing of the subject application.
tracts of such land exceed 12
not to exceed 12 hectares. (Sec. 1, 1) Does Lot No. 3246 form part of the alienable
hectares. (Sec. 2, R.A. 6940) and disposable land of the public domain?
R.A. 11573)
A: YES. An applicant for land registration must
The following persons under the amendatory law prove that the land sought to be registered has been
may file at any time an application for registration declared by the President or the DENR Secretary as
of title, not exceeding 12 hectares; alienable and disposable land of the public domain.
Specifically, an applicant must present a copy of the
1) Those who by themselves or through their original classification approved by the DENR
predecessors-in-interest have been in OCENPO Secretary and certified as a true copy by the legal
of alienable and disposable agricultural lands of custodian of the official records. A certificate of land
the public domain, under a bona fide claim of classification status issued by the CENRO or PENRO
of the DENR and approved by the DENR Secretary
2023 GOLDEN NOTES
must also be presented to prove that the land Incorporada, G.R. No. 200863, 14 Oct. 2020, as
subject of the application for registration is penned by J. Hernando)
alienable and disposable, and that it falls within the
approved area per verification survey by the PENRO 2) Has respondent HCCDI sufficiently proven
or CENRO. A CENRO or PENRO certification alone is that it has been in open, continuous, exclusive
insufficient to prove the alienable and disposable possession and occupation of the subject lot
nature of the land sought to be registered. It is the since 12 June 1945 or earlier?
original classification by the DENR Secretary or the
President which is essential to prove that the land is A: NO. While we hold that Lot No. 3246 is part of
indeed alienable and disposable. alienable and disposable land of the public domain,
HCCDI's application must fail due to non-
In Vega, the Court was mindful of the fact that the compliance with Sec. 14(1) of P.D. No. 1529 which
trial court rendered its decision on 13 Nov. 2003, requires the applicant and its predecessors-in-
way before the rule on strict compliance was laid interest to prove that they have been in OCENPO of
down in T.A.N. Properties on June 26, 2008. Thus, the the land under a bona fide claim of ownership since
trial court was merely applying the rule prevailing 12 June 1945 or earlier. In this case, HCCDI and its
at the time, which was substantial compliance. Thus, predecessors-in-interest admittedly have been in
even if the case reached the Supreme Court after the possession of the subject lot only from 1980, which
promulgation of T.A.N. Properties, the Court allowed is the earliest date of the tax declaration presented
the application of substantial compliance because by HCCDI. Although it claims that it possessed the
there was no opportunity for the registrant to subject lot through its predecessors-in-interest
comply with the Court's ruling in T.A.N. Properties, since 1943 as testified to by Leonides and Alekos,
the trial court and the CA already having decided the the tax declarations belie the same. While belated
case prior to the promulgation of T.A.N. Properties. declaration of a property for taxation purposes does
not necessarily negate the fact of possession, tax
Evidently, HCCDI did not present: (a) a copy of the declarations or realty tax payments of property are,
original classification approved by the DENR nevertheless, good indicia of possession in the
Secretary or the President and certified as a true concept of an owner, for no one in his right mind
copy by the legal custodian of the official records; would be paying taxes for a property that is not in
and (b) a certificate of land classification status his actual or, at least constructive possession.
issued by the CENRO or PENRO and approved by the (Republic v. Herederos De Ciriaco Chunaco Disteleria
DENR Secretary. Nevertheless, it is worth noting Incorporada, G.R. No. 200863, 14 Oct. 2020, as
that the trial court rendered its decision on the penned by J. Hernando)
application prior to 26 June 2008, the date of
promulgation of TA.N Properties. In this case, HCCDI 3) Is respondent HCCDI prohibited from owning
cannot be required to comply with the strict rules lands pursuant to Sec. 11, Art. XIV of the 1973
laid down in TA.N. Properties, as it had no Constitution; Sec. 3, Art. XII of the 1987
opportunity to comply with its twin certifications Constitution; and the ruling of this Court in the
requirement. Director of Lands v. Intermediate Appellate
Court?
Applying Vega and Serrano, the Court finds that
despite the absence of a certification by the CENRO A: YES. HCCDI, as a corporation, cannot apply for
and a certified true copy of the original classification registration of the land of the public domain. Under
by the DENR Secretary or the President, HCCDI the 1935 Constitution, there was no prohibition
substantially complied with the requirement to against corporations from acquiring agricultural
show that the subject property is indeed alienable land. Private corporations could acquire public
and disposable based on the evidence on record. agricultural lands not exceeding 1,024 hectares
(Republic v. Herederos De Ciriaco Chunaco Disteleria while individuals could acquire more than 144
hectares. However, when the 1973 Constitution
CIVIL LAW
took effect, it limited the alienation of lands of the delegated by Congress can no longer be further
public domain to individuals who were citizen of the delegated or redelegated by the original delegate to
Philippines. Private corporations, even if wholly- another. (Republic v. Herederos De Ciriaco Chunaco
owned by Filipino citizens, were prohibited from Disteleria Incorporada, G.R. No. 200863, 14 Oct. 2020,
acquiring alienable lands of the public domain. At as penned by J. Hernando)
present, the 1987 Constitution continues the
prohibition against private corporations from
acquiring any kind of alienable land of the public F. CERTIFICATE OF TITLE
domain.
In the case at bar, the evidence on record reveals

It is the transcript of the decree of registration made
that HCCDI acquired Lot No. 3246 through a Deed of
by the Register of Deeds in the registry. It
Assignment executed by the Heirs of Chunaco in
accumulates in one document a precise and correct
favor of HCCDI on 13 Aug. 1976. To reiterate, both
statement of the exact status of the fee simple title
HCCDI and its predecessors-in-interest have not
which an owner possesses.
shown to have been, as of date, in open, continuous,
and adverse possession of Lot No. 3246 for 30 years
Registration is the operative act which gives validity
since 12 June 1945 or earlier. In other words, when
to the transfer or creates a lien upon the land. A
HCCDI acquired Lot No. 3246 through a Deed of
certificate of title serves as evidence of an
Assignment, the subject property was not yet
indefeasible and incontrovertible title to the
private. Thus, the prohibition against private
property in favor of the person whose name appears
corporation acquiring alienable land of the public
therein. (Sps. Vilbar v. Opinion, G.R. No. 176043, 15
domain under the 1973 Constitution applies.
Jan. 2014) The titleholder is entitled to all the
(Republic v. Herederos De Ciriaco Chunaco Disteleria
attributes of ownership of the property, including
Incorporada, G.R. No. 200863, 14 Oct. 2020, as
possession. (Endaya v. Villaos, G.R. No. 202426, 27
Jan. 2016)
NOTE: In several cases, the Court has recognized

Every registered owner receiving a certificate of
the authority of the DENR Secretary to classify
title in pursuance of a decree of registration, and
agricultural lands of the public domain as alienable
every subsequent purchaser of registered land
and disposable lands, provided it must first be
taking a certificate of title for value and in good faith,
declared as agricultural lands of the public domain.
shall hold the same free from all encumbrances
The DENR Secretary can invoke his power under
except those noted in said certificate and any of the
Sec. 1827 of the Revised Administrative Code of
encumbrances which may be subsisting as provided
1917 to classify forest lands into agricultural lands.
for under the law (Sec. 44, P.D. 1529)
Once so declared, the DENR Secretary can invoke his
delegated power under Sec. 13 of P.D. No. 705 to
NOTE: A certificate of title is different from a title.
declare such agricultural lands as alienable and
The latter constitutes a just cause of exclusive
disposable lands of the public domain. (Republic v.
possession or the foundation of ownership of
Herederos De Ciriaco Chunaco Disteleria
property. Whereas the former is merely evidence of
Incorporada, G.R. No. 200863, 14 Oct. 2020, as
ownership and not the title to the land itself.
(Castillo v. Escutin, G.R. No. 171056, 13 Mar. 2009)
However, both the President and the DENR

Evidentiary Value of Certificate of Title
Secretary cannot delegate their discretionary
power to classify lands as alienable and disposable
A certificate of title is conclusive evidence with
as the same is merely delegated to them under C.A.
respect to the ownership of the land described
No. 141 and P.D. No. 705, respectively. Delegata
therein, and other matters which can be litigated
potestas non potest delegari. What has once been
2023 GOLDEN NOTES
and decided in land registration proceedings Certificate of Title vs. Deed

(Sampaco v. Lantud, G.R. No. 163551, 18 July 2011)
CERTIFICATE OF
DEED
Types of Certificates of Title TITLE
The transcript of the The instrument in
1. Original Certificate of Title (OCT) – The first decree of registration writing, by which any
title issued in the name of the registered owner made by the Register of real estate or interest
by the Register of Deeds covering a parcel of Deeds in the registry. It therein is created,
land which had been registered under the accumulates in one alienated, mortgaged
Torrens system by virtue of a judicial or document a precise or assigned, or by
administrative proceeding. It consists of one and correct statement which title to any real
original copy filed in the Register of Deeds, and of the exact status of estate may be affected
the owner’s duplicate certificate delivered to the fee simple title in law or equity.
the owner; and which an owner
possesses.
NOTE: The OCT shall be a true copy of the
decree of registration (Sec. 39, P.D. 1529). Ownership vs. Title
2. Transfer Certificate of Title (TCT) – The title OWNERSHIP TITLE

issued by the Register of Deeds in favor of a An independent right
transferee to whom the ownership of a of exclusive enjoyment
registered land has been transferred by any and control of the thing
legal mode of conveyance (e.g., sale and The cause for
for the purpose of
donation). It also consists of an original and an acquisition of
deriving therefrom all
owner’s duplicate certificate. ownership
advantages required
by the reasonable
Q: Who has right to possess owner’s duplicate e.g., sale = title;
needs of the owner and
certificate? delivery = mode of
the promotion of the
acquisition of
general welfare but
A: The owner’s duplicate certificate shall be issued ownership.
subject to the
by the Register of Deeds in the name of the person restrictions imposed
in whose favor the land was decreed, and further by law and the rights of
disposes that said duplicate shall be delivered to the others. (Art. 427, NCC)
registered owner. (Sec. 41, Act 496, as amended by
P.D. 1529) NOTE: Registration under the Torrens system, not
being a mode of acquiring ownership, does not
Title vs. Land Title create or vest title. The Torrens certificate of title is
merely evidence of ownership or title in the
TITLE LAND TITLE particular property described therein. In that sense,
A juridical act or deed The evidence of the the issuance of the certificate of title to a particular
which is not sufficient owner’s right or extent person does not preclude the possibility that
by itself to transfer of interest, by which he persons not named in the certificate may be co-
ownership but can maintain control, owners of the real property therein described with
provides only for a and as a rule, assert the person named therein, or that the registered
juridical justification to right to exclusive owner may be holding the property in trust for
effect the acquisition possession and another person. (Casimiro Development Corporation
or transfer ownership. enjoyment of property. v. Mateo, G.R. No. 175485, 27 July 2011)
CIVIL LAW
Q: St. Jude’s Enterprise, Inc. is the registered grant and shall be entitled to a certificate of
owner of a parcel of land. It subdivided the said title.
land which was later on found to have expanded
with an increase of 1,421 sqm. sq. m. St. Jude sold 3. By sale, donation, and other modes of
the lots to several individuals. Thus, the Solicitor acquiring ownership.
General filed an action seeking the annulment
and cancellation of the TCT issued in the name Modes of Acquiring Ownership over Land
of St. Jude. Is the government estopped from (OLD-TIPS)
questioning the approved subdivision plan
which expanded the areas covered by the TCTs 1. Occupation;
in question? 2. Law;
3. Donation;
A: YES, estoppel against the public is less favored. 4. Tradition;
They should not be invoked except in rare and 5. Intellectual creation;
unusual circumstances, nor if it would operate to 6. Prescription; and
defeat the effective operation of a policy adopted to 7. Succession.
protect the public. They must be applied with
circumspection and only in those special cases NOTE: Registration of a piece of land under the
where the interests of justice clearly require it. In Torrens System does not create or vest title,
the case at bar, St. Jude failed to correct and recover because it is not a mode of acquiring ownership.
the alleged increase in the land area for nearly 20 Thus, notwithstanding the indefeasibility of the
years. Its prolonged inaction strongly militates Torrens title, the registered owner may still be
against its cause, as it is tantamount to laches. compelled to reconvey the registered property to its
true owners. (Heirs of Tanyag v. Gabriel, et. al., G.R.
Verily, all persons dealing with registered land may No. 175763, 11 Apr. 2012)
safely rely on the correctness of the certificate of
title issued therefor, and the law or the courts do not Possession vs. Occupation
oblige them to go behind the certificate in order to
investigate again the true condition of the property. POSSESSION OCCUPATION
(Republic v. CA, G.R. No. 116111, 21 Jan. 1999)
Applies to a property Applies only to a
Modes of Acquiring Title Over Land with or without an property without an
owner. owner.
1. By possession of land since time
By itself does not confer Confers ownership by
immemorial;
ownership. itself.
2. By possession of alienable and disposable
public land; and There can be There can be no
possession without occupation without
NOTE: Under the Public Land Act (C.A. 141), ownership. ownership.
citizens of the Philippines, who by themselves
or through their predecessors-in-interest
Acquisition of Land Titles (DRIVE-PAA)
have been in OCENPO of alienable and
disposable agricultural land of the public
1. Public Grant – by administrative process,
domain under a bona fide claim of ownership
the government transfers land to a private
since 12 June 1945, or earlier, except when
individual by the issuance of sales patent or
prevented by war or force majeure, shall be
special patent; (C.A. 141)
conclusively presumed to have performed all
the conditions essential to a government
2023 GOLDEN NOTES
2. Emancipation Patent or Grant – Under a. Ordinary Prescription – possession in

P.D. 27, tenant-farmers are deemed owners good faith and with just title for 10
of the land they till. The purpose is to years; (Art. 1134, NCC)
ameliorate the sad plight of the tenant-
farmers; (Gonzales v. CA, G.R. No. 110335, 18 b. Extraordinary Prescription –
June 2001) uninterrupted adverse possession for
30 years without need of title or good
Lands acquired by beneficiaries may not be faith; (Art. 1137, NCC)
sold, transferred or conveyed except
through hereditary succession, or to the 5. Private Grant or Voluntary Transfer – the
government, or the LBP, or to other transfer of title to land by the owner
qualified beneficiaries for a period of 10 himself or his duly authorized
years; (Sec. 27. R.A. No. 6657) representative to another by mutual
consent is recognized by law; (Noblejas,
P.D. No. 27 has been superseded by the 2007)
Comprehensive Agrarian Reform Law
(CARL) approved on 10 June 1998. 6. Accretion – To the owners of lands
adjoining the banks of rivers belong the
3. Reclamation – filling of submerged land by accretion which they gradually receive
deliberate act and reclaiming title thereto; from the effects of the current of the
(Noblejas, 2007) waters; (Art. 457, NCC)
Under R.A. No. 1899, also known as An Act The alluvial property obtained due to
Authorizing the Reclamation of Foreshore accretion is not automatically covered by a
Lands by Chartered Cities and Torrens Title. Ownership of a piece of land
Municipalities, the National Government is one thing, and registration under the
granted to all municipalities and chartered Torrens System of that ownership is quite
cities the authority to undertake and carry another. To be covered by the Torrens
out at their own expense the reclamation System, the alluvial property must be
by dredging, filling, or other means, of any placed under the operation of the
foreshore lands bordering them. Any and registration laws (Grande v. CA, G.R. No. L-
all such land reclaimed will become 17652, 30 June 1962).
property of the respective municipalities or
chartered cities; but the new foreshore 7. Involuntary Alienation – may be acquired
along the reclaimed areas shall continue to against the express will of the owner.
become property of the National Transfers may not require the consent of
Government. However, under R.A. No. the owner of the land. Some examples are
1899, foreshore lands should not be exercise of power of eminent domain or
construed to include submerged areas escheat proceedings;
(Republic v. CA, G.R. No. 103882, 25 Nov.
1988). 8. Descent or Devise;
4. Adverse Possession or Acquisitive a. Acquired by descent – heir succeeds

Prescription – if the person has been in the deceased owner in intestacy or by
open, continuous, exclusive, and notorious reasons of certain relationship which
possession for a period prescribed by law; entitles him to succeed by operation of
law; or
CIVIL LAW
b. Succeeds by devise – acquires land agricultural tenancy.” Did the CA err in holding
from one who may not be a relative, if that Soriano failed to establish his status as a de
he is named by the latter in his last will jure tenant of the Disputed Lot?
and testament to succeed as such.
A: YES. The CARL of 1988 was enacted to facilitate
Q: Soriano filed before the Office of the PARAD a "a more equitable distribution and ownership of
petition for maintenance of possession, with land, with due regard to the rights of landowners to
prayer for issuance of status quo order and/or just compensation and to the ecological needs of the
injunction against San Pedro family and nation." CARL implements the CARP of the Republic.
respondents Sofronio Sariente and CARP covers not only alienable and disposable
Metropolitan Bank and Trust Company, Inc. lands of the public domain, but also those lands
Soriano averred that Rolando, Sr., with the owned by the government in its private capacity and
consent of the rest of the San Pedro family, lands owned by private individuals, provided they
instituted him as tenant farmer of the Disputed are devoted to or suitable for agriculture.
Lot, and that he had been tilling it since then.
Soriano further alleged that he had been The fact that the Disputed Lot is agricultural in
remitting a portion of the proceeds of the nature is clearly established by the evidence on
harvest to San Pedro, Sr. as part of the tenurial record. The Tax Declaration presented by San Pedro
arrangement. Soriano alleged that the San Pedro family to show that the Disputed Lot had already
family later mortgaged the Disputed Lot in favor been re-classified for residential use was shown to
of Metrobank without his consent, in order to have been forged. One of the modes by which DAR
secure an P8,000,000.00 loan. San Pedro family implements the distribution of agricultural lands
defaulted, leading to the foreclosure of the under the CARP is through the issuance of a CLOA.
mortgage and the consolidation of title in The issuance of CLOA No. T-2165 in Soriano's favor
Metrobank's name. thus confirms his right to retain possession over the
portion of the Disputed Lot identified thereunder,
Subsequently, San Pedro family directed such possession being an attribute of ownership
Soriano to vacate the Disputed Lot. Rolando, Sr. granted in his favor. Until duly cancelled in
denied that Soriano had been instituted as accordance with the prescribed procedure, CLOAs
tenant farmer and claimed that he was merely issued by the DAR shall remain valid and subsisting
employed as bulldozer and street roller and enjoy the same respect accorded to those issued
operator. Rolando, Sr. assailed the PARAD's through other modes of acquisition of title. (Dalit v.
jurisdiction, claiming that the Disputed Lot had Balagtas Sr., G.R. No. 202799, 27 Mar. 2019)
already been classified as residential property,
as stated in tax declaration issued in favor of San Torrens Title
Pedro family.
A certificate of ownership issued under the Torrens
PARAD issued a Decision declaring Soriano as system of registration by the government, through
lawful tenant. CA held that the Pagpapatunay the Register of Deeds (RD) naming and declaring the
and Sinumpaang Salaysay presented by Soriano owner in fee simple of the real property described
do not suffice to establish a tenancy therein, free from all liens and encumbrances,
relationship, for while these documents confirm except as may be expressly noted there or otherwise
that he worked on the Disputed Lot, they do not reserved by law.
prove that such work was in the nature of
personal cultivation, or that San Pedro family Q: Filomena allegedly bought a parcel of
agreed to merely share in the harvest arising unregistered land from Hipolito. When she had
therefrom. Thus, CA held that working on the property titled and declared for tax
another's landholding, without more, "does not purposes, she sold it. The Mapilis question the
raise a presumption of the existence of transfer, saying that Filomena falsely stated in
2023 GOLDEN NOTES
her Affidavit that Hipolito sold it to her in 1949, Q: In 1929, an OCT covering the lot in
since by that time, he is already dead. Filomena controversy was issued in the name of Maria
maintains that she is the lawful owner of the Ramos, Heirs of Maligaso’s aunt. In 1965, Maria
land by virtue of the issuance of the Torrens sold it to the Spouses Encinas which led to the
certificate and tax declarations in her name. Is issuance of a TCT in favor of the latter.
Filomena the lawful owner of such property?
Thirty (30) years from the time they purchased
A: NO. A Torrens certificate does not create or vest the lot, Spouses Encinas issued two demand
title, but is merely an evidence of an indefeasible letters to the Heirs of Maligaso asking them to
and incontrovertible title to the property in favor of vacate the contested area but they refused to
the person whose name appears therein. Land leave. Hence, the Spouses Encinas filed a
registration under the Torrens system was never complaint for unlawful detainer against them.
intended to be a means of acquiring ownership. According to the Heirs, however, their
occupation remained undisturbed for more
Neither does the existence of tax declarations create than thirty (30) years and the Spouses’ failure to
or vest title. It is not conclusive evidence of detail and specify the Heirs’ supposedly
ownership, but a proof that the holder has a claim of tolerated possession suggest that they are
title over the property. (Larena v. Mapili, G.R. No. aware of their claim over the subject area.
146341, 07 Aug. 2003) Decide with reason.
NOTE: A Torrens title is not a conclusive evidence A: The validity of Spouses’ certificate of title cannot
of ownership when the land or a portion covered be attacked by the Heirs in this case for ejectment. A
thereof was illegally or erroneously included certificate of title shall not be subject to collateral
thereto. The certificate of title cannot be used to attack. It cannot be altered, modified or cancelled,
protect a usurper from the true owner. (Sps. except in a direct proceeding for that purpose in
Valenzuela v. Sps. Mano, G.R. No. 172611, 09 July accordance with law. (Sec. 48, P.D. 1529) Whether or
2010) not petitioner has the right to claim ownership over
the property is beyond the power of the trial court
Torrens Title NOT subject to Prescription. to determine in an action for unlawful detainer.
No title to registered land in derogation to that of As ruled in Sps. Ragudo v. Fabella Estate Tenants
the registered owner shall be acquired by Association, Inc., (G.R. No. 146823, 09 Aug. 2005)
prescription or adverse possession. (Sec. 47, P.D. laches does not operate to deprive the registered
1529) owner of a parcel of land of his right to recover
possession thereof. (Heirs of Jose Maligaso, Sr. v. Sps.
Torrens Title NOT subject to Collateral Attack. Encinas, G.R. No. 182716, 20 June June 2012)
Torrens title can be attacked only for fraud, within Probative Value of a Torrens Title
one year after the date of the issuance of the decree
of registration. Such attack must be direct, and not A Torrens title may be received as evidence in all
by a collateral proceeding. The title represented by courts of the Philippines and shall be conclusive as
the certificate cannot be changed, altered, modified, to all matters contained therein, principally as to the
enlarged, or diminished in a collateral proceeding. identity of the landowner, except so far as provided
(Wee v. Mardo, G.R. No. 202414, 04 June 2014) in the Land Registration Act (LRA).
A Torrens certificate is an evidence of indefeasible

title of property in favor of the person whose name
appears therein–such holder is entitled to the
possession of the property until his title is nullified.
CIVIL LAW
(Heirs of Mariano v. City of Naga, G.R. No. 197743, 12 Absolute Sale in their favor. Decide who
Mar. 2018) between the parties has the right to possession
of the disputed properties.
Q: Hadji Serad filed an action to quiet title with
damages with the RTC. Accordingly, Datu Kiram A: RUBEN has the right to possession. A title issued
with several armed men, forcibly and unlawfully under the Torrens system is entitled to all the
entered his property and destroyed the nursery attributes of property ownership, which necessarily
buildings, cabbage seedlings and other includes possession. Ruben is correct that as a
improvements. Datu Kiram however denied the Torrens title holder over the subject properties, he
material allegations of Hadji Serad, asserting is the rightful owner and is entitled to possession
that he and his predecessors-in-interest are the thereof. In this case, the Quitclaim executed by the
ones who had been in open, public, continuous, elder Corpuz in favor of Ruben was executed made
and exclusive possession of the property in ahead of the Deed of Sale of Spouses Agustin. Thus,
dispute. He also alleged that he inherited the the sale of the subject properties by Ruben’s father
land in 1952 from his father and had been in to Spouses cannot be considered as a prior interest
adverse possession and ownership of the at the time Ruben came to know of the transaction.
subject lot, cultivating and planting trees and (Corpuz v. Sps. Agustin, G.R. No. 183822, 18 Jan. 2012)
plants. He also declared the land for taxation
purposes and paid real estate taxes. Who is the Q: OCT P-61499 which covered a parcel of land
rightful owner of the subject property? was issued in Gerald’s favor. Gerald’s father,
Julio, representing Gerald who was then still a
A: HADJI SERAD is the rightful owner. The Torrens minor, filed before the RTC an action for
title is conclusive evidence with respect to the recovery of ownership, possession with
ownership of the land described therein, and other damages with prayer for preliminary
matters which can be litigated and decided in land mandatory injunction and TRO against Joshua.
registration proceedings. Tax declarations and tax
receipts cannot prevail over a certificate of title Joshua, in his Answer with Motion to Dismiss,
which is an incontrovertible proof of ownership. An interposed the special and affirmative defenses
original certificate of title issued by the Register of of his actual possession and cultivation of the
Deeds under an administrative proceeding is as subject parcel of land in an open, adverse and
indefeasible as a certificate of title issued under continuous manner. He likewise asked for the
judicial proceedings. Thus, Hadji Serad’s Torrens reconveyance of the property, considering that
title is a valid evidence of his ownership of the land Gerald and his father fraudulently had the
in dispute. (Datu Kiram Sampaco v. Hadji Serad subject property titled in Gerald's name.
Mingca Lantud, G.R. No. 163551, 18 July 2011) Gerald's counsel repeatedly failed to attend the
scheduled hearings, and as a consequence, the
Q: Ruben filed a complaint against Sps. Agustin heirs of Joshua were eventually allowed to
alleging that he is the registered owner of two present their evidence after Gerald was deemed
parcels of land. Accordingly, his father bought it to have waived his right to cross-examine the
from Elias and then allowed spouses Agustin to witness of the heirs of Joshua. The RTC ruled in
occupy the subject properties. Despite demand favor of the heirs of Joshua. Gerald then filed
to vacate, the Agustins refused to leave the with the CA a petition for annulment of
premises. judgment on the ground of extrinsic fraud and
lack of jurisdiction. The CA initially dismissed
Ruben alleged that he has better right to possess the petition but reinstated the same upon
the property having acquired the same from his Dominic's motion for reconsideration. Is the CA
father through a Deed of Quitclaim in 1971. correct?
Spouses Agustin however contends that they are
the rightful owners as evidenced by a Deed of
2023 GOLDEN NOTES
A: YES. In an accion publiciana, the defense of Rules regarding the Indefeasibility and
ownership will not trigger a collateral attack on the Incontrovertibility of Torrens Title
plaintiffs Torrens or certificate of title because the
resolution of the issue of ownership is done only to 1. The certificate of title serves as evidence of
determine the issue of possession. In the present an indefeasible title to the property in favor
case, the Answer of Joshua raised, as “special and of the person whose name appears therein;
affirmative defenses” to Gerald's accion publiciana,
the issue of fraud in obtaining Gerald's certificate of 2. After the expiration of the 1-year period
title on the ground that “neither he nor his father from the issuance of the decree of
had been in actual possession and cultivation of the registration upon which it is based, it
subject parcel of land” and that Gerald was not becomes incontrovertible; and
qualified as he was then a minor.
3. Decree of registration and the certificate of
There is no dispute that Gerald was awarded a title issued pursuant thereto may be
patent on 10 May 1995 and OCT No. P-61499 was attacked on the ground of actual fraud
issued in his name pursuant to the said patent on 17 within one year from the date of its entry
May 1995. Joshua's Answer questioned the OCT and such an attack must be direct and not
issued in Gerald's name. At that time, Gerald's OCT by a collateral proceeding. The validity of
had already become incontrovertible upon the lapse the certificate of title in this regard can be
of the one-year period to question it by reason of threshed out only in an action expressly
actual fraud as provided in Sec. 32 of P.D. No. 1529. filed for the purpose (Melquiades v. IAC, G.R.
No. L-68291, 06 Mar. 1991)
Gerald has a better right of possession because his
right is based on ownership recognized by OCT P- NOTE: The defense of indefeasibility of a Torrens
61499 registered and titled under his name. The title does not extend to a transferee who takes it
age-old rule that the person who has a Torrens title with notice of a flaw in the title of his transferor. To
over the land is entitled to possession thereof be effective, the inscription in the registry must
squarely applies in his favor. have been made in good faith. A holder in bad faith
of a certificate of title is not entitled to the
Thus, RTC was clearly without jurisdiction in ruling protection of the law, for the law cannot be used as
that Joshua had become the owner of the land in a shield for fraud. (Rufloe v. Burgos, G.R. No. 143573,
controversy "through the medium of acquisitive 30 Jan. 2009)
prescription" having been in possession by himself
and with his wife for 36 years and that Gerald must The principle that the earlier title prevails over a
reconvey the land in favor of the heirs of Joshua. subsequent one applies only when there are two
While the RTC could have resolved the issue of apparently valid titles over a single property.
ownership provisionally to determine the “better Without a title, one cannot invoke the principle of
right of possession,” which is allowed in an accion indefeasibility of Torrens titles nor can he assert
publiciana, it was without any power or jurisdiction priority or presumptive conclusiveness. (Oliveros v.
to order the reconveyance of the land in dispute San Miguel Corp., G.R. No. 173531, 01 Feb. 2012)
because that can be done only upon a definitive
ruling on the said issue - something that cannot be Q: There is no specific provision in the Public
done in an accion publiciana. (Heirs of Cullado v. Land Law (C.A. 141, as amended) or the Land
Gutierrez, G.R. No. 212938, 30 July 2019) Registration Act (Act 496), now P.D. 1529, fixing
the one (1)-year period within which the public
land patent is open to review on the ground of
actual fraud as in Sec. 38 of the Land
Registration Act, now Sec. 32 of P.D. 1529, and
clothing a public land patent certificate of title
CIVIL LAW
with indefeasibility. What is the effect of such may defeat his right thereto. (Chua v. Soriano, G.R.
absence? No. 150066, 13 Apr. 2007)
A: NONE. The rule on indefeasibility of certificates XPN: When the party has actual knowledge of facts
of title was applied by the Court in Public Land and circumstances that would impel a reasonably
Patents because such application is in consonance cautious man to make such inquiry or when the
with the spirit and intent of homestead laws. purchaser has knowledge of a defect or the lack of
title in his vendor or of sufficient facts to induce a
The pertinent pronouncements in cases clearly reasonably prudent man to inquire into the status of
reveal that Sec. 38 of the LRA, now Sec. 32 of P.D. the title of the property in litigation. (Amoguis v.
1529, was applied by implication to the patent Ballado, G.R. No. 189626, 20 Aug. 2018)
issued by the Director of Lands duly approved by
the Secretary of Natural Resources, under the Application of Mirror Doctrine
signature of the President of the Philippines in
accordance with law. GR: Mirror Doctrine applies when title over a land
is registered under the Torrens system.
The date of issuance of the patent, therefore,
corresponds to the date of the issuance of the decree XPN: Mirror Doctrine cannot be invoked where:
in ordinary registration cases because the decree
finally awards the land applied for registration to 1. The purchaser or mortgagee is a
the party entitled to it, and the patent issued by the bank/financing institution; (Homebankers
Director of Lands equally and finally grants, awards, Saving & Trust Co. v. CA, G.R. No. 128354, 26
and conveys the land applied for to the applicant. Apr. 2005)
NOTE: A certificate of title issued under an 2. The owner still holds a valid and existing
administrative proceeding pursuant to a homestead certificate of title covering the same
patent is as indefeasible as a certificate of title property, because the law protects the
issued under a judicial registration proceeding, lawful holder of a registered title over the
provided the land covered by said certificate is a transfer of a vendor bereft of any
disposable public land within the contemplation of transmissible right; (Tomas v. Tomas, G.R.
the Public Land Law (Republic v. Roxas, G.R. No. No. L-36897, 25 June 1980)
157988, 11 Dec. 2013).
3. The purchaser is in bad faith; (Egao v. CA,
Mirror Doctrine G.R. No. L-79787, 29 June 1989)
GR: If a land is registered and is covered by a 4. The purchaser purchases land with a
certificate of title, any person may rely on the certificate of title containing a notice of lis
correctness of the certificate of title, and he or she is pendens;
not obliged to go beyond the four (4) corners of the
certificate to determine the condition of the 5. There are sufficiently strong indications to
property (Amoguis v. Ballado, G.R. No. 189626, 20 impel closer inquiry into the location,
Aug. 2018) boundaries and condition of the lot;
(Francisco v. CA, G.R. No. L-30162, 31 Aug.
Where there is nothing on the certificate of title to 1987)
indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the 6. The purchaser had full knowledge of flaws
purchaser is not required to explore further than and defects in the title; (Bernales v. IAC, G.R.
what the Torrens title upon its face indicates in Nos. 71490-91, 28 June June 1988) or
quest for any hidden defect or inchoate right that
2023 GOLDEN NOTES
7. A person buys land not from the registered

owner but from whose rights to the land has G. SUBSEQUENT REGISTRATION
been merely annotated on the certificate of
title. (Quiñiano v. CA, G.R. No. L-23024, 31
May 1971)
It is where incidental matters after original
registration may be brought before the land
Q: Cipriana Delgado was the registered owner of
registration court by way of motion or petition filed
the lot in controversy. She and her husband sold
by the registered owner or a party in interest.
the property to Cecilia where it was agreed that
the latter shall make partial payments from time
Necessity and Effects of Registration
to time and pay the balance when the Spouses
are ready to execute the deed of sale and
Q: After registering his land, what conveyances
transfer title to her. After paying the total
may the registered owner do?
amount and being ready to pay the balance,
Cecilia demanded the execution of the deed
A: An owner of registered land may convey,
which was refused. Cecilia learned of the sale of
mortgage, lease, charge or otherwise deal with the
the property to the Dys and its subsequent
same in accordance with existing laws. He may use
mortgage to petitioner Philippine Banking
such forms of deeds, mortgages, leases or other
Corporation (Philbank). Thus, a complaint for
voluntary instruments as are sufficient in law. (Sec.
annulment of the Certificate of title and for
51, P.D. 1529)
specific performance and/or reconveyance with
damages was filed against Spouses Delgado, the
GR: Such deed, mortgage, lease, or other voluntary
Dys and Philbank. However, Philbank contends
instrument shall operate only as a contract between
that it is a mortgagee in good faith. Is the bank’s
the parties and as evidence of authority to the
contention correct?
Register of Deeds to make registration. It is the act
of registration which shall operate to convey or
A: NO. Primarily, it bears noting that the doctrine of
affect the land insofar as third persons are
“mortgagee in good faith” is based on the rule that
concerned, and in all cases, the registration shall be
all persons dealing with property covered by a
made in the office of the Register of Deeds for the
Torrens Certificate of Title are not required to go
province or city where the land lies.
beyond what appears on the face of the title. In the
case of banks and other financial institutions,
The act of registration creates a constructive notice
however, greater care and due diligence are
to the whole world of such voluntary or involuntary
required since they are imbued with public interest,
instrument or court writ or process. (Sec. 52,. P.D.
failing which renders the mortgagee in bad faith.
1529)
Thus, before approving a loan application, it is a
standard operating practice for these institutions to
XPN: A will purporting to convey or affect
conduct an ocular inspection of the property offered
registered land shall take effect as a conveyance or
for mortgage and to verify the genuineness of the
bind the land, not merely as a contract or evidence
title to determine the real owner(s) thereof. The
of authority of the RD to make registration. (Sec. 51,.
apparent purpose of an ocular inspection is to
P.D. 1529)
protect the “true owner” of the property as well as
innocent third parties with a right, interest or claim
thereon from a usurper who may have acquired a
fraudulent certificate of title thereto. (Philippine
Banking Corporation v. Dy, et al., G.R. No. 183774, 14
Nov. 2012)
CIVIL LAW
1. VOLUNTARY DEALINGS On 21 May 2001, Damian mortgaged the

property to Calubad and Keh in consideration of
a P7,000,000.00 - loan. On the same day, the
Mortgages and Leases
mortgage was annotated on TCT No. N-217728.
Jimenez siblings learned about the mortgage,
GR: The mortgagor should be the absolute owner of
but only Sonia registered her Affidavit of
the property to be mortgaged, otherwise, the
Adverse Claim, which was annotated at the back
mortgage is considered null and void.
of TCT No. N-217728 on 12 July 2002. On 12 Oct.
2002, Sonia was informed that the property was
XPN: Doctrine of mortgagee in good faith. All
scheduled for auction on 24 Oct. 2002. This
persons dealing with property covered by a Torrens
prompted the Jimenez siblings to file a
Certificate of Title, as buyers or mortgagees, are not
complaint for the annulment of the Deed of
required to go beyond what appears on the face of
Donation and TCT No. N-217728, as well as the
the title. This is the same rule that underlies the
cancellation and annulment of the Deed of Real
principle of innocent purchasers for value.
Estate Mortgage, with prayer for preliminary
injunction before the RTC of Quezon City.
The prevailing jurisprudence is that a mortgagee
has a right to rely in good faith on the certificate of
RTC denied the prayer for injunction, hence, the
title of the mortgagor to the property given as
extrajudicial sale pushed through as scheduled.
security and, in the absence of any sign that might
Calubad and Keh emerged as the highest
arouse suspicion, has no obligation to undertake
bidders. Consequently, a Certificate of Sale
further investigation. Hence, even if the mortgagor
dated 03 Nov. 2002 was issued. The title to the
is not the rightful owner of, or does not have a valid
property was consolidated and TCT No. N-
title to, the mortgaged property, the mortgagee in
257432 was issued in favor of Calubad and Keh.
good faith is, nonetheless, entitled to protection.
(Duque-Rosario v. Banco Filipino Savings and
Danilo argues that while Calubad and Keh may
Mortgage Bank, G.R. No. 140528, 07 Dec. 2011)
be mortgagees in good faith, they are not
purchasers in good faith as they were aware of
NOTE: The subsequent nullification of the
Sonia's adverse claim when they purchased the
mortgagor’s title will not nullify the mortgage.
property during the public auction on 24 Oct.
(Gonzales v. IAC, G.R. No. L-69622, 29 Jan. 1988)
2002. As such, they have no right over the
disputed property. Calubad and Keh contend
Q: Corona is the registered owner of a lot
that that any subsequent adverse claim will not
covered by TCT No. RT-122097 (126876). Her
prejudice the mortgagee's right as a purchaser
children are petitioners Danilo and Sonia,
in the foreclosure sale. Are Calubad and Keh's
respondent Damian, and the Jimenez siblings
title as purchasers in the foreclosure sale are
(Vilma, Federico, and Chona Jimenez). Corona
valid?
died on 16 Jan. 2002. During the settlement of
the estate, Jimenez siblings discovered a Deed of
A: YES. There is a situation where, despite the fact
Donation allegedly executed by Corona in favor
that the mortgagor is not the owner of the
of Damian on 31 Aug. 2000 over the 532 sq. m.
mortgaged property, his title being fraudulent, the
property. By virtue of the Deed, TCT No. RT-
mortgage contract and any foreclosure sale arising
122097 was cancelled and TCT No. N-217728
therefrom are given effect by reason of public
was issued in the name of Damian on 07 Sept.
policy. The doctrine applies when the following
2000.
requisites concur, namely:
a. the mortgagor is not the rightful owner of,

or does not have valid title to, the property;
2023 GOLDEN NOTES
b. the mortgagor succeeded in obtaining a Furthermore, the nullity of the mortgagor's

Torrens title over the property; certificate of title does not automatically carry with
it the nullity of a registered mortgage if the
c. the mortgagor succeeded in mortgaging the mortgagee acted in good faith. Once the mortgagor
property to another person; defaulted in the fulfillment of his obligation, the
mortgagee in good faith can still cause the
d. the mortgagee relied on what appears on foreclosure of the mortgage. In such case, the
the title and there exists no facts and purchaser in the foreclosure sale acquires the right
circumstances that would compel a of the mortgagee in good faith, making the sale prior
reasonably cautious man to inquire into the in time as against any subsequent lien or
status of the property; and encumbrance. Accordingly, Sonia's adverse claim,
which was annotated after the registered mortgage
e. the mortgage contract was registered. in favor of Calubad and Keh, cannot prevail over
Calubad and Keh's rights as mortgagees in good
All these requisites were satisfied in this case, viz.: faith and purchasers in the foreclosure sale. Being
(a) Damian was found to have no valid title to the mortgagees in good faith, they have a superior lien
property as his title was derived from a forged Deed over that of Sonia, and their right to foreclose is
of Donation; (b) he was able to obtain TCT No. N- reserved. (Jimenez v. Jimenez, Jr., G.R. No. 228011, 10
217728; (c) he succeeded in mortgaging the Feb. 2021)
property to Calubad and Keh; (d) Calubad and Keh
found nothing on TCT No. N-217728 that would Effects of Registration of Voluntary Dealings
have notified them of Damian's invalid title. In fact,
Calubad and Keh even went beyond the title and 1. Creates a lien that attaches to the property in
conducted an ocular inspection, whereby they favor of the mortgagee; and
confirmed that Damian was in possession and 2. Constitutes constructive notice of his interest
occupation of the property; and (e) the mortgage in the property to the whole world.
contract was registered. Thus, the courts a quo did
not err in ruling that Calubad and Keh were Rule on Carry-Over of Encumbrances
mortgagees in good faith.
Mortgage lien is a right in rem which follows the
Jurisprudence dictates that a subsequent lien or property. If, at the time of any transfer, subsisting
encumbrance annotated at the back of a certificate encumbrances or annotations appear in the
of title of a foreclosed property will not affect the registration book, they shall be carried over and
rights of a purchaser in a foreclosure sale because stated in the new certificate or certificates; except
such sale retroacts to the date of the registration of so far as they may be simultaneously released or
the mortgage, making the sale prior in time to the discharged. (Sec. 59, P.D. 1529)
lien or encumbrance. The foreclosure sale retroacts
to the date of registration of the mortgage because It is inseparable from the property mortgaged as it
it is incidental to the fulfilment of the mortgagor's is a right in rem — a lien on the property whoever
obligation in the mortgage contract upon his its owner may be. It subsists notwithstanding a
default. In turn, the purchaser in a foreclosure sale change in ownership; in short, the personality of the
essentially derives his right from the previously owner is disregarded. (Ligon v. CA, GR No. 107751,
registered mortgage. To rule otherwise would be to 01 June 1995)
render nugatory the purpose of the mortgage as
security. Q: If the property that was the subject of
mortgage was subsequently foreclosed, must a
new certificate of title be automatically issued in
favor of the purchaser?
CIVIL LAW
A: The answer must be qualified. redemption as may be allowed by law.” (Robles v.

Yapcinco et al., G.R. No. 169569 169568, 22 Oct. 2014)
1. No Right of Redemption – The certificate of
title of the mortgagor shall be canceled, and a 2. INVOLUNTARY DEALINGS
new certificate issued in the name of the
purchaser; and
Necessity of Registration of Involuntary
Dealings
2. There is Right of Redemption – The
certificate of title of the mortgagor shall NOT
Involuntary dealings, unlike the voluntary dealings,
be cancelled, but the certificate of sale and
requires the registration. It is the act of registration
the order confirming the sale shall be
which creates a constructive notice to the whole
registered by a brief memorandum thereof
world of such instrument or court writ or process
made by the Register of Deeds upon the
and is the operative act that conveys ownership or
certificate of title.
affects the land insofar as third persons are
concerned. (Saberon v. Ventanilla, Jr. G.R. No.
In the event the property is redeemed, the
192669, 21 Apr. 2014)
certificate or deed of redemption shall be filed with
the Register of Deeds, and a brief memorandum
Voluntary vs. Involuntary Dealings
thereof shall be made by the Register of Deeds on
the certificate of title of the mortgagor.
VOLUNTARY INVOLUNTARY
DEALINGS DEALINGS
If the property is not redeemed, the final deed of
As to Registration
sale executed by the sheriff in favor of the purchaser
Requires registration
at a foreclosure sale shall be registered with the
to create a constructive
Register of Deeds; whereupon the title of the
Does not require notice to the whole
mortgagor shall be canceled, and a new certificate
registration. world of such
issued in the name of the purchaser. (Sec. 63, P.D.
instrument or court
1529)
writ.
As to Kinds
Q: Does non-registration of property after
judicial foreclosure and sale have the effect of 1. Sale; 1. Attachment;
invalidating the foreclosure proceedings, such 2. Real estate 2. Mandamus;
that ownership reverts to the original owner? mortgage; 3. Sale on execution
3. Lease; of judgment or
A: NO. The effect of the failure to obtain the judicial 4. Pacto de retro sales for taxes;
confirmation was only to prevent the title to the sale; 4. Adverse claims;
property from being transferred. For sure, such 5. Extra-judicial 5. Notice of lis
failure did not give rise to any right in favor of the settlement; pendens;
mortgagor or the respondents as his successors-in- 6. Free patent / 6. Expropriation;
interest to take back the property already validly homestead; 7. Forfeiture; and
sold through public auction. Nor did such failure 7. Powers of 8. Auction sale on
invalidate the foreclosure proceedings. To maintain attorney; and foreclosure of
otherwise would render nugatory the judicial 8. Trusts. mortgage
foreclosure and foreclosure sale, thus unduly As to the entry in the day book
disturbing judicial stability. After all, under the Entry in the day book is An entry thereof in the
applicable rule earlier cited, the judicial insufficient. There is a day book is sufficient
confirmation operated only “to divest the rights of need to present title to notice to all persons.
all the parties to the action and to vest their rights record the deed in (Garcia v. CA, G.R. Nos.
in the purchaser, subject to such rights of registry and to make L-48971 & 49011, 22
2023 GOLDEN NOTES
memorandum on title. Jan. 1980) Instances when a Claim of Interest is Adverse
Involuntary Dealings that must be Registered 1. Claimant’s right or interest in registered

land is adverse to the registered owner;
1. Attachment; (Sec. 69, P.D. 1529) 2. Such right or interest arose subsequent to
2. Adverse claim; (Sec. 70, P.D. 1529) the date of original registration; or
3. Sale on execution or levy for taxes or for 3. No other provision is made in the decree for
any assessment; (Sec. 74, P.D. 1529) and the registration of such right or claim. (Sec.
4. Notice of lis pendens. (Sec. 76, P.D. 1529) 110, Act 496)
Writ of Attachment Formal Requisites of an Adverse Claim for

Purposes of Registration
Attachment is the legal process of seizing another’s
property in accordance with a writ or judicial order 1. Adverse claimant must state the following in
for the purpose of securing satisfaction of a writing:
judgment yet to be rendered. It is used primarily to
seize the debtor’s property in order to secure the a. His alleged right or interest;
debt or claim of the creditor in the event that a b. How and under whom such alleged
judgment is rendered (Agcaoili, 2018) right of interest is acquired;
c. Description of the land in which
Effect of the Non-Recording of a Writ of the right or interest is claimed; and
Attachment d. Certificate of title number.
An attachment levied on real state not duly 2. Such statement must be signed and sworn to
recorded in the Registry of Property is not an before a notary public or other officer
encumbrance on the attached property, nor can authorized to administer oath; and
such attachment unrecorded in the registry, serve
as a ground for decreeing the annulment of the sale 3. Claimant shall state his residence or place to
of the property at the request of another creditor. which all notices may be served upon him.
(Siari Valley Estates, Inc. v. Lucasan, G.R. No. L-13281, (Agcaoili, 2018)
31 Aug. 1960)
Registration of Adverse Claim
(a) ADVERSE CLAIMS
By filing a sworn statement with the Register of
It is a notice to third persons that any transaction Deeds of the province where the property is located,
regarding the disputed land is subject to the setting forth the basis of the claimed right together
outcome of the dispute. (Arrazola v. Bernas, G.R. No. with other data pertinent thereto. The duty of the
L-29740, 10 Nov. 1978) Register of Deeds to record the same on the title is
ministerial. (Paz Ty Sin Sei v. Jose Lee Dy Piao, G.R.
Purpose of Annotating the Adverse Claim No. L-11271, 28 May 1958)
The purpose of annotating the adverse claim on the NOTE: Entry of the adverse claim filed on the day
title of the disputed land is to apprise third persons book is sufficient without the same being annotated
that there is a controversy over the ownership of the at the back of the corresponding certificate of title.
land and to preserve and protect the right of the (Director of Lands v. Reyes, G.R. No. L-27594, 28 Nov.
adverse claimant during the pendency of the 1975)
controversy. (Ibid. Arrazola v. Bernas, G.R. No. L-
29740, 10 Nov. 1978)
CIVIL LAW
Effect of the Registration of an Adverse Claim Sept. 2000, petitioner filed a consolidated
petition for cancellation of adverse claims on its
It renders the adverse claim effective and any TCTs with the RTC of Tagaytay City. Does the
transaction regarding the disputed land shall be respondent had a claim over the property under
subject to the outcome of the dispute. the Joint Venture Agreement?
Q: May an adverse claim exist concurrently with A: NO. The purpose of annotations of adverse claims
a subsequent annotation of a notice of lis on title is to apprise the whole world of the
pendens? controversy involving a property. These
annotations protect the adverse claimant's rights
A: YES, an adverse claim may exist concurrently before or during the pendency of a case involving a
with a subsequent annotation of a notice of lis property. It notifies third persons that rights that
pendens. When an adverse claim exists concurrently may be acquired with respect to a property are
with a notice of lis pendens, the notice of adverse subject to the results of the case involving it. Sec. 70
claim may be validly cancelled after the registration of P.D. 1529 or the Property Registration Decree
of such notice, since the notice of lis pendens also governs adverse claims. It describes an adverse
serves the purpose of the adverse claim. claim as a statement in writing setting forth a
subsequent right or interest claimed involving the
Subsequent Registration of an Adverse Claim property, adverse to the registered owner. A claim
based on a future right does not ripen into an
A prior registration of a lien creates a preference. adverse claim as defined in Sec. 70 of P.D. 1529. A
Hence, the subsequent annotation of an adverse right still subject to negotiations cannot be enforced
claim cannot defeat the rights of the mortgagee or against a title holder or against one that has a
the purchaser at the auction sale whose rights are legitimate title to the property based on possession,
derived from a prior mortgage validly registered. ownership, lien or any valid deed of transfer.
(Cathay Metal Corp. v. Laguna West Multi-Purpose
Q: Laguna West Multi-Purpose Cooperative is a Coop., Inc., G.R. No. 172204, 02 July 2014)
cooperative recognized under R.A. No. 6657 or
the Comprehensive Agrarian Reform Law Effect of Non-Registration of an Adverse Claim
(CARL). It allegedly entered into a joint venture
agreement with farmer-beneficiaries through The effect of non-registration or invalid registration
Certificates of Land Ownership Award (CLOA) in of an adverse claim renders it ineffective for the
Silang, Cavite. While respondent was purpose of protecting the claimant’s right or
negotiating with the farmer-beneficiaries, interest on the disputed land, and could not thus
petitioner Cathay Metal Corporation entered prejudice any right that may have arisen thereafter
into Irrevocable Exclusive Right to Buy (IERB) in favor of third parties.
contracts with the same farmer-beneficiaries.
Limitations to the Registration of an Adverse
In 1996, respondent caused the annotation of its Claim
adverse claim on the farmer-beneficiaries’
certificates of title. Petitioner and the farmer- 1. No second adverse claim based on the same
beneficiaries executed contracts of sale of the ground may be registered by the same
properties. TCTs were also issued in the name of claimant; (Sec. 70, P.D. 1529) and
petitioner in the same year. The annotations in
the original titles were copied to petitioner’s 2. A mere money claim cannot be registered
titles. Respondent’s Vice-President, Orlando as an adverse claim. (Sanchez v. CA, G.R. No.
dela Peña, sent two letters to petitioner, L-40177, 12 Feb. 1976)
informing it of respondent’s claim to the
properties. Petitioner did not respond. On 15
2023 GOLDEN NOTES
Lifespan of a Registered Adverse Claim removed as a recorded annotation in the TCT. (Star
Asset Management Ropoas, Inc. v. Register of Deeds,
The adverse claim shall be effective for a period of G.R. No. 233737, 03 Feb. 2021)
thirty (30) days from the date of registration and it
may be cancelled. The compromise agreement embodying the
contract to sell the 30 hectares of land, which has
Effect of the Expiration of the period of been cancelled by virtue of the inability of the buyer
Effectivity of an Adverse Claim to pay the purchase price, can no longer be a ground
for the continuous annotation of an adverse claim in
The expiration does not ipso facto terminate the the subject TCTs. (Star Asset Management Ropoas,
claim. The cancellation of the adverse claim is still Inc. v. Register of Deeds, G.R. No. 233737, 03 Feb.
necessary to render it ineffective; otherwise, the 2021)
inscription will remain annotated and shall
continue as a lien to the property. Sale on Execution or for Taxes or for any
Assessment
Q: May the RD cancel an adverse claim?
Whenever registered land is solved on execution, or
A: NO. The RD cannot, on its own, automatically taken or sold for taxes or for any assessment or to
cancel the adverse claim. enforce a lien of any character, or for any costs and
charges incident to such liens, any execution or copy
NOTE: Before the lapse of 30-day period, the of execution, any officer's return, or any deed,
claimant may file a sworn petition withdrawing his demand, certificate, or affidavit, or other instrument
adverse claim, or a petition for cancellation of made in the course of the proceedings to enforce
adverse claim may be filed in the proper Regional such liens and required by law to be recorded, shall
Trial Court. be filed with the Register of Deeds of the province
or city where the land lies and registered in the
Q: What must an interested party do if he seeks registration book, and a memorandum made upon
the cancellation of a registered adverse claim? the proper certificate of title in each case as lien or
encumbrance. (Sec. 74, P.D. 1529)
A: To cancel the annotation of the adverse claim on
the subject TCTs, Sec. 70 of P.D. 1529 requires the Q: In 2007, the services of Atty. Dominguez was
filing of a court action, through a verified petition. engaged by Carmelo Africa and his brothers in
The purpose of such court action is to have the one case to prevent the Bank of Commerce (B0C)
annotation of the adverse claim physically removed from taking possession of their family homes in
or erased in the TCT because otherwise, the Marikina City, Antipolo City, and Quezon City,
inscription will remain annotated in the certificate with a total redemption price of 25 million. Atty.
of title. (Star Asset Management Ropoas, Inc. v. Dominguez charged P250,000.00 or 1% of the
Register of Deeds, G.R. No. 233737, 03 Feb. 2021) redemption price as his acceptance fee. In 2009,
Carmelo and his brothers once again sought the
A court order is necessary before any annotation in legal services of Atty. Dominguez in a suit
the TCT may be cancelled pursuant to Sec. 108 of involving Hanjin Heavy Industries and
P.D. 1529, which provides that no erasure, Construction Co., Ltd.
alteration, or amendment shall be made upon the
registration book after the entry of a certificate of Meanwhile, BOC filed a petition for cancellation
title or of a memorandum thereon and the of adverse claim on TCT Nos. 473882 and
attestation of the same by the Register of Deeds, 473883. This petition was opposed by the
except by order of the proper trial court. A spouses Carmelo and Elizabeth Africa (spouses
registered owner therefore should apply by petition Africa) through Atty. Dominguez. In October
to the court in order for the adverse claim to be 2012, Atty. Dominguez filed before the trial
CIVIL LAW
court a Request for Admission of the aforesaid (b) NOTICE OF LIS PENDENS
allegations. A month later, Atty. Dominguez
manifested that he was no longer representing Lis pendens literally means a pending suit. The
the spouses Africa as oppositors in the petition doctrine of lis pendens refers to the jurisdiction,
for cancellation of adverse claim. power, or control which a court acquires over
property involved in a suit, pending the continuance
In January 2013, Atty. Dominguez filed a Motion of the action, and until final judgment. (Sps. Po Lam
to Fix Attorney's Fees and to Approve Charging v. CA, G.R. No. 116220, 06 Dec. 2000)
(Attorney's) Lien with Motion for Production of
Compromise Agreement (Motion to Fix It merely creates a contingency and not a lien. It
Attorney's Fees). However, the lower courts does not produce any right or interest which may be
denied his motion, ruling that trial courts exercised over the property of another. It only
cannot adjudicate money claims in petitions for protects the applicant’s rights which will be
cancellation of adverse claim and are restricted determined during trial.
in the determination of the property of
cancelling and adverse claim. NOTE: It is not a lien or encumbrance under our
civil law. It is mere cautionary notice to prospective
Can trial courts rule on money judgments in a buyers of certain property that said property is
petition for cancellation of adverse claim? under litigation. The annotation of a notice of lis
pendens at the back of the original copy of the
A: YES. The trial court may rule on money certificate of title on file with the Register of Deeds
judgments such as attorney's fees and record and is sufficient to constitute constructive notice to
enforce attorney's lien in a petition for cancellation purchasers or other persons subsequently dealing
of adverse claim or in a separate action, at the with the same property. One who deals with
option of the counsel claiming the same. To property subject of a notice of lis pendens cannot
distinguish, registration or recording of attorney's invoke the right of a purchaser in good faith neither
lien merely recognizes the right of the lawyer to can he acquire better rights that those of his
claim from the judgment of the suit, whereas the predecessors-in-interest. (Tanchoco v. Aquino, G.R.
lien can only be enforced when the money judgment No. 30670, 17 Jan. 1990)
in favor of the counsel's client becomes final and
executory. It is to be noted that among the prayers Purposes of a Notice of Lis Pendens
of Atty. Dominguez in his Motion to Fix Attorney's
Fees is to register a statement of his lien before the 1. Protect the rights of the party causing the
rendition of judgment. If a lien may be enforced in registration of the lis pendens; and
said petition when the money judgment has become
final, then the registration of the lien may be granted 2. Advise third persons who purchase or
even prior to the judgment in order to establish the contract on the subject property that they do
lawyer's claim. The determination and the fixing of so at their peril and subject to the result of
attorney's fees may be deferred until the resolution the pending litigation. (Agcaoili, 2006)
of the case and the finality of the money judgment in
favor of the lawyer's client. NOTE: A notice of lis pendens may involve actions
that deal not only with title or possession of a
The language of Section 70 of the Property property, but also with the use or occupation of a
Registration Decree (PD 1529) is clear; it does not property. The litigation must directly involve a
limit the issues that may be resolved by the trial specific property which is necessarily affected by
court in a petition for cancellation of adverse claim. the judgment. (Agcaoili, 2018)
(Atty. Aristotle T. Dominguez vs. Bank of Commerce
and Spouses Africa, G.R. No. 225207, 29 Sept. 2021, as
2023 GOLDEN NOTES
Q: When may a notice of lis pendens be made and 1. When it is shown that the notice is for the
when may it not be resorted to? purpose of molesting the rights of the
adverse party;
A:
2. Where the evidence so far presented by the
WHEN NOT plaintiff does not bear out the main
WHEN APPLICABLE
APPLICABLE allegations of the complaint;
1. Recover 1. Preliminary
possession of real attachments; 3. When it is shown that it is not necessary to
estate; 2. Levy or execution; protect the right of the party who caused
2. Quieting of title; 3. Proceedings on the registration thereof;
Remove clouds probate of wills;
upon title; 4. Administration of 4. Where the continuances of the trial are
3. For partition; or the real estate of unnecessarily delaying the determination
4. Any other deceased person; of the case to the prejudice of the
proceeding of any or defendant;
kind in court 5. Proceedings for
directly affecting the recovery of 5. Upon verified petition of the party who
title to the land or money judgments. caused the registration thereof; or
its use or
occupation or the 6. It is deemed cancelled after final judgment
building thereon. in favor of defendant, or other disposition
(Agcaoili, 2018) of the action, such as to terminate all rights
of the plaintiff to the property involved.
Effects of the Annotation of Notice of Lis Pendens (Sec. 77, P.D. 1529; Valderama v. Arguelles,
G.R. No. 223660, 02 Apr. 2018)
1. It keeps the subject matter of litigation within
the power of the court until the entry of the NOTE: Section 76 of PD 1529 and Sec. 19, Rule 13 of
final judgment to prevent the defeat of the the ROC impliedly require the registered owner to
final judgment by successive alienation; and be a party or be impleaded as a party to such
pending case. (Du v. Ortile, G.R. No. 255934, 13 July
2. It binds a purchaser, bona fide or not, of the 2022)
land subject of the litigation to the judgment
or decree that the court will promulgate Q: When is a notice of lis pendens deemed
subsequently. cancelled?
However, the filing of a notice of lis pendens does not A: Under Sec. 77 of P.D. 1529, a notice of lis pendens
create a right or lien that previously did not exist. shall be deemed cancelled only upon the
Without a notice of lis pendens, a third party who registration of a certificate of the clerk of court in
acquires the property after relying only on the which the action or proceeding was pending stating
certificate of title is a purchaser in good faith. (Lopez the manner of disposal thereof if there was a final
v. Enriquez, GR No. 146262, 21 Jan. 2005) judgment in favor of the defendant or the action was
disposed of terminating finally all rights of the
Q: When may a notice of lis pendens be plaintiff over the property in litigation. (Cunanan v.
cancelled? Jumping Jap Trading Corp. G.R. No. 173834, 24 Apr.
2009)
A: A notice of lis pendens may be cancelled in the
following cases before final judgment upon order of
the court:
CIVIL LAW
Adverse Claim vs. Lis Pendens

H. NON-REGISTRABLE PROPERTIES
NOTICE OF LIS
ADVERSE CLAIM
PENDENS
Non- Registrable Lands
As to definition
These are properties of public dominion which,

Literally means under existing legislation, are not the subject of
pending suit. It private ownership and are reserved for public
operates as a notice to purposes.
the whole world that a
particular real All lands of the public domain, waters, minerals,
Notice to third persons property is in coal, petroleum, and other mineral oils, all forces of
that any transaction litigation. The potential energy, fisheries, forests or timber,
regarding the disputed inscription serves as a wildlife, flora and fauna, and other natural
land is subject to the warning that one who resources are owned by the State. (Sec. 2, Art. XII,
outcome of the dispute. acquires interest over 1987 Constitution)
litigated property does
so at his own risk, or NOTE: The properties of public dominion are not
that he gambles on the susceptible to acquisitive prescription and only
result of the litigation properties of the State that are no longer earmarked
over the property. for public use, otherwise known as patrimonial, may
be acquired by prescription. In Heirs of Malabanan
As to purpose v. Republic, (G.R. No. 179987, 03 Sept. 2013) the
Supreme Court, in observance of the foregoing,
clarified the import of Sec. 14(2) and made the
Its purpose is to following declarations:
Its purpose is to protect the rights of the
apprise third persons party causing the 1. The prescriptive period for purposes of
that there is a registration of the lis acquiring an imperfect title over a property of
controversy over the pendens and to advise the State shall commence to run from the date
ownership of the land third persons who an official declaration is issued that such
and to preserve and purchase or contract property is no longer intended for public
protect the right of the on the subject property service or the development of national wealth;
adverse claimant that they do so at their and
during the pendency of peril and subject to the
the controversy. result of the pending 2. Prescription will not run as against the State
litigation. even if the property has been previously
classified as alienable and disposable as it is
that official declaration that converts the
property to patrimonial. (Republic v. Metro
Index Realty and Development Corp., G.R. No.
198585, 02 July 2012)
2023 GOLDEN NOTES
Reason behind their Non-Registrability continue to belong to the State. (Fernando

v. Acuña, G.R. No. 161030, 14 Sept. 2011)
Property of the public domain is beyond the
commerce of man and not susceptible of private 13. Reservations for public and semi-public
appropriation and acquisitive prescription. purposes;
Occupation thereof in the concept of owner no 14. Protected areas;
matter how long cannot ripen into ownership and 15. Resources within ancestral domains; and
be registered as a title. (Valiao v. Republic, G.R. No. 16. Others of similar character.
170757, 28 Nov. 2011)
Q: In 1913, Gov. Gen. Forbes reserved a parcel of
Non-Registrable Lands land for provincial park purposes. Sometime
thereafter, the court ordered said land to be
1. Property of public domain or those registered in Ignacio & Carmen Palomo’s name.
intended for public use, public service or What is the effect of the act of Gov. Gen Forbes in
development of the national wealth; (Art. reserving the land for provincial park purposes?
420, NCC)
2. Forest or timber lands; A: As part of the reservation for provincial park
3. Water sheds; purposes, they form part of the forest zone. It is
4. Mangrove swamps; elementary in the law governing natural resources
5. Mineral lands; that forest land cannot be owned by private
6. National parks and plazas; persons. It is not registrable and possession thereof,
no matter how lengthy, cannot convert it into
NOTE: Where the certificate of title covers private property, unless such lands are reclassified
a portion of land within the area reserved and considered disposable and alienable. (Sps.
for park purposes, the title should be Palomo, et. al. v. CA, et. al., G.R. No. 95608, 21 Jan.
annulled with respect to that portion. 1997)
(Palomo v. CA, G.R. No. 95608., 21 Jan. 1997)
Q: Does land classified as forest loses its
7. Military or naval reservations; classification because it has been stripped of it
8. Foreshore lands; forest cover?
9. Reclaimed lands;
10. Submerged areas; A: NO. A forested area classified as forest land of the
11. Riverbanks; public domain does not lose such classification
12. Lakes, rivers, creeks and lagoons; simply because loggers or settlers may have
stripped it of its forest cover. Parcels of land
NOTE: Areas beyond a lake’s natural bed, classified as forest land may actually be covered
or the ground covered by the waters at with grass or planted with crops by kaingin
their highest ordinary depth during the dry cultivators or other farmers. Forest lands do not
season, may be registered. (Republic v. CA, have to be on mountains or in out-of-the-way
G.R. No. L-43105, 31 Aug. 1984) places. The classification of land is descriptive of its
legal nature or status and does not have to be
A dried-up creek is property of public descriptive of what the land actually looks like.
dominion. Under Art. 420(1) and (Heirs of Jose Amunategui v. Director of Forestry, G.R.
Art.502(1) of the Civil Code, rivers and No. L-27873, 09 Nov. 1983)
their natural beds are property of public
dominion. IN the absence of any provision
of law vesting ownership of the dried-up
river bed in some other person, it must
CIVIL LAW
Forest Lands which exist naturally, but which are also, to some
extent, cultivated by man for the sake of the
It is defined as “a large tract of land covered with a combustible wood of the mangrove and like trees as
natural growth of trees and underbrush; a large well as for the useful nipa palm propagated thereon.
wood.” If the land forms part of the public forest, (Director of Forestry v. Villareal, G.R. No, 32266 L-
possession thereof, however long, cannot convert it 32266, 27 Feb. 1989)
into private property as it is within the exclusive
jurisdiction of the Bureau of Forest Development Q: Are mangrove swamps disposable?
and beyond the power and jurisdiction of the
registration court. (Agcaoili, 2018; Director of Lands A: NO. Mangrove swamps or manglares, as they are
v. Abanzado, G.R. No. L-21814, 15 July 1975) commonly called, are forestall and not alienable
agricultural land.
Unless the land is released as A and D, the rules on
confirmation of title do not apply. (Heirs of Jose Mangrove swamps form part of the public forests
Amunategui v. Director of Forestry, G.R. No. L-27873, and, therefore, not subject to disposition until and
09 Nov. 1983) unless they are first released as forest land and
classified as alienable agricultural land. (Ibid.
Foreshore Land Director of Forestry v. Villareal, G.R. No, L-32266, 27
Feb. 1989)
A strip of land that lies between the high and low
water marks and is alternately wet and dry Mineral Lands
according to the flow of tide. It is that part of the
land adjacent to the sea, which is alternately Mineral land means any land where mineral
covered by the ordinary flow of tides. (Republic v. resources are found. Mineral resources, on the
CA, G.R. No. 126316, 25 June 2004) other hand, mean any concentration of
mineral/rocks with potential economic value. (Sec.
Foreshore lands are inalienable unless reclaimed by 3, R.A. No. 7942)
the government and classified as agricultural lands
of the public domain. (Chavez v. Public Estates NOTE: Mineral resources are owned by the State
Authority, G.R. No. 133250, 11 Nov. 2003) and the exploration, development, and processing
thereof shall be under its full control and
NOTE: Seashore, foreshore land, and/or portions of supervision. The State may directly undertake such
the territorial waters and beaches, cannot be activities or it may enter into mineral agreements
registered. It is outside the commerce of man. Even with contractors. (Sec. 4, R.A. No. 7942)
alluvial formation along the seashore is part of the
public domain and, therefore, not open to Possession of mineral land, no matter how long,
acquisition by adverse possession by private does not confer possessory rights. Thus, a certificate
persons unless subsequently declared as no longer of title is void when it covers property of public
needed for public use. (Aranas De Buyser v. Director domain classified as mineral lands. Any title issued
of Lands, G.R. no. l- No. L-22763, 18 Mar. 1983) over non-disposable lots, even in the hands of
alleged innocent purchaser for value, shall be
Mangrove Swamps cancelled. (Lepanto Consolidated Mining Co. v.
Dumyung, G.R. No. L-31666, 20 30 Apr. 1979)
These are mud flats, alternately washed and
exposed by the tide, in which grows various kindred Ownership of land does not extend to mineral
plants which will not live except when watered by underneath. The Regalian doctrine reserves to the
the sea, extending their roots deep into the mud and State all minerals that may be found in public and
casting their seeds, which also germinate there. even private land devoted to agricultural, industrial,
These constitute the mangrove flats of the tropics, commercial, residential, or for any purposes other
2023 GOLDEN NOTES
than mining. (Republic v. CA, G.R. No. 45859, 28 Sept. that alienable lands of the public domain were
1938) transferred to the PEA (now PRA) and issued land
patents or certificates of title in PEA’s name did not
Q: Can land be partly mineral and partly automatically make such lands private. Supreme
agricultural? Court also held therein that reclaimed lands
retained their inherent potential as areas for public
A: NO. The rights over the land are indivisible and use or public service. (Republic v. City of Parañaque;
that the land itself cannot be half agricultural and G.R. No. 191109, 18 July 2012)
half mineral. The classification of land must be
categorical; the land must be either completely
mineral or completely agricultural. (Republic v. CA, I. DEALINGS WITH UNREGISTERED LAND
G.R. No. L-43938, 15 Apr. 1988)
Watershed
No deed, conveyance, mortgage, lease, or other
voluntary instrument affecting land not registered
It is a land area drained by a stream or fixed body of
under the Torrens system shall be valid, except as
water and its tributaries having a common outlet for
between the parties thereto, unless such instrument
surface runoff. (Sec. 3(m), P.D. No. 705)
shall have been recorded in the manner herein
prescribed in the office of the Register of Deeds for
Watershed Reservation
the province or city where the land lies (Sec. 113,
P.D. 1529)
It is a forest land reservation established to protect
or improve the conditions of the water yield thereof
NOTE: Where registered land has been the subject
or reduce sedimentation. (Sec. 3(l), P.D. 705)
of a transaction and this was recorded under Act No.
3344, such recording does not bind third persons
Q: Public Reclamation Authority (formerly
since registration thereunder refers to properties
Philippine Estate Authority or PEA) reclaimed
not registered under the Land Registration Act, and,
several portions of the foreshore and offshore
hence, not effective for purposes of Art. 1544 of the
areas of Manila Bay. In 2003, the Parañaque City
NCC on double sales. Registration of instruments, in
Treasurer issued Warrants of Levy on PRA’s
order to affect and bind the land, must be done in
reclaimed property. PRA filed a petition for
the proper registry (Soriano v. Magali, G.R. No. L-
prohibition with prayer for TRO but was denied
15133, 31 July 1963)
by the RTC on the ground that PRA was not
exempt from payment of real property taxes as
Q: Flora and Clemente filed an application for
it was organized as a stock corporation. Is PRA
registration of a parcel of land before the RTC.
exempted from the payment of real property tax
During the proceedings, the LRA issued a report
for its reclamation project?
stating that the parcel of land was previously the
subject of registration in another case and had
A: YES. The subject lands are reclaimed lands,
already been adjudicated to another person.
specifically portions of the foreshore and offshore
However, there is no record of the identity of the
areas of Manila Bay. As such, these lands remain
person to whom the property was adjudicated to
public lands and form part of the public domain. It
because the records of the case, including a copy
is clear from Sec. 234 of the LGC that real property
of the decision, were not available. The RTC thus
owned by the Republic of the Philippines is exempt
granted registration and nullified the order of
from real property tax unless the beneficial use
the cadastral court. Was the RTC correct?
thereof has been granted to a taxable person. In the
case of Chavez v. Public Estates Authority (PEA) and
AMARI Coastal Development Corporation, (G.R. No.
133250, 09 July 2002) the Court held that the fact
CIVIL LAW
A: YES. A regional trial court has no power to nullify Recording by Register of Deeds is Ministerial
or interfere with the decision of a co-equal court
pursuant to the law and the doctrine of judicial The Register of Deeds does not exercise a judicial or
stability. However, the foregoing presupposes that quasi-judicial power in the registration of sheriff’s
the decision of a co-equal cadastral court really deeds or certificates of sale. His duty with respect to
existed and that there actually is a decision in that the notation or recording of these instruments, so
case. The doctrine of judicial stability thus finds no far at least as relates to unregistered property, is
application in this case. Practical considerations ministerial only’ and the registration of such
now demand that the proceedings in the RTC be no instrument adds nothing to their intrinsic effect.
longer disturbed. It would be the height of injustice Registration in such cases is required merely as a
for the heirs to be held hostage or punished by means of notification of the purchaser’s rights to the
reason of the plain scarcity of the records. (Republic public. If the Register of Deeds refuses to register
of the Philippines v. Tapay, et al., G.R. No. 157719, 2 the instrument, he shall advise the party in interest
Mar. 2022, as penned by J. Hernando) in writing of the grounds for his refusal, and the
latter may elevate the matter to the Administrator,
Purpose of Registration Land Registration Authority, en consulta pursuant
to Section 117 of the Property Registration Decree.
A transaction affecting unregistered lands covered (Hermanos v. Register of Deeds, G.R. No. 274349
by an unrecorded contract may be valid and binding 27449, 10 Sept. 1927).
on the parties themselves, but not on third parties.
In the case of third parties, it is necessary for the Q: How is recording effected?
contract to be registered. (Dadizon v. CA, G.R. No.
159116, 30 Sept. 2009) A: Register of Deeds shall keep a Primary Entry
Book and a Registration Book. The Primary Entry
Sec. 113 Contemplates Instruments created by Book shall contain, among other particulars, the
Agreement of the Parties entry number, the names of the parties, the nature
of the document, the date, hour and minute it was
The opening paragraph of Sec. 113 cannot be presented and received. The recording of the deed
interpreted to include conveyances made by and other instruments relating to unregistered
ministerial officers, such as sheriff’s deeds. It lands shall be effected by any of annotation on the
contemplates only such instruments as may be space provided therefor in the Registration Book,
created by agreement of the parties. (Agcaoli, 2018) after the same shall have been entered in the
Primary Entry Book.
Recording shall be Without Prejudice to a Third
Party with ‘Better Right’ After recording, the Register of Deeds shall endorse
on the original of the instrument the file number
Sec. 113(b) states that any recording made and the date as well as the hour and minute when
thereunder shall be without prejudice to a third the instrument was received, returning to the
party with a ‘better right’. Thus, a mortgage of registrant the duplicate of the instrument with a
unregistered property which is recorded under Act certification that he has recorded the same. (Sec.
No. 3344 is valid as against everybody except a third 113, P.D. 1529)
person having a better right. (Mota v. Concepcion,
G.R. No. 34581 L-34581, 31 Mar. 1932)
NOTE: Under Sec. 113(d), a tax sale, attachment and

levy, notice of lis pendens, adverse claim and other
instruments in the nature of involuntary dealing
with respect to unregistered lands, if made in the
form sufficient in law, may be recorded.
2023 GOLDEN NOTES
estate or interest therein. (Sec. 95, P.D.

J. ASSURANCE FUND 1529)
NOTE: Any action for compensation against the

Assurance Fund by reason of any loss, damage or
1. NATURE OF ASSURANCE FUND deprivation of land or any interest therein shall be
instituted within a period of six (6) years from the
The Assurance Fund is only liable in the last resort, time the right to bring such action first occurred.
as suggested under Sec. 97 of PD 1529. The person (Sec. 102, P.D. 1529)
causing the fraud or the error should be liable first.
However, if the judgment cannot be executed, the Purpose (2019 BAR)
Assurance Fund is the insurance to the innocent
purchaser for value who relied on the validity of the Act 496 provides for an Assurance Fund to pay for
real property's certificate of title. In showing that the loss or damage sustained by any person who,
the person causing the fraud passed away and did without negligence on his part, is wrongfully
not leave property, it meant that the state cannot deprived of any land or interest therein on account
execute a judgment granting the innocent of the bringing of the same under the Act or
purchaser's claim from such person. It excuses the registration of any other persons as owner of the
claimant from impleading the person causing the land. (Agcaoili, 2015)
fraud or his estate in the Petition because in this
situation, the judgment may only be enforced The Assurance Fund is a long-standing feature of
against the Assurance Fund. (The Register of Deeds our property registration system which is intended
of Negros Occidental and The National Treasure of to relieve innocent persons from the harshness of
the Republic of the Philippines v. Anglo, Sr., G.R. No. the doctrine that a certificate is conclusive evidence
171804, 05 Aug. 2015) of an indefeasible title to land. (Sps. Esperanza v.
Register of Deed, G.R. No. 224678, 03 July 2018)
A person may bring an action in any court of
competent jurisdiction for the recovery of damages Q: Who must file?
to be paid out of the Assurance Fund if:
A: It is a condition sine qua non that he be the
Requisites for recovery: registered owner, and, as to holders of a TCT, that
they be innocent purchasers in good faith and for
1. Said person sustains loss or damage, or is value. Moreover, there must be a showing that there
deprived of any estate or interest in land; is no negligence on the part of the party sustaining
the loss or damage or deprivation of any land or
2. On account of the bringing of land under interest therein. (La Urbana v. Bernardo, G.R. No.
the operation of the Torrens system arising 41915, 08 Jan. 1936)
after original registration;
Q: When may the action be properly brought
3. Through fraud, error, omission, mistake, filed?
misdescription in any certificate of title or
in any entry or memorandum in the A: An action against the Assurance Fund on the
registration book; ground of “fraudulent registration under the
Torrens system after the land’s original
4. Without negligence on his part; and registration” may be brought only after the
claimant’s property is registered in the name of an
5. Is barred or precluded from bringing an innocent purchaser for value. This is because it is
action for the recovery of such land or only after the registration of the innocent purchaser
for value’s title (and not the usurper’s title which
CIVIL LAW
constitutes a breach of trust) can it be said that the 2. CONDITIONS FOR COMPENSATION FROM
claimant effectively “sustains loss or damage, or is ASSURANCE FUND
deprived of land or any estate or interest therein in
consequence of the bringing of the land under the
GR: Any action for compensation against the
operation of the Torrens system.” The registration
Assurance Fund shall be instituted within a period
of the innocent purchaser for value’s title is
of six (6) years from the time the right to bring such
therefore a condition sine qua non in order to
action first occurred.
properly claim against the Assurance Fund. (Sps.
Stilianopoulos v. The Register of Deeds, G.R. No.
XPN: The proper action may be instituted by the
224678, 03 July 2018)
person entitled to bring such or anyone claiming
from, by or under him at any time within two (2)
Q: Against whom is the action filed?
years after his or her disability (being a minor,
insane, imprisoned, or otherwise under legal
1. The Register of Deeds of the province or
disability) has been removed, notwithstanding the
city where the land lies and the National
expiration of the original period of six (6) years first
Treasurer – If the action is brought for the
above provided (Sec. 102, P.D. 1529).
recovery of loss or damage or for
deprivation of land or of any estate or
Amendment or Cancellation of Title
interest therein arising through fraud,
negligence, omission, mistake or
In the event the Assurance Fund is held liable on
misfeasance of the court personnel, the
account of the unlawful or erroneous issuance of a
Register of Deeds or other employees of the
certificate of title, the Register of Deeds, upon
registry in the performance of their duties.
authority of the LRA Administrator, shall file the
necessary action to amend or cancel the title or
2. The action shall be brought against the
perform any other act as may be directed by the
Register of Deeds, the National Treasurer
court. Such action may pre-empt any action against
and such other persons – If the action is
the Assurance Fund. (Agcaoili, 2015)
brought for the recovery of loss or damage
or for deprivation of land or of any estate or
interest therein arising through fraud, 3. PRESCRIPTIVE PERIOD
negligence, omission, mistake or
misfeasance of persons other than the The action must be brought within six (6) years
court personnel, the Register of Deeds or from the time the right to bring the action first
other employees of the Registry. (Sec. 96, occurred. (Sec. 102, P.D. 1529)
P.D. 1529)
NOTE: An action for compensation against the
Q: What are the limitation on the Amount to be Assurance Fund is separate and distinct remedy,
recovered? apart from review of decree of registration or
reconveyance of title, which can be availed of when
A: The plaintiff cannot recover as compensation there is an unjust deprivation of property. This is
more than the fair market value of the land at the evidence from the various provisions of Chapter VII
time he suffered the loss, damage, or deprivation of P.D. 1529 which provide for specific parameters
thereof. (Sec. 97, P.D. 1529) that govern the action. (Sps. Esperanza v. Register of
Deed, G.R. No. 224678, 03 July 2018)
2023 GOLDEN NOTES
Reckoning Period Considering that de Ocampo passed away and

left no property to his heirs before the finality of
Prescription, for purposes of determining the right the Court of Appeals' Decision, the only available
to bring an action against the Assurance Fund, remedy for Anglo, Sr. and Anglo Agricultural
should be reckoned from the moment the innocent Corporation was to recover the value of the lots
purchaser for value registers his or her title and from the Assurance Fund as provided for under
upon actual knowledge thereof of the original title Act No. 496 and P.D. 1529. Are the respondents
holder or claimant. The registration of the innocent Oscar Anglo, Sr. and Anglo Agricultural
purchaser for value’s title is a prerequisite for a Corporation entitled to an award of damages
claim against the Assurance Fund on the ground of from the Assurance Fund under Sec. 95 of P.D.
fraud to proceed, while actual knowledge of 1529?
registration is tantamount to the discovery of the
fraud. More significantly, this interpretation A: NO. We rule that respondent Anglo, Sr. in the sale
preserves and actualizes the intent of the law and transaction on January 6, 1966 acted in good faith.
provides some form of justice to innocent original However, he no longer had an interest over the lots
title holders. (Sps. Stilianopoulos v. The Register of after he had transferred these to respondent Anglo
Deeds, G.R. No. 224678, 3 July 2018) Agricultural Corporation in exchange for shares of
stock. Hence, he no longer has a claim from the
Q: Alfredo V. de Ocampo (de Ocampo) filed an Assurance Fund. On the other hand, respondent
application before the Court of First Instance of Anglo Agricultural Corporation cannot be
Negros Occidental to register two parcels of considered a transferee in good faith, considering it
prime sugar land, Lot No. 2509 of the cadastral was aware of the title's notices of lis pendens.
survey of Escalante and Lot No. 817 of the Hence, it also has no right to claim damages from the
cadastral survey of Sagay. The registration was Assurance Fund.
contested by the Republic of the Philippines'
Bureau of Education (the Republic). According The Torrens system is not infallible. It is possible
to the Republic, the lots de Ocampo sought to that through fraud or error, a person who is not the
register were bequeathed to the Bureau of owner acquires a certificate of title over property.
Education by the late Esteban Jalandoni. Due to The law thus created an Assurance Fund to address
the donation, the Bureau of Education owned this possibility. Under P.D. 1529, for every
the lots as evidenced by TCT No. 6014. certificate of title issued to a registered owner of the
property, building, or other improvements, the
While registration proceedings were pending, registered owner contributes "one-fourth of one
de Ocampo entered into an agreement with percent of the assessed value of the real estate on
Oscar Anglo, Sr. (Anglo, Sr.). Their agreement, the basis of the last assessment for taxation
denominated as a Deed of Conditional Sale, purposes, as contribution to the Assurance Fund." If
included an undertaking that de Ocampo would the property has not yet been assessed for taxation
cede, transfer, and convey Lot No. 2509 and part purposes, the contribution will be based on the
of Lot No. 817 under certain conditions. Anglo, value determined by two disinterested persons.
Sr. and Anglo Agricultural Corporation filed a These collections are pooled together under the
Complaint for Recovery of Damages from the custody of the National Treasurer. This court
Assurance Fund against the Register of Deeds of further explained that "the Assurance Fund is
Negros Occidental and the National Treasurer of intended to relieve innocent persons from the
the Republic of the Philippines before the RTC of harshness of the doctrine that a certificate is
Bacolod City, Negros Occidental. According to conclusive evidence of an indefeasible title to land."
their Complaint, Anglo, Sr. acquired the lots in
good faith and for value without any negligence
on his part.
CIVIL LAW
An individual who relied on the validity of a when it is satisfactorily shown that the title sought
certificate of title should not be prejudiced by fraud to be reconstituted is lost or no longer available.
committed during the original registration, nor
should he or she be prejudiced by the error, Q: May a writ of possession be issued in a
omission, mistake, or misdescription in the petition for reconstitution?
certificate of title caused by court personnel or the
Register of Deeds, his or her deputy, or other A: NO. In a land registration case, a writ of
employees of the Registry. (Register of Deeds of possession may be issued only pursuant to a decree
Negros Occidental v. Anglo, Sr., G.R. No. 171804, 05 of registration in an original land registration
Aug. 2015) proceedings “not only against the person who has
been defeated in a registration case but also against
anyone adversely occupying the land or any portion
K. RECONSTITUTION OF TITLES thereof during the proceedings up to the issuance of
the decree.”
However, it cannot be issued in a petition for

Reconstitution of Certificate of Title (2022 BAR)
reconstitution of an allegedly lost or destroyed
certificate of title. Reconstitution does not confirm
The restoration of the instrument which is
or adjudicate ownership over the property covered
supposed to have been lost or destroyed in its
by the reconstituted title as in original land
original form and condition, under the custody of
registration proceedings where, in the latter, a writ
Register of Deeds.
of possession may be issued to place the applicant-
owner in possession (Serra v. CA, G.R. No. L-34080,
Reconstitution is the restoration of the document or
G.R. No. 34693, 22 Mar. 1991)
title is the restoration of the instrument or title
allegedly lost or destroyed in its original form and
NOTE: Reconstitution of Title should be limited to
condition. Its only purpose is to have the title
the determination of whether there is a valid title
reproduced, after observing the procedure
and the same was lost an destroyed.
prescribed by law, in the same form they were when
the loss or destruction occurred. The process
Q: PBCOM filed a petition for issuance of an
involves diligent circumspect evaluation of the
owner's duplicate copy of its TCT No. 21320 in
authenticity and relevance of all the evidence
view of a lost one. The RTC dismissed the
presented for fear of the chilling consequences of
petition for insufficiency of evidence. Later,
mistakenly issuing a reconstituted title when in fact
PBCOM filed another petition for issuance of an
the original is not truly lost or destroyed. (Dela Paz
owner's duplicate copy, armed with additional
v. Republic, G.R. No. 195726, 20 Nov. 2017)
evidence. The RTC dismissed the second
petition on the ground of res judicata, ruling that
Purpose of Reconstitution of Title
the dismissal for insufficiency of evidence is a
ruling on the merits. Is the RTC correct?
To have the same reproduced, after proper
proceedings, in the same form they were when the
A: NO. A registered owner who fails to prove the
loss or destruction occurred. (Noblejas, 2007)
loss or destruction of his/her owner's duplicate
certificate of title may not be barred from refiling a
A reconstitution of title does not pass upon the
new petition to replace the same. (Philippine Bank of
ownership of land covered by the lost or destroyed
Communications v. The Register of Deeds for the
title but merely determines whether a re-issuance
Province of Benguet, G.R. No. 222958, 11 Mar. 2020)
of such title is proper (Republic v. Fule, G.R. No.
239273, 02 Mar. 2020). Restitution is proper only
2023 GOLDEN NOTES
Requisites for the Issuance of an Order for reconstitution is null and void. (Republic v. Susi, G.R.
Reconstitution (2022 BAR) No. 213209, 16 Jan. 2017)
1. That the certificate of title had been lost or Jurisdictional Requirements in Petitions for
destroyed; Reconstitution of Title
2. That the documents presented by Notice thereof shall be:

petitioner are sufficient and proper to
warrant reconstitution of the lost or 1. Published twice in successive issues of the
destroyed certificate of title; Official Gazette;
3. That the petitioner is the registered owner 2. Posted on the main entrance of the
of the property or had an interest therein; provincial building and of the municipal
building of the municipality or city, where
4. That the certificate of title was in force at the land is situated; and
the time it was lost or destroyed; and
3. Sent by registered mail to every person
5. That the description, area and boundaries named in said notice. (Sec. 9, R.A. No. 26)
of the property are substantially the same
as those contained in the lost or destroyed NOTE: The above requirements are mandatory and
certificate of title. (Republic v. Heirs of Booc, jurisdictional.
G.R. No. 207159, 28 Feb. 2022, as penned by
J. Hernando) Where the owner’s duplicate certificate of title is not
in fact lost or destroyed, a petition for the issuance
NOTE: In reconstitution proceedings, the Supreme of a new owner’s duplicate certificate is
Court has repeatedly ruled that before jurisdiction unwarranted, as in fact the court has no jurisdiction
over the case can be validly acquired, it is a over the petition, and any owner’s duplicate issued
condition sine qua non that the certificate of title has pursuant to said petition is null and void. (New
not been issued to another person. If a certificate of Durawood Co. v. CA, GR No. 111732, 20 Feb. 1996)
title has not been lost but is in fact in the possession
of another person, the reconstituted title is void and Q: Is reconstitution of title an action in rem or an
the court rendering the decision has not acquired action in personam?
jurisdiction over the petition for issuance of new
title. The existence of a prior title ipso facto nullifies A: The reconstitution of title is an action in rem,
the reconstitution proceedings. The proper which means it is one directed not only against
recourse is to assail directly in a proceeding before particular persons, but against the thing itself. The
the regional trial court the validity of the Torrens essence of posting and publication is to give notice
title already issued to the other person. (Aquino, et to the whole world that such petition has been filed
al. v. Aguirre, G.R. No. 232060, 14 Jan. 2019) and that interested parties may intervene or oppose
in the case. This purpose was achieved in this case
Jurisprudence is replete with cases underscoring when notices on the first and second amendments
the indispensability of actual and personal notice of were duly served upon the parties in interest of the
the date of hearing of the reconstitution petition to case and proper posting and publication was made
actual owners and possessors of the land involved to the original petition for reconstitution. (Republic
in order to vest the trial court with jurisdiction v. Abellanosa, G.R. No. 205817, 06 Oct. 2021, as
thereon. If no notice of the date of hearing of a penned by J. Hernando)
reconstitution case is served on a possessor or one
having interest in the property involved, he is
deprived of his day in court and the order of
CIVIL LAW
Kinds of Reconstitution of Title d. Authenticated copy of the decree of

registration or patent, as the case may be,
1. Judicial – Partakes the nature of a land which was the basis of the certificate of title;
registration proceeding in rem. The
registered owners, assigns, or any person e. Deed or mortgage, lease or encumbrance
having an interest in the property may file a containing description of property covered
petition for that purpose with RTC where by the certificate of title and on file with the
property is located. RD is not the proper Registry of Deeds, or an authenticated copy
party to file the petition. thereof; or
2. Administrative – May be availed of only in f. Any other document which, in the judgment
case of: of the court, is sufficient and proper basis for
a. Substantial loss or destruction of the reconstitution. (Sec. 2, R.A. No. 26)
original land titles due to fire, flood, or
other force majeure as determined by For TCT (in the following order):
the Administrator of the Land
Registration Authority. a. Owner’s duplicate of the certificate of title;
b. Co-owner’s, mortgagee’s or lessee’s duplicate
b. The number of certificates of title lost of said certificate;
or damaged should be at least 10% of c. Certified copy of such certificate, previously
the total number in the possession of issued by the Register of Deeds;
the Office of the Register of Deeds.
d. Deed of transfer or other document, on file in
b. In no case shall the number of the registry of deeds, or an authenticated
certificates of title lost or damaged be copy thereof, showing that its original had
less than 500. been registered, and pursuant to which the
lost or destroyed transfer of certificate was
c. Petitioner must have the duplicate issued;
copy of the certificate of title.
e. A document, on file with the Register of
NOTE: The law provides for retroactive application deeds, by which the property, the description
thereof to cases fifteen (15) years immediately of which is given in said document, is
preceding 1989. (Agcaoili, 2006) mortgaged, leased or encumbered, or an
authenticated copy of said document
Judicial Reconstitution showing that its original had been registered;
and
Section Sec. 2 of R.A. No. 26 governs reconstitution
of OCTs while Sec. 3 thereof governs petitions for f. Any other document which, in the judgment
reconstitution of TCTs. of the court, is sufficient and proper basis for
reconstitution. (Sec. 3, R.A. No. 26)
For OCT (in the following order):
Administrative Reconstitution
a. Owner’s duplicate of the certificate of title;
b. Co-owner’s, mortgagee’s or lessee’s duplicate 1. Owner’s duplicate of the certificate of title
of said certificate; (ODCT); and
c. Certified copy of such certificate, previously
issued by the Register of Deeds; 2. Co-owner’s, mortgagee’s or lessee’s DCT (Sec.
12, in relation to Secs. 2 & 3, R.A. No. 26)
2023 GOLDEN NOTES
Q: Catarroja et al. filed a petition for NOTE: Petition for reconstitution can be barred by
reconstitution of title covering two lots in Cavite laches.
which they inherited from their parents.
Allegedly, the LRA issued a certification Persons entitled to a DCT
confirming that the land registration court
issued a Decree covering the lots. A copy of the 1. Registered owner; and
decree however was no longer available in the 2. Each co-owner.
record. It was also claimed that the owner’s
duplicate copy of the title had been lost while Requirements for Replacement of Lost DCT
with their parents. If you were the judge, will
you grant the petition for reconstitution of title? 1. Due notice under oath shall be sent by the
owner or by someone in his behalf to the
A: In Republic v. IAC, applied the principle Register of Deeds of the province or city
of ejusdem generis in interpreting Sec. 2(f) of R.A. where the land lies as soon as the loss or
No. 26. “Any other document” refers to reliable theft is discovered; (Sec. 109, P.D. 1529);
documents of the kind described in the preceding
enumerations. This Court is not convinced that the 2. Petition for replacement should be filed
following documents (Microfilm printouts of Official with the RTC of the province or city where
Gazette., a certification by the LRA and from the the land lies; (Sec. 109, P.D. 1529)
Register of Deeds, a Report of the LRA and an
Affidavit of Loss) of the Catarrojas fall in the same 3. Notice to Solicitor General by petitioner is
class as those enumerated in paragraphs (a) to not imposed by law but it is the Register of
(e). None of them proves that a certificate of title Deeds who should request for
had in fact been issued in the name of their representation by the Solicitor General;
parents. Accordingly, the documents must come and
from official sources which recognize the ownership
of the owner and his predecessors-in- 4. A proceeding where the certificate of title
interest. None of the documents presented in this was not in fact lost or destroyed is null and
case fit such description. (Republic v. Catarroja, et void for lack of jurisdiction and the newly
al., G.R. No. 171774, 12 Feb. 2010) issued duplicate is null and void.
Q: Where the reconstituted title is a nullity,

when may the order for reconstitution be
attacked?
A: At any time. A reconstitution of Torrens title,

whether judicial or administrative, cannot proceed
once it is shown that another Torrens title has
already been issued to another person over the
same property. The reconstituting body or court has
no jurisdiction to issue another Torrens title over
the same property to the petitioner. The existence
of a prior title ipso facto nullifies the reconstitution
proceedings. The proper recourse is to assail
directly in a proceeding before the regional trial
court the validity of the Torrens title already issued
to the other person. (Justice Carpio’s separate
concurring opinion, Manotok v. Barque, GR. No.
162335, 18 Dec. 2008)
CIVIL LAW
those which have accrued thereto since the opening

V. WILLS AND SUCCESSION of the succession. (Art. 781, NCC)
NOTE: The rights to a person’s succession are

transmitted from the moment of his death. In
addition, the inheritance of a person consists of the
A. GENERAL PROVISIONS property, and transmissible rights and obligations
existing at the time of his death (by virtue of
succession), as well as those which have accrued
Succession thereto (by virtue of ownership, by right of
accession) since the opening of the succession.
It is a mode of acquisition by virtue of which the (Balus v. Balus, G.R. No. 168970, 10 Jan. 2010)
property, rights, and obligations, to the extent of the
value of the inheritance of a person, are transmitted Rules in Determining Which Rights are
through his death to another or others either by his Intransmissible and Transmissible
will or by operation of law. (Art. 774, NCC; Heirs of
Ciriaco Bayog-Ang v. Quinones, G.R. No. 205680, 21 In determining which rights are intransmissible
Nov. 2018) (extinguished by a person's death) or transmissible
(not extinguished by his death), the following
Requisites of Succession (D-A-T-E) general rules have been laid down:
1. Death of decedent; 1. That rights which are purely personal, not

2. Acceptance of the inheritance by the successor; in the inaccurate equivalent of this term in
3. Transmissible estate; and contractual obligations, but in its proper
4. Existence and capacity of successor, designated sense, are, by their nature and purpose,
by decedent or law. intransmissible, for they are extinguished
by death;
NOTE: The heir cannot be liable beyond the
inheritance received. Value to the extent of his e.g., those relating to civil personality, to
inheritance means that the heirs will only pay to the family rights, and to the discharge of public
extent of the value of his inheritance of the debts of office.
the decedent, and nothing more than that.
2. That rights which are patrimonial or
Decedent relating to property are, as a general rule,
not extinguished by death and properly
A person whose property is transmitted through constitute part of the inheritance;
succession whether or not he left a will. If the
decedent left a will, he is also called a testator. (Art. XPN: except those expressly provided by
775, NCC) law or by the will of the testator, such as
usufruct and those known as personal
Inheritance servitudes; and
It includes all the property, rights and obligations of 3. That rights of obligation are by nature
a person which are not extinguished by his death. transmissible and may constitute part of
(Art. 776, NCC) the inheritance, both with respect to the
rights of the creditor and as regards the
The inheritance of a person includes not only the obligations of the debtor.
property and the transmissible rights and
obligations existing at the time of his death, but also
2023 GOLDEN NOTES
V. WILLS AND SUCCESSION
XPNS: Rules on Properties Acquired After the

a. those which are personal, in the Execution of a Will
sense that the personal
qualifications and circumstances GR: Property acquired during the period between
of the debtor have been taken into the execution of the will and the death of the
account in the creation of the testator will not pass under the provisions of the
obligation; will but by the rules on legal succession. Otherwise
stated, the property will NOT form part of the estate
b. those that are intransmissible by of the testator that will pass on to his instituted
express agreement or by will of the heirs. (Art. 781, NCC)
testator; and
XPNs:
c. those that are intransmissible by 1. When a contrary intention expressly appears in
express provision of law, such as the will (Art. 793, NCC), in which case, the
life pensions given under contract. property will be included in that portion of the
(Heirs of Villaza v. Aliangan, G.R. estate that will pass to the instituted heirs by
Nos. 244667-69, 02 Dec. 2020) way of testamentary succession; and
Purely personal rights (intuitu personae) are 2. If the property acquired after the execution of
extinguished by death. Hence, they are not the will is one which the testator has disposed
transmitted to the heirs. Only patrimonial rights of under his will as a legacy or device, i.e., the
may be transmitted to the heirs. property did not belong to the testator at the
time he disposed of it as a device or as a legacy
The heirs succeed not only to the rights of the and he only acquired the same after making his
deceased but also to his obligations subject to the will. (Art. 930, NCC) In this case, the legacy or
following rules: device will be given effect even if the will is
silent with regard to such an intention on the
GR: Rights and obligations arising from contracts part of the testator.
are binding upon the heirs.
Liability of Heirs for Decedent’s Obligations
XPNs: When the rights and obligations arising are
not transmissible by: The heirs cannot be held personally liable with their
own individual properties for the debts or
1. Their nature obligations left by the decedent. The responsibility
2. Stipulation of the heirs for the debts of their decedent cannot
3. Provision of law. (Art. 1311, NCC) exceed the value of the inheritance they receive
from him. (Estate of K.H. Hemady v. Luzon Surety Co.,
INHERITANCE SUCCESSION G.R. No. L-8437, 28 Nov. 1956) It is only after the
debts are paid that the residue of the estate is
It is the objective distributed among the successors.
element of succession, It is the legal mode by
to the mass or totality which inheritance is A Contract of Guaranty is NOT Extinguished by
of the estate of a transmitted. Death
deceased person.
It is not extinguished by death because a contract of
guaranty is not one of the exceptions under Art.
1311 of the NCC (Relativity of Contracts). A
guarantor’s obligation is basically to pay the
creditor if the principal debtor cannot pay. Payment
CIVIL LAW
does not require any personal qualifications. Transmission by succession occurs at the precise
Personal qualifications become relevant only at the moment of death and, therefore, the heir, devisee, or
time the obligation is incurred but not so at the time legatee is legally deemed to have acquired
of discharge or fulfillment of the obligation. (Ibid.) ownership at that moment (even if, particularly in
the heir’s case, he will generally not know how
NOTE: The rationale of Hemady (G.R. No. L-8437, 28 much he will be inheriting and what properties he
Nov. 1956) is reiterated in the case of Santos v. will ultimately be receiving), and not at the time of
Lumbao, (G.R. No. 169129, 28 Mar. 2007; Balane, declaration of heirs, or partition, or distribution.
2016) (Balane, 2016)
The death of a party does not excuse Q: Can the heir enter into a contract of sale,
nonperformance of a contract which involves a conveyance, or any disposition pertaining to his
property right and the rights and obligations interest in the inheritance even pending the
thereunder pass to the personal representatives of settlement of the estate?
the deceased. Similarly, nonperformance is not
excused by the death of the party when the other A: YES, because his hereditary share or interest in
party has a property interest in the subject matter the decedent’s estate is transmitted or vested
of the contract. (Santos v. Lumbao, G.R. No. 169129, immediately from the moment of decedent’s death.
28 Mar. 2007) (Art. 777, NCC) This is, however, subject to the
outcome of the settlement proceedings to
Q: Fortunata died while her action for quieting determine the rights and definite portions of the
of title of parcels of land was pending. Does her estate pertaining to the vendees, assignees, or
death result in the extinguishment of the action creditors.
or may her heirs substitute her in the case?
Future inheritance
A: NO, her death did not extinguish the action. Her
heirs may substitute her because the action is not GR: No contract may be entered into upon future
extinguished by her death. Since the rights to the inheritance. (Art. 1347(2), NCC)
succession are transmitted from the moment of the
death of the decedent, the heirs become the XPNs:
absolute owners of his property, subject to the
rights and obligations of the decedent, and they 1. Partition inter vivos (Art. 1080, NCC)
cannot be deprived of their rights thereto except by 2. Donations propter nuptias by future spouses to
the methods provided for by law. The right of the each other of future property
heirs to the property of the deceased vests in them
upon such death even before judicial declaration of Requisites for the Contract to be Classified as
their being heirs in the testate or intestate One Upon Future Inheritance:
proceedings.
1. The succession has not yet been opened;
When she died, her claim or right to the parcels of 2. The object of the contract forms part of the
land in litigation was not extinguished by her death inheritance; and
but was transmitted to her heirs upon her death. 3. The promissory has an expectancy of a right
Her heirs have, thus, acquired interest in the which is purely hereditary in nature with
properties in litigation and became parties in respect to the object.
interest in the case. (Bonilla v. Barcena, G.R. No. L-
41715, 18 June 1976) An heir cannot enter into a compromise agreement
to renounce his rights over a future inheritance.
(Art. 2035(6), NCC)
2023 GOLDEN NOTES
Every renunciation or compromise as regards a The right to inherit is vested at the moment of death.
future legitime between the person owing it and his Even if an heir did not know how much she was
compulsory heirs is void, and the latter may claim going to inherit, she could still dispose of her share
the same upon the death of the former; but they in the inheritance. Said right to share was hers from
must bring to collation whatever they may have the moment of death, and she could do whatever she
received by virtue of the renunciation or wanted with it, even sell it. (De Borja v. Vda. De
compromise. (Art. 905, NCC) Borja, G.R. No. L-28040 18 Aug. 1972)
A future legitime is merely an expectancy, and the The interest of the heir over the inheritance prior to
heir does not acquire any right over the same until the death of the decedent is merely inchoate or a
the death of the testator. Hence, juridically, there is mere expectancy.
nothing on which to compromise. Furthermore, Art.
1347 of NCC expressly provides that, “no contract It is immaterial whether a short or long period of
may be entered into upon future inheritance except time elapses between the death of the predecessor
in cases expressly authorized by law.” and the entry in the possession of the properties of
the inheritance because the right is always deemed
NOTE: An heir may only sell his ideal or undivided to retroact to the moment of death.
share in the estate, not any specific property
therein. (Lee v. RTC, G.R. NO. 146006, 23 Feb. 2004) The law in force at the time of the decedent’s death
will determine who the heirs should be. (Uson v. Del
Actual Delivery is Not Necessary for an Heir to Rosario, G.R. No. L-4963, 29 Jan. 1953)
Acquire Ownership Over Inherited Property
Presumptive Death
The possession of hereditary property is deemed
transmitted to the heir without interruption and The absentee shall not be presumed dead for the
from the moment of the death of the decedent, in purpose of opening his succession till after an
case, the inheritance is transmitted. absence of 10 years. If he disappeared after the age
of 75 years, an absence of 5 years shall be sufficient
Pending a proceeding determining the rightful in order that his succession may be opened. (Art.
heirs, the prospective heirs can demand delivery of 390, NCC)
their supposed inheritance because ownership
passes to the heir at the very moment of death. The The following shall be presumed dead for all
basis of the heirs’ rights to the fruits is the Right of purposes, including the division of the estate among
Accession. the heirs:
Succession Occurs at the Moment of Death (2000 1. A person on board a vessel lost during a sea
BAR) voyage, or an aeroplane which is missing, who
has not been heard of for four (4) years since
The rights to the succession are transmitted from the loss of the vessel or aeroplane;
the moment of the death of the decedent. (Art. 777,
NCC) 2. A person in the armed forces who has taken
part in war, and has been missing for four (4)
The moment of death is the determining point when years; and
the heirs acquire a definite right to the inheritance,
whether such right is pure or conditional. The 3. A person who has been in danger of death under
possession of hereditary property is therefore other circumstances and his existence has not
deemed transmitted to the heir without been known for four years. (Art. 391, NCC)
interruption and from the moment of death of the
decedent.
CIVIL LAW
NOTE: If there is a doubt, as between two or more 2. Compulsory Heir – called by law to succeed to
persons who are called to succeed each other, as to a portion of the testator’s estate known as
which of them died first, whoever alleges the death legitime. They succeed by force of law to some
of one prior to the other, shall prove the same. In the portion of the inheritance, in an amount
absence of proof, it is presumed that they died at the predetermined by law, of which they cannot be
same time and there shall be no transmission of deprived by the testator, except by a valid
rights from one to the other. (Art. 43, NCC) disinheritance.
Kinds of succession 3. Legal or Intestate Heir – those who succeed by

operation of law through intestate succession.
1. Testamentary Succession - that which results Those who succeed to the estate of the decedent
from the designation of an heir, made in a will who dies without a valid will, or to the portion
executed in the form prescribed by law. (Art. of such estate not disposed of by will.
770, NCC)
Heirs vs.Legatees or Devisees
2. Legal or Intestate Succession - that which
takes place if a person dies without a will, or DEVISEES OR
HEIRS
with a void will, or one which has subsequently LEGATEES
lost its validity. As to representation of decedent’s
juridical person
Intestate succession can take place even if there
is a will, such as when the will does not dispose Represent the juridical
Never represent the
of all the disposable property of the decedent. personality of the
personality of the
In such case, the will defaulted pertains to the deceased and acquire
deceased no matter
remaining property not covered by it. their rights, with
how big the legacy or
certain exceptions to
the devise is.
3. Mixed Succession - that effected partly by will his obligations.
and partly by operation of law. (Art. 780, NCC)
Determination of amount of inheritance
4. Compulsory Succession – succession to the
Inherit an
legitimes (this prevails over all other kinds).
undetermined
(Balane, 2016)
quantity whose exact
Are always given a
amount cannot be
Kinds of Heirs determinate thing or a
known, and which
fixed amount
cannot be fixed until
1. Voluntary or Testamentary Heirs – called to
the inheritance is
succeed by virtue of the will of the testator:
liquidated.
a. Devisee - persons to whom gifts of real Extent of successional right
property are given by virtue of a will
Succeed to the
b. Legatee - persons to whom gifts of remainder of the Only succeed to the
personal property are given by virtue of a properties after all the determinate thing or
will debts and all the quantity which is
legacies and devices mentioned in the
NOTE: An heir is one who succeeds to the whole have been paid or legacy or devise
(universal) or aliquot part of the estate. Devisee given
or legatee is one who succeeds to definite,
specific, and individualized properties.
2023 GOLDEN NOTES
As to when they exist

Can exist whether the B. TESTAMENTARY SUCCESSION
Only in testamentary
succession be testate
succession
or intestate
1. GENERAL PROVISIONS
Q: Suppose a person is named to succeed to an
entire estate. The estate, however, consists of
Will
only one parcel of land. Is he an heir or a
devisee?
It is an act whereby a person is permitted, with the
formalities prescribed by law, to control to a certain
A: It depends on the manner of his designation in
degree the disposition of his estate, to take effect
the will. Here, because he is called to inherit the
after his death. (Art. 783, NCC)
entire estate, he is an heir.
A will has been defined as “a personal, solemn,

Instances where the distinctions between heirs
revocable and free act by which a capacitated
and devisees or legatees become significant
person disposes of his property and rights and
declares or complies with duties to take effect after
1. Preterition (Art. 852, NCC)
his death.” (Vitug v. CA, G.R. No. 82027, 29 Mar. 1990)
The effect is:
a. to annul entirely the institution of heirs, 2. CHARACTERISTICS OF A WILL
but
b. the legacies and devises shall be valid The following are the characteristics of a will:
insofar as they are not inofficious. (DIPSUM-MRS-F)
2. Imperfect or defective disinheritance (Art. 1. Purely Personal act – the disposition of the
918, NCC) property is solely dependent upon the testator;
The effect is: 2. Free from vices of consent – it must be

a. to annul the institution of heirs insofar executed freely, knowingly and voluntarily; the
as it may prejudice the person testator’s consent should not be vitiated by the
disinherited, causes mentioned in Art. 839(2-6); (insanity,
violence, intimidation, fraud, mistake) (Art. 839,
b. the devises and legacies and other NCC)
testamentary dispositions shall be valid
to such extent as will not impair the 3. Solemn and formal – the testator must comply
legitime. with the provisions of the law establishing the
formalities of a will (Art. 783, NCC)
NOTE: The requirements as to the form of the

will depends on whether it is attested or
holographic.
Attested wills – Art. 805-808, 820, and 821,

NCC;
Holographic wills – Art. 810-814, NCC; and
CIVIL LAW
Both wills – Art. 804, NCC A: The document, although it may initially come
across as mere disinheritance instrument, conforms
4. Revocable or ambulatory – this is because a to the formalities of holographic will. The
will only takes effect upon the testator’s death disinheritance results in the disposition of the
and no rights vest yet as long as the testator is property of the testator in favor of those who would
alive, even if the will has already been probated succeed in the absence of the disinherited heir.
ante-mortem (Art. 828, NCC) (Seangio v. Reyes, G.R. Nos. 140371–72, 27 Nov. 2006)
5. Mortis Causa – expressed in Art. 783, and is 3. NON-DELEGABILITY OF A TESTAMENTARY

also a necessary consequence of Art. 774 and POWER
777
The making of a will is a strictly personal act. It

6. Statutory right – will-making is purely a
cannot be:
statutory right and not a natural right (Art. 783,
NCC)
1. Left in whole or in part to the discretion of a
third person or
7. Unilateral act – acceptance is not needed in
2. Accomplished through the instrumentality of
making a will; acceptance comes later, after the
an agent or attorney. (Art. 784, NCC)
decedent’s death (Art. 783, NCC)
The exercise of the disposing power is the act that

8. Individual – joint wills are prohibited in
cannot be delegated but the mere mechanical act of
Philippine jurisdiction (Art. 818, NCC)
drafting the will may be done by a third person as it
does not constitute a delegation of the will or
NOTE: Mutual wills – Separate wills although
disposition.
containing reciprocal provisions are not
prohibited, subject to the rule on disposicion
Doctrine of Prohibited Designation
captatoria.
GR: The following cannot be left to the discretion of

9. Dispositive of property – disposition of the
a third person:
testator’s estate mortis causa is the purpose of
will-making (Art. 783, NCC)
1. Duration or efficacy of designation of heirs,
legatees, or devisees.
NOTE: Disposition of property is not an
essential requirement of a valid will. If a will
2. Determination of the portions which the heirs,
does not dispose of a property, it is a hollow
legatees or devisees are to receive when
will; it is s still valid but only as to form, and not
referred to by name.
substance. (Balane, 2016)
3. Determination as to whether or not a

Q: The document, a holographic one, contained
disposition is to be operative. (Arts. 785 & 787,
only a clause of disinheritance of one of the
NCC)
testator’s son. Does the document meet the
definition of the will under Art. 783 of NCC
NOTE: It is not only the delegation which is void; the
although it does not contain any disposition of
testamentary disposition whose effectivity will
the estate of the deceased?
depend upon the determination of the third person
is the one that cannot be made. Hence, the
disposition itself is void.
2023 GOLDEN NOTES
XPNs: The following may be entrusted to a third The words of a will are to receive an interpretation
person: which will give to every expression some effect,
rather than one which will render any of the
1. Distribution of specific property or sums of expressions inoperative, and of two modes of
money that the testator may leave in general to interpreting a will, that is to be preferred which will
specified classes or causes; and prevent intestacy. (Art. 791, NCC)
2. Designation of the persons, institutions, or Reason: Testacy is preferred over intestacy because
establishments to which such property or sums testacy is the express will of the decedent whereas
are to be given or applied. (Art. 786, NCC) intestacy is only his implied will.
Reason: This constitutes an exception to the rule of The invalidity of one of several dispositions
non-delegability of will-making. Without this contained in a will does not result in the invalidity
provision, the things allowed to be delegated here of the other dispositions unless it is to be presumed
would be non-delegable. (Balane, 2016) that the testator would not have made such other
dispositions if the first invalid disposition had not
NOTE: The testator must determine first the class or been made. (Art. 792, NCC)
cause to be benefited, and the specific property or
amount of money to be given before the delegation Every devise or legacy shall cover all the interest
to a third person is allowed. which the testator could devise or bequeath in the
property disposed of, unless it clearly appears from
What is delegable is only the manner of distribution the will that he intended to convey a less interest.
of property and the designation of who are to (Art. 794, NCC)
receive it within the class or cause.
Parol Evidence Rule in the Interpretation of
If a third person whom the powers under Art. 786 Wills
were delegated to refuses to do his duty, the court
can compel him to do so, and if ever the third person 1. When there is an imperfect description, or
dies, the court must appoint a substitute. when no person or property exactly answers
the description, mistakes and omissions must
Construction of a Will’s Provision be corrected; and
If a testamentary disposition admits of different 2. If the error appears from the context of the will
interpretations, in case of doubt, that interpretation or from extrinsic evidence, excluding the oral
by which the disposition is to be operative shall be declarations of the testator as to his intention;
preferred. (Art. 788, NCC) and when an uncertainty arises upon the face of
the will, as to the application of any of its
In construing the provisions of a will, substance provisions, the testator's intention is to be
rather than form must be regarded, and the ascertained from the words of the will, taking
instrument should receive the most favorable into consideration the circumstances under
construction to accomplish the purpose intended by which it was made, excluding such oral
the testator. declarations. (Art. 789, NCC)
NOTE: The principles in construction and Even if majority of the beneficiaries are religious
interpretation of wills are based on the principle orders or institutions, they can still be known by the
that the intent of the testator is supreme. (Balane, location indicated by Dr. Pascual in her will (i.e.,
2016) Carmelite Nuns of Gilmore and Subic; Dominican
Nuns of Cainta, Rizal, etc.). The personal
relationship of Dr. Pascual with the said
CIVIL LAW
beneficiaries may also be taken into account in the 4. APPLICABLE LAW AS TO FORM AND
event that the religious orders or institutions SUBSTANCE OF A WILL
cannot be immediately discovered (Ramos v.
Babista, G.R. No. 227965 (Notice), 11 Jan. 2023).
Applicable Law as to Form and Substance of a
Will
Kinds of Ambiguities in a Will
AS TO TIME AS TO PLACE
1. Latent (Intrinsic) – Ambiguities which are not
Extrinsic Validity
apparent on the face of a will but to
The will can be
circumstances outside the will at the time the
executed in accordance
will was made.
with the formalities of
For Filipinos and
the testator’s
e.g., If it contains an imperfect description of Foreigners:
nationality, domicile,
person or property. No person or property
residence, the place
exactly answers the description. The law in force at the
where the will was
time of the making of
executed depending on
e.g., Testator gives a legacy “to my cousin Anna” the will. (Art. 795, NCC)
the place where it is
and it will turn out that the testator has three
executed and the
cousins named “Anna.” For Foreigners:
nationality of the
testator the testator’s
2. Patent (Extrinsic) – when an uncertainty arises The assumption is that
citizenship, domicile,
upon the face of the will as to the application of the will is being
residence, the place
any of its provisions. (Art. 789, NCC) probated in the
where the will was
Philippines.
executed, or Philippine
E.g., Testator gives a devise “to some of the
Laws (Arts. 815-817,
eleven children of my only brother"
NCC)
Intrinsic Validity
Steps in Resolving Ambiguities
The national law of the
1. Examine the will itself; The law in force at the testator governs the
time of the decedent’s intrinsic validity of the
2. Refer to extrinsic evidence or the surrounding death. (Arts. 777 & will regardless of the
circumstances; 2263, NCC) place of execution.
(Arts. 16 & 1039, NCC)
XPN: except oral declarations of the testator as
to his intention); and Extrinsic vs. Intrinsic Validity
3. In the case of patent ambiguities, the extrinsic EXTRINSIC VALIDITY INTRINSIC VALIDITY
evidence acceptable is limited to those
pertaining to the circumstances under which It refers the forms and It refers to the legality
the will was executed. solemnities required of provisions in the
by law. will.
2023 GOLDEN NOTES
Applicability of Laws The Object of the Solemnities Surrounding the

Execution of a Will:
PLACE OF APPLICABLE LAW
EXECUTION (as to form) 1. To close the door against bad faith and fraud;
Testator is a Filipino 2. To avoid substitution of wills and testaments;
Philippines NCC and
1. Law of the place of 3. To guarantee their truth and authenticity.
Foreign country execution;
2. NCC. 5. TESTAMENTARY CAPACITY
Testator is an Alien
1. NCC; or Testamentary Capacity (2008 BAR)
Philippines
2. National law
1. National law; It refers to the ability as well as the power to make
2. Law of the place of a will and is considered an extrinsic or formal
Foreign country
residence; requirement for the validity of a will. (Art. 839, NCC)
3. NCC.
Requisites of Testamentary Capacity
Governing Law as to Substantive Validity
The following are the requisites of testamentary
Laws relating to family rights and duties, or to the capacity: (NotPro-18-SM)
status, condition, and legal capacity of persons are
binding upon citizens of the Philippines even 1. All persons Not expressly Prohibited by law
though living abroad. (Art. 15, NCC) (Art. 796, NCC)
Matters Pertaining to Intestate and 2. At least 18 years of age; (Art. 797, NCC) and
Testamentary Successions Which are Regulated
by the National Law of the Deceased: (C-I-A-O) NOTE: The provisions says, “under 18 years of
age cannot make a will.” This does not
1. Capacity to succeed; necessarily mean he is a minor because prior to
2. Intrinsic validity of testamentary provisions; 1989, the age of majority was 21. Thus, before
3. Amount of successional rights; and such date, some minors (18-21) can execute a
4. Order of succession. (Arts. 16 & 1039, NCC) will.
Formal Requirements Common to Both Notarial 3. Of Sound Mind. (Art. 798, NCC)
and Holographic Wills (2008 BAR)
NOTE: The ability as well as the power to make a
1. Law governing extrinsic validity of wills; will must be present at the time of the execution of
2. In writing; and the will.
NOTE: Noncupative wills are oral wills declared It is not necessary that the testator be in full
or dictated by the testator and dependent possession of all his reasoning faculties or that his
merely on oral testimony. Philippine laws do mind be wholly unbroken, unimpaired, or
not recognize the validity of “noncupative unshattered by disease, injury, or other cause.
wills.”
3. In a language or dialect known to the testator.
CIVIL LAW
To be of sound mind, it shall be sufficient if the The burden of proving that the testator acted in
testator was able at the time of making the will to lucid interval lies on the person who maintains the
know the: validity of the will. (Art. 800(2), NCC)
a. nature of the estate to be disposed of; Being forgetful does not necessarily make a person
b. proper objects of his bounty; and mentally unsound to render him unfit to execute a
c. character of the testamentary act. (Art. 799, will. Forgetfulness is not equivalent to being of
NCC) unsound mind. (Baltazar v. Laxa, G.R. No. 174489, 07
Apr. 2012)
The requirement that the testator be of sound mind
is essential only at the time of the making of the will Married Woman
(or execution). If he is not of sound mind at that
time, the will is invalid regardless of the state of A married woman may make a will without the
mind before or after such execution. consent of her husband and without the authority of
the court. (Art. 802, NCC)
NOTE: If the testator was of sound mind at the time
of the making of the will, the will is valid even if the A married woman may dispose by will all her
testator should later on become insane and die in separate property as well as her share of the CPG or
that condition. Supervening incapacity does not ACP. (Art. 803, NCC)
invalidate an effective will, nor is the will of an
incapable validated by the supervening capacity. NOTE: Art. 803 has been superseded by Art. 87, FC.
(Art. 801, NCC) It provides that either spouse may dispose by will,
of his or her interest in the community property
GR: The law presumes that every person is of sound since the ACP or CPG is dissolved upon the death of
mind, in the absence of proof to the contrary. (Art. either spouse. (Balane 2016; Arts. 99 & 126, FC)
800(1), NCC)
6. FORM OF NOTARIAL AND HOLOGRAPHIC
XPNs: If the testator was: (Pub-G) WILLS
1. Publicly known to be insane, one (1) month

1. Ordinary or Notarial will - requires an
or less, before making his will; (Art. 800(2),
attestation clause, an acknowledgement before
NCC)
a notary public;
2. Under Guardianship at the time of the

2. Holographic will - must be entirely written,
making of the will. (Torres v. Lopez, G.R. No.
dated and signed in the handwriting of the
L-25966, 01 Nov. 1926)
testator.
NOTE: Mere weakness of mind or partial imbecility

Time criterion
from disease of body or from age does not
necessarily render a person incapable of making a
law at the time of execution; subsequent laws
will.
cannot apply retroactively.
A person suffering from civil interdiction is qualified

to make a will. He is deprived of the power to
dispose of his properties through acts inter vivos but
not through acts mortis causa. (Art. 34, RPC)
2023 GOLDEN NOTES
Place criterion: Formalities in the Execution of a Notarial Will

(NWALa-PANS)
Under Arts. 815-817 of the NCC, the following are
available to the testator; the law of: 1. In Writing;
1. The testator's citizenship; 2. Executed in a Language or dialect known to the

2. Testator's domicile; testator;
3. Place of execution;
4. Testator's residence; and This rule is mandatory. Otherwise, the will is
5. Philippines. (Balane, 2016) void. (Suroza v. Honrado, A.M. No. 2026-CFI, 19
Dec. 1981) It is also applicable even if the
When a Will of an Alien Abroad Produces Effect provisions of the will are interpreted or
in the Philippines(1990, 1998, 2009 BAR) explained to the testator.
The will of an alien who is abroad produces effect in The fact that the will was executed in a
the Philippines if made: language known to the testator need not be
stated in the attestation clause. This fact can be
1. With the formalities prescribed by the law of established by extrinsic evidence or evidence
the place in which he resides; aliunde. (Lopez v. Liboro, G.R. No. L-1787, 27
2. According to the formalities observed in his Aug. 1948)
country: or
3. In conformity with those which the NCC This rule does NOT apply to witnesses in a
prescribes. (Art. 816, NCC) notarial or attested will because the witnesses
do not need to know the contents of the will.
A will made in the Philippines by a citizen or subject The attestation clause, on the other hand, must
of another country, which is executed in accordance be understood by the witnesses even if it is in a
with the law of the country of which he is a citizen language not known to them. (Art. 805, NCC
or subject, and which might be proved and allowed states that the attestation clause need not be in
by the law of his own country, shall have the same a language known to the witnesses)
effect as if executed according to the laws of the
Philippines. (Art. 817, NCC) (2002 BAR) Presumption that the testator knew the
language in which the will was written is
Validity of a Joint Will Executed by Filipinos in a present when:
Foreign Country
a. the will must be in a language or dialect
A joint will executed by Filipinos in a foreign generally spoken in the place of execution;
country shall not be valid in the Philippines, even b. the testator must be a native or resident of
though authorized by the laws of the country where said locality. (Abangan v. Abangan, G.R. No.
they may have been executed. (Art. 819, NCC) A joint 13431, 12 Nov. 1919)
will is against the public policy of the Philippines
particularly the policy that the execution of a will is 3. Subscribed at the end thereof by the testator
a strictly personal act. himself or by the testator’s name written by
some other person in his presence, and by his
express direction;
The signature of the testator of the will must be

at the end of the will, which may be at the logical
end (last testamentary disposition) or physical
end (non-dispositive provisions).
CIVIL LAW
NOTE: In notarial wills, subscription by If the entire document consists only of two
fingerprint is allowed as long as it is voluntarily sheets, the first containing the will and the
made (Matias v. Salud, G.R. No. L-10751, 23 June second, the attestation clause, there need not be
1958), but not in holographic wills given the any marginal signatures at all. (Abangan v.
explicit requirement for a holographic will to be Abangan, G.R. No. 13431, 12 Nov. 1919)
entirely written, dated, and signed with the
hand of the testator. A will was declared void which contained the
necessary signatures on the margin of each leaf
Cross as signature (folio), but not in the margin of each page
containing written matter. (In the Matter of the
GR: A cross is not a sufficient signature Estate of Saguinsin, G.R. No. L-15025, 15 Mar.
XPNs: The cross appearing on the will is: 1920)
a. the customary, habitual signature of the The signatures on the left-hand corner of every
testator; or page signify, among others, that the witnesses
b. one of the ways the testator signs his are aware that the page they are signing forms
signature. part of the will. On the other hand, the
signatures to the attestation clause establish
The one who alleges that it is the customary, that the witnesses are referring to the
habitual or one of the ways he sign his signature statements contained in the attestation clause
has the burden of proof. (Garcia v. Lacuesta, G.R. itself. (Azuela v. CA, G.R. No. 122880, 12 Apr.
No. L-4067, 19 Nov. 1951) 2006)
Signing by an Agent of the Testator 5. Attested and subscribed by three (3) or more
credible witnesses in the presence of the
a. must sign in testator’s presence; and testator and of one another;
b. by the testator’s express direction.
Requirements:
The important thing is that it should clearly
appear that the name of the testator was signed a. Attesting – an act of witnessing; and
at his express direction, in the presence of three b. Subscribing – an act of signing their names
witnesses, and in the presence of the testator in the proper places of the will.
and of each other. (Barut v. Cabacungan, G.R. No.
6285, 15 Feb. 1912) Test for the Determination of the Presence
of Witnesses
4. The testator or the person requested by him to
write his name must also sign every Page, In order that the witnesses be deemed present
except the last, on the left margin in the at the time of the execution of the will, it suffices
presence of the witnesses; that the witnesses were so situated in a manner
that they had the opportunity to see the testator
Purpose: to prevent the disappearance of the sign the will. It is not necessary that they
pages. actually saw the testator affix their signature on
the will.
a. Mandatory – the signing on every page in
the witnesses’ presence The true test of presence of the testator and the
b. Directory – the place of the signing (on the witnesses in the execution of a will is not
left margin). The signature can be affixed whether they actually saw each other sign, but
anywhere on the page. (Balane, 2016) whether they might have seen each other sign
had they chosen to do so considering their
2023 GOLDEN NOTES
mental and physical condition and position acknowledgment portion of the will supplied
with relation to each other at the moment of the omission by stating that the will has five (5)
inscription of each signature. pages, to wit: “Ang HULING HABILING ito ay
binubuo ng lima (5) na dahon, kasama ang
The question whether the testator and the dahong kinaroroonan ng Pagpapatunay at
subscribing witnesses to an alleged will sign the Pagpapatotoong ito.” Undoubtedly, such
instrument in the presence of each other does substantially complied with Art. 809 of the NCC.
not depend upon proof of the fact that their eyes Mere reading and observation of the will,
were actually cast upon the paper at the without resorting to other extrinsic evidence,
moment of its subscription by each of them, but yields the conclusion that there are actually five
whether at that moment existing conditions (5) pages even if the said information was not
and the position of the parties, with relation to provided in the attestation clause. In any case,
each other, were such that by merely casting the CA declared that there was substantial
their eyes in the proper direction they could compliance with the directives of Art. 805 of the
have seen each other sign. (Nera v. Rimando, NCC.
G.R. No. L-5971, 27 Feb. 1911)
Q: Clara, thinking of her mortality, drafted a
Actual seeing is not required, but the ability to will and asked Roberta, Hannah, Luisa, and
see each other by merely casting their eyes in Benjamin to be witnesses. During the day of
the proper direction and without any physical the signing of the will, Clara fell down the
obstruction to prevent his doing so. (Jaboneta v. stairs and broke both her arms. Coming
Gustilo, G.R. No. 1641, 19 Jan. 1906) from the hospital, Clara, insisted on signing
her will by thumbmark. Later Clara was run
An attestation must state all the details Art. over by a drunk driver while crossing the
805(3) of NCC requires. In the absence of the street in Greenbelt. May the will of Clara be
required avowal by the witnesses themselves, admitted to probate? Give your reason
no attestation clause can be deemed embodied briefly. (2007 BAR)
in the Acknowledgement of the Deed of
Donation Mortis Causa. (Echavez v. Dozen Cons, A: YES. Clara’s thumbmark in this case has all
G.R. No. 192916, 11 Oct. 2010) the hallmarks of a valid signature. Clara clearly
intended to use her thumbmark as her
The law is clear that the attestation must state signature and the circumstances justified her
the number of pages used upon which the will use of her thumbmark. (Garcia v. La Cuesta, G.R.
is written. The purpose of the law is to No. L-4067, 29 Nov. 1951)
safeguard against possible interpolation or
omission of one or some of its pages and 6. Must contain an Attestation clause which
prevent any increase or decrease in the pages. expressly states the following:
(Lopez v. Lopez, G.R. No. 189984, 12 Nov. 2012)
a. The number of pages used upon which the
However, in the case of Tanchanco v. Santos will is written;
(G.R. No. 204793, 08 June 2020, as penned by J.
Hernando), the Supreme Court ruled that even b. The fact that the testator signed the will
if the attestation clause failed to mention the and every page thereof, or caused some
number of pages, but the same is found in the other person to write his name, under his
acknowledgment portion of the will, by there is express direction, in the presence of the
substantial compliance with Art. 805 of the instrumental witnesses; and
NCC. In the case, at bar, the attestation clause
indisputably omitted to mention the number of c. The fact that the witnesses witnessed and
pages comprising the will. Nevertheless, the signed the will and all the pages thereof in
CIVIL LAW
the presence of the testator and of one (e.g., “Page One of Seven”) or in figures (e.g.,
another. (Art. 805(3), NCC) “Page 1 of 7”)
The signature of the witnesses must be at the 8. Must be acknowledged before a Notary public
bottom of the attestation clause. An unsigned by the testator and the witnesses. (Art. 806,
attestation clause cannot be considered as an NCC) (2008 BAR)
act of the witnesses, since the omission of their
signatures at the bottom thereof negatives their The certification of acknowledgment need not
participation. (Cagro v. Cagro, G.R. No. L-5826, be signed by the notary public in the presence
29 Apr. 1953) of the testator and the witnesses. (Javellana v.
Ledesma, G.R. No. L-7179, 30 June 1955)
Inasmuch as the signatures of the three A jurat is insufficient as the law requires an
witnesses to the will do not appear at the acknowledgment executed by the party before
bottom of the attestation clause, although the a notary public, not a declaration of the notary
page containing the same is signed by the public.
witnesses on the left hand margin, the will is
fatally defective. The attestation clause is "a The notary public before whom the will was
memorandum of the facts attending the acknowledged cannot be considered as the
execution of the will" required by law to be third instrumental witness since he cannot
made by the attesting witnesses, and it must acknowledge before himself having signed the
necessarily bear their signatures. will. He cannot split his personality into two so
that one will appear before the other to
The petitioner and appellee contend that acknowledge his participation in the making of
signatures of the three witnesses on the left the will. To permit such a situation to obtain
hand margin conform substantially to the law would be sanctioning a sheer absurdity. (Cruz v.
and may be deemed as their signatures to the Villasor, G.R. No. L-32213, 26 Nov. 1973)
attestation clause. This is untenable, because
said signatures are in compliance with the legal Acknowledgement
mandate that the will be signed on the left hand
margin of all its pages. If an attestation clause An acknowledgment is the act of one who has
not signed by the three witnesses at the bottom executed a deed in going before some
thereof, be admitted as sufficient, it would be competent officer or court and declaring it to be
easy to add such clause to a will on a subsequent his act or deed. It involves an extra step
occasion and in the absence of the testator and undertaken whereby the signatory actually
any or all of the witnesses. (Ibid.) declares to the notary public that the same is his
or her own free act and deed. (Lee v. Tambago,
NOTE: An attested will need not be dated, but a A.C. No. 5281, 12 Feb. 2008)
holographic will must be dated. (Art. 810, NCC)
Two-Fold Purpose of Acknowledgment in a
7. All the pages shall be Numbered correlatively in Notarial Will
letters on the upper part of each page;
(1) to safeguard the testator’s wishes long
a. Mandatory – pagination by means of a after his demise; and
conventional system purpose of which is to (2) to assure that his estate is
prevent insertion or removal of pages. administered in the manner that he
intends it to be done. (Lee v. Tambago,
b. Directory – pagination in letters on the A.C. No. 5281, 12 Feb. 2008)
upper part of each page. (Balane, 2010) The
pages may be expressed either in words
2023 GOLDEN NOTES
The issue in this case is whether or not the will Substantial Compliance
“acknowledged” by the testatrix and the
instrumental witnesses before a notary public A will is not rendered invalid by reason of defects or
acting outside the place of his commission imperfections in the form of attestation or in the
satisfies the requirement under Art. 806 of the language used therein.
NCC. Outside the place of his commission, he is
bereft of power to perform any notarial act; he In the absence of bad faith, forgery, or fraud, or
is not notary public. Any notarial act outside the undue and improper pressure and influence, defects
limits of his jurisdiction has no force and effect. and imperfections in the form of attestation or in the
(Guerrero v. Bihis, G.R. No. 174144, 17 Apr. 2007) language used therein shall not render the will
invalid if it is proved that the will was in fact
The absence of the documentary stamp does executed and attested in substantial compliance
not affect the validity of the will. It merely with all the requirements of Art. 805. (Art. 809, NCC)
prevents the will from being presented as
evidence. (Gabucan v. Manta, G.R. No. L-51546, In cases of omissions in the will, if it can be supplied
28 Jan. 1980) by an examination of the will itself, without the need
of resorting to extrinsic evidence it will not be fatal
Rules if the Testator is Deaf or Mute and, correspondingly, would be allowed for probate.
1. If the testator is able to read, he must personally However, evidence aliunde is not allowed to fill a
read the will; or void in any part of the document or supply missing
details that should appear in the will itself. Those
2. If the testator is unable to read, he must omissions which cannot be supplied except by
designate two (2) persons to read it and evidence aliunde would result in the invalidation of
communicate to him, in some practicable the will itself. (Caneda v. CA, G.R. No. 103554, 28 May
manner, the contents thereof. (Art. 807, NCC) 1993)
Rules if the testator is Blind (2008 BAR) Q: Consuelo and Anastacio Santos had two
daughters, namely Natividad and Remedios.
The will shall be read to him twice, once by one of When Anastacio died, Remedios followed
the subscribing witnesses, and another time by the predeceasing Consuelo and leaving her
notary public before whom the will is children. Thereafter, Consuelo died leaving
acknowledged. (Art. 808, NCC) several properties. Catalino, son of Remedios,
filed a petition to settle the intestate estate of
Purpose: The reading is mandatory for the purpose Consuelo alleging that Consuelo's heirs include
of making known to the testator the provision of the Remedios' children and Natividad. Thereafter,
will so that he may object if it is not in accordance Natividad filed a motion to dismiss stating that
with his wishes. she already filed for the probate of Consuelo's
will. Natividad asked that the will be allowed
Art. 808 of the NCC applies not only to blind and approved and as the named executrix in the
testators but also to those who, for one reason or will, she prayed that letters testamentary be
another, are incapable of reading their wills, either issued in her favor.
because of poor or defective eyesight or because of
illiteracy. (Garcia v. Vasquez, G.R. No. L-26615, 30 The Tanchancos filed an Opposition to
Apr. 1970) Natividad's petition for probate alleging that the
will's attestation clause did not state the
number of pages. Natividad countered that
there was substantial compliance with Art. 805
of the NCC. Although the attestation clause did
CIVIL LAW
not state the number of pages comprising the testator's will. (In the matter of the petition for the
will, the same was clearly indicated in the probate of the will of Consuelo Santiago Garcia:
acknowledgment portion. Moreover, the Catalino Tanchanco and Ronaldo Tanchanco v.
Tanchancos' allegations were not supported by Natividad Garcia Santos, G.R. No. 204793, 08 June
proof. Thus, the Tanchancos rebutted that the 2020, as penned by J. Hernando)
number of pages should be found in the body of
the will and not just in the acknowledgment Holographic Wills
portion. Was there substantial compliance with
the requirement under Art. 805 of the NCC? A holographic will is one entirely written, dated, and
signed by the hand of the testator himself. It is
A: YES. The rule on substantial compliance in Art. subject to no other form and may be made in or out
809 presupposes that the defects in the attestation of the Philippines, and need not be witnessed. (Art.
clause can be cured or supplied by the text of the 810, NCC)
will or a consideration of matters apparent
therefrom which would provide the data not Formalities Required in the Execution of
expressed in the attestation clause or from which it Holographic Wills: (H-D-S)
may necessarily be gleaned or clearly inferred that
the acts not stated in the omitted textual 1. Entirely Handwritten by the testator
requirements were actually complied with in the
execution of the will. In other words, the defects An illiterate cannot make a holographic will
must be remedied by intrinsic evidence supplied by because it is required to be in writing by the
the will itself. testator. However, he can make an ordinary or
notarial will because the law allows a notarial
In the case, the attestation clause indisputably will to be written by someone else and in
omitted to mention the number of pages comprising certain cases, for the will to be read by someone
the will. Nevertheless, the acknowledgment portion else not the testator.
of the will supplied the omission by stating that the
will has five pages, to wit: “Ang HULING HABILING NOTE: A will handwritten by a person other
ito ay binubuo ng lima (5) na dahon, kasama ang than the testator is a not a valid holographic
dahong kinaroroonan ng Pagpapatunay at will, but it may nonetheless be made valid by
Pagpapatotoong ito.” Undoubtedly, such complying with the requirements of a notarial
substantially complied with Art. 809 of the NCC. will.
Mere reading and observation of the will, without
resorting to other extrinsic evidence, yields the Effects of Insertions or Interpolations
conclusion that there are actually five pages even if
the said information was not provided in the GR: When a number of erasures, corrections,
attestation clause. In any case, the CA declared that cancellation, or insertions are made by the
there was substantial compliance with the testator in the will but the same have not been
directives of Art. 805 of the NCC. noted or authenticated with his full signature,
only the particular words erased, corrected,
When the number of pages was provided in the altered will be invalidated, not the entirety of the
acknowledgment portion instead of the attestation will.
clause, the spirit behind the law was served though
the letter was not. Although there should be strict XPNs:
compliance with the substantial requirements of the a. Where the change affects the essence of the
law in order to ensure the authenticity of the will, will of the testator such as where the
the formal imperfections should be brushed aside alteration partakes the effect of revoking a
when they do not affect its purpose and which, will;
when taken into account, may only defeat the
2023 GOLDEN NOTES
NOTE: When the holographic will had only The law does not specify a particular location
one substantial provision, which was where the date should be placed in the will. The
altered by substituting the original heir only requirements are the date be in the will
with another, and the same did not carry itself and executed in the hand of the testator.
the requisite full signature of the testator, (Labrador v. CA, G.R. Nos. 83843-44, 05 Apr.
the entirety of the will is voided or revoked. 1990) Thus, it may be placed either at the
beginning, in the middle, or at the end of the
Reason: What was cancelled here was the will.
very essence of the will; it amounted to the
revocation of the will. Therefore, neither 3. Signed by the hand of the testator himself;
the altered text nor the original unaltered
text can be given effect. (Kalaw v. Relova, In a holographic will, the signature must be at
G.R. No. L-40207, 28 Sept. 1984) the end of the will. This can be inferred from
Thus, unless the unauthenticated Art. 812 of the NCC by the reference to
alterations, cancellations, or insertions dispositions “written below his signature.” This
were made on the date of the holographic phrase implies that the signature is at the end of
will or on testator’s signature, their the will, and any disposition below it must
presence does not invalidate the will itself. further be signed and dated.
The lack of authentication will only result
in disallowance of such changes. (Ajero v. In a holographic will, the dispositions of the
CA, G.R. No. 106720, 15 Sept. 1994) testator written below his signature must be
dated and signed by him to make them valid as
b. Where the alteration affects the date of the testamentary dispositions. (Art. 812, NCC) If one
will or the signature of the testator, the disposition below the signature of the testator
whole will is void. is not dated, even if signed, that particular
disposition is void, without affecting the
c. If the words written by a third person were validity of the others or of the will itself.
contemporaneous with the execution of the
will, even though authenticated by the When a number of dispositions appearing in a
testator, the entire will is void for violation holographic will are signed without being
of the requisite that the holographic will dated, and the last disposition has a signature
must be entirely in the testator’s and a date, such date validates the dispositions
handwriting. preceding it, whatever be the time of prior
dispositions. (Art. 813, NCC)
2. Dated by the testator
NOTE: It is not required that the will be
GR: The “date” in a holographic will should executed on a single day, at one time and in the
include the day, month, and year of its same ink. The unity of the act is not required in
execution. holographic wills.
XPN: When there is no appearance of fraud, bad In case of several additional dispositions where
faith, undue influence, and pressure and the the additional ones before the last are dated but
authenticity of the will is established and the not signed, only the last will be valid, provided
only issue is whether or not the date appearing the last is signed and dated.
(e.g., “FEB. ‘61”) on the holographic will is a
valid compliance with Art. 810 of NCC, probate If the additional ones before the last are neither
of the holographic will should be allowed under signed nor dated, but the last is both signed and
the Principle of Substantial Compliance. (Roxas dated, a distinction will have to be made
v. De Jesus, G.R. No. L-38338, 28 Jan. 1985) whether they were made:
CIVIL LAW
a. on one occasion - the signature and date testator himself and this can only be done through
under the last additional disposition an examination of the will.
validate all; or
A Holographic Will Which was Lost or Could Not
b. on different occasions - the intermediate be Found Can be Proved by Means of a
additions are void. Photostatic Copy (photocopy).
NOTE: This distinction, though theoretically A photostatic copy or xerox copy of the holographic
valid, is almost worthless in practice because will may be allowed because comparison can be
the circumstances of the execution of made with the standard writings of the testator.
holographic wills are often difficult to prove. (Rodelas v. Aranza, G.R. No. L-58509, 07 Dec. 1982)
(Balane, 2016)
Requirements In Case of Alterations
Rules for the Probate of Holographic Wills
In case of insertion, cancellation, erasure, or
In the postmortem probate of holographic wills, the alteration in a holographic will, the testator must
following rules are to be observed as to the number authenticate the same by his full signature. (Art. 814,
of witnesses to be presented: NCC)
1. If the will is NOT contested - it shall be Full Signature

necessary that at least one (1) witness who
knows the handwriting and signature of the It refers to the testator’s habitual, usual, and
testator explicitly declares that the will and the customary signature.
signature are in the handwriting of the testator;
GR: If not authenticated with the testator’s full
2. If the will is contested - at least three (3) of signature, it is considered as not made, but the will
such witnesses shall be required to explicitly is not invalidated. It does not affect the validity of
declare that the signature in the will is the the will itself. The will is not thereby invalidated as
genuine signature of the testator; and a whole, but at most only as regards the particular
words erased, corrected, or inserted. (Velasco v.
3. In the absence of any competent witness and Lopez, G.R. No. 905, 12 Feb. 1903)
if the court deems it necessary, expert
testimony may be resorted to. (Art. 811, NCC) XPN: Unless the portion involved is an essential part
of the will, such as the date.
Presentation of the will is necessary
Crossing-Out of Name of Heir
The contents and due execution of a lost
holographic will cannot be established merely Where the testator himself crossed out the name of
through oral testimonies of witness who allegedly the original heir and substituted the name with
seen the same. It may not be proved by the bare another without proper authentication, it was held
testimony of witnesses who have seen or read such that this did not result in making the person whose
will. The will itself must be presented; otherwise, it name was crossed as heir. The cancellation should
shall produce no effect. (Gan v. Yap, G.R. No. L-12190, not have also been given effect. The Court, however,
30 Aug. 1958) ruled that neither the original heir nor the
substituted heir can receive the estate on the
By its very nature, a holographic will can only be ground that it could not ignore what appeared to be
proven authentic by establishing that the a change of heart on the part of the testator. One way
handwriting in which it is written belongs to the to justify the ruling of the Supreme Court is to
consider the cancellation as tantamount to a
2023 GOLDEN NOTES
revocation of the will. It amounts to a revocation Q: Stevie was born blind. He went to school for
even though the cancellation only pertained to the the blind and learned to read in Braille
name of the original heir because without the said language. He speaks English fluently. Can he:
name, there remains no other disposition in the will. (2008 BAR)
(Kalaw v. Relova, G.R. No. L-40207, 28 Sept. 1984)
a. Make a will?
7. WITNESSES TO A NOTARIAL WILL
(QUALIFICATION AND DISQUALIFICATIONS) A: YES. Stevie may make a notarial will. A blind man
is not expressly prohibited from executing a will. In
fact, Art. 808 of the NCC provides for an additional
Qualifications of Witnesses (SM-18-A-B-C-D)
formality when the testator is blind. Stevie,
(2008 BAR)
however, may not make a holographic will in Braille
because the writing in Braille is not handwriting. A
2. Of Sound Mind.
holographic will to be valid must be entirely written,
3. At least 18 years of age.
signed, and dated by the testator in his own
4. Able to read and write
handwriting.
5. Not Blind, deaf or dumb
b. Act as a witness to a will?

NOTE: While a blind or deaf may not be a
witness, he could be a testator in a notarial will
A: NO. A blind man is disqualified by law to be a
witness to a notarial will.
6. Not have been Convicted by final judgment of
falsification of a document, perjury, or false
c. In either of the instances, must the will be
testimony.
read to him?
7. Domiciled in the Philippines – his habitual

A: In case Stevie executes a notarial will, it has to
residence must be in the Philippines. (Art. 50,
be read to him twice. First by one of the
NCC)
instrumental witnesses and second by the notary
public before whom the will was acknowledged.
Determination of qualifications of witnesses
(Art. 808, NCC)
The presence of the qualifications of witnesses is

The person signing the testator’s name must NOT
determined at the time of the attestation of the will.
be one of the 3 instrumental witnesses because he
If the witnesses attesting the execution of a will are
must sign in the presence of the testator and of three
competent at the time of attesting, their becoming
other instrumental witnesses.
subsequently incompetent shall not prevent the
allowance of the will.
It is an established rule that “a testament may not be
disallowed just because the attesting witness
Instrumental witness as beneficiary in a will
declare against its due execution; neither does it
(2010 BAR)
have to be necessarily allowed just because all the
attesting witness declare in favor of its legalization.
The fact that a person acts as a witness to a will does
What is decisive is that the court is convinced by
not disqualify him to be a beneficiary. However, it
evidence before it, not necessarily from the
renders void any legacy or device given under said
attesting witnesses, although they must testify, that
will to such person or to his spouse, or parent, or
the will was or was not duly executed in the manner
child, UNLESS there are three (3) other competent
required by law.” (Baltazar v. Laxa, G.R. No. 174489,
witnesses to the will. Such person so attesting shall
11 Apr. 2012)
be admitted as a witness as if such devise or legacy
had not been made or given. (Art. 823, NCC)
CIVIL LAW
This Court has held in a number of occasions that 9. MODES OF REVOCATION OF WILLS AND
substantial compliance is acceptable where the TESTAMENTARY DISPOSITIONS
purpose of the law has been satisfied. The reason
being that the solemnities surrounding the
A will may be revoked by the testator at any time
execution of a will are intended to protect the
before his death. Any waiver or restriction of this
testator from all kinds of fraud and trickery but are
right is void. (Art. 828, NCC)
never intended to be so rigid and inflexible as to
destroy the testamentary privilege. (Alvarado v.
The testator’s right to revoke during his lifetime is
Gaviola, Jr., G.R. No. 74695, 14 Sept. 1993)
absolute because a will is ambulatory. It can neither
be waived nor restricted. As a matter of fact, even if
8. CONFLICT RULES the will has already been admitted to probate
during the testator’s lifetime, it may still be revoked.
Usually determined by the lex nationalii of the This necessarily follows from the principle that “a
deceased in countries that follow the nationality testament is of force after men are dead; otherwise
theory, and by the lex domicilii at the time of death, it is of no strength at all while the testator lives.”
in countries that follow the domiciliary theory.
Governing Law in case of Revocation
In case of conflict between the nationality theory
and the domiciliary theory, we can treat the case as 1. If the revocation takes place in the
one of renvoi as in the Christensen case (G.R. No. L- Philippines, whether the testator is domiciled
16749, 31 Jan. 1963.) so that we can still apply in the Philippines or in some other country –
Philippine law even if the deceased was a citizen of Philippine laws
another country.
2. If the revocation takes place outside the
Rules Philippines:
1. The national law of the decedent shall govern the a. By a testator who is domiciled in the
intrinsic validity of the will; Philippines – Philippine laws (Art. 817,
NCC)
2. If a person who is a citizen of another country
dies in the Philippines, the manner of the b. By a testator who is not domiciled in this
distribution of the estate as well as to the country:
amount of successional rights of his heirs are i. Laws of the place where the will
matters which are governed by his national law. was made; or
3. The foreign law has to be properly proved, ii. Laws of the place in which the
otherwise, processual presumption will apply, testator had his domicile at the
making Philippine law applicable. time of revocation. (Art. 829, NCC)
Modes of Revoking a Will
1. By implication of law;
2. By some will, codicil, or other writing executed
as provided in case of wills; or
3. By physical destruction through burning,
cancelation or obliteration. (Art. 830, NCC)
2023 GOLDEN NOTES
Revocation by Implication of law 6. When the heir, devisee, or legatee commits any
of the acts of unworthiness which by express
It takes place when certain acts or events take place provision of law will incapacitate him to
subsequent to the making of a will, which nullify or succeed. In such case, any testamentary
render inoperative either the will itself or some disposition in favor of such heir, devisee or
testamentary disposition therein. legatee is revoked. (Art. 1032, NCC)
Instances when revocation by implication of law 7. When in the testator’s will there is a legacy of a
takes place: credit against a third person or of the remission
of a debt of the legatee, and subsequently, after
1. Upon the termination of the subsequent the execution of the will, the testator brings an
marriage in Art. 41 of the FC through the filing action against the debtor for the payment of his
of the affidavit of reappearance, the spouse who debt. In such case, the legacy is revoked. (Arts.
contracted the marriage in bad faith shall be 935 and 936, NCC)
disqualified to inherit from the innocent spouse
by testate and intestate succession. Hence, any 8. When the testator:
testamentary disposition in the will of the
innocent spouse in favor of the guilty spouse a. transforms the thing bequeathed in such
shall be revoked by implication of law. (Art. a manner that it does not retain either the
43(5), FC) form or denomination it had;
2. If both spouses of the subsequent marriage b. alienates by any title or for any cause the
referred to in Art. 41 of the FC acted in bad faith, thing bequeathed or any part thereof; or
testamentary dispositions by one in favor of the
other are revoked by operation of law. (Art. 44, c. when the thing bequeathed is totally lost
FC) during the testator’s lifetime or after his
death without the heir’s fault. In such
3. In case of annulment, the spouse who cases, the legacy is revoked. (Art. 857,
contracted the marriage in bad faith shall be NCC; Rabuya, 2009)
disqualified to inherit from the innocent spouse
by testate and intestate succession. Hence, any Requisites of Revocation by Subsequent Will or
disposition in the will of the innocent spouse in Codicil
favor of the guilty spouse shall be revoked by
operation of law. (Art. 50, in relation to Art. 1. The subsequent instrument must comply with
43(5), FC) the formal requirements of a will;
4. Upon issuance of the decree of legal separation, 2. The testator must possess testamentary
provisions in favor of the offending spouse capacity;
made in the will of the innocent spouse shall be
revoked by operation of law. (Art. 63(4)) 3. The subsequent instrument must either contain
a revocatory clause or be incompatible, totally
5. In case of preterition of compulsory heirs in the or partially, with the prior will; and
direct line, whether living at the time of the
execution of the will or born after the death of 4. The revoking will must be admitted to probate.
the testator. In such case, the preterition shall
annul the institution of heir, but the devises and
legacies shall be valid insofar as they are not
inofficious. (Art. 845, NCC)
CIVIL LAW
Ways of making a revocation by a subsequent Ways of Revocation by Physically Destroying a

will Will (Bur-C-O-T)
1. Express - by providing for a revocatory clause; 1. Burning;

2. Implied - provisions are completely 2. Tearing;
inconsistent with previous will. 3. Cancelling; and
4. Obliterating.
The will containing the revocatory clause must itself
be valid, and admitted to probate, otherwise, there Requisites of Revocation by Physical Act of
is no revocation. Destruction (O-T-A-P)
Principle of Instanter 1. Overt act of physical destruction;

2. Testamentary capacity of the testator at the
1. The express revocation of the 1st will renders it time of performing the act of revocation;
void because the revocatory clause of the 2nd 3. Animus Revocandi - intention to revoke; and
will, not being testamentary in character, 4. Performed by testator himself or other person
operates to revoke the 1st will instantly upon in the presence and express direction of the
the execution of the will containing it. testator.
2. In implied revocation, the 1st will is not NOTE: It is not necessary that the will be totally
instantly revoked by the 2nd will because the destroyed. It is sufficient if on the face of the will,
inconsistent testamentary dispositions of the there is shown some sign of the physical act of
latter do not take effect immediately but only destruction. (Maloto v. CA, G.R. No. 76464, 29 Feb.
after the death of the testator. 1988)
The fact that the subsequent will is posterior and Revocation by physical destruction must be
incompatible with the first does not mean that the coupled with animus revocandi
first is entirely revoked because the revocation may
be total or partial. Therefore, it is possible for a prior The physical act of destruction of a will, like burning,
will to subsist with a subsequent will even if they does not per se constitute an effective revocation,
are incompatible. unless the destruction is coupled with animus
revocandi on the part of the testator. (Maloto v. CA,
NOTE: In case of inconsistent wills, the subsequent G.R. No. 76464, 29 Feb. 1988)
will prevails over the prior will because it is the
latest expression of testamentary intent of the The Physical Destruction Need Not be Done by
testator. the Testator Themselves
A revocation made in a subsequent will shall take It may be performed by another person under their
effect even if the new will should become express direction and in their presence. If the
inoperative by reason of the incapacity of the heirs, destruction done by a person other than the testator
devisees, or legatees designated therein, or by their is made not in their presence or not upon their
renunciation. (Art. 832, NCC) express direction, there is no revocation
.
Q: In 1919, Miguel executed a will. In the
postmortem probate, there was a testimony to
the effect that the will was in the testator’s
possession in 1919, but it can no longer be
found. Is the will revoked?
2023 GOLDEN NOTES
A: YES. The Doctrine of Presumed Revocation b) THEORY OF DEPENDENT RELATIVE

applies. Where a will which cannot be found is REVOCATION
shown to have been in the possession of the testator
when last seen, the presumption is, in the absence Where the testator’s act of destruction is connected
of other competent evidence, that the same was with the making of another will, so as fairly to raise
cancelled or destroyed. The same presumption the inference that the testator meant the revocation
arises where it is shown that the testator had ready of the old to depend upon the efficacy of the new
access to the will and it cannot be found after his disposition, the revocation will be conditional and
death. (Gago v. Mamuyac G.R. No. 26317, 29 Jan. dependent upon the efficacy of the new disposition.
1927) And if, for any reason, the new will intended to be
made as a substitute is inoperative, the revocation
NOTE: The presumption is not conclusive, and fails and the original will remains in full force.
anyone may prove the contrary to rebut the
presumption. But a mere intent to make at some time a will in
place of that which is destroyed will not render the
a) EFFECT ON THE RECOGNITION OF A NON- destruction conditional. It must appear that the
MARITAL CHILD revocation is dependent upon the valid execution of
a new will.
The filiation of illegitimate children may be
established by the following: (R-A-PH) The theory on which this principle is predicated is
that the testator did not intend to die intestate. And
1. Record of birth appearing in the civil this intention is clearly manifest when he executed
register; two wills on two different occasions and instituted
2. An Admission of filiation in a public his wife as his universal heir. There can therefore be
document; or no mistake as to his intention of dying testate. (Molo
3. a Private Handwritten instrument and v. Molo, G.R. No. L-2538, 21 Sept. 1951)
signed by the parent concerned. (Arts. 172
and 175, FC) NOTE: Failure of the new testamentary disposition
upon whose validity the revocation depends on is
The recognition of an illegitimate child does not lose equivalent to the non-fulfillment of a suspensive
its legal effect, even though the will wherein it was condition and thus prevents the revocation of the
made should be revoked. (Art. 834, NCC) original will.
Even if the will is revoked, the instrument still Q: Mr. Reyes executed a will completely valid as
constitutes an authentic instrument within the to form. A week later, however, he executed
meaning of Art. 175 of the FC, which provides for the another will which expressly revoked his first
proof of filiation of illegitimate children. (Jurado, will, upon which he tore his first will to pieces.
2009) Upon the death of Mr. Reyes, his second will was
presented for probate by his heirs, but it was
While a will is essentially revocable, recognition is denied due to formal defects. Assuming that a
irrevocable, unless there was vitiation of consent. copy of the first will is available, may it now be
Moreover, recognition is not really a testamentary admitted to probate and given effect? Why?
disposition, nor does recognition wait for the (2003 BAR)
testator’s death to become effective. (Paras, 2008)
A: YES. The first will may be admitted to probate
NOTE: This provision applies only if the will and given effect because the will that was supposed
recognizing the non-marital child is extrinsically to revoke the same was never admitted to probate
valid. (Ibid.) on account of formal defects. Admission to probate
CIVIL LAW
of the subsequent revoking will is one of the Compulsory heirs mentioned in Nos. 3, 4, and 5 are
requisites for express revocation to take place. not excluded by those in Nos. 1 and 2; neither do
they exclude one another.
c) REVOCATION BASED ON A FALSE CAUSE
In all cases of illegitimate children, their filiation
Requisites: (Co-Fa-Fa-R) must be duly proved.
1. The cause must be Concrete, factual and not The father or mother of illegitimate children of the
purely subjective. three classes mentioned shall inherit from them in
2. It must be False. the manner and to the extent established by this
3. The testator must not know of its Falsity. Code. (Art. 887, NCC)
4. It must appear from the will that the testator is
Revoking because of the cause which is false. Classifications of Compulsory Heirs
If the revocation is based on a false or illegal cause, 1. Primary – They are not excluded by the
it is null and void. (Art. 833, NCC) presence of other compulsory heirs, and have
precedence over and exclude other
Institution of heir based on false cause as a general compulsory heirs; e.g., legitimate children
rule does not affect the validity or efficacy of the and/or descendants.
institution and shall be considered as not written,
unless it appears from the will that the testator 2. Secondary – Those who succeed only in
would not have made such institution if he had default of the primary compulsory heirs; E.g.,
known the falsity of such cause. (Art. 850, NCC) legitimate parents and/or legitimate
ascendants; illegitimate parents.
10. HEIRS
3. Concurring – Those who succeed together
with the primary or secondary compulsory
a) COMPULSORY HEIRS
heirs. (e.g., Surviving spouse and illegitimate
children and descendants)
The following are compulsory heirs: (2003, 2005,
2006, 2008 BAR)
Table of Compulsory Heirs
1. Legitimate children and descendants, with
PRIMARY SECONDARY
respect to their legitimate parents and
COMPULSORY HEIRS COMPULSORY HEIRS
ascendants;
1) Legitimate and 4) Legitimate
their parents and
2. In default of the foregoing, legitimate parents
descendants; ascendants;
and ascendants, with respect to their
legitimate children and descendants;
2) Surviving Spouse NOTE: Inherit only in
(Legitimate); default of No. (1).
3. The widow or widower;
3) Illegitimate 5) Illegitimate
4. Acknowledged natural children, and natural
Children and Parents (no other
children by legal fiction;
their descendants).
descendants;
5. Other illegitimate children referred to in
NOTE: They inherit
Article 287.
NOTE: Nos. 2 and 3 are only in default of Nos.
concurring (1) and (3)
2023 GOLDEN NOTES
compulsory heirs. Children conceived and born outside of wedlock of

parents who, at the time of the conception of the
Compulsory heirs inherit either: former, were not disqualified by any impediment to
marry each other, or were so disqualified only
1. In their own right; or because either or both of them were below 18 years
2. By right of representation. of age, may be legitimated. (Art. 177, FC, as amended
by R.A. No. 9858)
Adopted Child is a Compulsory Heir
For purposes of succession, the opening of
Legitimate children include adopted children and succession must happen after the effectivity of R.A.
legitimated children. Under R.A. No. 8552 or the No. 9858; otherwise, the child will be considered as
Domestic Adoption Law, adopted children have the illegitimate.
same rights granted to the legitimate children.
Adopted children, for all intents and purposes are NOTE: Under the FC, there is no more distinction
considered as legitimate children. between acknowledged natural children and
illegitimate children. They are all considered
The relationship, however, does not extend to other illegitimate. (Art. 163, NCC)
relatives of the adopter, thus, disqualifying the
adopted from directly inheriting from the adopter’s Compulsory Heirs of an Illegitimate Person
ascendants. Since the adopted child enjoys
successional rights as a legitimate child, then he 1. Legitimate children and descendants;
excludes the adopter’s parents and ascendants. 2. Illegitimate children and descendants;
3. In default of the foregoing, parents only; and
Formal or judicial adoption is necessary before the 4. Surviving spouse.
adopted child can inherit from the adopter because
adoption is a juridical act, a proceeding in rem, Parents and ascendants are secondary compulsory
which creates between two persons a relationship heirs. They inherit in default of legitimate children
similar to that which results from legitimate and descendants. (Art. 985, NCC)
paternity and filiation. Without the benefit of formal
(judicial) adoption, the adopted child is neither a GR: The presence of the illegitimate children of the
compulsory nor a legal heir. Hence, he is not entitled decedent does NOT exclude parents and
to inherit. ascendants. Parents and ascendants concur with the
illegitimate children of the decedent. (Art. 911, NCC)
Rule on Legitimated Children
XPN: If the decedent is illegitimate, his illegitimate
Children conceived and born outside a valid children exclude the illegitimate parents and
marriage are illegitimate, unless otherwise ascendants.
provided in the FC. (Art. 165, FC)
Common law spouse NOT a compulsory heir
Legitimation takes place upon the marriage of the
child’s parents, the marriage being valid or at least A common law spouse cannot be a compulsory heir.
voidable, the child is automatically raised to the There must be a valid marriage between the
status of legitimacy, without need of any additional decedent and the surviving spouse. If the marriage
act on the part of either the child or the parents. is null and void, the surviving spouse cannot inherit.
(Rabuya, 2006)
CIVIL LAW
Surviving spouse NOT a compulsory heir of her more or less," was conveyed to one of their heirs,
Parent-in-law Alejandra.
Neither is a widow (surviving spouse) a compulsory Alejandra sold the land through a Deed of
heir of her parent-in-law in accordance with the Absolute Sale to Edith N. Deen, who in turn sold
provisions of Article 887 of the Civil Code. The it to Atty. Eddy A. Deen. Upon Atty. Deen's death,
aforesaid provision of law refers to the estate of the an extra-judicial settlement of estate, which did
deceased spouse in which case the surviving spouse not include Lot 2535, was executed by his heirs.
(widow or widower) is a compulsory heir. It does Later, they executed an Additional Extra-Judicial
not apply to the estate of a parent in law. Indeed, the Settlement with Absolute Deed of Sale, which
surviving spouse is considered a third person as sold the land to Norberto, who took possession
regards the estate of the parent-in-law. (Rosales v. of and built a house on it.
Rosales, GR No. L-40789, 27 Feb. 1987)
Norberto then died without a will and was
Q: Emil, the testator, has three legitimate succeeded by his niece and only heir, Lolita.
children: Tom, Henry, and Warlito; a wife named Subsequently, Lolita learned that a Transfer
Adette; parents named Pepe and Pilar; an Certificate of Title was issued in the names of
illegitimate child, Ramon; brother, Mark; and a Andres and Pedro on the basis of a reconstituted
sister, Nanette. Since his wife Adette is well-off, Deed of Conveyance. Lolita sought to register
he wants to leave to his illegitimate child as her portion in Lot 2535 but was denied by the
much of his estate as he can legally do. His estate Register of Deeds, citing the need for a court
has an aggregate net amount of P1, 200, 000.00, order. Lolita then filed for the cancellation of
and all the above-named relatives are still living. the titles. After trial, the Regional Trial Court
Emil now comes to you for advice in making a ruled in favor of Lolita. On appeal, the Court of
will. How will you distribute his estate according Appeals reversed the Regional Trial Court
to his wishes without violating the law on Decision and dismissed the complaint.
testamentary succession? (2005 BAR) According to the Court of Appeals, Lolita must
first be declared as the sole heir to the estate of
A: In his will, Emil should give his compulsory heirs Norberto in a proper special proceeding.
just their respective legitimes and give all of the free
portion to his illegitimate child in addition to the Is a prior judicial declaration necessary in order
said child’s legitime. He should divide his estate in that Lolita may assert her right to the property
his will as follows : of her predecessor?
Tom – P200, 000 (legitime) A: NO. This Court has stated that no judicial
Henry – P200, 000 (legitime) declaration of heirship is necessary in order that an
Warlito – P200, 000 (legitime) heir may assert his or her right to the property of
Adette – P200, 000 (legitime) the deceased.
Ramon – P400, 000 (P100, 000 as legitime and
P300, 000 as free portion). (UPLC, 2009) The right to assert a cause of action as an heir,
although he has not been judicially declared to be
Q: Andres and Pedro are the owners Lot 2535. so, if duly proven, is well settled in this jurisdiction.
Pedro sold to Faustina his portion of the subject This is upon the theory that the property of a
land as evidenced by a notarized Deed of Sale. deceased person, both real and personal, becomes
After the death of Faustina and her husband, the property of the heir by the mere fact of death of
their heirs executed a notarized Extra-Judicial his predecessor in interest, and as such he can deal
Declaration of Heirs and Deed of Absolute Sale. with it in precisely the same way in which the
Lot 2535 consisting of "1,000 square meters, deceased could have dealt, subject only to the
2023 GOLDEN NOTES
limitations which by law or by contract may be 3. The institution must be effective.

imposed upon the deceased himself.
NOTE: No repudiation by the heir; testator is
There is no legal precept or established rule which not predeceased by the heir.
imposes the necessity of a previous legal
declaration regarding their status as heirs to an Kinds of institution
intestate on those who, being of age and with legal
capacity, consider themselves the legal heirs of a 1. With a condition;
person, in order that they may maintain an action 2. With a term; and
arising out of a right which belonged to their 3. For a certain purpose or cause (Modal
ancestor." (Capablanca v. Heirs of Pedro Bas, G.R. No. Institution)
224144, 28 June 2017)
A holographic will is still valid despite non-
b) INSTITUTION OF HEIRS institution of an heir and the creation of a trust to
manage the income of a portion of the estate for
Definition distribution to the beneficiaries (Ramos v. Babista,
G.R. No. 227965 (Notice), 11 Jan. 2023).
Institution of heirs is an act by virtue of which a
testator designates in his will the person or persons (1) LIMITATIONS ON THE INSTITUTION OF
who are to succeed him in his property and HEIRS
transmissible rights and obligations. (Art. 840, NCC)
Three Principles in the Institution of Heirs
Institution of heirs cannot be allowed to affect the
legitimes of the compulsory heirs. There can be an 1. Equality – heirs who are instituted without a
instituted heir only in testamentary succession. designation of shares inherit in equal parts.
There can be a valid will even if it contains only a NOTE: Applies only when the heirs are of the
provision for disinheritance or if only legacies and same class or same juridical condition and
devises are contained in the will even though it does involves only the free portion.
not contain an institution of heir, or such institution
should not comprise the entire estate, and even As between a compulsory heir and a voluntary
though the person so instituted should not accept heir and they are instituted without any
the inheritance or should be incapacitated to designation of shares, the legitime must first be
succeed. (Art. 841, NCC) respected and the free portion shall then be
equally divided between them.
Requisites of a Valid Institution
2. Individuality – heirs collectively instituted are
1. The will must be extrinsically valid; deemed individually instituted unless contrary
intent is proven.
NOTE: The testator must have the testamentary
capacity to make the institution. NOTE: Art. 847 of the NCC provides that when
the testator institutes some heirs individually
2. The institution must be intrinsically valid; and and others collectively as when he says, “I
designate my heirs A and B, and the children of
NOTE: The legitime must not be impaired, the C,” those collectively designated shall be
person instituted must be identified or considered as individually instituted, unless it
identifiable, and there is no preterition. clearly appears that the intention of the testator
was otherwise.
CIVIL LAW
3. Simultaneity – when several heirs are A: NO. The determination of heirship in a prior
instituted, they are instituted simultaneously special proceeding is not a prerequisite for the
and not successively, unless the contrary is resolution of an ordinary civil action. Otherwise
proved. stated, the legal heirs may commence an ordinary
civil action arising out of a right based on succession
Doctrine Enunciated in Treyes v. Larlar without the necessity of a previous and separate
judicial declaration of their status as such.
Prior determination of heirship in separate special
proceeding NOT required before filing ordinary civil Here, it would be highly inimical to the very purpose
action to enforce ownership rights acquired by of the Rules to require a separate and lengthy
virtue of succession. (Treyes v. Larlar, G.R. No. special proceeding for the solitary purpose of
232579, 08 Sept. 2020) establishing the status of Antonio, et al. as legal heirs
of Rosie, when their heirship has already been
NOTE: Treyes (G.R. No. 232579, 08 Sept. 2020) has deemed established by virtue of civil law, with Dr.
effectively established this rule: unless there is a Nixon not seriously and substantially refuting that
pending special proceeding for the settlement of the they are siblings of the decedent. If the Court will
decedent's estate or for the determination of subscribe to Dr. Nixon’s arguments and grant the
heirship, the compulsory or intestate heirs may instant Petition, it would sanction superfluity and
commence an ordinary civil action to declare the redundancy in procedure. To accept his stance will
nullity of a deed or instrument, and for recovery of necessarily mean that, moving forward, heirs will
property, or any other action in the enforcement of not even be able to extra-judicially and summarily
their ownership rights acquired by virtue of settle the estate of a decedent without a prior
succession, without the necessity of a prior and judicial declaration of heirship in a special
separate judicial declaration of their status as such. proceeding. Ironically, even his Affidavits of Self-
The ruling of the trial court shall only be in relation Adjudication would be legally baseless as he himself
to the cause of action of the ordinary civil action, i.e., has not previously established in a prior special
the nullification of a deed or instrument, and proceeding his status as the husband and heir of
recovery or reconveyance of property, which ruling Rosie. (Treyes v. Larlar, G.R. No. 232579, 08 Sept.
is binding only between and among the parties. 2020)
Q: Rosie Treyes, the wife of Dr. Nixon Treyes, Q: In 1991, Alfredo Misa (Alfredo) died intestate
died without any children and without a will. and without any compulsory heir. Among the
She left behind 7 siblings, Antonio, Emilio, properties he left behind is a real property
Heddy, Rene, Celeste, Judy, and Yvonne consisting approximately 282 square meters
(Antonio, et al.). Dr. Nixon executed two located in Barangay Mauway, Mandaluyong City
Affidavits of Self-Adjudication, transferring the (lot), which passed on by law to his brother,
estate of Rosie unto himself, claiming that he Simplicio Misa (Simplicio), who also died
was the sole heir. Later, Antonio, et al. filed a intestate. Moises Misa (Moises), son of Simplicio,
complaint for annulment of the said affidavits, succeeded to the property in his father's stead.
reconveyance of ownership and possession, Upon Moises' death, his son Magdaleno Misa
partition and damages. Dr. Nixon, thereafter, (Magdaleno) and daughter Remedios Misa-De
filed a Motion to Dismiss on the ground that the Leon (Remedios) succeeded him and took over
RTC has no jurisdiction to decide on the the lot. Magdaleno is the spouse of respondent
complaint because the determination of the Lucy Misa (Lucy) while Remedios is the mother
legal heirs in a separate special proceeding is a of respondent Mina Mia Alviar (Mina). For more
prerequisite to an ordinary suit for recovery of than 20 years since Alfredo's death, Lucy and
ownership and possession of property Mina have been residing on the subject lot.
instituted by the legal heirs. Is his contention
correct?
2023 GOLDEN NOTES
In October 2012, petitioners Pascual and but the testator has designated the heir in such a
Dolores Borlongan (Sps. Borlongan) demanded manner that there can be no doubt as to who has
that Mina and Lucy purchase the lot. Believing been instituted, the institution is valid.
that there was no reason to buy something they
already owned, Mina and Lucy ignored the If two or more persons have the same names, the
demand. They later learned that the subject lot testator must indicate some circumstance by which
had allegedly been fraudulently registered the instituted heir may be known.
under Sps. Borlongan's name. Hence, Mina and
Lucy instituted a petition seeking the judicial If the testator fails to mention any circumstance
cancellation of TCT No. 008-2012000208. regarding the heir instituted and there appears to
be several persons bearing the same name, there is
In their Answer, Sps. Borlongan denied the latent ambiguity and extrinsic evidence other than
allegations of Mina and Lucy and disputed their the oral declaration of the testator as to his
claim that they are heirs of Alfredo. They intention is admissible to resolve the ambiguity.
insisted that Alfredo died with two compulsory
heirs, Fe Misa (Fe) and petitioner Dolores A conceived child may be instituted, provided the
Borlongan, who were adopted by Alfredo as conditions in Arts. 40 and 41 of the NCC are present.
evidenced by a Decision dated 02 July 1965 (Conceptus pro nato habetur)
issued by the City Court of Quezon City, Branch
III in Special Proceedings No. 276. They NOTE: A conceived child, although as yet unborn,
maintained inter alia that Mina and Lucy failed has a limited and provisional personality.
to prove their right to succeed as heirs of Alfredo (Quimiguing v. Icao, G.R. No. 26795, 31 July 1970) Its
and their title to the subject property. Is the personality is essentially limited because it is only
contention of Sps. Borlongan correct? for purposes favorable to the child. (Art. 40, NCC) Its
personality is provisional because it depends upon
A: NO, Mina and Lucy do not need to institute a the child being born alive later under the following
separate special proceeding to determine their conditions:
status as purported heirs of Alfredo. As held in Treys
v. Larlar (G.R. No. 232579, 08 Sept. 2020), legal heirs 1. The child must be alive for at least 24 hours
of a decedent are parties in interest to an ordinary from complete delivery if it had an intra-uterine
civil action arising out their respective right life of less than 7 months.
of succession without the need to file a separate
special proceeding for declaration of heirship. To 2. If the child had an intra-uterine life of at least 7
quiet title, Art. 477 of the NCC requires that the months, it is enough that the child is alive upon
plaintiff must have a legal or an equitable title to or delivery. (Art. 41, NCC)
interest in the real property that is the subject
matter of the action. Here, the ordinary civil action Disposition in favor of an Unknown Person
Mina and Lucy instituted may prosper as their
successional rights as collateral relatives of Alfredo GR: Every disposition in favor of an unknown
are transmitted and enforceable at the very moment person shall be void.
of his death without need of a separate judicial
determination. (Sps. Borlongan v. Alviar, G.R. No. XPNs:
240154 (Notice), 10 Nov. 2020) 1. If the identity can become certain by some
event or circumstance, the disposition is valid.
Designation of Heir It is important, however, that the event or
circumstance must appear in the will itself; it
Generally, an heir must be designated by his name cannot be shown by extrinsic evidence, either
and surname. This rule, however, is not mandatory. oral or documentary.
Even when the name of the heir has been omitted
CIVIL LAW
2. A disposition in favor of a definite class or group GR: The testator CANNOT impose any charge,
of persons shall be valid. condition or substitution whatsoever upon the
legitimes. If a charge condition or substitution is
Evidence aliunde CANNOT be presented to identify imposed, it shall be considered as not imposed.
the unknown person. The determinate event or
circumstance, sufficient to indicate with certainty XPN: Testator can validly impose a prohibition
the person whom the testator wants to favor, must against the partition of the legitimes for a period not
appear in the will itself; it cannot be shown by exceeding 20 years.
extrinsic evidence, either oral or documentary.
NOTE: The legitime passes by strict operation of
If there is merely a latent ambiguity as to the law, independently of the testator’s will. As such,
identity of the heir, extrinsic evidence other than the any condition, burden, or substitution upon the
oral declaration of the testator may be used, but if same is merely considered by law as not imposed.
his identity is unknown, extrinsic evidence is not (NCC, Art. 872)
allowed.
Effect of a Suspensive Condition
Conditional Institution of heirs
1. Heir, devisee, or legatee acquires no rights until
Condition is a future or uncertain event or a past the condition is fulfilled;
event unknown to the parties, upon which the
performance of an obligation depends. 2. If he dies before the condition is fulfilled, he
transmits no rights to his heirs, even though he
Conditions, terms and modes are not presumed, survived the testator.
they must be clearly expressed in the will. The
condition must fairly appear from the language of 3. Once the condition is fulfilled, its effects
the will. Otherwise, it shall be considered pure. retroact to the moment of the death of the
testator;
Kinds of Condition:
Reason: Capacity to succeed by the conditional
1. Resolutory Condition - The disposition becomes heir must be determined both at the time of the
effective upon the death of the testator but is death of the testator and at the time of the
extinguished upon the happening of the fulfillment of the condition.
condition.
4. If the suspensive condition is not fulfilled the
estate will be placed under administration
2. Suspensive Condition - The effectivity of the
until:
disposition is suspended until the fulfillment of
the condition.
a. The condition is fulfilled, in which case
the estate should be given to the
Effect of Impossible Condition on the
instituted heir;
Testamentary Disposition
b. It becomes obvious that it cannot be

Impossible conditions and those contrary to law or
fulfilled, in which case, the estate should
good customs shall be considered as not imposed
be given to the intestate heirs.
and shall in no manner prejudice the heir, even if the
testator should otherwise provide. (NCC, Art. 873)
2023 GOLDEN NOTES
(2) COLLECTIVE INSTITUTION as a general rule does not affect the validity or
efficacy of the institution. (Art. 850, NCC)
GR: When the testator institutes some heirs
individually and others collectively as when he says, Requisites for Annulment of Institution based
“I designate as my heirs A and B, and the children of on a False Cause
C,” those collectively designated shall be considered
as individually instituted. (Art. 847, NCC) 1. Cause for the institution of heirs must be
stated in the will ;
XPN: It clearly appears that the intention of the
testator was otherwise. (Ibid.) 2. Cause must be shown to be false ; and
(3) PROSCRIPTION AGAINST SUCCESSIVE 3. It must appear from the face of the will that
INSTITUTION the testator would not hvae made such
institution if he had known of the falsity of
When the testator calls to the succession a person the cause. (Jurado, 2009)
and his children, they are all deemed to have been
instituted simultaneously and not successively. (Art. c) SUBSTITUTION OF HEIRS
849, NCC)
Substitution of Heirs (2002 BAR)
Illustration
It is the appointment of another heir so that he may
The testator institutes “A” and his five children as enter into the inheritance in default of the heir
his heirs with respect to the disposable free portion originally instituted. (Art. 857, NCC)
of the inheritance. From this institution it is clear
that such disposable portion shall be divided The concept of substitution applies in cases where
equally among “A” and the five children. the heir or heirs instituted should die before the
testator or should not wish or should be
T instituted A and A’s two children, B and C, to an incapacitated to accept the inheritance.
estate of P30,000. Thus, A, B, and C gets P10,000
each all at the same time. If the Substitute Dies Ahead of the Testator
NOTE: Had the institution been successive, A would The substitute who dies ahead of the testator
get the whole P30,000 in the meantime, while B and prevents him from acquiring any rights, since there
C gets nothing during A’s lifetime. is no substitution to speak of.
(4) INSTITUTION BASED ON A FALSE CAUSE (1) CAUSES OF SUBSTITUTION
GR: The institution of heir is valid. The false cause Kinds of Substitution (2002 BAR)
shall be considered simply as not written.
1. Simple/common – takes place when the heir
XPN: If from the will itself, it appears that the instituted:
testator would not have made the institution if he a. Predeceases the testator;
had known the falsity of the cause, the institution b. repudiates the inheritance; or
shall be void. c. is incapacitated to succeed;
NOTE: The rule is, if the revocation is based on a NOTE: Simple substitution without a statement
false or illegal cause, it is null and void (Art. 833, of the causes, to which it refers, shall comprise
NCC) while institution of heir based on false cause the 3 above mentioned situations unless the
testator has provided otherwise.
CIVIL LAW
2. Fideicommissary or second heir is the one

Purpose: to prevent the inheritance from who eventually receives the inheritance.
passing by operation of law to those to whom
the same would pass either by right of Elements of Fideicommissary Substitution
representation, or by right of accretion, or by
right of intestate succession, were it not for the 1. There must be a first heir or fiduciary who takes
substitution. the property upon the testator’s death;
2. Brief/compendious – when two or more 2. An absolute obligation is imposed upon the

persons are substituted for one; and one person fiduciary to preserve and to transmit to a
for two or more heirs.; second heir the property at a given time;
3. Reciprocal – one heir is designated as a 3. There is a second heir who takes the property
substitute for an instituted heir while the latter subsequently from the fiduciary and must be
is simultaneously instituted as a substitute for one degree from the first heir; and
the former.;
4. The first and second heir must both be living
GR: The substitute shall be subject to the same and qualified at the time of the death of the
charges and conditions imposed upon the testator.
instituted heir.
NOTE: It should be imposed on the free portion and
XPNs: not on the legitime. Fideicommissary substitution
a. If the testator has expressly provided can never burden the legitime. (Art. 864, NCC)
the contrary
b. If the charges or conditions are Meaning of "One Degree"
personally applicable only to the heir
instituted. (Art. 862, NCC) It refers to the degree of relationship; it means “one
generation”. As such, the fideicommissary can only
4. Fideicommissary Substitution (Indirect be either a parent or child of the first heir. (Palacios
Substitution) – It is a substitution by virtue of v. Ramirez, G.R. No. L-27952, 15 Feb. 1982)
which the fiduciary or first heir instituted is
entrusted with the obligation to preserve and to The relationship is always counted from the first
transmit to a second heir the whole or part of heir. However, fideicommissary substitutions are
the inheritance. It shall be valid provided such also limited to one transmission. There can only be
substitution does not go beyond one degree one fideicommissary transmission such that after
from the heir originally instituted, and provided the first, there can be no second fideicommissary
further, that the fiduciary or first heir and the substitution.
second heir are living at the time of the death of
the testator. (Art. 863, NCC) (2002, 2008 BAR) Both the first and second heir must be living and
qualified at the time of the death of the testator
(2) FIDEICOMMISSARY SUBSTITUTION
(COMPARED WITH TESTAMENTARY TRUSTS) The fideicommissary inherits not from the first heir
but from the testator; thus, the requirement that the
Parties to a Fideicommissary Substitution fideicommissary be alive or at least conceived at the
time of the testator’s death.
1. Fiduciary or first heir is the one who preserves
and transmits the inheritance to the
fideicommissary; and
2023 GOLDEN NOTES
Effect if the Fideicommissary Predeceases the Delivery of property to fideicommissary heir

Fiduciary
GR: The fiduciary should deliver the property intact
If the fideicommissary predeceases the fiduciary and undiminished to the fideicommissary heir upon
but survives the testator, his rights pass to his own arrival of the period.
heirs.
XPN: The only deductions allowed, in the absence of
NOTE: The first heir receives property, either upon a contrary provision in the will are:
the death of the testator or upon the fulfillment of 1. Legitimate expenses;
any suspensive condition imposed by the will. 2. Credits; and
3. Improvements.
The first heir is almost like a usufructuary who has
the right to enjoy the property. Thus, like a The coverage of legitimate expenses and
usufructuary, he cannot alienate the property. The improvements are limited to necessary and useful
first heir is also obliged to make an inventory, but he expenses, but not to ornamental expenses.
is not required to furnish a bond.
Distinctions between a fiduciary in
Alienation of the property subject to the fideicommissary substitution and a trustee in a
fideicommissary substitution by the first heir trust
Alienation of the property subject to the FIDUCIARY TRUSTEE

fideicommissary substitution by the first heir is not May be designated
valid. The fiduciary cannot alienate the property either expressly by
Can only be designated
either by an act inter vivos or mortis causa. He is acts inter vivos or
expressly by means of
bound to preserve the property and transmit it to mortis causa or
a will
the second heir or fideicommissary. impliedly by operation
of law
NOTE: Entitled to all of the Has no usufructuary
rights of a right over the property
1. If the fiduciary registers the property in his usufructuary which he holds in trust
name without the fideicommissary May alienate his right
substitution, innocent parties are protected. of usufruct but always
However, if the property is unregistered, the subject to his
buyer acquires only the seller’s right. i.e., Cannot alienate
obligation of
subject to the fideicommissary substitution; anything whatsoever
preserving and
transmitting the object
2. The fideicommissary is a sort of naked owner; to a second heir
ownership is consolidated in him upon Fiduciary carries out
transmission of the property to him. not another’s wishes
but his own and he
Fiduciary’s Tenure Obligation is broader
enjoys the use and the
because it extends not
fruits unlike a trustee
1. Primary rule – the period indicated by the only to the properties
(he is like a
testator. but also to the fruits
usufructuary). (Perez
2. Secondary rule – if the testator did not v. Gachitorena, G.R. No.
indicate a period, then the fiduciary’s lifetime. L-31703, 13 Feb. 1930)
CIVIL LAW
Express obligation to preserve and transmit the 4. Those which leave to a person the whole or part
property of the hereditary property in order that he may
apply or invest the same according to secret
The obligation to preserve and transmit must be instructions communicated to him by the
given clearly and expressly: testator. (Art. 867, NCC)
1. by giving it a name “fideicommissary The nullity of the fideicommissary substitution does

substitution”; or NOT prejudice the validity of the institution of the
2. by imposing upon the first heir the absolute heirs first designated; the fideicommissary clause
obligation to preserve and deliver the property shall simply be considered as not written. (Art. 868,
to the second heir. NCC)
Remedy of the fideicommissary to protect Q: Raymond, single, named his sister Ruffa in his
himself against alienation to an innocent third will as a devisee of a parcel of land which he
person owned. The will imposed upon Ruffa the
obligation of preserving the land and
If the first heir was able to register the property in transferring it, upon her death, to her
his name, the fideicommissary should annotate his illegitimate daughter Scarlet who was then only
claim on the land on the title to protect himself one year old. Raymond later died, leaving
against any alienation in favor of innocent third behind his widowed mother, Ruffa and Scarlet.
parties. (2008 BAR)
When the property passes to the fideicommissary, a. Is the condition imposed upon Ruffa to
there is no more prohibition to alienate. preserve the property and to transmit it
upon her death to Scarlet, valid?
If the testator gives the usufruct to different persons
successively, the provisions on fideicommissary A: When an obligation to preserve and transmit the
substitution also apply. property to Scarlet was imposed on Ruffa, the
testator Raymond intended to create a
Different dispositions related or analogous to fideicommissary substitution where Ruffa is the
fideicommissary substitutions which the law fiduciary and Scarlet is the fideicommissary. Having
considers as void complied with the requirements of Art. 863 and 869
of the NCC, the fideicommissary substitution is
1. Fideicommissary substitutions which are not valid.
made in an express manner, either by giving
them this name, or imposing upon the fiduciary b. If Scarlet predeceases Ruffa, who inherits the
the absolute obligation to deliver the property property?
to a second heir;
A: If Scarlet predeceases Ruffa, the latter, as the
2. Provisions which contain a perpetual former’s heir, will be entitled to the property. But
prohibition to alienate and even a temporary since it is also Ruffa’s death which will trigger the
one, beyond the limit fixed in Art. 863 of the fideicommissary substitution, the practical effect of
NCC (20 years); (Art. 870, NCC) her death would be to allow her (Ruffa’s) mother to
inherit the property as Ruffa’s heir. The transfer of
3. Those which impose upon the heir the charge of the property from Scarlet to Ruffa (as Scarlet’s heir)
paying to various persons successively, beyond is what allows Ruffa’s mother to inherit the
the limit prescribed in Art. 863 of the NCC, a property, which she would otherwise be
certain income or pension; disqualified to inherit under Art. 992 of the NCC.
2023 GOLDEN NOTES
c. If Ruffa predeceases Raymond, can Scarlet b. legitimate parents and ascendants in

inherit the property directly from Raymond? the absence of legitimate children and
descendants always have 1/2 legitime
A: One requirement of a valid fideicommissary (Art. 887(1), NCC)
substitution is that both heirs should be alive at the
time of the testator’s death. Ruffa predeceasing 2. Variable – If the amount changes or varies
Raymond means that the fideicommissary depending with whom the compulsory heirs
substitution is no longer valid. In this regard, the concur.
only way by which Scarlet can inherit the property
directly from Raymond is by legal succession. Her After the legitime has been determined in
right to do so, however, is negated by (1) the accordance with Arts. 908 to 910 of the NCC, the
presence of Raymond and Ruffa’s mother, who reduction shall be made as follows:
necessarily excludes her; and (2) the provisions of
Art. 992 of the NCC. 1. Donations shall be respected as long as the
legitime can be covered, reducing or annulling,
NOTE: Scarlet can inherit the property from if necessary, the devises or legacies made in the
Raymond by way of compulsory succession. will;
11. LEGITIME 2. The reduction of the devises or legacies shall

be pro rata, without any distinction whatever.
Legitime (2003 BAR)

If the testator has directed that a certain devise
or legacy be paid in preference to others, it
It is that part of the testator's property which he
shall not suffer any reduction until the latter
cannot dispose of because the law has reserved it
have been applied in full to the payment of the
for certain heirs who are, therefore, called
legitime;
compulsory heirs. (Art. 886, NCC)
3. If the devise or legacy consists of a usufruct or

It is mandatory on the part of the testator to reserve
life annuity, whose value may be considered
that part of the estate to the legitime.
greater than that of the disposable portion, the
compulsory heirs may choose between
Determination of the Legitime
complying with the testamentary provision and
delivering to the devisee or legatee the part of
To determine the legitime, the value of the property
the inheritance of which the testator could
left at the death of the testator shall be considered,
freely dispose. (Art. 911, NCC)
deducting all debts and charges, which shall not
include those imposed in the will. (Art. 908, NCC)
4. If the devise subject to reduction should consist
of real property, which cannot be conveniently
Donations given to children shall be charged to the
divided, it shall go to the devisee if the reduction
legitime. (Art. 909, NCC)
does not absorb one-half of its value; and in a
contrary case, to the compulsory heirs; but the
Kinds of Legitime (2003, 2005, 2010 BAR)
former and the latter shall reimburse each
other in cash for what respectively belongs to
1. Fixed – If the amount (fractional part) does not
them.
vary or change regardless of whether there are
concurring compulsory heirs or not.
The devisee entitled to a legitime may retain the
entire property, provided its value does not
a. legitimate children and descendants
exceed that of the disposable portion and of the
always have 1/2 legitime; and
CIVIL LAW
share pertaining to him as legitime. (Art. 912, A: NO, the provision is not valid. At first glance, the
NCC) provision may appear valid as it provides for the
transfer of title in favor of Alex and Rene over the
NOTE: If the heirs or devisees do not choose to parcel of land. A legacy or devise is to be construed
avail themselves of the right granted by the as a donation effective mortis causa, and it is
preceding article, any heir or devisee who did intended to transfer ownership to the legatee or
not have such right may exercise it; should the devisee. Since the ownership is legally transferred
latter not make use of it, the property shall be to the Alex and Rene, they cannot be prohibited by
sold at public auction at the instance of any one the testator from alienating or partitioning the same
of the interested parties. (Art. 913, NCC) perpetually. The dispositions of the testator
declaring all or part of the estate inalienable for
The testator may devise and bequeath the free more than twenty years are void. (Art. 870, NCC)
portion as he may deem fit. (Art. 914, NCC)
Rules governing succession in the Direct
Rules on Legitime Descending line
There is no obligation on the compulsory heirs to 1. Preference between lines - descending line is
accept their legitimes. (Art. 1041, NCC) preferred over the ascending line;
GR: The testator cannot deprive the compulsory 2. Proximity- the nearer excludes the more
heirs of their legitimes. remote;
XPN: 3. Right of representation, in case of predecease,

1. When the testator validly disinherited his heir. incapacity and disinheritance;
(Art. 915, NCC)
2. When the partition of the hereditary estate for 4. If all the legitimate children repudiate their
a period not exceeding 20 years is expressly legitimes, the next generation of legitimate
forbidden by the testator. (Art. 1083, NCC) descendants succeed in their own right.
NOTE: Only the legitime is reserved. The free Rules governing succession in the Direct
portion may be disposed of by will. Ascending line
Q: Crispin died testate and was survived by Alex 1. Proximity - the nearer excludes the more
and Josine, his children from his first wife; Rene remote;
and Ruby, his children from his second wife; and 2. Division by line; and
Allan, Bea, and Cheska, his children from his 3. Equal division within the line.
third wife. One important provision in his will
reads as follows: "Ang lupa at bahay-sa-Lungsod Limitations on the Testator’s Rights of
ng Maynila ay ililipat at ilalagay sa pangalan nila Ownership
Alex at Rene hindi bilang pamana ko sa kanila
kundi upang pamahalaan at pangalagaan The testator CANNOT make donations inter vivos
lamang nila at nang ang sinuman sa aking mga upon the legitime or which are inofficious.
anak, sampung apo at kaapuapuhan ko sa
habang panahon, ay may tutuluyan kung NOTE: The prohibition does not cover an onerous
magnanais na mag-aral sa Maynila o sa kalapit disposition (sale) because this involves an exchange
na mga lungsod." Is the provision valid? (2008, of values. (Art. 886, NCC)
2014 BAR)
2023 GOLDEN NOTES
Rules on the Donations made by the testator in XPNs:

favor of his children, legitimate and illegitimate, 1. When testator should have so expressly
and strangers and those which are Inofficious: provided; or
2. When compulsory heir repudiates his
1. Donations given to children shall be charged to inheritance. (Art. 1061, NCC)
their legitimes;
Properties to be collated:
Reason: Donations to the compulsory heirs
are advances to the legitimes. 1. Any property or right received by gratuitous
title during testator’s lifetime.; (Art. 1061, NCC)
2. Donations made to strangers shall be charged 2. All that may have been received from decedent
to that part of the estate of which the testator during his lifetime;(Art. 1064(2) NCC)
could have disposed by his last will; 3. All that their parents have brought to collation
if alive; (Art. 1064(1), NCC) and
3. Insofar as they may be inofficious or may 4. Any sums paid by a parent in satisfaction of the
exceed the disposable portion, they shall be debts of his children, election expenses, fines,
reduced according to the rules established by and similar expenses. (Art. 1069, NCC)
this Code.; (Art. 909, NCC)
Properties NOT subject to collation:
4. Donations which an illegitimate child may have
received during the lifetime of his father or 1. Absolutely no collation – expenses for
mother, shall be charged to his legitime. support, education (elementary and
secondary only), medical attendance, even in
Should they exceed the portion that can be extraordinary illness, apprenticeship,
freely disposed of, they shall be reduced in the ordinary equipment, or customary gifts. (Art.
manner prescribed by this Code. (Art. 910, NCC) 1067, NCC)
a) COLLATION IN CONNECTION WITH THE 2. Generally not imputed to legitime:

COMPUTATION OF LEGITIME
a. Expenses incurred by parents in giving
Collation is the process whereby the value of all their children professional, vocational, or
donations inter vivos made by the decedent is added other career unless the parents so provide,
to his available assets in order to arrive at the value or unless they impair the legitimes; (Art.
of the net hereditary estate. (Balane, 2010) 1068, NCC)
To collate is to bring back or return to the hereditary b. Wedding gifts by parents and ascendants
mass, in fact or fiction, property which came from consisting of jewelry, clothing and outfit
the estate of the decedent, during his lifetime, but except when they exceed 1/10 of the sum
which the law considers as an advance from the disposable by will. (Art. 1070, NCC)
inheritance. Collation is applicable to both
donations to compulsory heirs and donations to NOTE: Only the value of the thing donated shall be
strangers. brought to collation. This value must be the value of
the thing at the time of the donation. (Sebastian,
GR: Compulsory heirs are obliged to collate. (Art. 2020)
1061, NCC)
Property left by will (legacy or devise) is not
deemed subject to collation if the testator has not
otherwise provided, but the legitime shall remain
unimpaired. (Art. 1063, NCC)
CIVIL LAW
Steps in determining the legitime of Compulsory even if in the process the disposition is
Heirs reduced to nothing.
1. Determination of the gross value of the estate at 6. If there are remaining portion of the estate, it
the time of the death of the testator; (Art. 908, shall be distributed to the devisees and legatees,
NCC) if there are any, and according to the provisions
of the will. (Sec. 1, Rule 89, ROC)
2. Deduct all the debts and charges which are
chargeable against the estate; (Art. 908, NCC) b) TABLE OF LEGITIME
3. Collate or add the value of all donations inter When Surviving Spouse Alone
vivos to arrive at the net hereditary estate which
will serve as the basis of determining the WHEN SURVIVING SPOUSE ALONE
legitime; (Art. 1061, NCC)
½ of the hereditary estate (Free portion = ½)
4. Impute all the value of donations inter vivos (Art. 900, NCC)
made to compulsory heirs against their legitime
and of the value of all donations inter vivos made Surviving spouse where
to strangers against the disposable free portion; the marriage was
(Art. 909, NCC) and solemnized under
articulo mortis and the
5. If the legitime is impaired, the following deceased died within 3
reductions shall be made: 1/3 of the hereditary
months from the time
estate
of marriage.
Order of Preference in Reducing
testamentary dispositions and donations (Free portion =2/3)
NOTE: The deceased
(Art. 900, NCC)
was the spouse who
a. Reduce pro rata the non-preferred
was at the point of
legacies and devises (Art. 911(2), NCC),
death at the time of
and the testamentary dispositions that
marriage (Tolentino,
impairs or diminish the legitime of the
1992)
compulsory heirs. (Art. 907, NCC) Among
these legacies, devises, and testamentary
dispositions, there is no preference.
Surviving spouse where
the marriage was
NOTE: Preferred legacies and devises are
solemnized under
those directed by testator to be preferred ½ of the hereditary
articulo mortis and the
than the others. estate
deceased died within 3
months from the time
b. Reduce pro rata the preferred legacies (Free portion = ½)
of marriage, but the
and devises. (Art. 911, last par., NCC)
parties have been living
(Art. 900, NCC)
as husband and wife for
c. Reduce the donations inter vivos
more than 5 years prior
according to the inverse order of their
to the marriage.
dates (i.e., the oldest is the most
preferred). (Art. 773, NCC)
NOTE: These reductions shall be to the

extent required to complete the legitimes,
2023 GOLDEN NOTES
When Legitimate Child or Children Alone divide the free portion equally
among themselves)
WHEN LEGITIMATE CHILD/CHILDREN ALONE (Art. 895, NCC)
½ of the hereditary estate
Free portion
Legitimate = whatever remains
(Free portion = ½)
children
Legitimate child
(Balane, 2016; Art. 888, NCC) = ½ of the hereditary estate
(Art. 888, NCC)
Primary Heirs Concur with Concurring
Surviving spouse
Compulsory Heirs (2005, 2010 BAR)
= ¼ of the hereditary estate
(Arts. 879, 898)
PRIMARY HEIRS CONCUR WITH CONCURRING
COMPULSORY HEIRS
One Illegitimate children
Legitimate child legitimate = ½ of the share of each
= ½ of the hereditary estate child, the legitimate child. (Art. 892, NCC)
surviving
One
Surviving spouse spouse, and Free portion
legitimate
= ¼ of the hereditary estate illegitimate = whatever remains
child and the
children
surviving
Free portion NOTE: The share of the
spouse
=¼ surviving spouse shall have
preference over those of the
(Art. 898, NCC) illegitimate children whose
share may suffer reduction pro
rata because there is no
Legitimate children
preference as among
= ½ of the hereditary estate in
themselves.
equal portions (Art. 888, NCC)
Two or more
Legitimate children
legitimate
Surviving spouse = ½ of the hereditary estate in
children and
= a share equal to that of each equal portions (Art. 888, NCC)
the surviving
child (Art. 892, NCC)
spouse
Surviving spouse
Free portion = a share equal to that of each
= whatever remains Two or more legitimate child (Art. 895, NCC)
legitimate
Legitimate child children, Illegitimate children
= ½ of the hereditary estate (if surviving = ½ of the share of each
there are several, they shall spouse and legitimate child (Art. 892, NCC)
One divide the ½ share in equal illegitimate
legitimate portions) (Art. 888, NCC) children Free portion
child and = whatever remains
illegitimate Illegitimate children
children = ½ of the share of each NOTE: The share of the
legitimate child (if the free surviving spouse shall have
portion is insufficient, the preference over those of the
illegitimate children shall illegitimate children whose
CIVIL LAW
share may suffer reduction pro Legitimate parents

rata because there is no = ½ of the hereditary estate
preference as among
themselves. Illegitimate children
Legitimate = ¼ of the hereditary estate in
Concurrence Among Concurring Compulsory parents, equal shares
Heirs surviving
spouse, and Surviving spouse
CONCURRENCE AMONG CONCURRING illegitimate = 1/8 of the hereditary estate
COMPULSORY HEIRS children
Free portion
Surviving spouse = 1/8
Surviving = 1/3 of the hereditary estate
spouse and (Arts. 889 and 890, NCC)
illegitimate Illegitimate children Parents
children = 1/3 of the hereditary estate. = excluded
(Rabuya, 2009; Art. 894, NCC)
Children
Parents and
Secondary Heirs Concur with Compulsory Heirs = ½ if legitimate and ½ of the
children of
(1999 BAR) share of each legitimate child if
the
illegitimate children
Illegitimate
SECONDARY HEIRS CONCUR WITH Decedent
COMPULSORY HEIRS Free portion
= whatever remains
Legitimate parents
= ½ of the hereditary estate. (Art. 903, NCC)
(Arts. 889 and 890, NCC) Parents
Legitimate = ¼ of the hereditary estate
parents and Surviving spouse Parents and
surviving = ¼ of the hereditary estate Surviving spouse
surviving
spouse (Art. 893, NCC) = ¼ of the hereditary estate
spouse of the
Illegitimate
Free portion Free portion
Decedent
=¼ =½
(Art. 903, NCC)

Legitimate parents
= ½ of the hereditary estate Legitime of Illegitimate Children
Illegitimate children The legitime of each illegitimate child shall consist

Legitimate
= ¼ of the hereditary estate in of 1/2 of the legitime of a legitimate child. (Art. 176,
parents and
equal shares FC)
illegitimate
children
Free portion The legitime of the illegitimate children shall be
=¼ taken from the portion of the estate at the free
disposal of the testator, provided:
(Arts. 889 and 890, NCC)
2023 GOLDEN NOTES
1. The total legitime of the illegitimate children shall in turn be inherited by the three (3) nephews
shall not exceed the free portion; in equal shares by right of representation.
Therefore, the three (3) nephews will receive P1,
2. The legitime of the surviving spouse must be 111, 111.10 each and the half-sister will receive the
first fully satisfied. (Art. 895(3), NCC) sum of P1, 666, 666.60. (UPLC, 2009)
Q: Ramon Mayaman died intestate, leaving a net c) IMPAIRMENT OF THE LEGITIME

estate of P10,000,000.00. Determine how much
each heir will receive from the estate: (2009 Remedies of a compulsory heir whose legitime
BAR) has been impaired
(a) If Ramon is survived by his wife, three full- 1. In case of preterition – annulment of
blood brothers, two half-brothers, and one institution of heirs and reduction of devises and
nephew (the son of a deceased full-blood legacies;
brother)? Explain.
2. In case of partial impairment – completion of
A: Having died intestate, the estate of Ramon shall legitime;
be inherited by his wife and his full and half-blood
siblings or their respective representatives. In 3. In case of inofficious donation –restoration.
intestacy, if the wife concurs with no one but the (Jurado, 2009)
sibling of the husband, all of them are the intestate
heirs of the deceased husband. The wife will receive The renunciation or compromise of future legitime
half of the intestate estate, while the siblings or their is prohibited and considered null and void.
respective representatives will inherit the other half
to be divided among them equally. If some siblings Reason: Prior the predecessor’s death, the heir’s
are of the full-blood and the others of the half-blood, right is simply inchoate. (Balane, 2016)
a half blood sibling will receive half of the share of a
full-blood sibling. The prohibition applies only to transactions of
compromise or renunciation between the
1. The wife of Ramon will, therefore, receive ½ of predecessor and the prospective compulsory heir.
the estate or the amount of P5,000,000.00; Any property which the compulsory heir may have
2. The three full-blood brothers will, therefore, gratuitously received from his predecessor by
receive P1, 000, 000.00 each; virtue of the renunciation or compromise will be
3. The nephew will receive P1,000,000.00 by right considered an advance on his legitime and must be
of representation; duly credited. (Balane, 2016)
4. The two half-brothers will receive P500, 000.00
each. Completion of legitime (2001, 2010 BAR)
(b) If Ramon is survived by his wife, a half- Any compulsory heir to whom the testator has left
sister, and three nephews (sons of a by any title less than the legitime belonging to him
deceased full-blood brother)? Explain. may demand that the same be fully satisfied. (Art.
906, NCC)
A: The wife will receive one half of the estate or
P5,000, 000.00. The other half shall be inherited by NOTE: Testamentary dispositions that impair or
(1) the full-blood brother, represented by his three diminish the legitime of the compulsory heirs shall
children, and (2) the half-sister. They will divide be reduced on petition of the same, insofar as they
that other half between them such that the share of may be inofficious or excessive. (Art. 907, NCC)
the half-sister is just half of the share of the full-
blood brother. The share of the full-blood brother
CIVIL LAW
If the testator has instituted only one heir, and the a) REQUISITES
institution is limited to an aliquot part of the
inheritance, - legal succession takes place with Requisites (TO-Co-S-No)
respect to the remainder of the estate. (Art. 851,
NCC) 1. There is a Total Omission in the inheritance;
2. The person omitted is a Compulsory heir in the
If the testator instituted several heirs as sole heirs direct line;
but allotted only an aliquot part of the inheritance
and together, they do not cover the whole 3. The omitted compulsory heir must Survive the
inheritance, or the whole free portion - each part testator, or in case the compulsory heir
shall be increased proportionately. (Art. 852, NCC) predeceased the testator, there is a right of
representation; and
If each of the instituted heirs has been given an
aliquot part of the inheritance and the parts 4. Nothing must have been received by the heir by
together exceed the whole inheritance, or the whole gratuitous title.
free portion, as the case may be, each part shall be
reduced proportionately. (Art. 853, NCC) Q: Araceli Mayuga alleged that she is one of the
three (3) surviving legitimate and forced heirs
d) PRESUMPTIVE LEGITIME of the late Perfecto Atienza who died intestate in
1978 without a will. He left two (2) properties in
An advance on the legitime given to the children Romblon. According to her, she was entitled to
upon the termination of their parents’ marriage by 1/3 of the disputed lots on the assumption that
annulment or declaration of void marriages under the decedent left only three legal heirs (his
Art. 43 in relation to Art. 44 of the FC, which consists children Araceli, Benjamin, Sr. and Armando)
of one- half of the value of the conjugal property of and that the lots were part of the inheritance.
the spouses as of the date of the final judgment. She contends that through the manipulation and
misrepresentation with intent to defraud a co-
12. PRETERITION heir, Antonio was able to secure Free Patent
11636 while Benjamin was able to secure Free
Patent 11637. However, Perfecto executed the
Preterition (1999, 2000, 2001, 2008 BAR)
Confirmation Affidavit in 1973 almost five years
prior to his death. Was Araceli preterited?
It is the omission in testator’s will of one, some or all
of the compulsory heirs in the direct line, whether
A: NO, Araceli could not claim preterition by virtue
living at the time of execution of the will or born
of the Confirmation Affidavit on the assumption that
after the death of the testator. (Art. 854, NCC)
the disputed two lots pertained to Perfecto's
inheritance, he had only three legal heirs and he left
Meaning of “born after the death of the testator”
Araceli with no share in the two lots. Although
Araceli was a compulsory heir in the direct
It simply means that the omitted heir must have
descending line, she could not have been preterited.
already been conceived at the time of death of the
Perfecto left no will. As contemplated in Article 854,
testator but was born only after the death of the
the presence of a will is necessary (Mayuga v.
testator.
Atienza, G.R. No. 208197, 10 Jan. 2018).
A spouse CANNOT be preterited. While a spouse is

a compulsory heir, he/she is not in the direct line
(ascending or descending). (Cain v. IAC, G.R. No.
72706, 27 Oct. 1987)
2023 GOLDEN NOTES
NOTE: The surviving spouse shall only be entitled To constitute preterition, the omission must be total
to recover his legitime but the institution of heirs and complete, such that nothing must be given to the
shall not be annulled. compulsory heir. (Aznar v. Duncan, G.R. No. L-24365,
30 June 1966)
There is total omission when the heir:
Effects of Preterition
1. Receives nothing under the will whether as
heir, legatee, or devisee; 1. Preterition annuls the institution of heirs;
NOTE: If a compulsory heir is given a share in 2. Devices and legacies are valid insofar as they
the inheritance, no matter how small, there is are not inofficious;
no preterition.
3. If the omitted compulsory heir dies before the
However, if a compulsory heir gets less than his testator, the institution shall be effectual,
legitime, while this is not a case of preterition, without prejudice to the right of representation.
he is entitled to a completion of his legitime
under Art. 906 of the NCC. His remedy is found Example: X has two legitimate children: A and
in Arts. 906 & 907of the NCC for the completion B. X makes a will which results in the preterition
of his legitime. of A. A predeceases X but leaves a legitimate
child A-1, who is himself completely omitted
The testator cannot defeat the right of the from the inheritance (A-1 being entitled to
compulsory heirs to their legitime by the simply succeed X by representation). There is
expedient of giving them less than what the law preterition, not because A was preterited but
reserves as their legal share, or by disposing of because A-1 was preterited. (Balane, 2010) In
the estate in favor of others to such an extent such case, the descendant of A, A-1, can now file
that the legitime of the compulsory heirs would an action to annul the institution of heirs.
be diminished or devalued. In such eventuality,
the affected compulsory heir may bring an Preterition annuls the institution of an heir and
action for the completion of his legitime or for annulment throws open to intestate succession the
the reduction of the disposition infringing upon entire inheritance. The only provisions which do not
his rightful share in the estate of the decedent. result in intestacy are the legacies and devises made
(Paguirigan, 2017) in the will for they should stand valid and respected,
except insofar as the legitimes are concerned. (Acain
2. Has received nothing by way of donation inter v. IAC, G.R. No. 72706, 27 Oct. 1987)
vivos or propter nuptias; and
b) GOVERNING LAW
NOTE: If a compulsory heir has already
received a donation from the testator, there is Omission of an illegitimate child in a will
no preterition. amounts to preterition
Reason: A donation to a compulsory heir is Art. 854 of the NCC do not distinguish. It is
considered an advance of the inheritance. immaterial whether the heir omitted in the
testator’s will is legitimate or illegitimate provided
3. The heir will receive nothing by way of intestate that he is a compulsory heir in the direct line.
succession. (e.g., if the heir is not mentioned in
the will nor a recipient of a donation inter vivos
and all of the estate is disposed by will)
CIVIL LAW
Omission of an adopted child in a will also faith, does not justify a collateral attack on Transfer
amount to preterition Certificate of Title. The relief instead rests on Article
1104 of the NCC to the effect that where the
An adopted child is by legal fiction considered a preterition is not attended by bad faith and fraud,
compulsory heir in the direct line. An adopted the partition shall not be rescinded but the
person is given the same rights and duties as if he is preterited heir shall be paid the value of the share
a legitimate child of the adopter and makes the pertaining to her. (Non v. CA, G.R. No. 137287, 15 Feb.
adopted person a legal heir of the adopter. (Acain v. 2000)
IAC, G.R. No. 72706, 27 Oct. 1987)
Q: Marionne and Larry, Sr. died testate. Larry, Jr.,
Compulsory Heirs in the Direct Line one of their six children, died intestate after his
mother’s death but before his father’s. Thus, the
1. Legitimate children and descendants with surviving heirs are the five children (and
respect to their legitimate parents or siblings of Larry, Jr.) of Marionne and Larry, Sr.,
ascendants; as well as the four grandchildren (children of
2. Legitimate parents of ascendants, with respect Larry, Jr.) of Marionne and Larry, Sr. namely:
to their legitimate children and descendants; Dianna, Greg, Matthew, and David.
3. Illegitimate children;
4. The father or mother of illegitimate children. Greg filed before the RTC a petition for the
probate of the Wills of Marionne and Larry, Sr.
Where the deceased left no descendants, legitimate which Wills were admitted to probate. Greg was
or illegitimate, but she left forced heirs in the direct appointed as administrator of the estates.
ascending line— her parents, and her holographic However, Darlene filed a Motion for
will does not explicitly disinherit them but simply Intervention stating that she has a legal interest
omits their names altogether, the case is one of in the estate of Marionne and Larry, Sr. because
preterition of the parents, not a case of ineffective she is the surviving spouse of Larry, Jr. having
disinheritance. (Nuguid v. Nuguid, et al., GR No. L- married him. Later on, Darlene filed a motion for
23445, 23 June 1966) intervention in the intestate settlement of Larry
Jr.'s estate proceedings which was granted.
Exclusion of an Heir in the Extrajudicial
Settlement of Estate As to the Motion of Darlene filed before the RTC
having jurisdiction over the testate proceedings
Q: Virginia P. Viado died intestate in 1982. Her of Marionne and Larry, Sr., Greg argued that
part in the conjugal property was transmitted to Darlene’s rights and interests, if any, can be fully
her heirs—her husband Julian and their protected in the settlement of Larry, Jr.'s estate
children Nilo Viado, Rebecca Viado, Leah Viado proceeding, which directly involves the
and Delia Viado. The inheritance, which vested settlement of Larry, Jr.'s intestate estate. Thus,
from the moment of death of the decedent, her intervention in the testate proceedings
remained under a co-ownership regime among which involves the wills of Marionne and Larry,
the heirs until partition. The heirs later on Sr., is completely unnecessary and superfluous.
executed a deed of extrajudicial settlement to Is Greg’s contention correct?
the exclusion of Delia Viado, alleged to be a
retardate. Can Delia Viado rescind the A: YES. Larry, Jr. died after his mother's death but
extrajudicial settlement among other heirs? before his father's death. When Marionne died,
Larry, Jr. would have inherited from her as a
A: NO. The exclusion of petitioner Delia Viado from compulsory heir by virtue of Art 887(1) of the Civil
the deed of extrajudicial settlement verily has the Code, which states:
effect of preterition. This kind of preterition,
however, in the absence of proof of fraud and bad
2023 GOLDEN NOTES
Art. 887. The following are compulsory heirs: In both cases, the omitted heir and the imperfectly
(1) Legitimate children and descendants, with disinherited heir get at least their legitimes.
respect to their legitimate parents and
ascendants… Both legacies and devises remain valid insofar as
the legitime has not been impaired.
As far as Darlene is concerned, she would inherit
from Larry, Jr. pursuant to Art. 887(3) and part of NOTE: The mere fact that an heir was omitted in a
his estate would be his share in the estate of his will, does NOT automatically equate to preterition.
mother, Marionne. Darlene could not inherit from
the estate of Larry, Sr. because Larry, Jr. One must distinguish whether the omission of a
predeceased Larry, Sr., his father, and the children forced heir in the will of the testator is by mistake or
of Larry, Jr. would succeed by right of in advertence or voluntary or intentional:
representation from their grandfather pursuant to
Art. 972 of the NCC. Moreover, Darlene is not related 1. If by mistake or inadvertence, there is true
by blood, but only by affinity, to Larry, Sr. (Tirol v. preterition and total intestacy results.
Nolasco, G.R. No. 230103, 27 Aug, 2020)
2. If the omission is intentional, the effect would
Preterition and Defective Disinheritance be a defective disinheritance covered by Art.
918 of the NCC in which case the institution of
DEFECTIVE heir is not wholly void but only in so far as it
PRETERITION
DISINHERITANCE prejudices the legitime of the person
A testamentary disinherited. (Tolentino, 1973)
disposition depriving Omission in the
any compulsory heir of testator’s will of the Effect of Preterition on the Will Itself
his share in the forced heirs or any of
legitime for a cause them. GR: The effect of annulling the institution of heirs
authorized by law. will be, necessarily, the opening of a total intestacy
except that proper legacies and devises must be
The institution of heirs
respected. Here, the will is not abrogated.
The institution is completely annulled.
remains valid but must Hence, the annulment
XPN: If the will contains a universal institution of
be reduced insofar as is in toto, unless there
heirs to the entire inheritance of the testator, the
the legitime has been are in addition,
will is totally abrogated. (Nuguid v. Nuguid, G.R. No.
impaired. Such nullity testamentary
L-23445, 23 June 1966)
of institution is limited dispositions in the
only to that portion of form of legacies and
Reason: The nullification of such institution of the
which, the disinherited devices which shall
universal heirs without any other testamentary
heir has been remain valid so long as
disposition in the will amounts to a declaration that
unlawfully deprived of. they are not
nothing at all was written.
inofficious.
The omission is
By mere mistake or
intentional in which
inadvertence resulting
case the institution of
in the fact that the
heir is not wholly void
compulsory heir
but only in so far as it
receives nothing at all.
prejudices the legitime
There is total
of the person
deprivation.
disinherited.
CIVIL LAW
13. CONDITIONAL DISPOSITIONS AND same is merely considered by law as not imposed.
DISPOSITIONS (Art. 872, NCC)
Effect of a Suspensive Condition

Definition
1. Heir, devisee, or legatee acquires no rights until

Condition is a future or uncertain event or a past
the condition is fulfilled.
event unknown to the parties, upon which the
performance of an obligation depends.
2. If he dies before the condition is fulfilled, he
transmits no rights to his heirs, even though he
Conditions, terms, and modes are not presumed,
survived the testator.
they must be clearly expressed in the will. The
3. Once the condition is fulfilled, its effects
condition must fairly appear from the language of
retroact to the moment of the death of the
the will. Otherwise, it shall be considered pure.
testator.
Kinds of Condition
Reason: Capacity to succeed by the conditional
heir must be determined both at the time of the
RESOLUTORY SUSPENSIVE death of the testator and at the time of the
CONDITION CONDITION fulfillment of the condition.
The disposition
becomes effective The effectivity of the 4. If the suspensive condition is not fulfilled, the
upon the death of the disposition is estate will be placed under administration
testator but is suspended until the until:
extinguished upon the fulfillment of the a. The condition is fulfilled, in which case the
happening of the condition. estate should be given to the instituted
condition. heir;
b. It becomes obvious that it cannot be
Effect of Impossible Condition on the fulfilled, in which case, the estate should be
Testamentary Disposition given to the intestate heirs.
Impossible conditions and those contrary to law or Negative potestative condition consists in the non-
good customs shall be considered as not imposed performance of an act or not giving something and
and shall in no manner prejudice the heir, even if the he shall comply by giving a security that he will not
testator should otherwise provide. (Art. 873, NCC) do or give that which has been prohibited by the
testator. (Art. 879, NCC) In this case, the heir
GR: The testator CANNOT impose any charge, instituted has a right to receive his share in the
condition or substitution whatsoever upon the inheritance upon the death of the testator and loses
legitimes. If a charge condition or substitution is his right only when he violates the condition.
imposed, it shall be considered as not imposed.
Institution of heir with a term
XPN: Testator can validly impose a prohibition
against the partition of the legitimes for a period not A term is any future and certain event upon the
exceeding 20 years. arrival of which the validity or efficacy of a
testamentary disposition subject to it depends.
NOTE: The legitime passes by strict operation of
law, independently of the testator’s will. As such, A disposition with a suspensive term does not
any condition, burden, or substitution upon the prevent the instituted heir from acquiring his rights
and transmitting them to his heirs even before the
arrival of the term.
2023 GOLDEN NOTES
Reason: The right of the heir instituted subject to a succeed to the property upon violation of the
term is vested at the time of the testator's death - he condition.
will just wait for the term to expire.
Instances When Caucion Muciana is Needed
If the heir dies after the testator but before the term (2002 BAR)
expires, he transmits his rights to his own heirs
because of the vested right. 1. Suspensive term - the legal heir shall be
considered as called to the succession until
Suspensive Term vs. Suspensive Condition the arrival of the period. But he shall not
enter into possession of the property until
SUSPENSIVE after having given sufficient security, with
SUSPENSIVE TERM the intervention of the instituted heir. (Art.
CONDITION
885(2), NCC)
The instituted heir
does not acquire any
The right of the heir 2. Negative potestative condition - If the
successional right
instituted subject to a potestative condition imposed upon the
upon the death of the
term is vested at the heir is negative, or consists in not doing or
testator as long as the
time of the testator’s not giving something, he shall comply by
condition is not yet
death. Hence, if he dies giving a security that he will not do or give
fulfilled. Hence, upon
after the testator but that which has been prohibited by the
the death of the
before the term testator, and that in case of contravention
instituted heir, prior to
expires, he can he will return whatever he may have
the fulfillment of the
transmit his rights to received, together with its fruits and
condition, no right is
his own heirs. interests. (Art. 879, NCC)
transmitted to his
heirs.
NOTE: If the heirs do not post the required
bond in case of a suspensive term or a
Q: When the disposition is subject to a term,
negative potestative condition, the estate
what should be done by the instituted heirs or
shall be placed under administration. (Art.
legal heirs so that they can enjoy possession of
880, NCC)
the property?
3. Mode - That which has been left in this

A: If the disposition is subject to a:
manner may be claimed at once provided
that the instituted heir or his heirs give
1. Suspensive term - The legal heirs can enjoy
security for compliance with the wishes of
possession of the property until the expiration
the testator and for the return of anything
of the period, but they must put up a bond
he or they may receive, together with its
(caucion muciana) in order to protect the right
fruits and interests, if he or they should
of the instituted heir.
disregard this obligation. (Art. 882, NCC)
2. Resolutory term - The legal heirs can enjoy
a) CONDITION NOT TO MARRY
possession of the property but when the term
arrives, he must give it to the legal heirs. The
GR: An absolute condition not to contract a first or
instituted heir does not have to file a bond.
subsequent marriage is not a valid condition and
shall be considered as not written. (Art. 874, NCC).
Caucion Muciana
However, the validity of the disposition itself shall
not be affected.
It is a security or bond required from the conditional
heir in order to secure the rights of those who would
CIVIL LAW
XPN: If such condition was imposed on the widow Mode distinguished from a Condition
or widower by the deceased spouse or by the latter’s
ascendants or descendants, in which case, the
MODE CONDITION
condition is valid. (Art. 874, NCC)
If the prohibition is relative with respect to persons, Imposes an obligation
time or place, such condition is valid and must be The condition must
upon the heir, devisee
complied with unless the testator renders it happen or be fulfilled in
or legatee, but it does
impossible for the heir to marry at all. order for the heir to be
not affect the efficacy of
entitled to succeed the
his rights to the
b) DISPOSICION CAPTATORIA testator.
succession.
Disposition Captatoria is any disposition made upon Obligates but does not Suspends but does not
the condition that the heir shall make some suspend obligate
provision in his will in favor of the testator or of any
In case of doubt, the institution should be
other person shall be void. (Art. 875, NCC) Here,
considered as modal not conditional.
both the condition and the disposition are void but
the validity of the other provisions, including the
will itself, shall not be affected. Q: The testatrix devised a parcel of land to Dr.
Rabadilla. It was provided that Dr. Rabadilla
Reason for the prohibition will acquire the property subject to the
obligation, until he dies, to give Maria 100
Disposition captatoria is incompatible with good piculs of sugar, and in the event of non-
faith and with the nature of testaments; it is fulfillment, the property will pass to the nearest
immoral and contrary to the freedom to make wills. descendants of the testatrix.
c) MODAL INSTITUTION When Dr. Rabadilla died, Maria filed a complaint

to reconvey the land alleging that the heirs of Dr.
A mode is an obligation imposed upon the heir to do Rabadilla violated the condition. Is the
or to give something. institution of Dr. Rabadilla, a modal institution?
Modal institution – statement of: A: YES. It imposes a charge upon the instituted heir
1. Object of the institution, without, however, affecting the efficacy of such
2. Application of the property left by the testator, institution.
3. Charge imposed by him.
In a modal institution, the testator states the object
Modal disposition of the institution, the purpose or application of the
property left by the testator, or the charge imposed
A “mode” imposes an obligation upon the heir, by the testator upon the heir. A mode imposes an
devisee or legatee, but it does not affect the efficacy obligation upon the heir or legatee, but it does not
of his rights to the succession. The mode obligates affect the efficacy of his rights to the succession. The
but does not suspend. condition suspends but does not obligate; and the
mode obligates but does not suspend. (Rabadilla v.
CA, G.R. No. 113725, 29 June 2000)
2023 GOLDEN NOTES
14. VOID TESTAMENTARY DISPOSITIONS 15. DISINHERITANCE
GR: The testator may not make a testamentary It is the process or act, through a testamentary
disposition in such a manner that another person disposition of depriving a compulsory heir of his
has to determine whether or not it is to be operative. legitime for causes expressly stated by law. (Art.
(Art. 787, NCC) 915, NCC)
If a person attests the execution of a will, to whom The only way in which a compulsory heir can be
or to whose spouse, or parent, or child, a devise or deprived of his legitime is through valid
legacy is given by such will, such devise or legacy disinheritance. It can be effected only through a will
shall, so far only as concerns such person, or spouse, wherein the legal cause therefor shall be specified.
or parent, or child of such person, or any one (Art. 916, NCC)
claiming under such person or spouse, or parent, or
child, be void. (Art. 823, NCC) Disinheritance is not automatic
XPN: There are three other competent witnesses to There must be evidence presented to substantiate
such will. (Ibid.) the disinheritance and must be for a valid and sound
cause. (Arts. 916 and 917, NCC)
The dispositions of the testator declaring all or part
of the estate inalienable for more than twenty years Burden of Proof
are void. (Art. 870, NCC)
The burden of proving the truth of the cause for
Doctrine of Prohibited Designation disinheritance shall rest upon the other heirs of the
testator, if the disinherited heir should deny it. (Art.
The following cannot be left to the discretion of a 917, NCC)
third person:
Effect of disinheritance
1. Duration or efficacy of designation of heirs,
legatees, or devisees; The effect of total exclusion to the inheritance,
meaning loss of the legitime, right to intestate
2. Determination of the portions which the succession, and of any disposition in a prior will.
heirs, legatees or devisees are to receive
when referred to by name; and Disinheritance, however, is without prejudice to the
right of representation of the children and
3. Determination as to whether or not a descendants of the person disinherited. But the
disposition is to be operative. (Art. 785 and disinherited parent shall not have the usufruct or
787, NCC) administration of the property which constitutes
the legitime. (Art. 923, NCC)
NOTE: It is not only the delegation which is void; the
testamentary disposition whose effectivity will NOTE: Parents no longer enjoy the right of usufruct
depend upon the determination of the third person over the properties of their children under the
is the one that cannot be made. Hence, the Family Code. (Art. 923, NCC)
disposition itself is void.
CIVIL LAW
a) GROUNDS FOR DISINHERITANCE ii. Maltreatment of the testator by

word or deed by the children or
The following enumeration are exclusive. Only the descendant;
grounds enumerated can serve as grounds for
disinheritance. (Arts. 919 - 921, NCC) iii. When the children or descendant
has been convicted of adultery or
1. Common causes for disinheritance of concubinage with the spouse of the
children or descendants, parents or testator; or
ascendants, and spouse:
iv. When the children or descendant
a. When the heir has been found guilty of an leads a dishonorable or disgraceful
attempt against the life of the testator, life.
his/her descendants or ascendants, and
spouse, in case of children or parents; b. Parents or Ascendants:
b. When the heir by fraud, violence, i. When the parent or ascendant has
intimidation, or undue influence causes the been convicted of adultery or
testator to make a will or to change one concubinage with the spouse of the
already made; testator;
c. When the heir has accused the testator of a ii. When the parents have abandoned
crime for which the law prescribes their children or induced their
imprisonment of six years or more, if the daughters to live a corrupt or
accusation has been found groundless; immoral life, or attempted against
their virtue;
d. Refusal without justifiable cause to support
the testator who disinherits such heir; iii. Loss of parental authority for
causes specified in the Code;
e. Maltreatment of the testator by word or
deed, by the child or the descendant; iv. Attempt by one of the parents
against the life of the other, unless
f. When a child or descendant leads a there has been reconciliation
dishonorable or disgraceful life; between them;
g. Conviction of a crime which carries with it v. When the parent or ascendant has
the penalty of civil interdiction; or accused the testator of a crime for
which the law prescribes
h. When a child or descendant has been imprisonment for 6 years or more;
convicted of adultery or concubinage with
the spouse of the testator. vi. When the parent or ascendant by
fraud, violence, intimidation or
2. Peculiar Causes for Disinheritance: undue influence causes the
testator to make a will or to change
a. Children and Descendants: one already made; or
i. Conviction of a crime which carries vii. The refusal to support the children
with it a penalty of civil or descendants without justifiable
interdiction; cause.
2023 GOLDEN NOTES
c. Spouse: b) REQUISITES FOR THE VARIOUS GROUNDS

FOR DISINHERITANCE
i. When the spouse has given cause
for legal separation; or Requisites of a Valid Disinheritance
ii. When the spouse has given 1. It must be made in a valid will; (Art. 915, NCC)
grounds for the loss of parental 2. It must be for a cause specified by law; (Art. 916,
authority. NCC)
3. The will must specify the cause; (Art. 916 and
Right of Representation in case of 918, NCC)
Disinheritance 4. It must be unconditional;
5. It must be total; (Balane, 2010)
The causes of disinheritance are personal to the 6. The cause must be true; (Art. 918, NCC) and
disinherited heir. Hence, in case of valid 7. If the truth is denied, it must be proved by the
disinheritance, only the disinherited heir is proponent. (Art. 917, NCC)
deprived of his right to the legitime. But the children
or descendants of the disinherited heir can take his c) EFFECTS OF RECONCILIATION
place and preserve the disinherited heir’s share to
the legitime. 1. If it occurs before disinheritance is made, the
right to disinherit is extinguished;
Effect of Disinheritance Without Cause 2. If it occurs after the disinheritance is made, the
disinheritance is set aside. (Balane, 2010)
Disinheritance without a specification of the cause,
or for a cause the truth of which, if contradicted, is Effects of Setting Aside the Disinheritance
not proved, or which is not one of those set forth in
this Code, shall annul the institution of heirs insofar 1. The disinherited heir is restored to his legitime;
as it may prejudice the person disinherited; but the
devises and legacies and other testamentary 2. If the disinheriting will did not dispose of the
dispositions shall be valid to such extent as will not disposable portion, the disinherited heir is
impair the legitime. (Art. 918, NCC) entitled to his proportionate share if any, of the
disposable portion;
Reconciliation
3. If the disinheriting will or any subsequent will
Reconciliation exists when two persons who are at disposed of the disposable portion in favor of
odds decide to set aside their differences and to testamentary heirs, legatees, or devisees, such
resume their relations. They need not go back to dispositions remain valid. (Balane, 2010)
their old relation. In order to be effective, the
testator must pardon the disinherited heir. The 16. LEGACIES AND DEVISES
pardon whether express or tacit, must refer
specifically to the heir disinherited and to the acts
Definitions
he has committed, and must be accepted by such
heir. In disinheritance, reconciliation need not be in
Legacy is defined as a gift of personal property given
writing.
in a will. It is bequeathed to a legatee. (Paras, 2008)
Devise is defined as a gift of real property given in a

will. It is devised to a devisee. (Ibid.)
CIVIL LAW
Legacies and devises are testamentary dispositions When Right to Legacy or Devise Vests
giving an economic benefit or advantage other than
an aliquot or fractional part of the inheritance. The legatee or devisee acquires a right to the pure
(Ibid.) and simple legacies or devises from the death of the
testator and transmits it to his heirs. (Art. 947, NCC)
Purposes of legacies and devises This rule is merely a restatement of the general
principle declared in Art. 777 of the NCC, to the effect
The following are the purposes of legacies and that the rights to the succession are transmitted at
devises: the moment of the death of the decedent. Even those
which are subject to a suspensive term or period
1. Compliance by the testator of social duties; must be included within the purview of the rule
2. Rewarding of the love and devotion of because in such legacies or devises what is
friends and relatives; suspended by the term or period is not the
3. Show of gratefulness for acts done to him; acquisition of the right but merely demandability of
and the right. (Jurado, 2009)
4. Giving of funds to beneficent and charitable
institutions. (6 Manresa 652) Even if the legatee or devisee, after the death of the
testator, dies before the expiration of the term or
Generic legacies period, he can transmit his rights to his own heirs.
However, in case of conditional legacies or devises,
A generic legacy refers to a legacy consisting of if the condition is suspensive, what is acquired upon
personal property designated merely by its class or the death of the testator by the legatee or devisee is
genus without any particular designation or only a mere hope or expectancy. Such hope or
physical segregation from all others of the same expectancy is converted into a perfected right only
class. Thus, if the testator, in his will bequeaths “ten from the moment of the fulfillment of the condition.
horses” to A, the legacy is generic. Even granting Consequently, if the legatee or devisee, after the
that there are no horses in the estate of the testator death of the testator, dies before the fulfillment of
after his death, the legacy is valid. (Jurado, 2009) the condition, he cannot transmit his expectancy to
his own heirs. (Jurado, 2009)
The right of choice shall belong to the executor or
administrator who shall comply with the legacy by Transmission of Right of Ownership
the delivery of a thing which is neither of inferior
nor of superior quality. (Art. 941, NCC) Once made, If the legacy or devise is of a specific and
the choice becomes irrevocable. In other words, the determinate thing pertaining to the testator, the
legacy ceases to be generic; it becomes determinate. legatee or devisee acquires the ownership thereof
(Juraado, 2009) upon the death of the testator, as well as any
growing fruits, or unborn offspring of animals, or
Generic devises uncollected income; but not the income which was
due and unpaid before the latter’s death. (Art. 948,
A generic devise refers to a devise consisting of real NCC)
property designated merely by its class or genus
without any particular designation or physical If the bequest be generic or of quantity, its fruits and
segregation from all others of the same class. Thus, interests from the time of the death of the testator
if the testator devises five hectares of “rice lands” or shall pertain to the legatee or devisee if the testator
“sugar lands” to A, the devise is generic. The law, has expressly so ordered. (Art. 949, NCC)
however, declares that a devise of indeterminate
real property shall be valid only if there be
immovable property of its kind in the estate of the
testator. (Ibid.)
2023 GOLDEN NOTES
Arts. 948 and 949 vs. Art. 947 a) REQUISITES FOR VALIDITY
ARTS. 948 AND 949 ART. 947 All things and rights which are within the commerce
Refers to the moment of man may be bequeathed or devised. (Art. 924,
when the legatee or NCC)
devisee becomes the
Refers to the moment
owner of the thing Requisites:
when the legatee or
which is bequeathed or
devisee acquires a
devised, depending 1. Anything within the commerce of man;
right to the legacy or
upon whether the
devise.
legacy or devise is a. Susceptible of appropriation or of
determinate or being subjected to property rights
generic. of natural or juridical persons; and
(Jurado, 2009)
b. Transmissible from one person to
Transmission of ownership in determinate another, such that they may be
legacies or devises disposed of as forming part of
one’s patrimony, by way of sale,
It is essential before the legatee or devisee can barter, donation, etc.
acquire ownership of the thing bequeathed or
devised upon the death of the testator that the thing 2. The thing bequeathed or devised must
is determinate and that the legacy or devise is pure belong to the testator, except as provided
and simple. Thus, the thing bequeathed or devised under Articles 930 and 931; and
shall be at risk of the legatee or devisee, who shall,
therefore, bear its loos or deterioration, and shall be 3. It does not impair the legitime.
benefitted by its increase or improvement, without
prejudice to the responsibility of the executor or b) PROPERTY NOT OWNED BY THE TESTATOR
administrator. However, if such loss or
deterioration of the thing is through the fault or Testator can bequeath or devise a thing or
negligence of the executor or administrator, the property belonging to someone else
latter can be held liable for damages. (Jurado, 2009)
It occurs when:
Transmission of ownership in generic legacies
and devices 1. The testator thought that he owned it;
Once the choice or selection has been made in GR: The legacy or device of a thing belonging to
accordance with Art. 941 to 943 of the NCC, the another person is void, if the testator
legacy or devise ceases to be generic; it becomes a erroneously believed that the thing pertained to
pure and simple legacy or devise. It will be only then him. (Art. 930, NCC)
that the legatee or devisee can be considered as the
owner of the thing chosen; and from that very Reason: Nemo dat quod non habet. You cannot
moment, the legatee or devisee shall be entitled to give what you don’t have.
all of the fruits and interests of the thing, unless the
testator has expressly ordered in his will that such XPN:
fruits and interest shall pertain to the legatee or a. If subsequent to the making of the
devisee from the moment of his death. (Jurado, disposition, the thing is acquired by the
2009) testator onerously or gratuitously, such
disposition is validated. (Balane, 2010)
CIVIL LAW
b. If the thing bequeathed, though not XPN: When the testator expressly declares that he
belonging to the testator when he made the bequeaths or devises the thing in its entirety.
will, afterwards becomes his, by whatever
title, the disposition shall take effect. (Art. However, before this exception can be applied,
930, NCC) there must be:
2. The testator knows that he does not own it 1. an express declaration to that effect
but ordered its acquisition appearing in the will itself; and
2. knowledge on the part of the testator that
If the thing given as devise or legacy is not the thing belongs partly to a third person.
owned by the testator at the time he made the
will but he orders his estate to acquire it, it is a Such knowledge may be proved either from the
valid legacy or devise. (Art. 931, NCC) context of the will itself or from extrinsic evidence.
Obviously, such knowledge on the part of the
GR: If the thing already belonged to the testator of his limited right is essential because,
legatee/devisee at the time of the execution of the otherwise, the legacy or devise would be void under
will, the legacy/devise is void. It is not validated by Art. 930. (Jurado, 2009)
an alienation by the legatee/devisee subsequent to
the making of the will. (Balane, 2010) Suppose the Legatee or Devisee Acquired the
Property After the Will has been Executed
XPN: Unless the acquirer is the testator himself.
(Balane, 2010) 1. If he acquired it by gratuitous title, then the
legacy or devise is void;
Applicability of Arts. 911 & 950
Reason: The purpose of the testator that the
ART. 911 ART. 950 property would go to the devisee or legatee has
already been accomplished with no expense to
Art. 950 will apply if the
Art. 911 will apply if the legatee or devisee.
reason for the reduction
reductions have to be
is not the impairment of
made because the 2. If he acquired it by onerous title, the legacy or
legitimes;
legitimes have been devise is valid and the estate may be required to
impaired; reimburse the amount.
e.g., there are no
legitimes because there
i.e., if the When the property bequeathed or devised has
are no compulsory heirs,
legacies/devises have been pledged or mortgaged
or the legitimes have
exceeded the
already been satisfied
disposable portion. GR: The estate is obliged to pay the debt. (Art.
through donations inter
(Balane, 2010) 934(1), NCC)
vivos. (Balane, 2010)
XPN: If the testator provides otherwise. (Art. 934,

Legacy of Things Belonging Partly to Strangers
NCC)
The presumption is that the testator desires to
However, any other charge such as easements and
bequeath or devise only that which belongs to him.
usufruct, with which the thing bequeathed is
The same rule is applied where the thing belongs
burdened, shall be respected by the legatee or
partly to the heir, legatee or devisee and partly to a
devisee. (Art 934(3); Art. 946, NCC)
third person. The legacy or devise is limited only to
the part or interest belonging to such heir, legatee,
or devisee.
2023 GOLDEN NOTES
Legacy of Credit and Legacy of Remission Order of Payment of Legacies and Devises
A legacy of credit takes place when the testator 1. Remuneratory legacies or devises;
bequeaths to another a credit which he has against 2. Legacies or devises declared by testator to be
a third person. In effect, it is a novation of the credit preferential;
by the subrogation of the legatee in the place of the 3. Legacies for support;
original creditor. (Jurado, 2009) 4. Legacies for education;
5. Legacies or devises of a specific determinate
A legacy of remission is a testamentary disposition thing which forms part of the estate; and
of a debt in favor of the debtor. The legacy is valid 6. All others pro rata. (Art. 950, NCC)
only to the extent of the amount of the credit
existing at the time of the testator's death. In effect, NOTE: The order of preference mentioned above is
the debt is extinguished. applicable when:
In legacy of remission, the right to collect the debt 1. The estate is insufficient to cover all devises or
from the legatee himself is extinguished by legacies; and
condonation. (Mison, 2010)
2. When the reason for the reduction is not the
A legacy of credit or remission: impairment of legitimes. (e.g., there are no
legitimes because there are no compulsory
1. Applies only to amount still unpaid at the time heirs or the legitimes have already been
of the testator’s death; (Art. 935, NCC); satisfied through donations inter vivos).
(Balane, 2016)
2. It is revoked if the testator subsequently sues
the debtor for collection; (Art. 936, NCC) Art. 911 vs. Art. 950
3. If generic, applies only to those existing at the ART. 911, NCC ART. 950, NCC
time of the execution of the will, unless Order of Preference
otherwise provided. (Arts. 793 & 937, NCC)
(Balane, 2016)
1. Remuneratory
legacies or
Legacy to Creditors
devises;
1. Legitime of 2. Preferential
GR: A legacy or devise made to a creditor shall not
compulsory heirs; legacies or
be applied to his credit. As creditor, he shall file his
devises;
claim during the testate proceedings just like any
2. Donations inter 3. Legacy for
other creditor; as legatee, he shall wait until all
vivos; support;
claims against the estate and expenses of
4. Legacy for
administration had been paid in accordance with
3. Preferential education;
the Rules of Court.
legacies or 5. Legacies or
devises; devises of a
XPN: When the testator expressly declares that the
specific,
legacy or devise must be applied to the credit.
4. All other legacies determinate thing
If the testator expressly declares that the legacy or
or devises pro rata. which forms a part
devise shall be applied to the credit, the creditor
of the estate;
shall have the right to collect the excess, if any, of the
credit or of the legacy or devise. (Art. 938, NCC)
All others pro rata.
CIVIL LAW
When Applied 4. If the legacy is a credit against a third person or

Art. 911 will apply if Art. 950 will apply if the remission of a debt, and the testator,
the reductions have to the reason for subsequent to the making of the will, brings an
be made because the reduction is not the action against the debtor for payment. (Art. 936,
legitimes have been impairment of NCC)
impaired. legitimes.
c) INEFFECTIVE LEGACIES/DEVISES C. INTESTATE SUCCESSION
Grounds for the Revocation of Legacy or Devise

Legal or intestate succession is that which is
1. Transformation of the thing in such a manner effected by operation of law in default of a valid will.
that it does not retain either the form or the
denomination it had; (Art. 957 par. 1, NCC) It is legal because it takes place by operation of law;
it is intestate because it takes place in the absence
2. Alienation of the thing bequeathed or any part or in default of a last will of the decedent. (Jurado,
thereof. In the latter case, the legacy or devise
2009)
shall be without effect only with respect to the
part alienated; (Art. 957 par. 2, NCC)
1. RELATIONSHIP
GR: The alienation revokes the legacy/devise,
even if for any reason, the thing reverts to the Rules on Exclusion and Concurrence in Intestate
testator. (Balane, 2010) Succession
XPN: 1. Legitimate children

a. If the reversion is caused by the annulment
of the alienation and the cause for the a. Exclude parents, collaterals and State;
annulment was vitiation of consent on the b. Concur with surviving spouse and
grantor’s part, either by reason of illegitimate children;
incapacity or of duress; (Fernandez v. c. Excluded by no one.
Dimagiba, G.R. No. L-23638, 12 Oct. 1967)
2. Illegitimate children
b. If the reversion is by virtue of redemption
in a sale with pacto de retro. (Art. 957, NCC; a. Exclude illegitimate parents, collaterals
Balane, 2010) and State;
b. Concur with surviving spouse, legitimate
3. Total loss of the thing bequeathed. (Ibid.) children, and legitimate parents;
c. Excluded by no one.
This will be a cause for revocation only if it
takes place before the testator’s death. A 3. Legitimate parents
fortuitous loss after the testator’s death will
simply be an instance of “res perit domino” and a. Exclude collaterals and the State;
will be borne by the legatee/devisee. (Balane, b. Concur with illegitimate children and
2010) surviving spouse;
c. Excluded by legitimate children.
Reason: The loss shall be borne by the
legatee/devisee because the transmission of
ownership retroacts to the time of the death of
the testator.
2023 GOLDEN NOTES
4. Illegitimate parents exploded mid-air, killing everyone on board.

Esther is Alex's surviving widow. Esther
a. Exclude collaterals and State; executed an Affidavit of Self-Adjudication as
b. Concur with surviving spouse; Alex's sole heir, adjudicating to herself two
c. Excluded by legitimate children and parcels of land and two motor vehicles. Esther
illegitimate children. sought appointment as the legal representative
of Efren's estate, which the RTC granted. She
5. Surviving spouse then filed a claim for damages with Kenya Air for
"indemnity and compensation for the loss of her
a. Excludes collaterals other than brothers, husband," which Kenya Air amicably settled
sister, nephews and nieces, and State; with her. She received an award of
US$430,000.00. Thereafter, Felicidad and
b. Concurs with legitimate children, Cecilio, representing their siblings and their
illegitimate children, legitimate parents, nephews and nieces (Alex's collateral relatives),
illegitimate parents, brothers, sisters, filed a Complaint for Partition of Estate and
nephews and nieces; Declaration of Nullity of Affidavit of Self-
adjudication and Damages. They argued that
c. Excluded by no one. they have a rightful share in Efren's estate as his
collateral relatives. On the other hand, Esther
6. Brothers and Sister, nephews, and nieces alleged that her husband died as a result of a
quasi-delict, considering he had no ticket when
a. Exclude all other collaterals and the State; he rode the airplane. Thus, it is the Fatal
b. Concur with surviving spouse; Accidents Act of Kenya which is applicable, and
c. Excluded by legitimate children, it clearly defined who the dependents are: the
illegitimate children, legitimate parents spouse, descendants, and ascendants. Esther
and illegitimate parents. was able to properly plead the Kenyan Law. Do
the Filipino decedent's collateral relatives be
7. Other collaterals indemnified along with the surviving widow?
a. Exclude collaterals in remoter degrees and A: NO. Courts do not take judicial notice of foreign
the State; law. However, Esther properly pleaded and proved
b. Concur with collaterals in the same degree; the applicable Kenyan law. The Kenyan Law
c. Excluded by legitimate children, provides that the action for damages shall be for the
illegitimate children, legitimate parents, family of the deceased — wife, husband, parent, or
illegitimate parents, surviving spouse, child — which makes no mention of collateral
brothers and sisters, and nephews and relatives. Thus, it is clear that the Fatal Accidents Act
nieces. of Kenya applies. Accordingly, petitioner, as the
wife, is entitled to the totality of the US$430,000.00
8. State indemnity that Kenya Air paid her as settlement.
a. Excludes no one; Invoking the Civil Code, the collateral relatives of

b. Concurs with no one; Alex seek a share of the settlement proceeds and
c. Excluded by everyone. (Balane, 2016) pray for its division among them. However, as found
that Kenyan law properly applies here, there is no
Q: Alex was an Air Afrique pilot. On 30 Jan. 2000, basis to apply Philippine law on the matter. As far as
as a non-paying passenger, he boarded Kenya the Fatal Accidents Act of Kenya is concerned, a
Air flight 431 bound for Nairobi, Kenya. The decedent's heirs are only the surviving spouse,
plane departed from Abidjan, Ivory Coast. While ascendants, and descendants. Nowhere does it
in transit over the Ivory Coast, the plane mention the collateral relatives of a deceased
CIVIL LAW
person. (Vda. De Alcañeses v. Alcañeses, G.R. No. 3. When a testamentary disposition is subject to a
187847, 30 June 2021) Term or period, and such term or period
expires; or
Application of Inheritance
4. When a testamentary disposition is Impossible
The following are applied successively: (R-A-I-S-In) of compliance, or is ineffective. (Jurado, 2009)
1. Institution of an heir (bequest, in case of 3. ORDER OF INTESTATE SUCCESSION

legacies or devises);
2. Substitution, if proper;
Order of Preference Between Lines
3. Representation, if applicable;
4. Accretion, if applicable; and
1. First, succession takes place in the direct
5. Intestacy, if all of the above are not applicable.
descending line; (Art. 978, NCC)
2. Second, in the direct ascending line; (Art. 985,
2. CAUSES OF INTESTACY NCC) and
3. Finally, in the collateral line. (Art. 1003, NCC)
When Legal or Intestate Succession Takes Place
Order of Intestate Succession to a Legitimate
1. There is no will, the will is void, or the will is Child
revoked;
In general, and without prejudice to the concurrent
2. The will does not institute an heir to, or dispose right of other heirs in proper cases, the order of
of all the property of the testator (partial intestate succession to a legitimate child is as
intestacy); follows:
3. The suspensive condition attached to the 1. Legitimate children and descendants;

inheritance does not happen or is not fulfilled; 2. Legitimate parents and ascendants;
3. Illegitimate children;
4. The heir predeceased the testator or repudiates 4. Illegitimate parents;
the inheritance, and no substitution and no 5. The surviving spouse;
right of accretion take place; or 6. Brothers, sisters, nephews, nieces;
7. Other collaterals up to the fifth degree; and
5. The heir instituted is incapacitated to succeed. 8. State. (Rabuya, 2009; Balane, 2016)
(Art. 960, NCC)
Order of Intestate Succession to an Illegitimate
NOTE: The enumeration is not exclusive; there are Child
other causes for intestacy which are not included in
the enumeration. In general, and without prejudice to the concurrent
right of other heirs in proper cases, the order of
Examples: (P-Re-T-I) intestate succession to a legitimate child is as
follows:
1. When there is a Preterition in the testator’s will;
1. The legitimate children and descendants of a
2. When a testamentary disposition is subject to a person who is an illegitimate child are
Resolutory condition, and such condition is preferred over other intestate heirs, without
fulfilled; prejudice to the right of concurrence of
illegitimate children and the surviving spouse;
2023 GOLDEN NOTES
2. In the absence of legitimate children and 20 years of cohabitation they were able to
descendants, the illegitimate children (of the acquire real estate assets registered in their
illegitimate child) and their descendants names as co-owners. Unfortunately, Bert died of
succeed to the entire estate, without prejudice cardiac arrest, leaving no will. Bert was survived
to the concurrent right of the surviving spouse; by his biological siblings, Joe, and the boy. What
are the successional rights of Joe and the boy
3. In the absence of children and descendants, they raised as their son? (2015 BAR)
whether legitimate or illegitimate, the third in
the order of succession to the estate of the A: Neither of the two will inherit from Bert. Joe
illegitimate child is his illegitimate parents. If cannot inherit because the law does not recognize
both parents survive and are entitled to the right of a stranger to inherit from the decedent
succeed, they divide the estate share and share in the absence of a will. Their cohabitation will not
alike. Although the law is silent, if the surviving vest Joe the right to inherit from Bert. The child will
spouse of the illegitimate child concurs with the likewise not inherit from Bert because of the lack of
illegitimate parents, the surviving spouse shall formal adoption of the child.
be entitled to one-half of the estate while the A ward (ampon), without the benefit of formal
illegitimate parents get the other half; (judicial) adoption, is neither a compulsory nor a
legal heir. (Ibid.)
NOTE: In the ascending line, only the
illegitimate parents are entitled to inherit from Q: Donato, Sr. was legally married to Anatacia
the illegitimate child; the other illegitimate Santos and they had two children, namely:
descendants are not so entitled. Emerenciana, and Milagros. During his
marriage, Donato, Sr. had illicit relation with
4. In default of children or descendants, legitimate Emiliana dela Cruz. They begot four children,
or illegitimate, and illegitimate parents, the namely: Flora, born on 09 May 1928; Donato, Jr.,
surviving spouse shall inherit the entire estate. born on 22 Apr. 1930; Ruperto, born on 27 Mar.
But if the surviving spouse should survive with 1934; and Virgilio, born on 28 May 1937. Flora
brothers and sisters, nephews and nieces, the and Donato, Jr., now deceased, are substituted
surviving spouse shall inherit one-half of the by their heirs in the present action. On 21 Aug.
estate, and the latter the other half. The 1956, Donato, Sr. died intestate, leaving several
brothers and sisters must be by illegitimate properties he acquired during his lifetime. In
filiation; otherwise, the Iron Curtain Rule shall said settlement proceedings of Emerenciana's
apply; estate, Judge Cuevas declared that respondents
Flora, Donato, Jr., Ruperto and Virgilio, all
5. Although the law is silent, illegitimate brothers surnamed Pacheco, the illegitimate children of
and sisters who survive alone shall get the the deceased Donato R. Pacheco, Sr. and are,
entire inheritance. The legitimate children of therefore, entitled not only to intervene in the
the illegitimate parents are not entitled to proceedings but also to inherit from his estate
inherit from the illegitimate child by virtue of pursuant to the pertinent provisions of the New
Art. 992 of the NCC; Civil Code. According to the RTC and CA, the
respondents are the illegitimate children and
6. The State (Manuel v. Ferrer, G.R. No. 117246, 21 nephews and nieces of the late Donato, Sr. and
Aug. 1995) the legitime of each illegitimate child shall
consist of 1/2 of the legitime of legitimate child.
Q: Bert and Joe, both male and single, lived Are the RTC and CA correct?
together as common law spouses and agreed to
raise a son of Bert's living brother as their child A: NO. The legitime of an illegitimate child who is
without legally adopting him. Bert worked while neither an acknowledged natural, nor a natural
Joe took care of their home and the boy. In their child by legal fiction, shall be equal in every case to
CIVIL LAW
4/5 of the legitime of an acknowledged natural

child. (Art. 895(2), NCC) The whole estate, the
Legitimate
surviving spouse being
Children,
Flora, Ruperto, Virgilio, and Donato, Jr. cannot be counted as one legitimate
surviving
considered as acknowledged natural children of child and each illegitimate
spouse and
Donato, Sr. Children born outside wedlock of child getting ½ share of one
illegitimate
parents who, at the time of the conception of the legitimate child (Arts. 888 &
children
former, were not disqualified by any impediment to 999, NCC; Art. 176, FC)
marry each other, are natural. While they are
acknowledged or recognized, Flora, Ruperto, Legitimate The whole estate, divided
Virgilio and Donato, Jr. are not natural children. parents alone equally (Art. 985, NCC)
They are only acknowledged illegitimate children of
Donato, Sr.
Legitimate
The whole estate, observing in
Pursuant to the second paragraph of Art. 895, the ascendants
proper cases, the rule of
legitime of Flora, Ruperto, Virgilio and Donato, Jr., (other than
division by line (Art. 987, NCC)
being illegitimate children, shall consist of 4/5 of the parents) alone
legitime of an acknowledged natural child. The
legitime of an acknowledged natural child shall Legitimate parents
consist of 1/2 of the legitime of each of the = ½ of the estate
Legitimate
legitimate children or descendants. Thus, the
parents and
legitime of Flora, Ruperto, Virgilio and Donato, Jr., Illegitimate children
illegitimate
shall consist of 4/5 of the legitime of an = ½ of the estate
children
acknowledged natural child. (Rivera v. Villanueva,
G.R. No. 197310, 23 June 2021) (Art. 991, NCC)
Table of Intestate Shares

Legitimate parents
HEIR INTESTATE SHARE = ½ of the estate
Legitimate
parents and
Legitimate The whole estate divided Surviving spouse
surviving
Children alone equally (Art. 980, NCC) = ½ of the estate
spouse
(Art. 997, NCC)
Legitimate The whole estate, each

children and illegitimate child getting ½ Legitimate parents
Illegitimate share of one legitimate child = ½ of the estate
children (Art. 983 & Art. 895, NCC) Legitimate
parents, Surviving spouse
surviving = ¼ of the estate
spouse and
Legitimate The whole estate, divided illegitimate Illegitimate children
children and equally (the surviving spouse children = ¼ of the estate
surviving counted as one legitimate
spouse child) (Art. 996, NCC)
(Art. 1000, NCC)
2023 GOLDEN NOTES
The whole estate (Sec. 43, R.A. Surviving The whole estate. (Arts. 994 &
Adoptee alone
No. 11642) spouse alone 995, NCC)
Adoptee and No article governing, but Art.

legitimate The whole estate, divided 997 may be applied by
child of equally (Art. 980, NCC) analogy, thus:
Surviving
adopter
spouse and
Surviving spouse
illegitimate
Adoptee = ½ of the estate
parents
= ½ of the estate
Illegitimate parents
Adoptee and Illegitimate child of adopter = ½ of the estate
illegitimate = ¼ of the estate
child of Surviving spouse
adopter Balance of ¼ of the estate Surviving = ½ of the estate
= divided using the 2:1 ratio in spouse and
favor of the adoptee (Sta. legitimate Legitimate brothers, sisters,
Maria, 2022) brothers and nephews, nieces
sisters, = ½ of the estate (the nephews
The whole estate. (Art. 899, nephews and and nieces inheriting by
Adopter alone
NCC) nieces representation in proper
cases. (Art. 1001, NCC)
Adopter
Legitimate
= excluded
children of Surviving spouse
decedent- = ½ of the estate
Only the legitimate children
adoptee
will inherit (Art. 991, NCC)
Illegitimate brothers, sisters,
nephews and nieces
Adopter = ½ of the estate (the nephews
Illegitimate = ½ of the estate and nieces inheriting by
children of Surviving representation in proper
decedent- Illegitimate children spouse and cases) (Art. 994(2), NCC)
adoptee = ½ of the estate (Art. 991, illegitimate
NCC) brothers and NOTE: When the law speaks of
sisters, brothers and sisters, nephews
nephews and and nieces as legal heirs of an
Illegitimate The whole estate, divided
nieces illegitimate child, it refers to
children alone equally (Art. 988, NCC)
illegitimate brothers and
sisters as well as to the
Illegitimate children children, whether legitimate
Illegitimate = ½ of the estate or illegitimate, of such
children and brothers and sisters. (Manuel
surviving Surviving spouse v. Ferrer, G.R. No. 117246, 21
spouse = ½ of the estate Aug. 1995)
(Art. 998, NCC)
CIVIL LAW
Illegitimate The whole estate. (Art. 993, Illegitimate

No article governing, but Arts.
parents alone NCC) brothers,
1005 and 1008 may be applied
sisters,
by analogy, hence, they
nephews and
acquire the whole estate
Illegitimate parents nieces
=excluded
The whole estate per capita,
Children Nephews and but observing the 2:1
Illegitimate a. Child alone (legitimate or nieces alone proportion for the full and half
parents and illegitimate) blood (Art. 1009, NCC)
children of any = whole estate
kind
b. Legitimate and
The whole estate, per capita,
illegitimate children
Other the nearer in degree excluding
= each illegitimate gets ½
collaterals the more remote. (Arts. 1009 &
share of one legitimate child
1010, NCC)
The whole estate. (Art. 1011,

The whole estate, with a
Legitimate NCC)
sibling of the half-blood
brothers and
inheriting ½ the share of a
sister alone Assignment/Disposition:
sibling of the full blood. (Art.
1004, NCC)
1. If decedent was a
resident of the
The whole estate, observing
Legitimate Philippines at any time:
the 2:1 proportion of full and
brothers and
half-blood fraternity and the
sisters, a. Personal property – to
nephews and nieces inheriting
nephews and municipality of last
by representation in the
nieces residence;
proper cases. (Art. 1008, NCC)
b. Real property – where
situated;
Uncles and Aunts State
= excluded 2. If decedent was never a
resident of the
Nephews and
Nephews and nieces Philippines.
nieces with
= whole estate per capita, but
Uncles and
observing the 2:1 proportion Personal and real
aunts
for the full and half blood. property – where
respectively situated
(Art. 1009, NCC)
How property is to be used:
Illegitimate The whole estate, observing 1. For the benefit of public

brothers and the 2:1 proportion of full and educational and
sisters alone half-blood fraternity. charitable institutions in
the respective
municipalities or cities;
2023 GOLDEN NOTES
2. Alternatively, at the 3. Iron Curtain Rule

instance of an interested
party, or motu propio, NOTE: This exception was modified by the recent
court may order creation ruling of the Supreme Court in Aquino v. Aquino.
of a permanent trust for
the benefit of the See page 449 for the discussion on Aquino v.
institutions concerned. Aquino (G.R. Nos. 208912 & 209018, 07 Dec.
2021).
4. RULE OF PROXIMITY AND RULE OF EQUALITY
4. Art. 1009
Rule of Proximity
Should there be neither brothers nor sisters nor
children of brothers or sisters, the other collateral
Proximity of relationship is determined by the
relatives shall succeed to the estate. (Art. 1009(1),
number of generations. Each generation forms a
NCC)
degree. (Art. 963, NCC)
The latter shall succeed without distinction of lines
In every inheritance, the relative nearest in degree
or preference among them by reason of relationship
excludes the more distant ones. (Art. 962(1), NCC)
by the whole blood. (Art. 1009(2), NCC)
Rule of Equality
Exceptions to the Rule of Equality
Intestate heirs equal in degree inherit in equal

1. In the ascending line, the rule of division
shares. (Art. 962(2), NCC)
by line is ½ to the maternal line and ½ to
the paternal line, and within each line, the
a) EXCEPTIONS TO THE RULE OF PROXIMITY division is per capita. (Art. 987, NCC)
AND RULE OF EQUALITY
2. In the collateral line, the full-blood
Exception to the Rule of Proximity brothers/sisters will get double that of the
half-blood. (Art. 1006, NCC)
1. Right of Representation
3. The division in representation, where
Representation is a right created by fiction of law, division is per stirpes – the representative
by virtue of which the representative is raised to the divide only the share pertaining to the
place and the degree of the person represented, and person represented.
acquires the rights which the latter would have if he
were living or if he could have inherited. (Art. 970, NOTE: Compulsory heirs shall, in no case, inherit ab
NCC) intestato less than their legitimes as provided in
testamentary succession.
See page 461 for further discussion under Right
of Representation in Testacy and Intestacy When Children of One or More Brothers or
Sisters of the Deceased Survived
2. Preference between Lines
When children of one or more brothers or sisters of
Succession pertains, in the first place, to the the deceased survive, they shall inherit from the
descending direct line. (Art. 978, NCC) latter by representation, if they survive with their
uncles or aunts;
See page 442 for further discussion or under
Order of Intestate Succession
CIVIL LAW
But if they alone survive, they shall inherit in equal family and the illegitimate family there is presumed
portions. (division not per stirpes). (Art. 975, NCC) to be an intervening antagonism and
incompatibility. (Diaz v. ICA, G.R. No. L-66574, 21
5. DETERMINATION OF HEIRS Feb. 1990)
The rule in Art. 992 has consistently been applied in

The Supreme Court has abandoned the ruling
the following cases:
established in Ypon, Yaptinchay, Portugal, Reyes,
Heirs of Gabatan v. Court of Appeals, and other
a. where the illegitimate child had half-brothers
similar cases, which required a prior determination
who were legitimate, the latter had no right to
of heirship in a separate special proceeding as a
the former’s inheritance;
prerequisite before one could file an ordinary civil
action to enforce ownership rights acquired by
b. the legitimate collateral relatives of the mother
virtue of succession.
cannot succeed from her illegitimate child;
In Treyes v. Larlar (G.R. No. 232579, 08 Sep. 2020),

c. a natural child cannot represent his natural
the Court En Banc held that the heirs’ rights become
father in the succession to the estate of the
vested without the need for them to be declared
legitimate grandparent;
heirs. This is more in accordance with Art. 777 of the
NCC which states that “the rights of succession are
d. the natural daughter cannot succeed to the
transmitted from the moment of the death of the
estate of her deceased uncle who is a legitimate
decedent.” The compulsory or intestate heirs may
brother of her natural father; and an
initiate an ordinary civil action to declare the nullity
illegitimate child has no right to inherit ab
of a deed or instrument, for the recovery of
intestato from the legitimate children and
property, or any other action in the enforcement of
relatives of his father. (Manuel v. Ferrer, G.R. No.
their ownership rights acquired by virtue of
117246, 21 Aug. 1995)
succession, without the need for a prior and
separate judicial declaration of their status as such.
NOTE: The iron curtain rule only applies in intestate
succession.
6. SUCCESSIONAL BARRIER
(THE “IRON CURTAIN RULE”) Reason: Between the legitimate family and the
illegitimate family there is presumed to be an
See page 449 for the discussion on Aquino v. intervening antagonism and incompatibility. (Diaz,
Aquino (G.R. Nos. 208912 & 209018, 07 Dec. et al., v. IAC, G.R. No. L-66574, 21 Feb. 1990)
2021).
The right of representation is not available to
An illegitimate child has no right to inherit ab illegitimate descendants of legitimate children in
intestato from the legitimate children and relatives the inheritance of a legitimate grandparent.
of his father or mother; nor shall such children or
relatives inherit in the same manner from the Petitioners argued that the illegitimate descendant
illegitimate child. (Art. 992, NCC) of a legitimate child is entitled to represent by virtue
of the provisions of Article 982, which provides that
Art. 992 of the NCC provides a barrier or iron “the grandchildren and other descendants shall
curtain in that it prohibits absolutely a succession inherit by right of representation.” Such a
ab intestato between the illegitimate child and the conclusion is erroneous. It would allow intestate
legitimate children and relatives of the father or succession by an illegitimate child to the legitimate
mother of said illegitimate child. They may have a parent of his father or mother, a situation which
natural tie of blood, but this is not recognized by law would set at naught the provisions of Art. 992 of the
for the purpose of Art. 992. Between the legitimate NCC.
2023 GOLDEN NOTES
Art. 982 of the NCC is inapplicable to instant case A: YES. In Aquino v. Aquino (G.R. Nos. 208912 &
because Art. 992 prohibits absolutely a succession 209018, 07 Dec. 2021), the Court En Banc adopts a
ab intestato between the illegitimate child and the construction of Art. 992 of the NCC or the “Iron
legitimate children and relatives of the father or Curtain Rule.” Children, regardless of the
mother. It may not be amiss to state that Art. 982 is circumstances of their births, are qualified to inherit
the general rule and Art. 992 the exception. (Diaz v. from their direct ascendants, such as their
IAC, G.R. No. L-66574, 17 June. 1987) grandparents, by their right of representation. Both
marital and nonmarital children, whether born from
Law on succession is animated by a uniform general a marital or nonmarital child, are blood relatives of
intent, and no part should be rendered inoperative their parents and other ascendant. A child whose
by, but must be construed in relation to, any other parents did not marry each other can inherit from
part as to produce a harmonious whole. (Manuel v. their grandparent by their right of representation,
Ferrer, G.R. No. 117246, 21 Aug. 1995) regardless of the grandparent’s marital status at the
birth of the child’s parent.
Aquino v. Aquino
G.R. Nos. 208912 and 209018, 07 Dec. 2021 The Court abandoned the presumption that non-
marital children are products of illicit relationships
Q: Miguel Aquino died intestate leaving personal or that they are automatically placed in a hostile
and real properties. Amadea Angela Aquino environment perpetrated by the marital family. The
moved that she be included in the distribution Court is not duty bound to uncritically parrot
and partition of Miguel’s estate. She alleged that archaic prejudices and cruelties, to mirror and
she was the only child of Arturo, Miguel’s son, as amplify oppressive and regressive ideas about the
evidenced by a hospital certification stating that status of children and family life. The best interest
she was Arturo and Susan Kuan’s daughter. of the child should prevail. (Aquino v. Aquino, G.R.
Angela stated Arturo died before she was born Nos. 208912 & 209018, 07 Dec. 2021)
on 09 Oct. 1978. While her parents were not
married, they did not suffer from any Iron Curtain Rule vs. Right of Representation
impediment to marry. Her parents were
planning to marry before Arturo died. Since her RIGHT OF
IRON CURTAIN RULE
birth, her father’s relatives had continuously REPRESENTATION
recognized her as Arturo’s natural child. Miguel Prohibits absolutely a
also instructed the distribution of his succession ab intestato Right created by fiction
properties, wherein Angela was among the heirs between the of law where the
who would receive portions of Miguel’s estate. illegitimate child and representative is
Angela filed a Motion for Distribution of Residue the legitimate children raised to the place and
of Estate or for Allowance to the Heirs. She and relatives of the degree of the person
alleged that as Arturo's natural child, she has a father or mother of represented and
legal right to a monthly allowance like those said illegitimate child. acquires the rights
given to Miguel's other heirs. The RTC granted (Paras, 2008) which the latter would
Angela’s motions. Miguel’s son, Rodolfo filed a have if he were living
petition for certiorari before the CA which was NOTE: Iron curtain or could have
denied. Meanwhile, Abdulah, Miguel’s other son, rule imposes a inherited. (Jurado,
appealed the RTC’s orders before the CA, limitation on right of 2009)
claiming that Angela failed to prove her filiation representation.
and that Angela could not inherit from Miguel ab Applies to both
Applies only in
intestato. The CA rendered in favor of Abdulah. intestate and testate
intestate succession
Can Angela, a nonmarital child, represent her succession
deceased parent to succeed in her grandparent’s
estate?
CIVIL LAW
2023 GOLDEN NOTES
7. SUCCESSIONAL RIGHTS OF ADOPTED The adopter may disinherit the adoptee for the
CHILDREN same causes as those of legitimate as well as
illegitimate children provided in Art. 919 of the NCC.
(Sec. 47, R.A. No. 11642)
GR: Adopted children are entitled to the same
successional rights as legitimate children. (Jurado,
If the National Authority for Child Care (NACC) finds
2009)
that the allegations of the petition for rescission are
true, succession rights shall revert to its status prior
XPNs:
to adoption, but only as of the date of the approval
of the petition. (Sec. 51(b), R.A. No. 11642)
1. If the adopter is survived by legitimate parents
or ascendants and by an adopted person, the
Intestate share of adopted children:
latter shall not have more successional rights
than an acknowledged natural child. (Art. 343,
INTESTATE SHARE OF ADOPTED CHILDREN
NCC)
Adoptee alone
2. If the adopter dies before his legitimate parent The whole estate (Sec. 43, R.A. No. 11642)
or ascendant or is incapacitated to inherit from Adoptee and legitimate child of adopter
such parent or ascendant, the adopted child, his The whole estate, divided equally (Art. 980, NCC)
legitimate children, or descendants cannot Adoptee and illegitimate child of adopter
inherit by right of representation from the Adoptee
adopter’s parent or ascendant. (Art. 979, NCC) = 1/2 of the estate
NOTE: An adopted child cannot represent, and Illegitimate child of adopter

neither may be represented. = 1/4 of the estate
The relationship established by adoption is limited Balance of 1/4 of the estate

solely to the adopter and the adopted. It does not = divided using the 2:1 ratio in favor of the
extend to the relatives of the adopter, or of the adoptee (Sta. Maria, 2022)
adopted child. No relationship is created between
the adopted and the collaterals of the adopter.
Consequentially, the adopted is an heir of the If the adopter is survived only by his or her adoptee,
adopter, but not of the relatives of the adopter. the latter gets the whole of the estate of the adopted.
(Balane, 2016) (Sec. 43, R.A. No. 11642). The adoptee will not only
get his or her legitime, which constitutes one-half of
Successional rights of adopted children under the estate, but also the free portion. (Sta. Maria,
R.A. No. 11642 or the Domestic Administrative 2022)
Adoption and Alternative Child Care Act of 2022:
If the adopter is survived only by the adoptee and a
The law provides that in legal and intestate legitimate child of the adopter, the collective
succession, the adopter and the adoptee shall have legitime is one-half of the estate which they will
reciprocal rights of succession without distinction divide equally. They will likewise divide the free
from legitimate filiations. The adopted child is a portion equally. Hence, they will divide the whole
legal or intestate heir of the adopter. (Sec. 43, R.A. estate equally (Art. 980, NCC)
No. 11642)
If the survivors are only the adoptee and an
illegitimate child of the adopter, one-half of the
estate shall go to the adoptee and one-fourth shall
go to the illegitimate child and the balance of one-
CIVIL LAW
fourth shall be divided between the adoptee and the 9. SUCCESSIONAL RIGHTS OF MARITAL AND
illegitimate child using the ratio 2:1 in favor of the NON-MARITAL CHILDREN
adoptee because of the rule that an illegitimate child
gets half of what a legitimate child gets. (Sta. Maria,
Children, regardless of their parents’ marital status,
2022)
can now inherit from their grandparents and other
direct ascendants by right of representation.
8. SUCCESSIONAL RIGHTS OF ADOPTING (Aquino v. Aquino, G.R. Nos. 208912 & 209018, 07
PARENTS Dec. 2021)
GR: The adopter shall not be a legal heir of the In Aquino v. Aquino (G.R. Nos. 208912 & 209018, 07
adopted person, whose parents by nature shall Dec. 2021), the Court En Banc reinterpreted Art. 992
inherit from him. of the NCC, which prohibits nonmarital children
from inheriting from their siblings who are marital
XPN: If the natural parents are both dead, the children, as well as “relatives of their father or
adopting parent takes their place in the line of mother.” The Decision used the terms “marital” and
succession, whether testate or intestate. “nonmarital” to replace the terms “legitimate” and
“illegitimate” when referring to the children, as the
Intestate share of adopting parents: latter terms are pejorative terms when used to
describe children based on their parents’ marital
If the adopted dies and the only survivor is the status.
adopter, the adopter gets one-half of the estate as
his or her legitime (Art. 899, NCC) and he or she also This case involves a woman who claims to be the
gets the other half which is the free portion. In effect, nonmarital child of a man who died before she was
he or she gets the whole estate. born. After her alleged paternal grandfather died,
she asserted her right to represent her deceased
If the decedent-adoptee has legitimate children of father—a marital child—in inheriting from her
his or her own, only these children will inherit to the grandfather’s estate.
exclusion of the adopter. But if the children are
illegitimate, the adopter shall get one-half of the However, in previous cases, the Court had
estate, and the other half goes to the illegitimate interpreted Art. 992 as barring nonmarital children
children (Art. 991, NCC) from inheriting from their grandparents and other
direct ascendants, as they are covered by the term
INTESTATE SHARE OF ADOPTING PARENT “relatives.” The Supreme Court had called this
Adopter alone prohibition the “iron curtain rule,” inferred from a
The whole estate. (Art. 899, NCC) perceived hostility between the marital and
nonmarital sides of a family.
Legitimate children of decedent-adoptee
Adopter = excluded Now, the Court reexamined the iron curtain rule,
finding that Art. 992 “should be construed to
Only the legitimate children will inherit (Art. account for other circumstances of birth and family
991, NCC) dynamics. Peace within families cannot be
encouraged by callously depriving some of its
Illegitimate children of decedent-adoptee members of their inheritance. Such deprivation
Adopter = ½ of the estate may even be the cause of antagonism and alienation
that could have been otherwise avoided.”
Illegitimate children = ½ of the estate (Art. 991,
NCC)
2023 GOLDEN NOTES
The Court ruled that grandparents and other direct INTESTATE SHARE OF SURVIVING SPOUSE
ascendants are outside the scope of “relatives” Surviving spouse alone
under Art. 992. “Both marital and nonmarital The whole estate (Arts. 994 & 995, NCC)
children, whether born from a marital or nonmarital Legitimate children and surviving spouse
child, are blood relatives of their parents and other The whole estate, divided equally (the surviving
ascendants.” Thus, a nonmarital child’s right of spouse counted as one legitimate child) (Art. 996,
representation should be governed by Art. 982 of NCC)
the NCC, which does not differentiate based on the Legitimate Children, surviving spouse and
birth status of grandchildren and other direct illegitimate children
descendants. The whole estate, the surviving spouse being
counted as one legitimate child and each
10. SUCCESSIONAL RIGHTS OF THE SURVIVING illegitimate child getting ½ share of one
SPOUSE legitimate child (Arts. 888 & 999, NCC; Art. 176,
FC)
In intestate succession, the order is based on the Illegitimate children and surviving spouse
presumed will of the decedent. It is presumed that Illegitimate children
the he would have first provided for legitimate = ½ of the estate
relatives; second, for illegitimate relatives; third, for
the surviving spouse; and fourth, for the State. (Art. Surviving spouse
961, NCC) = ½ of the estate (Art. 998, NCC)
Requisites of a surviving spouse to qualify as an

intestate heir (Paras, 2008) 11. SUCCESSIONAL OF COLLATERAL RELATIVES
1. Have a legitimate marriage recognized in Inheritance by Collateral Relatives

the Philippines;
2. Not married to a person already married to If there are no descendants, ascendants, illegitimate
another even in good faith; and children, or a surviving spouse, the collateral
3. Not the guilty party in the case of a legal relatives shall succeed to the entire estate of the
separation. (Art. 1002, NCC) deceased. (Art. 1003, NCC)
Inheritance by the Surviving Spouse Persons qualified to inherit as collateral

relatives
In the absence of legitimate descendants and
ascendants, and illegitimate children and their 1. Only refer to those within the fifth degree;
descendants, whether legitimate or illegitimate, the
surviving spouse shall inherit the entire estate, 2. Where two or more collateral relatives concur
without prejudice to the rights of brothers and in the succession, the rule of proximity is
sisters, nephews and nieces, should there be any. applicable;
(Art. 995, NCC)
3. The right of representation is extended only to
The surviving spouse is entitled, not only to the nephews and nieces; and
usufruct, but also to the ownership of his or her
share in the inheritance. (Jurado, 2009) 4. Where the survivors are of the same degree, the
rule of preference is recognized, but it is a rule
which can be applied only to brothers and
sisters or nephews and nieces and not to other
collateral relatives. (Jurado, 2009)
CIVIL LAW
INTESTATE SHARE OF COLLATERALS

Legitimate brothers and sister alone D. PROVISIONS COMMON TO TESTATE AND
INTESTATE SUCCESSION
The whole estate, with a brother/sister of the
half-blood inheriting ½ the share of a sibling of
the full blood (Art. 1004, NCC)
1. CAPACITY TO SUCCEED
Legitimate brothers and sisters, nephews
and nieces Persons not incapacitated by law may succeed by
will or ab intestato. The provisions relating to
The whole estate, observing the 2:1 proportion of
incapacity by will are equally applicable to intestate
full and half-blood fraternity and the nephews
succession. (Art. 1024, NCC)
and nieces inheriting by representation in the
proper cases (Art. 1008, NCC)
In order to be capacitated to inherit, the heir,
Nephews and nieces with Uncles and aunts devisee, or legatee must be living at the moment the
succession opens, except in case of representation,
Uncles and Aunts when it is proper. (Art. 1025, NCC)
= excluded
Capacity to Succeed of a Child Already Conceived
Nephews and nieces at the Time of the Death of the Decedent (2007
= whole estate per capita, but observing the 2:1 BAR)
proportion for the full and half-blood (Art. 1009,
NCC) A child already conceived at the time of the death of
the decedent is capable of succeeding provided it be
Illegitimate brothers and sisters alone
born later under the conditions prescribed in Art. 41
of the NCC. (Ibid.)
The whole estate, observing the 2:1 proportion of
full and half-blood fraternity
Requisites for a Person to Inherit Either by Will
Illegitimate brothers, sisters, nephews or by Intestacy
and nieces
1. Heir, legatee, or devisee must be living or in
No article governing, but Arts. 1005 and 1008 existence at the moment the succession
may be applied by analogy, hence, they acquire opens; and
the whole estate
Nephews and nieces alone XPNs:
The whole estate per capita, but observing the 2:1 a. Testamentary disposition made to the
proportion for the full and half-blood (Art. 1009, State, provinces, municipal
NCC) corporations, private corporations,
organizations, or associations for
Other collaterals
religious, scientific, cultural,
The whole estate, per capita, the nearer in degree educational, or charitable purposes;
excluding the more remote (Arts. 1009 & 1010, (Art. 1026(1), NCC)
NCC)
XPN XPN: All other corporations or
entities may succeed under a will,
unless there is a provision to the
contrary in their charter or the laws of
2023 GOLDEN NOTES
their creation, and always subject to Incapacity to Succeed

the same. (Art. 1026(2), NCC)
Incapacity to succeed may either be absolute or
b. Where the testator disposes of the relative. (Jurado, 2009)
whole or part of his property for
prayers and pious works for the benefit Absolute incapacity to succeed
of his soul, in general terms and
without specifying its application; (Art. It means that the person is incapacitated to succeed
1029, NCC) and in any form, whether by testate or intestate
succession. (Jurado, 2009)
c. Testamentary provisions in favor of
the poor in general, without Persons who are Absolutely Incapacitated to
designation of particular persons or of Succeed:
any community, shall be deemed
limited to the poor living in the 1. Those not living at the time of death of the
domicile of the testator at the time of testator; (Art. 1025, NCC)
his death, unless it should clearly
appear that his intention was 2. Those who cannot be identified. (Art. 845, NCC)
otherwise. (Art. 1030, NCC; Jurado,
2009) 3. Individuals, associations, and corporations who
are not permitted by law to inherit. (Art.
2. Heir, legatee, or devisee must not be 1027(6), NCC)
incapacitated by law to succeed.
Relative incapacity to succeed
Determination of the Capacity to Succeed
It means the person is incapacitated to succeed
GR: In order to judge the capacity of the heir, because of some special relation to the testator, to
devisee, or legatee, his qualification at the time of other persons or to the property disposed of.
the death of the decedent shall be the criterion. (Jurado, 2009)
XPN: If the institution, devise or legacy should be Grounds for Relative Incapacity to Succeed (U-
conditional (suspensive condition), the capacity is M-A-O)
to be determined not only at the time of the death of
the decedent but also at the time of the fulfillment of 1. Undue influence or interest; (Art. 1027, NCC)
the condition. 2. Morality or public policy; (Art. 739, NCC)
3. Acts of unworthiness; (Art. 1032, NCC)
NOTE: If the institution is subject to a suspensive 4. By Operation of law. (Jurado, 2009)
term, the requirement of being alive applies only at
the moment of the decedent’s death; the successor a) INCAPACITY BY REASON OF UNWORTHINESS
need not be alive when the term arrives. (Balane, AND EFFECTS OF CONDONATION
2016; Art. 878. NCC)
Persons incapable of succeeding by reason of
NOTE: In case of representation, the representative unworthiness
must at least already be conceived when the
decedent dies. 1. Parents who have abandoned their children
or induced their daughters to lead a corrupt
or immoral life, or attempted against their
virtue;
CIVIL LAW
Abandonment within the meaning of the law NOTE: Since the law does not make any
refers to the failure of parents to give their qualification whatsoever, “accusation”
children due care, instructions, and support. includes not only the act of the disinherited
(Sanchez Roman 274-275) heir of instituting the criminal action in the
capacity of a complainant, but also any act
Inducing their daughters to live a corrupt or of intervention such as being a witness for
immoral life means that the parents, by advice, the prosecution, by which he accuses the
force, intimidation, or any other positive act, testator of having committed the crime
induce their daughters or granddaughters to charged.
live a life of corruption and/or immorality.
(Jurado, 2009) b. penalty prescribed by law for such crime
must be 6 years imprisonment or more;
Attempting against their virtue includes any act and
of the parents as principals, co-principals, or
accomplices, which can properly be classified as c. the accusation must have been found to be
an attempt against the virtue of their daughters groundless.
or granddaughters. This would include all
criminal acts against the chastity of the latter. NOTE: it will not make any material
(Jurado, 2009) difference whether the accusation was
found groundless during the preliminary
2. Any person who has been convicted of an investigation, or during the trial, or on
attempt against the life of the testator, his or appeal. (Jurado, 2009)
her spouse, descendants, or ascendants;
4. Any heir of full age who, having knowledge of
Requisites: the violent death of the testator, should fail to
report it to an officer of the law within a
a. There must be an attempt or a frustrated month, unless the authorities have already
attempt to commit a crime on the part of taken action; this prohibition shall not apply
the ascendant against the life of the to cases wherein, according to law, there is no
testator, his or her spouse, or descendants; obligation to make an accusation;
and
Requisites for application of the fourth
b. There must be a conviction for the paragraph
attempted or frustrated crime committed
against the life of the testator, his or her a. Heir must be of full age;
spouse, or descendants. (Jurado, 2009) b. He must have knowledge of the violent
death of the decedent;
3. Any person who has accused the testator of a c. He must have failed to report the matter to
crime for which the law prescribes the proper authorities; and
imprisonment for 6 years or more, if the d. There must be a legal obligation to make an
accusation has been found groundless; accusation.
Requisites 5. Any person convicted of adultery or

concubinage with the spouse of the testator;
a. The ascendant must accuse the testator of a
crime; The heir who is incapable of succeeding by
reason of unworthiness is the person who is
convicted of adultery or concubinage with the
2023 GOLDEN NOTES
spouse of the decedent. The spouse is not Three (3) Characteristics of Incapacity Due to
included. Unworthiness
Requisites: 1. They are based on offenses committed by

the disqualified person against the
a. There must be an attempt to commit a decedent which render him unworthy to
crime of adultery or concubinage on the succeed.
part of the ascendant with the testator’s
spouse; and 2. They are applicable to both testamentary
and intestate succession.
b. There must be a final judgment of
conviction for the adultery or concubinage 3. Although relative in character, they are
committed with the testator’s spouse. total in the sense that if the heir who is
disqualified is a compulsory heir, the
NOTE: Mere adultery or concubinage with the incapacity shall apply not only to the free
spouse of the testator is not, therefore, a ground portion given to him but even to his
for the disinheritance of a child or descendant. legitime. (Jurado, 2009)
It is, however, possible that even without a
previous criminal conviction, adultery or Effects of Condonation
concubinage with the spouse of the testator
may be a ground for disinheriting the child or The causes of unworthiness shall be without effect
descendant, provided that it falls within the if the testator had knowledge thereof at the time he
scope or purview of “living a disgraceful or made the will, or if, having known of them
dishonorable life.” (Jurado, 2009) subsequently, he should condone them in writing.
(Art. 1033, NCC)
6. Any person who by fraud, violence,
intimidation, or undue influence should Only the decedent himself and no other person can
cause the testator to make a will or to change erase the effects of such acts of unworthiness.
one already made; (Jurado, 2009)
The fraud, violence, intimidation, or undue
influence may have been employed either for The condonation of the acts of unworthiness may
the purpose of causing the testator to execute a done expressly or impliedly.
will or for the purpose of causing the testator to
change or will which has already been made. Express vs. Implied
Consequently, what had been stated in a
previous section with regard to fraud, violence, EXPRESS IMPLIED
intimidation, and undue influence may also be As to how it is done
applied here. (Jurado, 2009)
7. Any person who by the same means prevents Testator, with

another from making a will, or from revoking knowledge of the act of
one already made, or who supplants, Decedent condones unworthiness,
conceals, or alters the latter's will; and the act of executes a will
unworthiness in instituting the person
8. Any person who falsifies or forges a supposed writing. (Jurado, 2009) who has committed
will of the decedent. (Art. 1032, NCC) the offense as an heir.
(Jurado, 2009)
CIVIL LAW
As to when it is done As to Effects of Pardon or Reconciliation
In case of Reconciliation between

testamentary the offender and the
If testator already If the testator pardons
succession, it is done if offended party
knew of the causes of the act of
knowledge of the act of deprives the latter of
unworthiness at the unworthiness, the
unworthiness comes the right to disinherit
time he made the will. cause of unworthiness
only after the and renders ineffectual
(Paras, 2008) shall be without effect.
execution of the will. any disinheritance that
(Paras, 2008) may have been made.
As to its applicability in testate or intestate As to Manner of Reconciliation

succession
Written condonation
Takes place both in
Only takes place in Express or implied or execution by the
testamentary and
testamentary Either an express offended party of a will
intestate succession.
succession. (Ibid.) pardon or unequivocal with knowledge of the
(Ibid.)
conduct of the testator. cause of
(Balane, 2016) unworthiness. (Art.
NOTE: If an implied condonation is made in a void 1033, NCC)
or revoked will, it is as if there was no condonation.
Therefore, the incapacity remains. (6 Sanchez As to Grounds
Roman 285)
There are grounds for disinheritance which are
Reason for Allowing Condonation also causes for incapacity by reason of
unworthiness.
The decedent’s intention should be given effect
As to effect of subsequent reconciliation if
because after all, the act of unworthiness had been
disinheritance has already been made on any
committed against him. (6 Sanchez Roman 284)
of the grounds which are also causes for
unworthiness
Unworthiness vs. Disinheritance
The moment the testator uses one of the causes
DISINHERITANCE UNWORTHINESS for unworthiness as a ground for disinheritance,
he thereby submits it to the rule on
As to Effects on the Inheritance
disinheritance. (Rabuya, 2009)
b) INCAPACITY BY REASON OF MORALITY
Exclusion from the Incapacity by reason of morality (A-C-O) (2000

Deprivation of a entire inheritance. BAR)
compulsory heir of his However, donations
legitime. inter vivos are not a. Persons guilty of Adultery or concubinage with
affected. the testator at the time of the making of the will;
b. Persons guilty of the same Criminal offense, in

consideration thereof;
2023 GOLDEN NOTES
c. A public officer or his wife, descendants and to a person with whom he has been living in
ascendants, by reason of his Office. (Art. 1028 in concubinage. Thus, the prohibition mentioned in
relation to Art. 739 of NCC) Art. 739 of the NCC concerning donations inter vivos
apply to testamentary provisions.
Incapacity Based on Morality or Public Policy
c) INCAPACITY BY REASON OF POSSIBLE UNDUE
Prohibitions concerning donations inter vivos shall INFLUENCE
apply to testamentary provisions. (Art. 1028, NCC)
Persons incapacitated to succeed based on
The following donations shall be void: Undue Influence or Interest (P-Re-Guard-A-P-I)
1. Those made between persons who were 1. The Priest who heard the confession of the
guilty of adultery or concubinage at the testator during his last illness, or the
time of the donation; minister of the gospel who extended
spiritual aid to him during the same period;
NOTE: Previous criminal conviction is not
necessary. (Jurado, 2009) 2. The Relatives of such priest or minister of
the gospel within the fourth degree, the
NOTE: The action for declaration of nullity church, order, chapter, community,
may be brought by the spouse of the donor organization, or institution to which such
or donee; and the guilt of the donor and priest or minister may belong;
donee may be proved by preponderance of
evidence in the same action. (Paras, 2008; 3. A Guardian with respect to testamentary
Art. 739, NCC) dispositions given by a ward in his favor
before the final accounts of the
2. Those made between persons found guilty guardianship have been approved, even if
of the same criminal offense, in the testator should die after the approval
consideration thereof; and thereof; nevertheless, any provision made
by the ward in favor of the guardian when
NOTE: Previous criminal conviction is the latter is his ascendants, descendant,
indispensable. brother, sister, or spouse, shall be valid;
3. Those made to a public officer or his wife, 4. Any Attesting witness to the execution of a
descendants, and ascendants, by reason of will, the spouse, parents, or children, or
his office. (Art. 739(4), NCC) anyone claiming under such witness,
spouse, parents, or children;
NOTE: Like the disqualifications provided for in Art. NOTE: Nos. 1 to 4 do not apply to legitimes.
1027, they are applicable only in testamentary
succession. Furthermore, they are not only relative 5. Any Physician, surgeon, nurse, health
in character, but they are also partial in the sense officer or druggist who took care of the
that if the heir who is disqualified is a compulsory testator during his last illness;
heir, the incapacity shall apply only to the free
portion given to him, but not to his legitime. (Jurado, NOTE: No. 5 is an absolute disqualification.
2009)
6. Individuals, associations, and corporations
In Nepomuceno v. CA (G.R. No. 62952, 09 Oct. 1985), not permitted by law to inherit. (Art. 1027,
the Court held that the very wordings of a will may NCC)
invalidate the legacy, such as where the testator
admits in the will that he is disposing the properties
CIVIL LAW
Requisites for Disqualification of Priests and 4. Community;

Ministers 5. Organization; or
6. Institution to which they may belong. (Jurado,
1. That the priest must have heard the confession 2009; Art. 1027(2), NCC)
of the testator or that the minister must have
extended spiritual aid to the testator during the NOTE: The rules on incapacity must be strictly
latter’s last illness; and construed.
2. That the testator must have executed the will Q: If the confession was made before the will was
during such last illness. (Jurado, 2009) made, can the priest inherit upon the death of
the sick person, if the priest is the son of the sick
“Last Illness” person?
It must be the illness of which the testator died. The A: YES. He can get the legitime.
fact that the testator died from some other cause
does not necessarily exclude the application of the NOTE: A priest is incapacitated to succeed when the
disqualification. What is essential is there must be confession is made prior to or simultaneously with
an imminent or impending danger of the illness the making of a will. The disqualification applies
being the last as far as the testator is concerned at only to testamentary dispositions.
the time he executed the will. (Jurado, 2009)
Q: If the confession was made before the will was
Failure to Rectify the Disposition Constitutes made, can the priest inherit upon the death of
Ratification of the Same the sick person, if the priest was the sick
person’s brother?
Where a testator, after he has been pronounced
hopeless by his physicians, executes a will disposing A: YES. He can inherit by intestacy.
of all of his disposable properties in favor of the
minister who is extending spiritual aid to him, but NOTE: Despite the seemingly restrictive terms of
still lived after a few months and did not make any this disqualification, it applies also to all individuals
changes to the testamentary disposition, such is a belonging to other religions, sects, or cults, whose
valid disposition. (Jurado, 2009) office or function is to extend the peculiar spiritual
ministrations of their creed. (Balane, 2016)
NOTE: The basis of disqualification is the
presumption that at the threshold of death the Reason: It is conclusively presumed that the
testator becomes an easy prey to the scheming spiritual minister used his moral influence to induce
priest or minister. Thus, failure to revoke or rectify or influence the sick person to make a testamentary
the disposition is deemed to be a confirmation of the disposition in his favor.
same. (Jurado, 2009)
Disqualification of Guardians
Extended Disqualifications to the Relatives
Within the Fourth Degree of Priests and GR: The disqualification applies when the will is
Ministers of the Gospel made before the approval of final accounts or lifting
of guardianship.
The following are also disqualified by reason of
possibility of undue influence: (Ch-I-C-O-C-O) XPN: It does not apply even when the will is made
after the guardianship began or before it is
1. The Church; terminated when the guardian is an: (S-A-D-Bro-
2. Order; Sis)
3. Chapter;
2023 GOLDEN NOTES
1. Spouse of the testator; 2. RIGHT OF REPRESENTATION IN TESTACY

2. Ascendant ; AND INTESTACY
3. Descendant ;
4. Brother; and
Representation is a right created by fiction of law,
5. Sister. (Jurado, 2009)
by virtue of which the representative is raised to the
place and the degree of the person represented, and
NOTE: The disqualification applies even if the ward
acquires the rights which the latter would have if he
should die after the approval thereof. (Ibid.)
were living or if he could have inherited. (Art. 970,
NCC)
Disqualification of Witnesses
Basis: The rule of proximity is primarily a rule of

Unlike the others, the basis of this disqualification is
exclusion because in inheritance, the relative
not the possibility of undue influence but interest.
nearest in degree excludes the more distant ones.
(Ibid.)
The right of representation serves as an exception
to this rule. By virtue of the right, more distant
GR: An attesting witness or that he is the spouse,
relatives are raised to the place and degree of such
parent, or child of one of the attesting witnesses or
person represented. (Jurado, 2009)
that he is claiming under such witness, spouse,
parent, or child are disqualified.
NOTE : Representation never takes place in the
ascending line. (Art. 972, NCC)
XPN: if there are three (3) other competent witness.
(Ibid.)
Qualifications of a Representative
Disqualification of Physicians or Nurses

The Representative must have the following
qualifications:
The position of the physician or nurse who took care
of the testator during his last illness is very similar
1. The representative himself is capable of
to that of the priest or minister of the gospel. (Ibid.)
succeeding the decedent, not the person
NOTE: The meaning of “last illness” as mentioned
represented; (Art. 973, NCC)
above can also be applied in the disqualification of
physicians and nurses. (Ibid.)
2. The representative must be living at the
moment the succession opens; (Art. 973, NCC)
Relatives of the Physician or Nurse, Not
and
Disqualified
3. The law of the nation of the decedent governs

Unlike in the disqualification of guardians, such
the capacity to succeed. (Art. 1039, NCC)
disqualification is not extended to the relatives of
the physician or nurse, or to the organization or
a) REQUISITES AND LIMITATIONS
institution to which such physician or nurse may
belong. To disqualify them because of the possibility
1. Succession is done through a Will or codicil
of undue influence would be unjust and illogical.
which may be notarial or holographic. (Paras,
(Ibid.)
2008)
NOTE: When a husband, wife, parents, or child

2. The person represented must be a Compulsory
rushes to the bedside of the testator who is about to
heir of the testator in the direct descending line.
die, he or she does so because he or she is the
(Jurado, 2009)
spouse, parent, or child and not because he or she is
a physician or nurse. (Ibid.)
CIVIL LAW
Limitations of Representation in Testacy (L-V-R) 3. RIGHT OF ACCRETION IN TESTAMENTARY

SUCCESSION AND IN INTESTACY
1. The representative can transmit his rights, but
only with respect to the Legitime. (Art. 856, Accretion is a right by virtue of which, when two or
NCC) more persons are called to the same inheritance,
devise or legacy, the part assigned to the one who
2. There is no right to represent a Voluntary heir. renounces or cannot receive his share, or who died
(Paras, 2008) before the testator, is added or incorporated to that
of his co-heir, co-devisees, or co-legatees. (Art. 1015,
3. Heirs who Repudiate their share may not be NCC)
represented. (Art. 977, NCC)
Basis: Accretion is a right based on the presumed
Requisites of Representation in Intestacy (W-D) will of the deceased that he prefers to give certain
properties to certain individuals rather than to his
1. If the testator dies Without a will, a void will, or legal heirs. Accretion is preferred over intestacy.
the will has subsequently lost its validity. (Paras, 2008)
(Balane, 2016)
2. The intestate heir is in the Direct line (Art. 972, a) REQUISITES AND LIMITATIONS
NCC)
In order that the right of accretion may take place in
XPN: a testamentary succession, it shall be necessary:
The right of representation in the collateral line is 1. That two or more persons be called to the same
true only in intestate succession, never in inheritance, or to the same portion thereof, pro
testamentary succession. In the collateral line, the indiviso; and
right of representation is given solely to children of
brothers and sisters. Therefore, neither the children 2. That one of the persons thus called die before the
of first cousins nor the grandchildren of brothers testator, or renounce the inheritance, or be
and sisters may represent the decedent in the incapacitated to receive it.
succession. (Paras, 2008)
In testamentary succession, accretion takes
Limitations of Representation in Intestacy place in case of:
1. The testator’s presumed will according to law 1. Predecease;

governs, not the testator’s expressed will. 2. Incapacity;
(Jurado, 2009) 3. Renunciation; (Art. 1015, NCC)
4. Non-fulfillment of the suspensive condition
2. Take place only with respect to the property of imposed upon instituted heir; and
which the testator has not disposed. (Art. 960, 5. Ineffective testamentary disposition. (Paras,
NCC) 2008)
3. Illegitimates of legitimates cannot represent Accretion takes place in cases of:

because of the barrier but illegitimates and
legitimates of illegitimates can represent. 1. Predecease of legal heir;
(Paras, 2008) 2. Incapacity or unworthiness of legal heir; and
3. Repudiation or renunciation by legal heir. (Art.
1015, NCC)
2023 GOLDEN NOTES
NOTE: Accretion takes place only if there is no 3. In default of the

representation. In renunciation, there is always above, the vacant
accretion. portion shall go to In default thereof, then
the other secondary the vacant share shall
Reason: No representation in renunciation. and/or other go to the heirs in the
compulsory heirs. next order of intestacy.
Limitations of accretion:
NOTE: Substitution
1. Accretion shall not take place if the share of each cannot take place with
heir or legatee is earmarked in case any of them respect to legitime.
is rendered vacant by predecease, incapacity or
repudiation. (Jurado, 2009)
In case of repudiation
2. In intestate succession, accretion can only take
place in case of repudiation; it cannot take place
in case of either predecease or incapacity. (Art.
1018, NCC)
Distinctions among Substitution,

Representation and Accretion under Testate With respect to the
and Intestate Successions legitime:
The vacant portion

TESTAMENTARY INTESTATE 1. The other co-heirs
shall go to the other co-
SUCCESSION SUCCESSION shall succeed to it in
heirs by right of
their own right and
In case of predecease and incapacity accretion. In legal
not by right of
1. If the right of succession, the share
accretion since there
With respect to the representation takes of the person who
is no accretion with
legitime: place, then the repudiates the
respect to legitime.
representative inheritance always
1. If the right of succeeds to the accrues to his co-heirs.
2. In default thereof, the
representation takes vacant portion.
vacant portion shall
place, then the In default thereof, the
go to the other
representative NOTE: Representation vacant share shall go to
secondary and/or
succeeds to the takes place in case of the heirs of next degree
compulsory heirs.
vacant portion; predecease and in their own right.
incapacity with respect
NOTE: Representation
2. If representation is to inheritance In default thereof, it
does NOT take place in
not available, then conferred by law. shall go to the heirs in
repudiation.
the co-heirs of the Hence, it takes place in the next order of
same degree shall legal or intestate intestacy.
NOTE: Substitution
succeed to it in their succession.
cannot take place with
own right and not by
respect to legitime.
accretion since there 2. If representation is
is no accretion with not available, then
respect to the the vacant portion
legitime; shall go to the co-
heirs in their own
right.
CIVIL LAW
With respect to the FREE PORTION in case of 4. ACCEPTANCE AND REPUDIATION OF

predecease, incapacity or renunciation INHERITANCE
The acceptance or repudiation of the inheritance is

a purely voluntary and free act. (Art. 1041, NCC)
Principal Characteristics of Acceptance and

1. Substitution shall Repudiation
take place if provided
for by the testator 1. It is voluntary and free; (Art. 1041, NCC)
2. It retroacts to the moment of the death of the
2. If no substitution is decedent (Art. 1042, NCC)
provided, the vacant 3. Once made, it is irrevocable.
share shall go to the
co-heir by right of XPN:
accretion if the 1. When it was made through any of the
requisites are causes that vitiate consent, or
present and the 2. When an unknown will appears. (Art. 1056,
testator has not NCC)
provided the
contrary Inheritance is deemed accepted when:
3. If the requisites of 1. The heir sells, donates, or assigns his rights to

accretion are not a stranger, to his co-heirs, or to any of them;
present or when the
None
testator provides 2. The heir renounces it, even though
that no accretion gratuitously, for the benefit of one or more
shall take place, the heirs;
vacant portion shall
pass to the legal heirs 3. Renunciation is in favor of all heirs
if no substitute has indiscriminately for a consideration (Art. 1050,
been designated. NCC); or
(Art. 1022, NCC)
4. Other tacit acts of acceptance:
NOTE: In testamentary a. Heir demands partition of the inheritance;
succession,
representation takes b. Heir alienates some objects of the
place only with respect inheritance;
to the legitime; it does
not take place with c. Acts of preservation or administration if,
respect to what is through such acts, the title or capacity of
voluntarily given by the heir has been assumed; (Jurado, 2009)
will. (Art. 856, NCC)
d. Failure to signify acceptance or repudiation
within 30 days after an order of
distribution by the probate court. (Art.
1057, NCC)
2023 GOLDEN NOTES
a) FORM OF REPUDIATION c. Such act of repudiation must be prejudicial to

the creditor or creditors.
1. By means of a public instrument;
2. By means of an authentic instrument; d. There must be judicial authorization. (Art. 1052,
3. By means of a petition presented to the court NCC)
having jurisdiction over the testamentary or
intestate proceedings. (filed in the settlement b) EFFECTS OF REPUDIATION COMPARED TO
proceedings) (Art. 1051, NCC) PREDECEASE AND INCAPACITY
Effect of Repudiation if an heir is Both a Testate 1. Effect of Repudiation

and Legal Heir
Whether voluntary or compulsory, heirs who
If an heir is both a testate and legal heir and he repudiate their inheritance cannot transmit any
repudiated the inheritance as a testate heir, he is right to their own heirs. (Art. 977, NCC)
understood to have repudiated in both capacities.
However, should he repudiate as a legal heir, NOTE: This rule is absolute.
without knowledge of being a testate heir, he may
still accept the inheritance as a testate heir. (Art. Basis: He deprives, by his own positive act, his
1055, NCC) children or descendants of the right of
representation. A person cannot transmit a right
Remedy if the heir Repudiates the inheritance to which he does not have. (Jurado, 2009)
the Prejudice of his creditors
2. Effect of Predecease
If the heir repudiates the inheritance to the
prejudice of his own creditors, the latter may If the heir who predeceases the testator is a
petition the court to authorize them to accept it in voluntary heir, a devisee or a legatee with respect to
the name of the heir. a determinate property, shall transmit no right to
his own heirs. A compulsory heir who dies before
The acceptance shall benefit the creditors only to an the testator, shall transmit no right to his own heirs
extent sufficient to cover the amount of their except by representation. It must be noted that what
credits. (Art. 1052, NCC) is transmitted to the representatives is his right to
the legitime and not to the free portion in case he
This is an instance of accion pauliana, which is the has also been instituted by the testator to the whole
right given to creditors to impugn or set aside or to an aliquot part of such free portion. (Art. 856,
contracts, transactions or dispositions of their NCC)
debtors which will prejudice or defraud them.
(Balane, 2016) 3. Effect of Incapacity
Requisites A voluntary heir who is incapacitated to succeed

from the testator shall transmit no right whatsoever
a. The heir who repudiated his inheritance must to his own heirs. A compulsory heir may be
have been indebted at the time when the represented, but only with respect to his legitime.
repudiation is made. (Art. 1035, NCC)
b. The heir-debtor must have repudiated his In the event of of incapacity or repudiation or in case
inheritance according to the formalities it becomes ineffective, the legacy or the devise will
prescribed by law. descend by intestate succession unless there is
substitution or accretion. (Paras, 2008)
CIVIL LAW
Transmission of Rights in Repudiation,

Predecease, and Incapacity
REPUDIATION PREDECEASE INCAPACITY
Voluntary Heir
Cannot transmit any right to their own heirs.
Compulsory Heir
Cannot transmit May be represented, but only
any right to with respect to his legitime.
their own heirs.
2023 GOLDEN NOTES
I. OBLIGATIONS
Form of Obligation
OBLIGATIONS AND CONTRACTS

GR: The law does not require any form in
obligations arising from contracts for their validity
or binding force. (Art. 1356, NCC)
XPNs:
I. OBLIGATIONS
1. When the form is essential to the validity of the
contract as required by law.; and (Art. 1346,
NCC)
A. GENERAL PROVISIONS 2. When the contract is unenforceable, unless it is

in a certain form, such as those under the
Statute of Frauds as formulated in Art. 1403.
1. DEFINITION
Obligations arising from other sources (Art. 1157,
NCC) do not have any form at all. (De Leon, 2010)
An obligation is a juridical necessity to give, to do, or
not to do. (Art. 1156, NCC)
2. ESSENTIAL ELEMENTS
Obligation as Juridical Necessity
The following are the elements of an obligation
It is a juridical necessity because in case of non- (C-A-P-O):
compliance, the courts of justice may be called upon
by the aggrieved party to enforce its fulfillment or, 1. Juridical tie or vinculum juris or efficient
in default thereof, the economic value that it Cause - the efficient cause by virtue of which the
represents. (De Leon, 2010) debtor becomes bound to perform the
prestation; (Pineda, 2000)
It is a juridical relation or necessity that allows one
person (creditor) to demand the observance of NOTE: The vinculum juris is established by:
determinative conduct (i.e., giving, doing, or not
doing) from another (debtor), and in case of breach, a. Law;
the former can demand satisfaction from the assets b. Bilateral acts; and
of the latter. (Makati Stock Exchange v. Campos, G.R. c. Unilateral act. (Tolentino, 2002)
No. 138814, 16 Apr. 2009)
2. Active subject (creditor or obligee) - The
Art. 1156 refers only to civil obligations that are person demanding the performance of the
enforceable in court when breached. It does not obligation. It is he in whose favor the obligation
cover natural obligations (Arts. 1423 -1430, NCC) is constituted, established, or created;
because the latter are obligations that cannot be
enforced in court on equity and natural law and not 3. Passive subject (debtor or obligor) - The
on positive law. (Pineda, 2000) person bound to perform the prestation to give,
to do, or not to do; and
When there is a right, there is a corresponding
obligation. Right is the active aspect while 4. Object or prestation - The subject matter of the
obligation is the passive aspect. Thus, the concepts obligation which has a corresponding economic
of credit and debt are two distinct aspects of a value or susceptible of pecuniary substitution
unitary concept of obligation. (Ibid.) in case of noncompliance. It is a conduct that
CIVIL LAW
may consist of giving, doing, or not doing Examples

something. (Pineda, 2000) Contract for Negative
Sale, deposit, professional easement,
NOTE: In order to be valid, the object or pledge, services like restraining
prestation must be: donation, painting, order, or
antichresis modeling, injunction.
a. Licit or lawful; singing, etc. (Pineda, 2000)
b. Possible, physically, and judicially;
c. Determinate or determinable; and Classification of Obligations
d. Pecuniary value or possible equivalent
in money. 1. As to the creation
The absence of any of the first three makes the a. Legal – imposed by law; and(Art. 1158,
object void. (Tolentino, 2002) NCC)
b. Conventional – established by the
NOTE: Some writers add a fifth one: the form in agreement of the parties (e.g., Contracts).
which the obligation is manifested. This element,
however, cannot be considered as essential. There 2. As to the nature
is no particular form required to make obligations
binding, except in certain rare cases. (Tolentino, a. Personal – to do; not to do; and
1991) b. Real – to give.
The obligation is constituted upon the concurrence 3. As to the object

of the essential elements thereof, viz: (a) the
vinculum juris or juridical tie which is the efficient a. Determinate or specific - particularly
cause established by various sources of obligations designated or physically segregated from
(law, contracts, quasi-contracts, delicts and quasi- all others of the same class;
delicts); (b) the object which is the presentation or
conduct, required to be observed (to give, to do or b. Generic – designated merely by its class or
not to do); and (c) the subject-persons who are the genus; and
active (obligee) and the passive (obligor) subjects.
(De Leon v. The Manufacturers Life Insurance c. Limited generic – generic objects confined
Company (Phils.) Inc., G.R. No. 243733, 12 Jan. 2021) to a particular class or source (e.g., an
obligation to deliver one of my horses).
Different Kinds of Prestation (Tolentino, 2002)
TO GIVE TO DO NOT TO DO 4. As to the performance

As to what the obligation consists of
a. Positive - to give; to do; and
b. Negative – not to do.
Rendering of
works or 5. As to the person obliged
Delivery of a Refraining
services,
thing to from doing
whether a. Unilateral – only one party is bound; and
creditor certain acts
physical or b. Bilateral – both parties are bound.
mental
2023 GOLDEN NOTES
I. OBLIGATIONS
NOTE: A bilateral obligation may be reciprocal 9. As to the right to choose and substitution
or non-reciprocal. Reciprocal obligations arise
from the same cause, wherein each party is a a. Alternative – obligor may choose to
debtor and a creditor of the other, such that the completely perform one out of the several
performance of one is conditioned upon the prestations; and (Art. 1199, NCC);
simultaneous fulfillment of the other.
Meanwhile, in non-reciprocal obligations, b. Facultative – only one prestation has been
performance by one is independent from the agreed upon, but the obligor may render
other. (Paras, 2008) one in substitution of the first one. (Art.
1206, NCC)
6. As to the existence of burden or condition
10. As to the imposition of penalty
a. Pure – not burdened with any condition or
term. It is immediately demandable; and a. Simple – there is no penalty imposed for
(Art. 1179, NCC) violation of the terms; and (Art. 1226, NCC)
b. Conditional – subject to a condition which b. Obligations with a penal clause –

may be suspensive (e.g., satisfaction of the obligation which imposes a penalty for
condition gives rise to the obligation) or violation of the terms. (Art. 1226, NCC)
resolutory (satisfaction of the condition
terminates the obligation). (Art. 1181, NCC) 11. As to the sanction
7. As to the character of responsibility or a. Civil – gives a right of action to compel their

liability performance; the sanction is judicial
process;
a. Joint – each debtor is liable only for a part
of the whole liability and to each creditor c. Natural – not based on positive law, but on
shall belong only a part of the correlative equity and natural law; does not grant a
rights; and (8 Manresa 194; Art. 1207, NCC); right of action to enforce their
performance, but after voluntary
b. Solidary – debtor is answerable for the fulfillment by the obligor, they authorize
whole of the obligation without prejudice retention of what has been delivered
to his right to collect from his co-debtors rendered by reason thereof; the sanction is
the latter’s shares in the obligation. (Art. the law; and
1207, NCC)
d. Moral – cannot be enforced by action but
8. As to the susceptibility of partial fulfillment are binding on the party who makes it in
conscience and natural law; the sanction is
a. Divisible – obligation is susceptible of conscience or morality.
partial performance; and (Arts. 1223 &
1224, NCC); 3. SOURCES OF OBLIGATION
b. Indivisible – obligation is not susceptible of

1. Law;
partial performance. (Art. 1225, NCC)
2. Contracts;
3. Quasi-contracts;
4. Delict; and
5. Quasi-delict.
CIVIL LAW
NOTE: This enumeration is exclusive. No obligation NOTE: If there is conflict between the NCC and a
exists if its source is not one of those enumerated in special law, the latter prevails unless the contrary
Art. 1157 of the NCC. (Navales v. Rias, G.R. No. L- has been expressly stipulated in the NCC. (Art. 18,
3489, 07 Sep. 1907) NCC)
NOTE: Actually, there are only two sources (i.e., law Characteristics of a Legal Obligation
and contracts) because obligations arising from
quasi-contracts, delicts, and quasi-delicts are 1. It does not need the consent of the obligor;
imposed by law. (Leung Ben v. O’Brien, G.R. No. L- 2. It must be expressly set forth in the law creating
13602, 6 Apr. 1918) it and not merely presumed; and
3. For the law to be a source of obligation, it should
Time of Perfection be the creator of the obligation itself. (Art. 1158,
NCC)
GR: Examples:
1. Law – from the time designated by the law
creating or regulating them; 1. According to Art. 2014 of the NCC, a loser in a
2. Contracts –from the time of the perfection of game of chance may recover his loss from the
the contract; and (Art. 1319, NCC) (e.g., meeting winner, with legal interest from the time he
of the minds). paid the amount lost;
XPNs: 2. The obligation of the spouses to support each

a. When the parties made a stipulation on the other; (Art. 68, FC)
right of the creditor to the fruits of the
thing; 3. The obligation of the employers under the
Worker’s Compensation Act;
b. When the obligation is subject to a
suspensive condition, from which it arises 4. The obligations of the owners of the dominant
upon fulfillment of the condition; and and servient estates in legal easements and
others scattered in the NCC and in special laws;
c. When the obligation is with a period; there and (Jurado, 2009)
is already an existing obligation, but it is
only demandable when the period expires 5. The obligation to pay taxes. (Rabuya, 2017)
or becomes due.
Obligation Ex Contractu
3. Quasi-contracts, delicts, quasi-delicts – from
the time designated by the law creating or Requisites of a Contractual Obligation:
regulating them.
1. It must contain all the essential requisites of a
Obligations Ex Lege contract; (Art. 1318, NCC) and
Obligations derived from law are not presumed. 2. It must not be contrary to law, morals, good
Only those expressly determined in the Code or in customs, public order, and public policy. (Art.
special laws are demandable and shall be regulated 1306, NCC)
by the precepts of the law that establishes them and
as to what has not been foreseen by the provisions Rules governing Obligation Ex Contractu
of Book IV of NCC. (Art. 1158, NCC)
GR: These obligations arising from contracts shall
be governed primarily by the stipulations, clauses,
terms, and conditions of the parties’ agreements.
2023 GOLDEN NOTES
I. OBLIGATIONS
XPN: Contracts with prestations that are Obligation Ex Quasi-Contract

unconscionable or unreasonable. (Pineda, 2009)
A juridical relation arising from lawful, voluntary,
Binding Force of Obligation Ex Contractu and unilateral acts based on the principle that no
one shall be unjustly enriched or benefited at the
Obligations arising from contracts have the force of expense of another. (Art. 2142, NCC)
law between the parties and should be complied
with in good faith. (Art. 1159, NCC) This is known as Distinguished from “Implied Contracts”
the “principle of obligatory force of contracts.”
(Rabuya, 2017) An implied contract requires consent, while a quasi-
contract, being a unilateral contract, does not. The
Good faith is a performance in accordance with the basis of an implied contract is the will of the parties,
stipulation, clauses, terms, and conditions of the while the basis of a quasi-contract is law, to the end
contract. (Pineda, 2000) that there be no unjust enrichment. (Rabuya, 2017)
GR: Neither party may unilaterally evade his Characteristics of Quasi-Contract (L-U-V)
obligation in the contract.
1. It must be Lawful;
XPNs: Unilateral evasion is allowed when the: 2. It must be Unilateral; and
1. Contract authorizes such evasion; or 3. It must be Voluntary. (Pineda, 2000)
2. Other party assents thereto.
Presumptive Consent
Q: FBDC entered into a Trade Contract with MS
Maxco Company, Inc. (MS Maxco) for the Since a quasi-contract is a unilateral contract
execution of the structural and partial created by the sole act of the gestor, there is no
architectural works of one of its condominium express consent given by the other party. The
projects. The Trade Contract provided that MS consent needed in a contract is provided by law
Maxco is prohibited from assigning or through presumption. (Pineda, 2000)
transferring any of its rights, obligations, or
liabilities under the said Contract without the Principal Forms of Quasi-Contracts
written consent of FBDC. FBDC received a letter
from Fong’s counsel, informing it that MS Maxco 1. Negotiorum gestio (inofficious manager) –
had already assigned its receivables from FBDC Arises when a person voluntarily takes charge of the
to him. Despite Fong’s repeated requests, FBDC management of the business or property of another
refused to deliver to Fong the amount assigned without any power from the latter; and (Art. 2144,
by MS Maxco. Is FBDC bound by the assignment NCC);
between MS Maxco and Fong?
2. Solutio indebiti (unjust enrichment) – Takes
A: NO. Obligations arising from contracts have the place when a person received something from
force of law between the contracting parties and another, without any right to demand for it, and the
should be complied with in good faith. The Court thing was unduly delivered to him through mistake,
finds that MS Maxco, as the Trade Contractor, thereby the obligation to return it arises. (Art. 2154,
cannot assign or transfer any of its rights, NCC)
obligations, or liabilities under the Trade Contract
without the written consent of FBDC. FBDC cannot, NOTE: There is solutio indebiti when: (1) payment
therefore, be bound by the unilateral assignments of is made when there exists no binding relation
MS Maxco of its receivables from FBDC to Fong. between the payor, who has no duty to pay, and the
(Fort Bonifacio Dev. Corp. v. Fong, G.R. No. 209370, 25 person who received the payment; and (2) the
Mar. 2015) payment is made through mistake and not through
CIVIL LAW
liberality or some other cause. (Land Bank of the XPNs: Crimes of treason, rebellion, espionage,
Philippines v. BIR, G.R. No. 242319, 16 June 2021) contempt, and others wherein no civil liability
arises on the part of the offender either because
Solutio Indebiti (SI) v. Accion in Rem Verso (AIRV) there are no damages to be compensated or there is
no private person injured by the crime. (Reyes,
1. Mistake is an essential element in SI which is 2008)
not necessary for AIRV; and
Implied Institution of the Civil Action in a
2. An AIRV is merely an auxiliary action, available Criminal Case
only when there is no other remedy on contract,
quasi-contract, crime, or quasi-delict. (Rabuya, GR: When a criminal action is instituted, the civil
2017) action for the recovery of the civil liability arising
from the offense charged shall be deemed instituted
Rule in case of Excess Payment of Interest with the criminal action. (Rule 111, Sec. 1, ROC)
If the borrower pays interest when there has been XPNs: When the offended party:
no stipulation therefor, the provisions of the Code 1. Waives the civil action;
concerning solutio indebiti, or natural obligations, 2. Reserves the right to institute it separately;
shall be applied. and
3. Institutes the civil action prior to the criminal
If the payment of interest is made out of mistake, action. (Rule 111, Sec. 1, ROC)
solutio indebiti applies; hence, the amount must be
returned to the debtor. If the payment was made Scope of Civil Liability (R-R-I)
after the obligation to pay interest has already
prescribed, natural obligation applies; hence, the 1. Restitution;
creditor is authorized to retain the amount paid. 2. Reparation for damage caused; and
3. Indemnity for consequential damages. (Art.
Contract vs. Quasi-Contract 104, RPC)
CONTRACT QUASI-CONTRACT Acquittal in Criminal Case

As to Consent
There is a meeting of GR: The acquittal of the accused in criminal case on
There is no consent,
the minds or consent; the ground of reasonable doubt does not preclude
but the same is
the parties must have the filing of a subsequent civil action, and only
supplied by fiction of
deliberately entered preponderance of evidence is required to prove the
law to prevent
into a formal latter.
injustice.
agreement.
XPNs: When the acquittal is on the basis that:
Obligation Ex Delicto
1. The accused did not commit the crime
Delict is an act or omission punishable under the charged; or
law.
2. There is a declaration in the decision of
Basis acquittal that no negligence can be attributed
to the accused, and that the fact from which
GR: Art. 100 of the RPC provides: “Every person the civil action might arise did not exist. (Art.
criminally liable for a felony is also civilly liable.” 29, NCC)
2023 GOLDEN NOTES
I. OBLIGATIONS
NOTE: Although an acquittal on reasonable doubt 5. If there is no damage or injury caused to

does not necessarily extinguish civil liability, it also another. (Art. 2176, NCC)
does not mean that the civil liability of the acquitted
nonetheless automatically survives. (De Leon v. Delict vs. Quasi-delict
Roqson Industrial Sales, Inc., G.R. No. 234329, 23 Nov.
2021) DELICT QUASI-DELICT
As to what must be present
Obligation Ex Quasi-Delicto
Presence of criminal or
Only fault or
malicious intent or
Quasi-delict is an act or omission arising from fault negligence.
criminal negligence.
or negligence which causes damage to another,
there being no pre-existing contractual relations As to whether private or public interest is
between the parties. (Art. 2176, NCC) concerned
Concerned with public Concerned with
Elements of a Quasi-delict interest. private interest.
1. Negligent or wrongful act or omission; As to the kind of liability arises

2. Damage or injury caused to another; Generally, the act or
The act or omission
3. Causal relation between such negligence or omission gives rise to
gives rise only to civil
fault and damage; and two liabilities: criminal
liability.
4. No pre-existing contractual relationship and civil liability.
between the parties. (Art. 2176, NCC)
As to availability of a compromise
Instances when Art. 2176 is not applicable Criminal liability is not

The civil liability can be
subject to a
compromised.
1. When there was a pre-existing contractual compromise.
relation because the breach of contract is the
source of the obligation; (Robles v. Yap Wing, As to the quantum of evidence is required
G.R. No. L-20442, 04 Oct. 1971) Guilt must be proved Guilt may be proved by
beyond reasonable preponderance of
NOTE: If a contracting party's act that breaches doubt. evidence.
the contract would have given rise to an extra-
contractual liability had there been no contract, NOTE: In as much as civil liability co-exists with
the contract would be deemed breached by a criminal responsibility in negligence cases, the
tort, and the party may be held liable under offended party has the option between an action for
Article 2176 and its related provisions; (Orient enforcement of civil liability based on culpa criminal
Freight Intl. Inc. v. Keihin-Everett Forwarding under Art. 100 of the RPC and an action for recovery
Co., Inc., G.R. No. 191937, 09 Aug. 2017) of damages based on culpa aquiliana under Art.
2177, NCC
2. When the fault or negligence is punished by law
as a crime, Art. 100 of RPC shall be applicable;
3. If the action for quasi-delict is instituted after

four years, it is deemed prescribed; (Art. 1146,
NCC)
4. When the injury suffered by a person is the

result of a fortuitous event without human
intervention; and
CIVIL LAW
As to what delivery comprises of

B. NATURE AND EFFECTS OF OBLIGATIONS
Delivery of another
Deliver all accessions,
thing within the same
accessories, and fruits
genus as the thing
Types of Real Obligations of the thing even
promised, if such thing
though they may not
is damaged due to lack
1. Determinate or specific – Particularly have been mentioned.
of care or a general
designated or physically segregated from all (Art. 1166, NCC)
breach is committed.
others of the same class;
As to effect of breach of obligation
2. Indeterminate or Generic – Is designated
Pay damages in case of Pay damages in case of
merely by its class or genus; and
breach of obligation by breach of obligation by
reason of delay, fraud, reason of delay, fraud,
3. Delimited generic – Generic objects confined
negligence, negligence,
to a particular class (e.g., An obligation to
contravention of the contravention of the
deliver one of my horses). (Tolentino, 2002)
tenor thereof. (Art. tenor thereof. (Art.
1170, NCC) 1170, NCC)
Obligations of a Debtor in an Obligation to
Deliver As to effect of fortuitous event
Obligation is not
The obligations of the debtor in an obligation to Fortuitous event
extinguished (genus
deliver depends upon the kind thing involved: extinguishes the
nunquam peruit –
obligation.
genus never perishes).
SPECIFIC GENERIC
As to what the obligation consists of Remedies of the Creditor in case of Failure to
Deliver the thing due
Deliver the thing which
is neither of superior SPECIFIC GENERIC
nor inferior quality, if Specific performance
Deliver the thing (delivery of anything
quality and Specific performance
agreed upon. (Art. belonging to the same
circumstances have
1165, NCC) species)
not been stated by the
parties. (Art. 1246, Ask that the obligation
NCC) Rescission (action to be complied with at the
rescind under Art. debtor’s expense with
1380, NCC) right to recover
As to required diligence to be observed damages.
Resolution or specific
Resolution (action for
Take care of the thing performance, with
cancellation under Art.
with the proper damages in either case.
If the object is generic, 1191, NCC)
diligence of a good (Art. 1191, NCC)
but the source is
father of a family Damages, in both cases (Art. 1170, NCC)
specified or delimited,
unless the law requires (Pineda, 2000)
the obligation is to
or parties stipulate
preserve the source.
another standard of
care. (Art. 1163, NCC)
2023 GOLDEN NOTES
I. OBLIGATIONS
Principle of “Balancing of Equities” in Actions for Personal Right vs. Real Right
Specific Performance
PERSONAL RIGHT REAL RIGHT
In decreeing specific performance, equity requires The right or power of a The right or interest of
not only that the contract be just and equitable in its person (creditor) to a person over a specific
provisions, but that the consequences of specific demand from another thing (i.e. ownership,
performance likewise be just and equitable. The (debtor), as a definite possession, mortgage),
general rule is that this equitable relief will not be passive subject, the without a definite
granted if, under the circumstances of the case, the fulfillment of the subject against whom
result of the specific performance of the contract latter’s obligation to the right may be
would be harsh, inequitable, and oppressive or give, to do, or not to do. personally enforced.
result in an unconscionable advantage to the There is a definite
There is only a definite
plaintiff. (Agcaoili v. GSIS, G.R. No. 30056, 30 Aug. active subject and a
active subject without
1988) definite passive
any passive subject.
subject.
Right of the Creditor to the Fruits Binding and
enforceable only Directed against the
The creditor has a right to the fruits of the thing against a particular whole world.
from the time the obligation to deliver it arises. person.
However, he shall acquire no real right over it until
the same has been delivered to him. (Art. 1164, NCC) Types of Personal Obligations
SOURCE OF WHEN OBLIGATION 1. Positive - To do; and

OBLIGATION ARISES 2. Negative - Not to do.
Law, quasi-delict,
Based on specific
quasi-contract, or Remedies in Personal Obligations
provisions of law.
crime.
Subject to a 1. Positive personal obligations
From the happening of the
suspensive a. Not purely personal act – To have
condition.
condition. obligation executed at debtor's expense
Subject to a From the constitution, plus damages;
suspensive creation, or perfection of
term/period. obligation. b. Purely personal act - Damages only.
From the constitution, When positive personal obligations
Pure creation, or perfection of considered breached:
the obligation.
1. If the debtor fails to perform the
Nature of the Right of Creditor to Fruits obligation; or
1. Before delivery – Personal right; and 2. Even in the case of performance

2. After delivery – Real right. but the same is done either in a
poor manner or in contravention of
the tenor of the obligation. (Art.
1167, NCC)
2. Negative personal obligation – To have the

prohibited thing undone at the expense of the
debtor plus damages. However, if thing cannot
CIVIL LAW
be physically or legally undone, only damages contract of carriage is structured so that passengers
may be demanded. (8 Manresa 58) or shippers surrender total control over their
persons or goods to common carriers, fully trusting
Specific Performance is Not a Remedy in that the latter will safely and timely deliver them to
Positive Personal Obligations their destination. Here, the petitioner is a common
carrier obligated to exercise extraordinary
If specific performance is allowed, it will amount to diligence over the goods entrusted to her. Her
involuntary servitude, which is prohibited by the responsibility began from the time she received the
Constitution. (Pineda, 2000) soya beans from the respondent's broker and would
only cease after she has delivered them to the
1. BREACHES OF OBLIGATIONS consignee or any person with the right to receive
them. (Tan v. Great Harvest Enterprises, Inc., G.R.
No. 220400, 20 Mar. 2019)
Degree of Diligence Required
Q: Eliza, a condo unit owner, delivered thru
1. That agreed upon;
FedEx a check to Sison, who will be paying in
2. In the absence of such, that which is required by
behalf of Eliza, however, Sison did not receive
the law;
the package. Later, it was found out that the
check was delivered to Sison’s neighbor, but
GR: In the absence of the foregoing, diligence of
there was no signed receipt. Hence, Eliza sent a
a good father of a family.
demand letter to FedEx, the delivery courier, for
payment of damages since the check was
XPNs:
supposed to be used to pay the balance for the
a. Common carriers requiring
condo unit, which was foreclosed since it was
extraordinary diligence (Arts. 1998-
unpaid. FedEx refused, and thus Eliza filed a
2002, NCC); and
complaint for damages with the Regional Trial
Court. Is FedEx liable?
b. Banks require the highest degree of
diligence, being imbued with public
A: YES. The Civil Code mandates common carriers
interest.
to observe extraordinary diligence in caring for the
goods they are transporting. Common carriers must
Diligence of a Good Father of a Family
ascertain the identity of the recipient. Failing to
deliver shipment to the designated recipient
That reasonable diligence which an ordinary
amounts to a failure to deliver. The shipment shall
prudent person would have done under the same
then be considered lost, and liability for this loss
circumstances.
ensues. FedEx is unable to prove that it exercised
extraordinary diligence in ensuring delivery of the
Q: Great Harvest hired Tan to transport 430 bags
package to its designated consignee. It claimed to
of soya beans from Tacoma to Selecta Feeds. At
have made a delivery but it even admits that it was
Selecta Feeds, however, the shipment was
not to the designated consignee. (Federal Express
rejected. The truck and its shipment never
Corp. v. Antonino, G.R. No. 199455, 27 June 2018)
reached Great Harvest's warehouse. Great
Harvest asked Tan about the missing delivery but
NOTE: Banks are expected to exercise higher degree
to no avail. Is Annie Tan liable for the lost bags of
of diligence in their dealings, including those
soya beans?
involving lands. Banks may not rely simply on the
face of the certificate of title. (LBP v. Musni, G.R. No.
A: YES, Annie Tan should be liable. Common carriers
206343, 22 Feb. 2017)
are mandated to internalize or shoulder the costs
under the contracts of carriage. This is so because a
2023 GOLDEN NOTES
I. OBLIGATIONS
Forms of Breach of Obligations DELAY OR DEFAULT
1. Voluntary – Debtor is liable for damages if he is Delay (Mora) or Debtor’s Default

guilty of:
a. Default (mora); Those obliged to deliver or to do something incur in
b. Fraud (dolo); delay from the time the obligee (creditor) judicially
c. Negligence (culpa); or or extrajudicially demands from them the
d. Breach through contravention of the tenor fulfillment of their obligation.
In reciprocal obligations, neither party incurs in
2. Involuntary – Debtor is unable to perform the delay if the other does not comply or is not ready to
obligation due to fortuitous event, thus not comply in a proper manner with what is incumbent
liable for damages, as a rule. upon him. From the moment one of the parties
fulfills his obligations, delay by the other begins.
Effects of Breach of Obligation (Art. 1169, NCC)
If a person obliged to do something fails to do it, the Kinds of Delay

same shall be executed at his cost.
1. Ordinary delay – This is the mere failure to
This same rule shall be observed if he does it in perform an obligation at the stipulated time.;
contravention of the tenor of the obligation. and
Furthermore, it may be decreed that what has been
poorly done be undone. (Art. 1167, NCC) 2. Extraordinary delay or legal delay – This
delay already equates to non-fulfillment of the
When the obligation consists in not doing, and the obligation and arises after the extrajudicial or
obligor does what has been forbidden him, it shall judicial demand has been made upon the
also be undone at his expense. (Art.1168, NCC) debtor. (Pineda, 2000)
Instances where the Remedy under Art. 1168 is Kinds of Legal Delay or Default
Not Available
1. Mora solvendi – Default on the part of the
1. Where the effects of the act which is forbidden debtor/obligor;
are definite in character – Even if it is possible
for the creditor to ask that the act be undone at a. Ex re – Default in real obligations (to
the expense of the debtor, consequences give);
contrary to the object of the obligation will have b. Ex personae – Default in personal
been produced which are permanent in obligations (to do);
character.; and
2. Mora accipiendi – Default on the part of the
2. Where it would be physically or legally creditor/obligee; and
impossible to undo what has been undone –
Because of: 3. Compensatio morae – Default on the part of
1. The very nature of the act itself; both the debtor and creditor in reciprocal
2. A provision of law; or obligations.
3. Conflicting rights of third persons.
Causes of Cessation of the Effects of Mora
NOTE: In either case, the remedy is to seek recovery
for damages. (Art. 1168, NCC) 1. Renunciation (express/implied); or
2. Prescription.
CIVIL LAW
Q: American Express Card (AMEX) failed to A: NO. Petitioner defaulted in its obligation. Thus,
approve Pantaleon’s credit card purchases, respondent was within its rights to foreclose the
which urged the latter to commence a complaint property. Under the NCC, there is default when a
for moral and exemplary damages against party obliged to deliver something fails to do so. In
AMEX. He said that he and his family Social Security System v. Moonwalk Development &
experienced inconvenience and humiliation due Housing Corp. (G.R. No. 73345, 07 Apr. 1993), this
to the delays in credit authorization during his Court enumerated the elements of default:
vacation trip in Amsterdam and in the United
States. Did AMEX commit a breach of its In order that the debtor may be in default, it is
obligations to Pantaleon? necessary that the following requisites be present:
(1) that the obligation be demandable and already
A: YES. Generally, the relationship between a credit liquidated; (2) that the debtor delays performance;
card provider and its cardholders is that of creditor- and (3) that the creditor requires the performance
debtor, with the card company as the creditor judicially and extrajudicially. Default generally
extending loans and credit to the cardholder, who as begins from the moment the creditor demands the
debtor is obliged to repay the creditor. One hour performance of the obligation. (Gotesco Properties,
appears to be patently unreasonable length of time Inc. v. Solid Bank Corporation, G.R. No. 209452, 26
to approve or disapprove a credit card purchase. July 2017)
The culpable failure of AMEX herein is not the
failure to timely approve petitioner’s purchase, but Requisites of Mora Solvendi
the more elemental failure to timely act on the same,
whether favorably or unfavorably. (Pantaleon v. 1. Obligation pertains to the debtor;
American Express International, Inc., G.R. No. 2. Obligation is determinate, due and
174269, 08 May 2009) demandable, and liquidated;
3. Obligation has not been performed on its
Elements of Default maturity date;
4. There is judicial or extrajudicial demand by
Q: Gotesco obtained from Solidbank a term loan the creditor; and
of ₱300 million. To secure the loan, Gotesco was 5. Failure of the debtor to comply with such
required to execute a Mortgage Trust Indenture demand.
naming Solidbank-Trust Division as Trustee.
The Indenture obliged Gotesco to mortgage Non-Applicability of Mora Solvendi
several parcels of land in favor of Solidbank.
When the loan was about to mature, Gotesco Mora solvendi does not apply in natural obligations
found it difficult to meet its obligation because because performance is optional or voluntary on the
of the 1997 Asian Financial Crisis. Solidbank debtor’s part. One can never be late in not giving or
sent a demand letter to Gotesco as the loan doing something.
became due. Despite having received this
demand letter, Gotesco failed to pay the Instances when Demand by the Creditor is Not
outstanding obligation. Solidbank then filed a necessary in order that Delay may exist
Petition for the Extrajudicial Foreclosure of the
lot. Gotesco filed a complaint before the RTC for GR: there is no default when there is no demand.
Annulment of Foreclosure Proceedings, Specific (Art. 1169, NCC)
Performance, and Damages against Solidbank.
Gotesco assailed the validity of the foreclosure XPNs: Demand by the creditor shall not be
proceeding, claiming that it was premature and necessary in order that delay may exist when:
without legal basis. Was the foreclosure
premature? 1. The law expressly so declares;
2023 GOLDEN NOTES
I. OBLIGATIONS
2. The contract expressly stipulates that demand Debtor’s Liability may be Mitigated even if he is
is not necessary; Guilty of Delay
3. From the nature and the circumstances of the If the debtor can prove that loss would nevertheless
obligation it appears that, the designation of transpire even if he had not been in default, the
time when the thing is to be delivered or the court may equitably mitigate his liability. (Art.
service is to be rendered, was a controlling 2215(4), NCC)
motive for the establishment of the contract or
when time is of the essence; or Requisites of Mora Accipiendi
4. Demand would be useless, as when the obligor Requisites: (P-C-R)

has rendered it beyond his power to perform.
(Art. 1169, NCC) 1. Offer of Performance by a capacitated debtor;
2. Offer must be to Comply with the prestation as
Q: “A” borrowed P2,000 from “B” on 01 Dec. it should be performed; and
1956. He executed a promissory note promising 3. Refusal of the creditor without just cause.
to pay the indebtedness on 01 Dec. 1956. Upon (Pantaleon v. Amex, G.R. No. 174269, 08 May
the arrival of the designated date for payment, is 2009)
demand necessary in order that “A” shall incur
delay? Effects of Mora Accipiendi
A: YES. In the first two paragraphs of Art. 1169 of the 1. Responsibility of debtor is limited to fraud and
NCC, it is not sufficient that the law or obligation gross negligence;
fixes a date for performance. It must further state 2. Debtor is exempted from risk of loss of thing;
expressly that after the period lapses, default will creditor bears risk of loss;
commence. (Rivera v. Sps. Chua, G.R. No. 184472, 14 3. Expenses by debtor for preservation of thing
Jan. 2015) after delay is chargeable to creditor;
4. If the obligation bears interest, debtor does not
Effects of Mora Solvendi have to pay it from time of delay;
5. Creditor liable for damages; and
1. Debtor may be liable for damages (Art. 1155, 6. Debtor may relieve himself of obligation by
NCC) or interests; consigning the thing.
NOTE: The interest begins to run from the filing Compensatio Morae
of the complaint when there is no extrajudicial
demand. Delay in Reciprocal Obligations. One party incurs in
delay from the moment the other party fulfills his
2. When the obligation has for its object a obligation, while he, himself does not comply or is
determinate thing, the debtor may bear the risk not ready to comply in a proper manner with what
of loss of the thing even if the loss is due to is incumbent upon him.
fortuitous event; and
NOTE: Demand is only necessary for a party to incur
3. Rescission or resolution. delay when the respective obligations are to be
performed on separate dates.
CIVIL LAW
Reciprocal Obligations also seek rescission, even after he has chosen

fulfillment, if the latter should become impossible.
Reciprocal obligations are those which arise from (Camp John Hay Development Corporation v. Charter
the same cause, wherein each party is a debtor and Chemical and Coating Corporation, G.R. No. 19884, 07
a creditor of the other, such the obligation of one id Aug. 2019)
dependent upon the obligation of the other. They
are to be performed simultaneously such that the Q: On 16 May 1998, Wellex and U-Land entered
performance of one is conditioned upon the into a Memorandum of Agreement (First
simultaneous fulfillment of the other. (Heirs of Mary Memorandum of Agreement) to expand their
Lane R. Kim v. Quicho, G.R. No. 249247, 15 Mar. 2021) respective airline operations in Asia. The First
Memorandum of Agreement stated that within
Q: Camp John Hay Development entered into a 40 days from its execution date, Wellex and U-
Contractor's Agreement with Charter Chemical. Land would execute a share purchase
Although the Contractor's Agreement contained agreement covering U-Land’s acquisition of the
no date of the units' turnover, it allowed Charter shares of stock of both APIC (APIC shares) and
Chemical to choose the units for offsetting under PEC (PEC shares).
an offsetting scheme against the 2 Units chosen
by Charter Chemical. In this share purchase agreement, U-Land would
purchase from Wellex its APIC shares and PEC
The contract price was P13,239,734.16, for shares. Both parties agreed that the purchase
which Camp John Hay Development paid price of APIC shares and PEC shares would be
P7,339,734.16. The balance of P5,900,000.00 paid upon the execution of the share purchase
was ought to be settled by offsetting the price of agreement and Wellex’s delivery of the stock
the two studio units. Camp John Hay certificates covering the shares of stock. The
Development had initially estimated that the transfer of APIC shares and PEC shares to U-
construction would be completed by 2006. Land was conditioned on the full remittance of
Because of its failure to follow this timetable, the the final purchase price as reflected in the share
Camp John Hay Suites was estimated to be purchase agreement.
completed by 2012.
Further, the transfer was conditioned on the
Due to the subsisting construction delay, approval of the Securities and Exchange
Charter Chemical, through counsel, wrote Camp Commission of the issuance of the shares of
John Hay Development, demanding that it stock, and the approval by the Taiwanese
transfer the units or pay the value of these units government of U-Land’s acquisition of these
in the sum of P6,996,517.48. Charter Chemical shares of stock. Wellex and U-Land agreed that if
filed before the Construction Industry they were unable to agree on the terms of the
Arbitration Commission a Request for share purchase agreement and the joint
Arbitration. The arbitral tribunal ruled that development agreement within 40 days from
Charter Chemical was entitled to its claim for the signing, then the First Memorandum of
value of the two (2) units because Camp John Agreement would cease to be effective.
Hay Development failed to deliver the units
within the targeted completion date. Is the The 40-day period lapsed 25 June 1998. Wellex
remedy of rescission proper? and U-Land were unable to enter into any share
purchase agreement although drafts were
A: YES. Rescission on account of breach of exchanged between the two. Whether or not the
reciprocal obligations is provided under Art. 1191 rescission of the First Memorandum of
of the NCC. The injured party may choose between Agreement can be subject of rescission?
the fulfillment and the rescission of the obligation,
with the payment of damages in either case. He may
2023 GOLDEN NOTES
I. OBLIGATIONS
A: YES, Respondent U-Land is praying for the Unilateral vs. Reciprocal Obligations
rescission or resolution under Art. 1191 and not
rescission under Art. 1381. The failure of one of UNILATERAL RECIPROCAL
the parties to comply with the reciprocal OBLIGATIONS OBLIGATIONS
obligation allows the wronged party to seek the As to time of delay
remedy of Art. 1191. The wronged party is
entitled to rescission under Art. 1191 and even
the payment of damages. It is a principal action
precisely because it is a violation of the original Default or delay begins
prestation. from extrajudicial or
Delay by the other
judicial demand – mere
party begins from the
Art. 1381 and Art. 1383 pertains to rescission expiration of the
moment one of the
where creditors or even third persons not privy to period fixed is not
parties fulfills his
the contract can file an action due to lesion or enough in order that
obligation.
damage as a result of the contract. debtor may incur
delay.
Rescission or resolution under Art. 1191,
therefore, is a principal action due to lesion or
damage because of the contract, and it is a
XPNs
principal action that is immediately available to
the party at the time that the reciprocal prestation
was breached. Art. 1383 mandating that
rescission be deemed a subsidiary action cannot a) The obligation or
be applicable to rescission or resolution under the law expressly
Art. 1191. so dictates;
Thus, respondent U-Land correctly sought the b) Time is of the

principal relief of rescission or resolution under essence;
Art. 1191. The obligations of the parties gave rise When different dates
to reciprocal prestations, which arose from the c) Demand would be for the performance of
same cause: the desire of both parties to enter useless, as debtor obligation is fixed by
into a share purchase agreement that would allow has rendered it the parties.
both parties to expand their respective airline beyond his power
operations in the Philippines and other to perform; or
neighboring countries. (The Wellex Group, Inc. v.
U-Land Airlines, Co., Ltd., G.R. No. 167519, 14 Jan. d) Debtor has
2015) acknowledged that
he is in default.
Effect of Non-Compliance of Both Parties in
Reciprocal Obligations
If neither party complies with his prestation, the

default of one compensates for the default of the
other.
CIVIL LAW
FRAUD (DECEIT OR DOLO) As to remedy

Contract remains valid.
Annulment with
It is an intentional evasion of the faithful The remedy is a claim
damages.
performance of the obligation. (8 Manresa 72) for damages only.
Kinds of Fraud Fraud as Mentioned in Art. 1171
IN THE FRAUD FRAUD IN THE It is incidental fraud or fraud in the performance of

PERFORMANCE PERFECTION the obligation and not the fraud in the execution of
As to time of occurrence the contract or causal fraud. It is the intentional
It occurs after the valid evasion of the normal fulfillment of the obligation.
It occurs before or
execution of the (Pineda, 2000)
simultaneous with the
contract. It is employed
creation or perfection
in the performance of a Waiver of Action Arising from Future Fraud
of the obligation.
pre-existing obligation.
As to consent With respect to fraud that has already been
Consent is vitiated by committed (past fraud), the law does not prohibit
Consent is free and not
serious deception or renunciation of the action for damages based on the
vitiated.
misrepresentation. same since such can be deemed an act of generosity.
As to effect What is renounced is the effect of fraud, particularly
It is not a ground for It is a ground for the right to indemnity.
annulment of the annulment of the
contract. contract. However, the law prohibits any waiver of an action
As to remedy for future fraud since the same is contrary to law
Action for damages Action for annulment and public policy. Waiver for future fraud is void.
only. with damages. (Art. 1171, NCC)
Dolo causante vs. Dolo incidente Remedies of the Defrauded Party
DOLO INCIDENTE 1. Specific performance (Art. 1233, NCC); or

DOLO CAUSANTE 2. Resolution of the contract (Art. 1191, NCC); and
(INCIDENTAL
(CAUSAL FRAUD) 3. Damages, in either case.
FRAUD)
As to nature
NEGLIGENCE
This is the kind of fraud
that is not the efficient Culpa or Negligence
This is the essential cause for the giving of
cause of the consent, consent to the contract, The fault or negligence of the obligor consists of the
without which the as it refers merely to an omission of that diligence which is required by the
party would not have incident therein and, nature of the obligation, and corresponds with the
agreed to enter into the which even if not circumstances of the persons, of the time and the
contract. (Art. 1338, present, the place.
NCC) contracting party
would have still agreed When negligence shows bad faith, the provisions of
to the contract. Art. 1171 and 2201(2), shall apply. If the law or
As to effect contract does not state the diligence which is to be
It renders the contract It does not affect the observed in the performance, that which expected
voidable. validity of the contract. of a good father of a family shall be required. (Art.
1173, NCC)
2023 GOLDEN NOTES
I. OBLIGATIONS
Test of Negligence damages which may be reasonably attributed to the

non-performance of the obligation.
Did the defendant in doing the alleged negligent act
use the reasonable care and caution which an Contributory Negligence of the Creditor
ordinarily prudent person would have used in the
same situation? If not, then he is guilty of negligence. GR: It reduces or mitigates the damages which he
(Picart v. Smith, G.R. No. L-12219, 15 Mar. 1918) can recover.
Fraud vs. Negligence XPN: If the negligent act or omission of the creditor
is the proximate cause of the event, which led to the
FRAUD NEGLIGENCE damage or injury complained of, he cannot recover.
As to the intention to cause damage
There is no deliberate CONTRAVENTION OF THE TENOR
There is deliberate intention to cause
intention to cause damage or injury even Contravention of Tenor of Obligation (Violatio)
damage. if the act was done
voluntarily. If a person obliged to do something fails to do it, or
As to the mitigation of liability if he does it in contravention of the tenor of the
Liability cannot be Liability may be obligation or it is poorly done, the same shall be
mitigated. mitigated. undone at his expense. (NCC, Art. 1167)
As to the waiver of future fraud
GR: Waiver for future When the obligation consists in not doing, and the
negligence may be obligor does what has been forbidden him, it shall
allowed in certain also be undone at his expense. (NCC, Art.1168)
cases.
The act of contravening the tenor or terms or
Waiver for future fraud conditions of the contract is also known as “violatio”
XPN: Nature of the
is void. (i.e. failure of common carrier to safely take its
obligation or public
policy requires passenger to their destination). (Pineda, 2000)
extraordinary
diligence. (e.g., The phrase “in any manner contravene the tenor” of
common carrier). the obligation includes any illicit act which impairs
the strict and faithful fulfillment of the obligation, or
NOTE: When negligence is so gross that it amounts every kind of defective performance. Such violation
to wanton attitude on the part of the debtor or such of the terms of contract is excused in proper cases
negligence shows bad faith, the laws in case of fraud by fortuitous events. (Art. 1170, NCC)
shall apply.
Instances where the remedy under Art. 1168 is
Effect of Good Faith or Bad Faith of the Obligor not available
If the obligor acted in good faith, he is responsible 1. Where the effects of the act which is forbidden
for the natural and probable consequences of the are definite in character – Even if it is possible
breach of contract and which the parties have for the creditor to ask that the act be undone at
reasonably foreseen at the time of the constitution the expense of the debtor, consequences
of the obligation. contrary to the object of the obligation will have
been produced which are permanent in
If the obligor is guilty of fraud, bad faith, malice, or character.
wanton attitude, he shall be responsible for all
CIVIL LAW
2. Where it would be physically or legally The mere difficulty to foresee the happening is not
impossible to undo what has been undone – impossibility to foresee the same. (Metro Concast
Because of: Steel Corp. v. Allied Bank Corp., G.R. No. 177921, 04
1. The very nature of the act itself; Dec. 2013)
2. A provision of law; or
3. Conflicting rights of third persons. Liability for Loss due to Fortuitous Event
NOTE: In either case, the remedy is to seek recovery GR: There is no liability for loss in case of fortuitous
for damages. (NCC, Art. 1168) event.
Fortuitous Event or Caso Fortuito (2002, 2008 XPNs: (La-N-S-P-C-Ba-G)

BAR)
1. Law;
An occurrence or happening which could not be
foreseen, or even if foreseen, is inevitable. (Art. 2. Nature of the obligation requires the
1174, NCC) assumption of risk;
Requisites: (C-O-D-E) 3. Stipulation;
1. Cause of breach is independent of the will of the 4. The debtor is guilty of dolo, malice or bad faith
debtor; has Promised the same thing to two or more
persons, who does not have the same interest;
2. The Event is unforeseeable or unavoidable; (Art. 1165, NCC);
3. Occurrence renders it absolutely impossible for 5. The debtor Contributed to the loss; (Tan v.
the debtor to fulfill his obligation in a normal Inchausti & Co., G.R. No. 6092, 08 Mar. 1912);
manner - impossibility must be absolute not
partial, otherwise not force majeure; and 6. The possessor is in Bad faith; or (Art. 552, NCC);
or
4. Debtor is free from any participation in the
aggravation of the injury to the creditor. 7. The obligor is Guilty of fraud, negligence or
delay or if he contravened the tenor of the
NOTE: The fortuitous event must not only be the obligation. (Nakpil v. United Construction Co.,
proximate cause, but it must also be the only and Inc. v. CA, G.R. No. L-47851, 15 Apr. 1988)
sole cause. Contributory negligence of the debtor
renders him liable despite the fortuitous event. Act of God vs. Act of Man
(Pineda, 2000)
ACT OF GOD ACT OF MAN
If the negligence was the proximate cause, the
obligation is not extinguished. It is converted into a Fortuitous event Force majeure
monetary obligation for damages.
Event caused by the
Event which is legitimate or
Difficulty to Foresee
absolutely independent illegitimate acts of
of human intervention persons other than the
Fortuitous events by definition are extraordinary
obligor
events not foreseeable or avoidable. It is therefore
not enough that the event should not have been
foreseen or anticipated, as is commonly believed,
but it must be one impossible to foresee or to avoid.
2023 GOLDEN NOTES
I. OBLIGATIONS
e.g. Earthquakes, e.g. Armed invasion, Effects of Fortuitous Events

storms, floods, robbery, war. (Pineda,
epidemics 2000) 1. On determinate obligation – The obligation is
extinguished.; and
NOTE: There is no essential difference between 2. On generic obligation – The obligation is not
fortuitous event and force majeuere; they both refer extinguished (genus nun quam peruit – genus
to causes independent of the will of the obligor. never perishes).
(Tolentino, 2002)
Q: Kristina brought her diamond ring for
Q: MIAA entered into a compromise agreement cleaning to a jewelry shop that failed to fulfill its
with ALA. MIAA failed to pay within the period promise to return such ring in 01 Feb. 1999.
stipulated. Thus, ALA filed a motion for Kristina went back to the shop on 06 Feb. 1999,
execution to enforce its claim. MIAA filed a but she was informed that the ring was stolen by
comment and attributed the delays to it being a a thief the night before. Kristina filed an action
government agency and to the Christmas rush. Is for damages against the jewelry shop, which put
the delay of payment a fortuitous event? up the defense of force majeure. Will the action
prosper or not? (2000 BAR)
A: NO. The act-of-God doctrine requires all human
agencies to be excluded from creating the cause of A: YES. The action will prosper. Since the defendant
the mischief. Such doctrine cannot be invoked to was already in default for not having delivered the
protect a person who has failed to take steps to ring when delivery was demanded by plaintiff at its
forestall the possible adverse consequences of loss due date, the defendant is liable for the loss of the
or injury. Since the delay in payment in the present thing and even when the loss was due to force
case was partly a result of human participation – majeure.
whether from active intervention or neglect – the
whole occurrence was humanized and was Q: AB Corp entered into a contract with XY Corp
therefore outside the ambit of a caso fortuito. for the construction of the research and
laboratory facilities of the XY Corp. XY Corp paid
First, processing claims against the government are 50% of the 10M contract price on the other hand
certainly not only foreseeable and expectable, but AB agreed to complete the work for 18 months.
also dependent upon the human will. Second, the After 17 months, work was only 45% completed
Christmas season is not a caso fortuito, but a as AB Corp experienced work slippage due to
regularly occurring event. Third, the occurrence of labor unrest. (2008 BAR)
the Christmas season did not at all render
impossible the normal fulfillment of the obligation. (a) Can the labor unrest be considered a
Fourth, MIAA cannot argue that it is free from any fortuitous event?
participation in the delay. It should have laid out on
the compromise table the problems that would be A: NO. Labor unrest is not a fortuitous event that
caused by a deadline falling during the Christmas will excuse AB Corp. from complying with its
season. Furthermore, it should have explained to obligation of constructing the research and
ALA the process involved in the payment of ALA’s laboratory facilities of XY Corp. The labor unrest,
claim. (MIAA v. Ala Industries Corp., G.R. No. 147349, which may even be attributed largely to AB Corp.
13 Feb. 2004) itself, is not the direct cause of non-compliance by
AB Corp. It is independent of its obligation. It does
not excuse compliance with the obligation. (DBP v.
Vda. De Moll, G.R. No. L-25802, 31 Jan. 1972) AB Corp.
could have anticipated the labor unrest caused by
delays in paying the laborer’s wages. The company
CIVIL LAW
could have hired additional laborers to make up for 2. REMEDIES FOR BREACH OF OBLIGATION
the work slowdown.
In case of breach of obligation, the following are the

(b) Can XY Corp. unilaterally and
remedies available:
immediately cancel the contract?
1. Specific performance, or substituted

A: YES. XY Corp. may unilaterally cancel the
performance by a third person in case of an
obligation, but this is subject to the risk that the
obligation to deliver a generic thing, and in
cancellation of the reciprocal obligation being
obligations to do, unless it is a purely personal
challenged in court and if AB Corp. succeeds, then
act;
XY Corp. will be declared in default and be liable for
2. Rescission (or resolution in reciprocal
damages.
obligations);
(c) Must AB Corp. return the 50% down

3. Damages, in any case; or
payment?
4. Subsidiary remedies of creditors:
A: NO. Under the principle of quantum meruit, AB
a. Accion subrogatoria;
Corp. had the right to retain payment corresponding
b. Accion pauliana; and
to his percentage of accomplishment less the
c. Accion directa.
amount of damages suffered by XY Corp. because of
the delay or default.
SPECIFIC PERFORMANCE
Q: X, a dressmaker, accepted clothing materials

Remedies in connection with Specific
from Karla to make two dresses for her. On the
Performance
day X was supposed to deliver Karla’s dresses, X
had an urgent matter to attend to and told Karla
1. Exhaustion of the properties of the debtor
to deliver those the next day. That night,
(not exempt from attachment under the law);
however, a robber broke into her shop and took
everything, including Karla’s dresses. X claims
2. Accion subrogatoria (subrogatory action) –
she is not liable to deliver Karla’s dresses nor
An indirect action brought in the name of the
pay for the clothing materials considering she,
debtor by the creditor to enforce the former’s
herself, was a victim of the robbery, which was a
rights; and
fortuitous event, and over which she had no
control. Do you agree? Why? (2015 BAR)
XPNs:
a. Personal rights of the debtor;
A: NO. The law provides that except when it is
b. Rights inherent in the person of the debtor;
otherwise declared by stipulation, or when the law
and
expressly provides, or when the nature of the
c. Properties exempt from execution (e.g.,
obligation requires the assumption of risk, no
family home);
person shall be liable for those events which could
not be foreseen or which though foreseen were
3. Accion pauliana (rescissory action) – An
inevitable. (Art. 1174, NCC)
action to impugn or assail the acts done or
In this case, X cannot invoke fortuitous event as a
contracts entered into by the debtor in fraud of
defense because she had already incurred delay at
his creditor.
the time of the occurrence of the loss. (Art. 1165,
NCC)
NOTE: Resort to the remedies must be in the order
stated above. (Art. 1177, NCC)
2023 GOLDEN NOTES
I. OBLIGATIONS
Q: Sacramento Steel Corporation (SSC) executed was also allowed to sell its allocated units under
five separate deeds of chattel mortgage such terms as it may deem fit, subject to the
constituted over various equipment for condition that the price agreed upon was with
International Exchange Bank (IEB) which the conformity of Sps. Salonga. Thereafter,
subsequently, SSC defaulted in the payment of Jebson entered into a Contract to Sell with
its obligations. IEB’s demand for payment went Buenviaje over one of its units without the
unheeded. Meanwhile, Metropolitan Bank and conformity of Sps. Salonga. Buenviaje was able
Trust Company (Metro Bank) filed a motion for to fully pay for Jebson’s unit through a swapping
intervention as a creditor of SSC. Which it arrangement, which allows the vendee to
contends that the mortgage contracts between convey certain properties as consideration for
IEB and SSC were entered into to defraud the the sale. Despite this full payment, Jebson was
latter’s creditors. Thus, it prayed for the unable to complete said unit.
rescission of the chattel mortgaged executed by
SSC in favor of IEB. Will the action to rescind the This prompted Buenviaje to demand the unit’s
mortgage prosper? immediate completion and delivery. Jebson,
having failed to comply with the demand,
A: NO. Jurisprudence is clear that the following Buenviaje filed an action before the HLURB
successive measures must be taken by a creditor against Jebson and Sps. Salonga for specific
before he may bring an action for rescission of an performance praying for the unit’s completion
allegedly fraudulent contract: and delivery and rescission in the alternative.
Jebson, in its defense, claimed that they were not
(1) exhaust the properties of the debtor able to secure the necessary permits because
through levying by attachment and execution Sps. Salonga stubbornly refused to cause the
upon all the property of the debtor, except such consolidation and partition of the parcels of
as are exempt by law from execution; land. Sps. Salonga averred that they were not
liable to the complainants since there was no
(2) exercise all the rights and actions of the privity of contract between them, adding that
debtor, save those personal to him (acción the contracts to sell were unenforceable against
subrogatoria); and them as they were entered into by Jebson
without their conformity, in violation of the JVA.
(3) seek rescission of the contracts executed by HLURB rescinded the Contract to Sell and held
the debtor in fraud of their rights (acción Sps. Salonga Solidarily liable with Jebson.
pauliana). HLURB-BOC reversed the former ruling and
instead rescinded the swapping arrangement
It is thus, apparent that an action to rescind, or an and maintaining the validity of the Contract to
acción pauliana, must be of last resort, availed of Sell, thereby granting specific performance
only after the creditor has exhausted all the instead. Is the grant of the remedy of specific
properties of the debtor not exempted from performance in Buenviaje’s favor proper?
execution or after all other legal remedies have been
exhausted and have been proven futile. A: YES. As between the two remedies made
(Metropolitan Bank and Trust Company v. available to him, Buenviaje had chosen the remedy
International Exchange Bank, G.R. No. 176008, 10 of specific performance and, therefore, ought to be
Aug. 2011) bound by the choice he had made. To add, the
fundamental rule is that reliefs granted a litigant are
Q: Jebson entered into a Joint Venture limited to those specifically prayed for in the
Agreement (JVA) with Sps. Salonga obligated the complaint. Buenviaje’s alternative prayer for
former to construct ten (10) residential units on resolution is textually consistent with that portion
the latter’s three parcels of land. Out of the ten of Art. 1191 of the NCC provides that an injured
units, seven (7) units will belong to Jebson. It party “may also seek rescission, even after he has
CIVIL LAW
chosen fulfillment if the latter should become SUBSTITUTED PERFORMANCE OF A

impossible.” Nevertheless, the impossibility of THIRD PERSON
fulfillment was not sufficiently demonstrated in the
proceedings conducted in this case. Substitute Performance
Besides, mutual restitution is the proper It is a remedy of the creditor in case of non-
consequence of the remedy of resolution. It cannot performance by the debtor where another party
arise – as it is, in fact, theoretically incompatible – performs the obligation or the same is performed at
with the remedy of specific performance, which is the expense of the debtor.
the relief prayed for and consequently, granted to
the injured party herein. (Buenviaje v. Sps. Salonga, Applicability of Substitute Performance
GR No. 216023, 05 Oct. 2016)
1. Positive personal obligation:
Q: While the case was pending, Felix donated his
parcels of land in favor of his children. Judgment a. If not purely personal – Substitute
was rendered against Felix. Four years after the performance; the obligation shall be
said donation, the sheriff sought to enforce the executed at debtor’s cost if he fails to do it.
alias writ of execution and discovered that Felix (Art. 1167, NCC)
no longer had any property and had conveyed
the subject properties to his children. Thus, b. Purely personal – No substitute
Philam filed an accion pauliana for rescission of performance may be demanded because of
the donations. Felix countered that an action for the personal qualifications taken into
rescission of the donation had already consideration. The only remedy is
prescribed since the time of prescription has to damages.
run from the date of registration. Has the action
filed by Philam prescribed? 2. Real obligation:
A: NO. Philam only learned about the unlawful a. Generic thing – Substitute performance;
conveyances made by Felix more than four years delivery may be made by a person other
after the donations were effected, when its counsel than the debtor since the object is merely
accompanied the sheriff to Butuan City to attach the designated by its class or genus. The
properties. There they found that he no longer had creditor may ask that the obligation be
any properties in his name. It was only then that complied with at the expense of the debtor.;
Philam’s action for rescission of the deeds of and (Art. 1165, NCC)
donation accrued because then it could be said that
Philam had exhausted all legal means to satisfy the b. Specific thing – Specific performance may
trial court’s judgment in its favor. Since Philam filed be demanded, that is, the creditor may
its complaint for accion pauliana against petitioners compel the debtor to make the delivery.
barely a month from its discovery that Felix had no
other property to satisfy the judgment award RESCISSION
against him, its action for rescission of the subject
deeds clearly had not yet prescribed. (Khe Hong Recission (2005, 2008 BAR)
Cheng v. CA, G.R. No. 144169, 28 Mar. 2001)
It refers to the cancellation of the contract or
NOTE: The debtor is liable with all his property, reciprocal obligation in case of breach on the part of
present and future, for the fulfillment of his one, which breach is violative of the reciprocity
obligations, subject to the exemptions provided by between the parties. This is properly called
law. (De Leon, 2003) resolution.
2023 GOLDEN NOTES
I. OBLIGATIONS
NOTE: The rescission under Art. 1380 is rescission OA, averring therein that its obligation to pay
based on lesion or fraud upon creditors. royalties to PMC arises only when the mining
claims are placed in commercial production,
Applicability which condition has not yet taken place. PMC no
longer responded to GVEI’s letter. Is the
Rescission or resolution is applicable in reciprocal rescission of the Operating Agreement valid?
obligations since it is implied therein. (Art. 1191)
A: YES. The rescission is valid. As a general rule, the
Characteristics of the Right to Rescind power to rescind an obligation must be invoked
judicially and cannot be exercised solely on a party’s
1. It can be demanded only if plaintiff is ready, own judgment that the other has committed a
willing, and able to comply with his own breach of the obligation. This is so because
obligation and defendant is not; rescission of a contract will not be permitted for a
slight or casual breach, but only for such substantial
2. It is not absolute; and fundamental violations as would defeat the very
object of the parties in making the agreement. As a
3. It needs judicial approval in the absence of a well-established exception, however, an injured
stipulation allowing for extrajudicial rescission, party need not resort to court action to rescind a
in cases of non-reciprocal obligations; contract when the contract itself provides that it
may be revoked or canceled upon violation of its
4. It is subject to judicial review if availed of terms and conditions. PMC’s unilateral rescission of
extrajudicially; the Operating Agreement (OA) due to GVEI’s
nonpayment of royalties considering the parties’
5. It may be waived, expressly or impliedly; and express stipulation in the OA that said agreement
may be canceled on such ground. (Golden Valley
6. It is implied to exist in reciprocal obligations, Exploration, Inc. v. Pinkian Mining Company, G.R. No.
therefore, need not be expressly stipulated 190080, 11 June 2014)
upon.
Q: Vermen and Seneca entered into an
Fulfillment or Rescission of the Obligation “offsetting agreement,” where Seneca is obliged
to deliver construction materials to Vermen,
GR: The injured party can only choose either who is obliged to pay Seneca and to deliver
fulfillment or rescission of the obligation, and not possession of two condominium units to Seneca
both. upon its completion. Seneca filed a complaint for
rescission of the offsetting against Vermen,
XPN: He may also seek rescission, even after he has alleging that the latter had stopped issuing
chosen fulfillment, if the latter should become purchase orders of construction materials
impossible. (Art. 1191, NCC) without a valid reason, thus resulting in the
stoppage of deliveries of construction materials
Q: Pikian Mining Company (PMI) entered into an on its part, in violation of the Offsetting
Operating Agreement (OA) with Golden Valley Agreement. Can the agreement be rescinded?
Exploration, Inc. (GVEI), granting the latter "full,
exclusive and irrevocable possession, use, A: YES because the provisions of the offsetting
occupancy, and control over the mining claims agreement are reciprocal in nature. Art. 1191 of the
and the processing and marketing of the NCC provides the remedy of rescission (more
products for a period of 25 years.” Later, PMC appropriately, the term is “resolution”) in case of
extrajudicially rescinded the OA upon GVEI’s reciprocal obligations, where one of the obligors
violation of Sec. 5.01, Art. V thereof. GVEI fails to comply with that is incumbent upon him.
contested PMC’s extra-judicial rescission of the
CIVIL LAW
(Vermen Realty Development Corp. v. CA, G.R. No. petitioners' favor, and the latter shall be entitled
101762, 06 July 1993) to cancel the subject contract without judicial
recourse in addition to other appropriate legal
Q: Ong and Sps. Robles executed an “agreement action; (c) respondents are not entitled to
of purchase and sale” of two parcels of land. Ong possess the subject land until full payment of the
partially paid the spouses by depositing sums of purchase price; (d) petitioners shall transfer the
money with the BPI in accordance with their title over the subject land from a certain
stipulation that Ong will pay the loan of Sps. Edilberta N. Santos to petitioners' names, and,
Robles with BPI. To answer for Ong’s balance, he should they fail to do so, respondents may cause
issued four (4) post-dated checks which were the said transfer and charge the costs incurred
dishonored. Ong failed to replace the checks and against the monthly amortizations; and (e) upon
to pay the loan in full. Can the contract entered full payment of the purchase price, petitioners
into by Ong and the spouses be rescinded? shall transfer title over the subject land to
respondents. However, respondents sent
A: NO. The agreement of the parties, in this case, petitioners a letter seeking to rescind the
may be set aside, but not because of a breach on the subject contract on the ground of financial
part of Ong for failure to complete payment of the difficulties. They also sought the return of the
purchase price. Rather, his failure to do so brought amount they had paid.
about a situation that prevented the obligation of
the spouses to convey title from acquiring an As their letter went unheeded, respondents filed
obligatory force. a complaint for rescission. Petitioners
countered that respondents' act is a unilateral
The agreement of purchase and sale shows that it is cancellation of the subject contract as the
in the nature of a contract to sell. Ong’s failure to former did not consent to it. Moreover, the
complete payment of the purchase price is a non- ground of financial difficulties is not a ground to
fulfillment of the condition of full payment which effect a valid rescission. The RTC ruled in favor
rendered the contract to sell ineffective and without of respondents and, accordingly, ordered the
force and effect. The breach contemplated in Art. rescission of the subject contract; and the return
1191 is the obligor’s failure to comply with an of the amounts already paid as well as the
obligation. In this case, Ong’s failure to pay is not remaining post-dated checks issued by
even a breach but merely an event that prevents the respondent representing the remaining
vendor’s obligation to convey title from acquiring monthly amortizations. The CA affirmed. Is the
binding force. (Ong v. CA, G.R. No. 97347, 06 July CA correct?
1999)
A: NO. It cannot be said that petitioners' failure to
Q: Petitioners and respondents entered into a undertake their obligation under paragraph 7 to
Contract to Sell (subject contract) over the cause the transfer of the property to their names
subject land. The subject contract provides, from one Edilberta N. Santos within 90 days from
inter alia, that: (a) the consideration for the sale the execution of the said contract defeats the object
is P33,155,000.00 payable as follows: down of the parties in entering into the subject contract,
payment in the amount of P11,604,250.00 considering that the same paragraph provides
inclusive of the amount of P2,000,000.00 respondents contractual recourse in the event of
previously paid by respondents as earnest petitioners' non-performance of the aforesaid
money or reservation fee, and the remaining obligation, that is, to cause such transfer themselves
balance of P21,550,750.00 payable in 36 in behalf and at the expense of petitioners.
monthly installments, each in the amount of Indubitably, there is no substantial breach of
P598,632.00 through post-dated checks; (b) in paragraph 7 on the part of petitioners that would
case any of the checks is dishonored, the necessitate a rescission (or resolution) of the
amounts already paid shall be forfeited in subject contract.
2023 GOLDEN NOTES
I. OBLIGATIONS
Notwithstanding the foregoing facts, the Court contravene the tenor thereof) shall pay damages
cannot grant petitioners' prayer to order the only if aside from the breach of contract, prejudice
cancellation of the subject contract and the or damage was caused. (Berg v. Teus, G.R. No. L-6450,
forfeiture of the amounts already paid by 30 Oct. 1954)
respondents on account of the latter's failure to pay
its monthly amortizations, simply because NOTE: If action is brought for specific performance,
petitioners neither prayed for this specific relief nor damages sought must be asked in the same action;
argued that they were entitled to the same. Worse, otherwise, the damages are deemed waived.
petitioners were declared "as in default" for failure (Daywalt v. La Corporacion, G.R. No. L-13505, 04 Feb.
to file the required pre-trial brief and, thus, failed to 1919)
present any evidence in support of their defense.
(Nolasco v. Cuerpo, GR No. 210215, 09 Dec. 2015) Kinds of Damages (M-E-N-T-A-L)
NOTE: If the case involves a contract to sell, wherein 1. Moral;

full payment of the purchase price is a positive 2. Exemplary;
suspensive condition, the non-fulfillment of which is 3. Nominal;
not a breach of contract, but merely an event that 4. Temperate;
prevents the seller from conveying title to the 5. Actual; and
purchaser. (Royal Plains View, Inc. v. Mejia, G.R. No. 6. Liquidated.
230832, 12 Nov. 2018)
SUBSIDIARY REMEDIES
Q: Can a contract be rescinded extrajudicially
despite the absence of a special contractual Accion Subrogatoria
obligation therefor?
An action whereby the creditor, whose claim has not
A: YES. An extrajudicial rescission based on grounds been fully satisfied, may go after the defendant
not specified in the contract would not preclude a debtor’s debtor (third person). (Art. 1177, NCC)
party to treat the same as rescinded. The rescinding
party, however, by such course of action, subjects It is different and distinct from active subjective
himself to the risk of being held liable for damages subrogation governed by Arts. 1300 to 1304. In the
when the extrajudicial rescission is questioned by latter, there is change of creditors, whereas in the
the opposing party in court. In other words, the former there is no change of creditors; the creditor
party who deems the contract violated may merely acts in the name and for the account of the
consider it resolved or rescinded, and accordingly, debtor after exhausting the assets of the latter but
without previous court action, but it proceeds at its not enough to satisfy the claims of the creditor.
own risk. For it is only the final judgment of the
corresponding court that will conclusively and Requisites (As-P-I-N)
finally settle whether the action taken was or was
not correct in law. (Nissan Car Lease Phils, Inc., v. 1. The debtor’s Assets must be insufficient to
LICA Management and Proton Pilipinas, Inc., G.R. No. satisfy claims against him;
176986, 13 Jan. 2016) 2. The creditor must have Pursued all
properties of the debtor subject to
DAMAGES execution;
3. The right of action must Not be purely
Liability for Damages personal; and
4. The debtor whose right of action is
Those liable under Art. 1170 (i.e., those who in the exercised must be Indebted to the creditor.
performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner
CIVIL LAW
Effects of Subrogatory Action Accion Directa
1. The creditor may exercise the subrogatory The right of a person to go directly against another
action on behalf of the debtor not only up to the person who is not privy to the contract. (Arts. 1652,
amount of his credit but in its totality; 1608, 1729 and 1893, NCC)
NOTE: The excess (if any) must be returned to Kinds

the debtor.
1. Subsidiary liability of sublessee for the rent;
2. The bringing of action does not entitle the (Art. 1652, NCC);
creditor to preference.; and
2. Right of sellers a retro to redeem the property
3. The defendant (the debtor of the debtor) may from persons other than the buyer a retro; (Art.
avail himself of all defenses available against 1608, NCC);
the creditor.
3. Subsidiary liability of owners to laborers and
NOTE: In order to exercise action subrogatoria, a material men; and (Art. 1729, NCC); and
previous approval of the court is not necessary.
(Tolentino, 1991) 4. The principal may sue the substitute of the
agent with respect to the obligations which the
Accion Pauliana substitute has contracted under the
substitution. (Art. 1893, NCC)
An action where the creditor files in court for the
rescission of acts or contracts entered into by the
debtor designed to defraud the former. (Art. 1177, C. DIFFERENT KINDS OF OBLIGATIONS
NCC)
NOTE: When the creditor could not collect in any

Pure Obligation
manner, accion pauliana may be resorted by him to
rescind a fraudulent alienation of property.
An obligation whose performance does not depend
(Regalado, v. Luchsinger and Co., G.R. No. L-2250, 17
upon a future or uncertain event, or upon a past
Feb. 1906)
event or upon a past event unknown to the parties,
demandable at once. (Art. 1179, NCC)
Requisites (P-A-P-I-L)
NOTE: Other obligations which are demandable at

1. Defendant must be Indebted to plaintiff;
once are:
2. The fraudulent act performed by the debtor
subsequent to the contract gives Advantage to
1. Obligations with a resolutory condition; and
another;
2. Obligations with a resolutory term or period.
3. The creditor is Prejudiced by such act;
(Arts. 1179 (2) and 1193 (2), NCC)
4. The creditor must have Pursued all properties
of the debtor subject to execution; and
The most distinctive characteristic of a pure
5. The creditor has no other Legal remedy.
obligation is its immediate demandability. This
quality, however, must not be understood in such a
Example: Alienations of property, payment of debts
way as to lead to absurd interpretations which
which are not due, renunciation of rights such as the
would literally require the obligor or debtor to
right of usufruct or an inheritance, assignment of
comply immediately with his obligation. A
credit, and remission of debts.
distinction must be made between:
2023 GOLDEN NOTES
I. OBLIGATIONS
1. The immediate demandability of the obligation; Q: Ramon, the judicial administrator of the
and estate of Juan, found out that Rodriguez had
enlarged the area of the land which he
2. Its performance or fulfillment by the obligor or purchased from Juan before his death. Thus,
debtor. Although the obligee or creditor can Ramon demanded Rodriguez to vacate the
demand the performance of the obligation portion allegedly encroached by him. Rodriguez
immediately, the quality of immediate refused and contested there was indeed a
demandability is not infringed or violated when conditional sale with the balance of the
a reasonable period is granted for performance. purchase price payable within five years from
(Jurado, 2009) the execution of the deed of sale. Ramon then
filed an action for recovery of possession of the
Conditional Obligation disputed lot. Is the contract of sale a conditional
one?
An obligation subject to a condition and the
effectivity of which is subordinated to the A: NO. The stipulation that the "payment of the full
fulfillment or non-fulfillment of a future and consideration based on a survey shall be due and
uncertain event or a past event unknown to the payable in five years from the execution of a formal
parties. (Pineda, 2000) deed of sale" is not a condition that affects the
efficacy of the contract of sale. It merely provides
Condition the manner by which the full consideration is to be
computed and the time within which the same is to
A condition is an event that is future and uncertain, be paid. But it does not affect in any manner the
upon which the efficacy or extinguishment of an effectivity of the contract. (Heirs of San Andres v.
obligation depends. It has two requisites: (i) Rodriguez, G.R. No. 135634, 31 May 2000)
futurity, and (ii), uncertainty.
Period vs. Condition
Uncertain but Past Event as a Condition
PERIOD CONDITION
An uncertain but past event itself can never As to time
constitute a condition because, to be classified as a May refer to past event
condition, the requisites of futurity and uncertainty Refers to the future. unknown to the
are required. Neither can it constitute a term or parties.
period because, in order to be classified as a term or As to fulfillment
period, the requisites of futurity and certainty are It will happen at an
required. However, the proof or ascertainment of exact date or at an May or may not
the fact or event, as distinguished from the fact or indefinite time but is happen.
event itself, may either constitute a condition or a definite to arrive.
term depending upon the circumstances of each As to characteristic
case. (Jurado, 2009) Futurity and
Futurity and certainty.
uncertainty.
Constructive Fulfillment of a Condition As to the effect of its happening to the
obligation
The condition shall be deemed fulfilled when the May give rise to an
obligor voluntarily prevents its fulfillment. (Art. No effect upon the obligation
1186, NCC) existence of the (suspensive) or the
obligation but only in cessation of one
its demandability. already existing
(resolutory).
CIVIL LAW
If fulfillment is dependent upon the sole will of received before the fulfillment of the
the debtor condition unless contrary to the intention
Valid. But the court is of the parties. (Art. 1187, NCC)
empowered to fix the Annulled
duration of the period. 2. Personal obligations – the court determines
As to retroactivity the retroactive effect of the condition fulfilled.
The moment the (Art. 1187, NCC)
condition is fulfilled,
the effects will retroact Rights of the Parties Before the Fulfillment of
No retroactivity. the Condition
on the day of the
constitution of the
obligation. 1. Creditor – May bring the appropriate actions
for the preservation of his right (Art. 1188, NCC),
Suspensive Condition such as:
a. Action for prohibition/restraining the
A condition the fulfillment of which will give rise to alienation of the thing pending the
the acquisition of a right. While the condition has happening of the suspensive condition;
not arrived yet, in the meantime, the rights and
obligations of the parties are suspended. b. Petition for the annotation of the creditor’s
right with the proper registry;
NOTE: A contract to sell is akin to a conditional sale
where the efficacy or obligatory force of the c. Action to demand security if the debtor has
vendor's obligation to transfer title is subordinated become insolvent;
to the happening of a future and uncertain event, so
that if the suspensive condition does not take place, d. Action to set aside alienations made by the
the parties would stand as if the conditional debtor in fraud of creditors; or
obligation had never existed. The suspensive
condition is commonly full payment of the purchase e. Action against adverse possessors to
price. (Sps. Serrano v. Caguiat, G.R. No. 139173, 28 interrupt the running of prescriptive
Feb. 2007) period.
Effects of Fulfillment of the Suspensive 2. Debtor – May recover what, during the same
Condition (1999 BAR) time, he has paid by mistake in case of a
suspensive condition. (Art. 1188, NCC)
1. Real obligations
Effect of Loss, Deterioration and Improvement
GR: Retroacts to the day of the constitution of in an Obligation to Deliver a Determinate Thing
the obligation. Subject to a Suspensive Condition
XPNs: There is no retroactive effect with WITH DEBTOR’S WITHOUT DEBTOR’S

respect to the fruits and interest: FAULT FAULT
As to Loss
1. In reciprocal obligations, the fruits and
interests shall be deemed to have been Obligation is not
mutually compensated; and extinguished. Obligation
extinguished.
2. In unilateral obligations, the debtor Debtor pays damages.
appropriates the fruits and interest
2023 GOLDEN NOTES
I. OBLIGATIONS
As to Deterioration turn over the title. (Reyes v. Tuparan, G.R. No.

188064, 01 June 2011)
Creditor may choose
between rescission of Resolutory Condition (1999 BAR)
obligation or Impairment borne by
fulfillment (with creditor. A condition where the rights already acquired are
indemnity for damages lost upon fulfillment of the condition. It is also
in either case). known as condition subsequent.
As to Improvement
Effects of Fulfillment of Resolutory Condition
By the thing’s nature or through time – Inure to
the benefit of the creditor;
1. Real obligations:
At the debtor’s expense – Debtor shall have no
a. The parties shall return to each other what
right other than that granted to a usufructuary.
they have received (mutual restitution);
NOTE: The abovementioned do not apply to
b. Obligation is extinguished; and
indeterminate or generic things on the basis of the
maxim “genus nun quam peruit” (genus never
c. In case of loss, deterioration or
perishes). It will only apply when the object or thing
improvement of the thing, Art. 1189, NCC,
to be given is specific.
with respect to the debtor, shall be applied
to the party who is bound to return. (Art.
Requisites for the Application of Art. 1189
1190, NCC)
1. Must be a real obligation;
2. Personal obligations – The courts shall
2. Object of the obligation is a specific thing;
determine, in each case, the retroactive effect of
3. Obligation is subject to a suspensive condition.
the condition that has been complied with.
4. The condition is fulfilled; and
(Arts. 1187 & 1190, NCC)
5. There is loss, deterioration, or improvement of
the thing during the pendency of the
Suspensive Condition vs. Resolutory Condition
happening of the condition.
SUSPENSIVE RESOLUTORY
NOTE: The same conditions apply to an obligor in
CONDITION CONDITION
obligations subject to a resolutory condition. In such
cases, the third requisite must read, “subject to a As to effect of fulfillment
resolutory condition.” Obligation arises or Obligation is
becomes effective. extinguished.
Positive Suspensive Condition
As to effect of non-fulfillment
A condition which requires a positive act on the part
If not fulfilled, no If not fulfilled, juridical
of the obligor that gives rise to the acquisition of
juridical relation is relation is
rights.
created. consolidated.
In case of a contract to sell, the obligation to deliver As to when rights are acquired
the subject properties becomes demandable only Rights are not yet
upon the happening of the positive suspensive Rights are already
acquired, but there is
condition (payment of full purchase price). Without vested, but subject to
hope or expectancy
full payment, there can be no breach of contract to the threat or danger of
that they will soon be
speak of because the seller has no obligation yet to extinction.
acquired.
CIVIL LAW
Q: The late Don Lopez, Sr., who was then a Plains View, Inc. v. Mejia, G.R. No. 230832, 12 Nov.
member of the Board of Trustees of CPU, 2018)
executed a deed of donation in favor of the latter
involving a parcel of land subject to the Potestative Condition (1997, 2000, 2003 BAR)
condition that it shall be utilized for the
establishment and use of a medical college. A condition that depends upon the will of one of the
However, the heirs of Don Lopez, Sr., filed an contracting parties. (Art. 1182, NCC)
action for annulment of the donation,
reconveyance, and damages against CPU, Effects of Potestative Conditions Upon the
alleging that CPU did not comply with the Obligation
conditions of the donation. Are the conditions
imposed resolutory or suspensive? If the condition is potestative in the sense that its
fulfillment depends exclusively upon the will of the
A: Under Art. 1181 of the NCC, on conditional debtor, and the same is suspensive, both the
obligations, the acquisition of rights, as well as the condition and obligation are VOID.
extinguishment or loss of those already acquired,
shall depend upon the happening of the event which However, if the condition is a pre-existing one or the
constitutes the condition. Thus, when a person condition is resolutory, only the condition is void,
donates land to another on the condition that the leaving the obligation itself valid because what is
latter would build upon the land a school, the left to the sole will of the debtor is not the existence
condition imposed was not a condition precedent or or the fulfillment of the obligation but merely its
a suspensive condition but resolutory. It is not extinguishment.
correct to say that the schoolhouse (or the
establishment and use of a medical college in this If the condition is potestative in the sense that its
case) had to be constructed before the donation fulfillment depends exclusively upon the will of the
became effective, that is, before the donee could creditor, the obligation shall be valid. This is so
become the owner of the land, otherwise, it would because the provision of the first sentence of Art.
be invading the property rights of the donor. The 1182 extends only to conditions which are
donation had to be valid before the fulfillment of the potestative to the obligor or debtor. Besides, the
condition. If there was no fulfillment or compliance creditor is naturally interested in the fulfillment of
with the condition, the donation may now be the condition since it is only by such fulfillment that
revoked and all rights which the donee may have the obligation arises or becomes effective. (Jurado,
acquired under it shall be deemed lost and 2009; Art. 1181, NCC)
extinguished. (Central Philippine University v. CA,
G.R. No. 112127, 17 July1995) Causal Condition
Negative Resolutory Condition It is the performance or the fulfillment of the

condition which depends upon chance and/or the
An act, which if not done, would give rise to a cause will of a third person.
of action against the obligor. It contemplates a
situation where rights are already acquired but Mixed Condition
subject to an obligation, the non-fulfillment of which
does not affect the rights already acquired but It is the performance or fulfillment of the condition
merely gives a cause of action in favor of the other which depends partly upon the will of a party to the
party. In a contract of sale, the buyer’s non-payment obligation and partly upon chance and/or the will of
of the price is a negative resolutory condition. In a third person.
such case, the seller has lost and cannot recover the
ownership of the property, unless he takes action to NOTE: Casual and mixed conditions are valid, unlike
rescind or set aside the contract of sale. (Royal purely potestative conditions.
2023 GOLDEN NOTES
I. OBLIGATIONS
Q: Suppose that the debtor executed a 5. Conjunctive – There are several conditions in
promissory note promising to pay his obligation an obligation all of which must be performed;
to the creditor as soon as he has received funds 6. Alternative – There are several conditions in an
derived from the sale of his property in a certain obligation but only one must be performed;
place, is the condition potestative or mixed? 7. Possible – It is capable of fulfillment according
to the nature, law, public policy, or good
A: The condition is mixed because its fulfillment customs; and
depends not only upon the will of the debtor but 8. Impossible – It is not capable of fulfillment
also upon the concurrence of other factors, such as according to nature, law, public policy, or good
the acceptability of the price and other conditions of customs. (Art. 1183, NCC)
the sale, as well as the presence of a buyer, ready,
able, and willing to purchase the property. Obligation with a Period or a Term
NOTE: The existing rule in a mixed conditional Obligations for whose fulfillment a day certain has
obligation is that when the condition was not been fixed, shall be demandable only when that day
fulfilled but the obligor did all in his power to comes. (Art. 1193, NCC)
comply with the obligation, the condition should be
deemed satisfied. (Intl. Hotel Corp. v. Joaquin, Jr., G.R. “Term” or “Period”
No. 158361, 10 Apr. 2013)
A certain length of time which determines the
Impossible Conditions (1997, 2007 BAR) effectivity or the extinguishment of the obligations.
Requisites of a Valid Period or Term
GR: Impossible conditions annul the obligation
which depends upon the parties but not of a third 1. Future;
person. 2. Certain; and
3. Possible, legally, and physically. (Paras, 2008)
XPNs:
1. Pre-existing obligation; “Day Certain”
2. Obligation is divisible;
3. In simple or remuneratory donations; It is understood to be that which must necessarily
4. In case of conditions not to do an impossible come, although it may not be known when.
thing; and
5. In testamentary dispositions. Kinds of Terms or Periods
NOTE: In the foregoing, the obligations remain 1. Ex die – This is a term or period with suspensive
valid; only the condition is void and deemed to have effect. The obligation begins only from a day
not been imposed. It is applicable only to certain, in other words, upon the arrival of the
obligations, not to do, and gratuitous obligations. period;
Other Types of Conditions 2. In diem – A period or term with a resolutory

effect. Up to a certain extent, the obligation
1. Positive – It involves the doing of an act; remains valid, but upon the arrival of said
2. Negative –It involves the omission of an act; period, the obligation terminates;
3. Divisible – It is susceptible of partial
performance; 3. Legal – A period granted under the provisions
4. Indivisible – It is not susceptible of partial of the law;
performance;
4. Conventional or voluntary – The period
agreed upon or stipulated by the parties;
CIVIL LAW
5. Judicial – The period or term fixed by the courts Effect of a Fortuitous Event to an Obligation with
for the performance of an obligation or for its a Period
termination;
It only relieves the contracting parties from the
6. Definite – The exact date or time is known and fulfillment of their respective obligation during the
given; and term or period.
7. Indefinite – It is something that will surely Instances where the Court may Fix the Period
happen, but the date of happening is unknown. (1991, 1997, 2003 BAR)
e.g., “I will pay when my means permit me to do
so.” 1. If the obligation does not fix a period, but from
its nature and circumstances it can be inferred
When the debtor binds himself to pay when his that a period was intended by the parties;
means permit him to do so, the obligation is deemed
with a period. (Art. 1180, NCC) This is valid because 2. If the duration of the period depends upon the
it is not the payment itself that is dependent upon will of the debtor; (1997, 2003 BAR)
the will of the debtor but the moment of payment.
3. In case of reciprocal obligations, when there is
Benefit of the Period a just cause for fixing the period; or
GR: Whenever in an obligation a period is 4. If the debtor binds himself when his means
designated, it is presumed to have been established permit him to do so.
for the benefit of both the creditor and the debtor
NOTE: Once fixed by the courts, the period cannot
XPN: When it appears from the tenor of the period be changed by the parties. (Art. 1197, NCC)
or other circumstances that it was established for
the benefit of one of the parties. (Art 1196, NCC) Instances where the Debtor Loses his Right to
make Use of the Period
Effect of the Term or Period
1. When after the obligation has been contracted,
1. When it is for the benefit of the creditor – he becomes insolvent, unless he gives a
Creditor may demand the performance of the guaranty or security for the debt;
obligation at any time, but the debtor cannot
compel him to accept payment before the 2. When he does not furnish to the creditor the
expiration of the period.; and guaranties or securities which he has promised;
e.g., “on demand”
3. When by his own acts he has impaired said
2. When it is for the benefit of the debtor – guaranties or securities after their
Debtor may oppose any premature demand establishment;
on the part of the creditor for performance of
the obligation, or if he so desires, he may 4. When through a fortuitous event they
renounce the benefit of the period by disappear, unless he immediately gives new
performing his obligation in advance. ones or equally satisfactory;
5. When the debtor violates any undertaking, in

consideration of which the creditor agreed to
the period; and
2023 GOLDEN NOTES
I. OBLIGATIONS
6. When the debtor attempts to abscond. (Art. As to effect of culpable loss

1198, NCC)
Culpable loss obliges
Culpable loss of any
the debtor to deliver a
Alternative Obligation object due will give rise
substitute prestation
to liability to the
without liability to the
It is an obligation where the debtor is alternatively debtor.
debtor.
bound by different prestations, but the complete
performance of one is sufficient to extinguish the As to liability of debtor
obligation. The creditor shall have
the right of indemnity
Facultative Obligation When substitution has
for damages when,
been made and
solely through the fault
It is an obligation where the debtor, who has a communicated to the
of the debtor, all things
reserved right to choose another prestation or creditor, the obligor is
which are alternatively
thing, is bound to perform one of the several liable for the loss of the
the object of the
prestations due or to deliver a thing as a substitute thing on account of
obligation have been
for the principal. delay, negligence, or
lost, or the compliance
fraud.
of the obligation has
Conjunctive Obligation become impossible.
As to void prestation
An obligation where the debtor has to perform
several prestations; it is extinguished only by the If one prestation is
performance of all of them. If the principal
void, the others that
obligation is void, the
are free from any vices
Facultative Obligations vs. Alternative creditor cannot compel
of consent preserve the
Obligations delivery of the
validity of the
substitute.
obligation.
FACULTATIVE ALTERNATIVE
OBLIGATIONS OBLIGATIONS As to impossibility of prestation
As to number of prestation If some prestations are
If there is impossibility impossible to perform
Only one object is due. Several objects are due.
to perform or to or to deliver except for
As to manner of compliance deliver the principal one - this one must be
May be complied with May be complied with thing or prestation, the delivered.
by substitution of one by fulfilling any of obligation is
that is due. those alternately due. extinguished, even if If all prestations are
the substitute impossible to perform,
As to right to choose obligation is valid. the obligation is
GR: Choice pertains to extinguished.
debtor.
As to loss of substitute
Choice pertains only to
debtor. XPN: Expressly When the choice is
Loss of the substitute
granted to creditor or a given to the creditor,
before the substitution
third person. the loss of the
is made through the
As to effect of fortuitous loss alternative through the
fault of the debtor
Fortuitous loss of all fault of the debtor
Fortuitous loss doesn’t make him
prestations will renders him liable for
extinguishes the liable.
extinguish the damages.
obligation.
obligation.
CIVIL LAW
Limitations on Debtor’s Right to Choose NOTE: The choice made by the debtor does not
require the concurrence of the creditor. Otherwise,
1. The debtor must absolutely perform the it would destroy the very nature of the right to select
chosen prestation. He cannot compel the given to the debtor.
creditor to receive part of one and part of the
other undertaking; Impossibility of Choice Due to Creditor’s Acts
2. The debtor shall have no right to choose those When the choice is rendered impossible through the
prestations which are impossible, unlawful, or creditor’s fault, the debtor may bring an action to
which could not have been the object of the rescind the contract with damages. (Art. 1203, NCC)
obligation; (Art. 1200, NCC)
Plurality of Parties
3. The debtor shall lose the right of choice when
among the prestation whereby he is When there are various debtors or creditors, and
alternatively bound, only one is practicable; the obligation is joint, the consent of all is necessary
and (Art. 1202, NCC); to make the selection effective because none of
them can extinguish the entire obligation.
4. The selection made by the debtor (or the
creditor when it has been expressly granted to If the obligation is solidary and there is no
him) cannot be subjected by him to a stipulation to the contrary, the choice by one will be
condition or a term unless the creditor (or binding personally upon him; the choice of one will
debtor in case the choice is with the creditor) be personally binding to him, but not as to the
consents thereto. (Tolentino, 2002) others.
Effectivity of the Choice in Alternative Thus, if A and B solidarily bind themselves to deliver
Obligations a horse or a carabao to C, the selection of A of the
horse, when communicated to C, will bind him, and
The choice made takes effect only upon its he cannot, later on, deliver the carabao. It is,
communication to the other party, and from such however, not binding on B, who may extinguish the
time, the obligation ceases to be alternative. (Art. obligation by delivering the carabao. (Tolentino,
1201, NCC; Art. 1205, NCC) 2002)
NOTE: The notice of selection or choice may be in

any form provided it is sufficient to make the other
party know that the election has been made.
(Tolentino, 2002)
When Alternative Obligation becomes a Simple

Obligation
1. When the debtor has communicated the choice

to the creditor; and
2. When debtor loses the right of choice among

the prestations whereby the debtor is
alternatively bound, only one is practicable.
(Art. 1202, NCC)
2023 GOLDEN NOTES
I. OBLIGATIONS
Effects of Loss of Objects
OBJECTS DUE TO FORTUITOUS EVENT DUE TO DEBTOR’S FAULT

Choice Belongs to Debtor
Creditor shall have the right to be

Debtor is released from the indemnified for damages based on the
All are lost
obligation. value of the last thing which disappeared
or last service which became impossible.
Debtor shall deliver that which he Debtor shall deliver that which he shall
Some but not all are lost shall choose from among the choose from among the remainder
remainder. without damages.
Only one remains Deliver that which remains.
Choice Belongs to Creditor
Debtor is released from the Creditor may claim the price or value of
All are lost
obligation. any of them with indemnity for damages.
Creditor may claim any of those

Creditor may choose from among the subsisting OR he may choose any of those
Some but not all are lost remainder or that which remains if which were lost, but it is the price or
only one subsists. value of with right to damages that can be
claimed.
Deliver that which remains. In case of fault of debtor, creditor has a right to
Only one remains
indemnity for damages.
CIVIL LAW
Joint Obligations As to right of the creditor to the fulfillment of

the obligation
One where the credit or debt shall be presumed to
Each creditor has the
be divided into as many equal shares as there are
Each creditor, if there right to demand from
creditors or debtors, the credits or debts being
are several, is entitled any of the debtors, the
considered distinct from one another. (Art. 1208,
only to a proportionate payment or fulfillment
NCC) Each debtor is liable only for a proportionate
part of the credit. of the entire obligation.
part of the debt and each creditor to his
(Tolentino, 1999)
proportionate share to the credit.
Other terms for joint obligations are: Character of an obligation

a. joint simply;
b. mancomunada; or GR: When two or more creditors or two or more
c. pro rata. debtors concur in one and the same obligation, the
presumption is that the obligation is joint.
Solidary Obligations
XPNs: The obligation shall only be solidary when:
It is where each of the debtors obliges to pay the (L-E-N)
entire obligation, while each one of the creditors has
the right to demand from any of the debtors, the 1. Law requires solidarity;
payment or fulfillment of the entire obligation. (Art. 2. Expressly stipulated that there is solidarity; and
1207, NCC) 3. Nature of the obligation requires solidarity. Art.
1207, NCC)
Other terms for solidary obligations are:
a. Joint solidarily; Q: Chua bought and imported to the Philippines
b. Jointly and severally; or dicalcium phosphate. When the cargo arrived at
c. In solidum. the Port of Manila, it was discovered that some
were in apparent bad condition. Thus, Chua filed
Joint Obligation vs. Solidary Obligation with Smith Bell and Co., Inc. (claiming agent of
First Insurance Co.) a formal statement of claim
SOLIDARY for the loss. No settlement of the claim having
JOINT OBLIGATION been made, Chua then filed an action. Is Smith,
OBLIGATION
As to presumption by law Bell, and Co., solidarily liable upon a marine
insurance policy with its disclosed foreign
Not presumed. Must be principal?
expressly stipulated by
the parties, or when A: NO. Art. 1207 of the NCC clearly provides that
Presumed by law. (Art. "there is a solidary liability only when the obligation
the law or the nature of
1208, NCC)
the obligation requires expressly so states, or when the law or the nature of
solidarity. (Art. 1207, the obligation requires solidarity." The well-
NCC) entrenched rule is that solidary obligation cannot
lightly be inferred. It must be positively and clearly
As to liability of each debtor expressed. (Smith, Bell & Co., Inc. v. CA, G.R. No.
110668, 06 Feb. 1997)
Proportionate part of Obliged to pay the
the entire debt. entire obligation.
2023 GOLDEN NOTES
I. OBLIGATIONS
Q: The labor arbiter rendered a decision, the monthly fees. Despite the foregoing, MRII
fallo of which states the following respondents allegedly never paid Germo his rightful
as liable, namely: FCMC, Sicat, Gonzales, Chiu commissions amounting to P2,225,969.56 as of
Chin Gin, Lo Kuan Chin, and INIMACO. INIMACO December 2009, inclusive of interest. Initially,
questions the execution, alleging that the alias Germo filed a complaint before the National
writ of execution altered and changed the tenor Labor Relations Commission (NLRC), but the
of the decision by changing their liability from same was dismissed for lack of jurisdiction due
joint to solidary, by the insertion of the words to the absence of employer-employee
"AND/OR.” Is the liability of INIMACO pursuant relationship between him and MRII. Germo filed
to the decision of the labor arbiter solidary or the instant complaint praying that MRII and
not? Tompar pay him for unpaid commissions with
legal interest from the time they were due until
A: INIMACO's liability is not solidary but merely fully paid, moral damages, exemplary damages,
joint. Well-entrenched is the rule that solidary and the costs of suit.
obligation cannot lightly be inferred. There is a
solidary liability only when the obligation expressly MRII and Tompar averred, among others, that:
so states, when the law so provides or when the (a) there was no employer-employee
nature of the obligation so requires. relationship between MRII and Germo as the
latter was hired as a mere consultant; (b) Germo
In the dispositive portion of the labor arbiter, the failed to prove that the ICTSI account
word "solidary" does not appear. The said fallo materialized through his efforts as he did not
expressly states the following respondents therein submit the required periodic reports of his
as liable, namely: Filipinas Carbon Mining negotiations with prospective clients; and (c)
Corporation, Sicat, Gonzales, Chiu Chin Gin, Lo Kuan ICTSI became MRII's client through the efforts of
Chin, and INIMACO. Nor can it be inferred therefrom a certain Ed Fornes. Are MRII and Tompar, as the
that the liability of the six respondents in the case CEO and President, solidarily liable to pay
below is solidary; thus, their liability should merely Germo?
be joint. (INIMACO v. NLRC, G.R. No. 101723, 11 May
2000) A: NO. It is a basic rule that a corporation is a
juridical entity vested with legal and personality
Q: Mactan Rock Industries, through its President separate and distinct from those acting for and on
and Chief Executive Officer Tompar, entered behalf of, and from the people comprising it. As a
into a Technical Consultancy Agreement (TCA) general rule, directors, officers, or employees of a
with Germo, whereby the parties agreed, inter corporation cannot be held personally liable for the
alia, that: (a) Germo shall stand as MRII's obligations incurred by the corporation unless it can
marketing consultant who shall take charge of be shown that such director/officer/employee is
negotiating, perfecting sales, orders, contracts, guilty of negligence or bad faith and that the same
or services of MRII, but there shall be no was clearly and convincingly proven.
employer-employee relationship between
them; and (b) Germo shall be paid on a purely Before a director or officer of a corporation can be
commission basis, including a monthly held personally liable for corporate obligations, the
allowance of P5,000.00. During the effectivity of following requisites must concur:
the TCA, Germo successfully negotiated and
closed with International Container Terminal a. the complainant must allege in the
Services, Inc. (ICTSI) a supply contract of 700 complaint that the director or officer
cubic meters of purified water per day. assented to patently unlawful acts of the
Accordingly, MRII commenced supplying water corporation, or that the officer was guilty of
to ICTSI on 22 Feb. 2007, and in turn, the latter gross negligence or bad faith; and
religiously paid MRII the corresponding
CIVIL LAW
b. the complainant must clearly and Joint Divisible Obligations

convincingly prove such unlawful acts,
negligence or bad faith. The obligation is joint because the parties are
merely proportionately liable. It is indivisible
In this case, Tompar's assent to the patently because the object or subject matter is not
unlawful acts of the MRII or that his acts were physically divisible into different parts. In other
tainted by gross negligence or bad faith was not words, it is joint as to liabilities of the debtors or
alleged in Germo's complaint, much less proven rights of the creditors but indivisible as to
during the course of the trial. Therefore, the compliance. This obligation also constitutes the
deletion of Tompar's solidary liability with MRII is middle ground between a joint obligation and a
in order. (Mactan Rock Industries v. Germo, G.R. No. solidary obligation. (De Leon, 2010)
228799, 10 Jan. 2018)
A joint indivisible obligation gives rise to indemnity
Consequences of a Joint Obligation for damages from the time any one of the debtors
does not comply with his undertaking. The debtors
1. Each debtor is liable only for a proportionate who may have been ready to fulfill their promises
part of the entire debt; shall not contribute to the indemnity beyond the
corresponding portion of the price of the thing or of
2. Each creditor, if there are several, is entitled the value of the service in which the obligation
only to a proportionate part of the credit; consists. (Art. 1224, NCC)
3. The demand made by one creditor upon one Characteristics

debtor, produces effects of default only as
between them; 1. Obligation is joint, but since it is indivisible,
creditor must proceed against all the joint
4. Interruption of prescription caused by the debtors;
demand made by one creditor upon one debtor, 2. Demand must be to all debtors ;
will NOT benefit the co-creditors or the co- 3. In case of insolvency of one debtor, others are
debtors; not liable for his share ;
4. If there are joint creditors, delivery must be
5. Insolvency of a debtor will not increase the
made to all unless authorized by others; and
liability of his co-debtor;
5. Each joint creditor may renounce his share.
6. Vices of each obligation emanating from a
Effects of Different Permutations of Joint
particular debtor or creditor will not affect the
Indivisible Obligations
others;
7. In indivisible or joint obligation, the defense of 1. If there are two or more debtors, compliance
res judicata of one does not extend to the with the obligation requires the concurrence of
others; or (8 Manresa, 200-201); or all the debtors, although each for his own share.
The obligation can be enforced only by
8. The delay on the part of only one of the joint preceding against all of the debtors;
debtors does not produce effects with respect
to the others, and if the delay is produced 2. If there are two or more creditors, the
through the acts of only one of the joint concurrence or collective act of all the creditors,
creditors, the others cannot take advantage although each of his own shares, is also
thereof. necessary for the enforcement of the obligation;
and
2023 GOLDEN NOTES
I. OBLIGATIONS
3. Each credit is distinct from one another; 2. Each creditor represents the others in the act of
therefore, a joint debtor cannot be required to receiving payment and in all other acts which
pay for the share of another with debtor, tend to secure the credit or make it more
although he may pay if he wants to. advantageous. Hence, if he receives only a
partial payment, he must divide it among the
In case of insolvency of one of the debtors, the other creditors. He can interrupt the period of
others shall not be liable for his shares. To hold prescription or render the debtor in default, for
otherwise would destroy the joint character of the the benefit of all other creditors;
obligation. (Art. 1209, NCC)
3. One creditor, however, does not represent the
Effect of Breach by a Debtor others in such acts as novation (even if the
credit becomes more advantageous),
If one of the joint debtors fails to comply with his compensation and remission. In these cases,
undertaking and the obligation can no longer be even if the debtor is released, the other
fulfilled or performed, it will then be converted into creditors can still enforce their rights against
one of indemnity for damages. Innocent joint debtor the creditor who made the novation,
shall not contribute to the indemnity beyond his compensation, or remission;
corresponding share of the obligation.
4. The creditor and its benefits are divided equally
Solidary Obligations among the creditors, unless there is an
agreement among them to divide differently.
Each of the debtors is obliged to pay the entire Hence, once the credit is collected, an
obligation, and each one of the creditors has the accounting and a distribution of the amount
right to demand from any of the debtors the collected should follow;
payment or fulfillment of the entire obligation.
5. The debtor may pay to any solidary creditor,
Kinds of Solidary Obligation but if a judicial demand is made on him, he must
pay only to the plaintiff; and
1. Passive – Solidarity on the part of the debtors.;
2. Active – Solidarity on the part of the creditors.; 6. Each creditor may renounce his right even
3. Mixed – Solidarity on both sides.; against the will of the debtor, and the latter
4. Conventional – agreed by the parties.; and need not thereafter pay the obligation to the
5. Legal – imposed by law. former.
Active Solidarity Passive Solidarity
The essence of active solidarity consists in the In passive solidarity, the essence is that each debtor
authority of each creditor to claim and enforce the can be made to answer for the others, with the right
rights of all, with the resulting obligation of paying on the part of the debtor-payor to recover from the
everyone what belongs to him; there is no merger, others their respective shares. In so far as the
much less a renunciation of rights, but only mutual payment is concerned, this kind of solidarity is
representation. It is thus essentially a mutual similar to a mutual guaranty. Its effects are as
agency. Its juridical effects may be summarized as follows:
follows:
1. Each debtor can be required to pay the entire
1. Since it is a reciprocal agency, the death of a obligation, but after the payment, he can
solidary creditor does not transmit the recover from the co-debtors their respective
solidarity to each of his heirs but to all of them shares;
taken together;
CIVIL LAW
2. The debtor who is required to pay may set up As to the effect of breach
by way of compensation his own claim against
the creditor. In this case, the effect is the same In case of breach, it is
as that of payment; In case of breach, the converted to one of
liability of the solidary indemnity for damages
3. The total remission of a debt in favor of a debtor debtors although and the indivisibility of
releases all the debtors; but when this converted into one of the obligation is
remission affects only the share of one debtor, the indemnity for terminated and so each
the other debtors are still liable for the balance damages remains debtor is liable only for
of the obligation; solidary. his part of the
indemnity.
4. All the debtors are liable for the loss of the thing
As to the effect of death of a party
due, even if such loss is caused by only one of
them, or by fortuitous event after one of the
Death of solidary
debtors has incurred in delay;
debtor terminates the Heirs of the debtor
solidarity, the tie, or remain bound to
5. The interruption of prescription as to one
vinculum being perform the same
debtor affects all the others; but the
intransmissible to the prestation.
renunciation by one debtor of the prescription
heirs.
already had does not prejudice the others,
because the extinguishment of the obligation by
prescription extinguishes also the mutual
Rules in Solidary Obligations (1998, 2003 BAR)
representation among the solidary debtors; and
1. Anyone of the solidary creditors may collect or
6. The interest due by reason of the delay by one
demand payment of the whole obligation; there
of the debtors is borne by all of them.
is mutual agency among solidary debtors; (Arts.
1214 & 1215, NCC)
NOTE: Example of words that connote solidary
obligation: a) joint and several; b) in solidum; c)
2. Any of the solidary debtor may be required to
individually and collectively; d) each will pay the
pay the whole obligation; there is mutual
whole value; e) “I promise to pay” and there are two
guaranty among solidary debtors; and (Arts.
or more signatures; and f) juntos o separadamente
1216, 1217 & 1222, NCC)
(jointly or separately).
3. Each one of solidary creditors may do whatever
Solidarity v. Indivisibility
may be useful to the others, but not anything
prejudicial to them (Art. 1212, NCC); however,
SOLIDARITY INDIVISIBILITY
any novation, compensation, confusion, or
As to the kind of unity it refers to
remission of debt made by any solidary
Refers to the vinculum Refers to the creditors or with any of the solidary debtors
existing between the prestation or object of shall extinguish the obligation without
subjects or parties. the contract. prejudice to his liability for the shares of other
solidary creditors. (Arts. 1215 & 1219, NCC)
As to the requirement of
plurality of parties or subjects
Q: Joey, Jovy, and Jojo are solidary debtors under
Does not require a loan obligation of P300,000.00 which has
Requires the plurality fallen due. The creditor has, however, condoned
plurality of subjects or
of parties or subjects. Jojo's entire share in the debt. Since Jovy has
parties.
2023 GOLDEN NOTES
I. OBLIGATIONS
become insolvent, the creditor makes a demand one year. Because of their lack of business
on Joey to pay the debt. (1998 BAR) know-how, their business collapsed. Juancho
and Don ended up penniless, but Pedro was able
a. How much, if any, may Joey be compelled to to borrow money and put up a restaurant which
pay? did well. Can Cita demand that Pedro pay the
entire obligation since he, together with the two
A: Joey can be compelled to pay only the others, promised to pay the full amount after
remaining balance of P200,000, in view of the one year? Defend your answer. (2015 BAR)
remission of Jojo’s share by the creditor. (Art.
1219, NCC) A: NO. The obligation in this case is presumed to be
joint. The concurrence of two or more creditors or
b. To what extent, if at all, can Jojo be two or more debtors in one and the same obligation
compelled by Joey to contribute to such does not imply that each one of the former has the
payment? right to demand, or that each one of the latter is
bound to render the entire compliance of the
A: Jojo can be compelled by Joey to contribute prestation. (Art. 1207, NCC) In a joint obligation,
P50,000. When one of the solidary debtors cannot, there is no mutual agency among the joint debtors
because of his insolvency, reimburse his share to the such that if one of them is insolvent the others shall
debtor paying the obligation, such share shall be not be liable for his share.
borne by all his co-debtors, in proportion to the debt
of each. (Art. 1217(3), NCC) To whom payment should be made in a solidary
obligation
Since the insolvent debtor's share, which Joey
paid was P100,000, and there are only two GR: To any of the solidary creditors.
remaining debtors - namely Joey and Jojo -
these two shall share equally the burden of XPN: If demand, judicial or extra-judicial, has been
reimbursement. Jojo may thus be compelled by made by one of the creditors, payment should be
Joey to contribute P50,000. made to him. (Art. 1214, NCC)
Q: Iya and Betty owed Jun P500,000 for In cases of Solidary Creditors, one may act for all
advancing their equity in a corporation they
joined as incorporators. Iya and Betty bound Each one of the solidary creditors may execute acts
themselves solidarily liable for the debt. Later, that may be useful or beneficial to the others, but he
Iya and Jun became sweethearts, so Jun may not do anything which may be prejudicial to
condoned the debt of P500,000. May Iya demand them. (Art. 1212, NCC)
from Betty P250,000 as her share in the debt?
Explain with legal basis? (2015 BAR) NOTE: Prejudicial acts may still have valid legal
effects, but the performing creditor shall be liable to
A: NO. Iya may not demand the P250,000 from Betty his co-creditors. (Pineda, 2000)
because the entire obligation has been condoned by
the creditor Jun. In a solidary obligation, the Effects of Assignment of Rights in a Solidary
remission of the whole obligation obtained by one Obligation
of the solidary debtors does not entitle him to
reimbursement from his co-debtors. (Art. 1220, GR: A solidary creditor cannot assign his right
NCC) because it is predicated upon mutual confidence,
meaning the personal qualification of each creditor
Q: Juancho, Don, and Pedro borrowed P150,000 had been taken into consideration when the
from their friend Cita to put up an internet café, obligation was constituted. (Art. 1213, NCC)
orally promising to pay her the full amount after
CIVIL LAW
XPNs: divided, its value is impaired disproportionately.

1. Assignment to co-creditor; or (Pineda, 2000)
2. Assignment is with the consent of co-creditor.
Factors to Determine whether an Obligation is
Divisible Obligations Divisible or Indivisible
Those which have as their object a prestation which 1. The will or intention of the parties (express
is susceptible of partial performance without the or implied);
essence of the obligation being changed. An 2. The objective or purpose of the stipulated
obligation the object of which, in its delivery or prestation;
performance, is capable of partial performance. 3. The nature of the thing; and
4. The provisions of law affecting the
Indivisible Obligations prestation.
Those which have as their object a prestation which Obligations deemed Divisible
is not susceptible of partial performance, because
otherwise the essence of the obligation will be When the object of the obligation involves:
changed. 1. Certain number of days of work;
2. Accomplishment of work by metrical unit;
An obligation is indivisible when it cannot be validly and
performed in parts, whatever may be the nature of 3. Analogous things which are by their nature
the thing which is the object thereof. The susceptible of partial performance. (Art.
indivisibility refers to the prestation and not to the 1225, NCC)
object thereof. (Sps. Lam v. Kodak Philippines, Ltd.,
G.R. No. 167615, 11 Jan. 2016) Obligations deemed Indivisible
Kinds of Indivisibility 1. Obligations to give definite things;

2. Those which are not susceptible of partial
1. By operation of law; performance; and
2. By will of the parties; and 3. Even the object or service may be physically
3. By the nature of the obligation. divisible, an obligation is indivisible if so
provided by law or intended by the parties. (Art.
Divisible vs. Indivisible Obligations 1225, NCC)
DIVISIBLE INDIVISIBLE NOTE: A pledge or mortgage is one and indivisible

Non-susceptibility to by provision of law, and the rules apply even if the
Susceptibility of an
be performed partially. obligation is joint and not solidary. (Art. 2089, NCC)
obligation to be
Partial performance is
performed partially.
tantamount to non- Partial Performance in Indivisible Obligation
(Pineda, 2009)
performance.
GR: In indivisible obligations, partial performance is
Test of Divisibility equivalent to non-performance.
Whether or not the prestation is susceptible of XPNs:

partial performance, not in the sense of 1. Where the obligation has been substantially
performance in separate or divided parts, but in the performed in good faith, the debtor may
sense of the possibility of realizing the purpose recover as if there had been complete
which the obligation seeks to obtain. It is indivisible performance, minus the damages suffered by
if a thing which could be divided into parts and as the creditor; and
2023 GOLDEN NOTES
I. OBLIGATIONS
2. Where the creditor accepts performance Double Functions

knowing its incompleteness and without
protest, the obligation is deemed fully 1. To provide for liquidated damages; and
performed. (Art 1234 and 1235, NCC)
2. To strengthen the coercive force of the obligation
Effect of Illegality of a Part of a Contract by the threat of greater responsibility in case of
breach.
1. Divisible contract – the illegal part is void and
unenforceable, meanwhile, the legal part is Kinds of penalties
valid and enforceable.; and (Art. 1420, NCC)
1. As to origin
2. Indivisible contract – the entire contract is
void and unenforceable. 1. Legal - it is legal when it is constituted by
law.; and
OBLIGATIONS OBLIGATIONS 2. Conventional - it is constituted by
TO GIVE TO DO agreement of the parties.
In obligations to do,
In obligations to give, indivisibility is also 2. As to purpose
those for the delivery presumed, and it is only
of certain objects when they are under the a. Compensatory - it is compensatory when it
such as an animal or a exceptional cases is established for the purpose of
chair are indivisible. mentioned in Art. indemnifying the damages suffered by the
(Art. 1225(1), NCC) 1225(2) of the NCC that obligee or creditor in case of breach of the
they are divisible. obligation.; and
Divisibility or indivisibility in Negative b. Punitive - it is punitive when it is

obligations established for the purpose of punishing
the obligor or debtor in case of breach of
In negative obligations not to do, the character of the obligation.
the prestation in each particular case shall
determine their divisibility or indivisibility. (Pineda, 3. As to effect
2009)
a. Subsidiary - it is subsidiary when only the
Obligations with a Penal Clause penalty may be demanded in case of breach
of the obligation; and
An obligation with a penal clause is one with an
accessory undertaking by virtue of which the b. Joint - it is joint when the injured party may
obligor assumes a greater liability in case of breach demand the enforcement of both the
of the obligations. (Jurado, 2009) penalty and the principal obligation.
Penal Clause Can the debtor just choose penalty over non-
fulfillment?
A coercive means to obtain from debtor compliance.
It is an accessory undertaking to assume greater GR: The debtor cannot exempt himself from the
liability in case of breach. The penalty is generally a performance of the obligation by paying the penalty.
sum of money. But it can also be any other thing (Art. 1227, NCC)
stipulated by the parties, including an act or
abstention. XPN: When the right has been expressly reserved to
the debtor. (Art. 1227, NCC)
CIVIL LAW
Obligation with a Penal Clause vs. Alternative As to demand for fulfillment of both
Obligation prestations
The creditor may Creditor cannot

OBLIGATION WITH ALTERNATIVE
PENAL CLAUSE OBLIGATION demand both the demand both
principal and prestations or
As to Number of Obligations
accessory obligations. obligations.
There is only one
There are two or more (Pineda, 2009)
principal obligation,
obligations, the
the non-performance
fulfillment of one of Creditor Cannot Demand Both the Fulfillment of
of which makes the
which is sufficient to the Principal Obligation and the Penalty
stipulated penalty
satisfy the obligation.
enforceable.
GR: The creditor cannot demand the fulfillment of
As to Impossibility of Obligation the obligation and the satisfaction of the penalty at
The impossibility of the same time. (Art. 1227, NCC)
The impossibility of one of the obligations,
the principal obligation without fault of the XPNs:
extinguishes the debtor, leaves the 1. When the right has been clearly granted to
penalty other prestation him; and
subsisting.
2. If the creditor has decided to require the
As to Freedom to Choose fulfillment of the obligation, the performance
Obligor cannot choose thereof should become impossible without
to pay the penalty to his fault, the penalty may be enforced. (Art.
The obligor can choose
excuse himself from 1227, NCC)
which prestation or
the principal
obligation to fulfill.
obligation, unless NOTE: The creditor need not present proof of actual
(Pineda, 2009)
given that right damages suffered by him in order that the penalty
explicitly. may be demanded. (Art. 1228, NCC) In this
jurisdiction, there is no difference between a
Obligation with a Penal Clause vs. Facultative penalty and liquidated damages, so far as the results
Obligation are concerned. Whatever differences exist between
them, as a matter of language, they are legally
OBLIGATION WITH A FACULTATIVE treated the same. (Rabuya, 2017)
PENAL CLAUSE OBLIGATION
As to power to make substitution Effect of Incorporating a Penal Clause in an
Obligation
GR: The penalty fixed by the parties is

The obligor cannot compensation or substitute for damages in case of
substitute the payment The power of the breach.
of penalty for the obligor to make
principal obligation, substitution is XPNs: Damages shall still be paid even if there is a
unless expressly absolute. penal clause if:
allowed.
1. There is a stipulation to the contrary;
2. The debtor refuses to pay the agreed
penalty; or
2023 GOLDEN NOTES
I. OBLIGATIONS
3. The debtor is guilty of fraud in the NOTE: When there are several debtors in an
fulfillment of the obligation. (Art. 1126, obligation with a penal clause, the divisibility of the
NCC) principal obligation among the debtors does not
necessarily carry with it the divisibility of the
NOTE: The nullity of the penal clause does not carry penalty among them.
with it that of the principal obligation. For example,
the penal clause may be void because it is contrary NOTE: The nullity of the penal clause does not carry
to law, morals, good custom, public order, or public with it that of the principal obligation. For example,
policy. In such case, the principal obligation subsists the penal clause may be void because it is contrary
if valid. to law, morals, good custom, public order, or public
policy. In such case, the principal obligation subsists
GR: The nullity of the principal obligation carries if valid.
with it that of the penal clause. (Art. 1230, NCC)
GR: The nullity of the principal obligation carries
XPNs: The penal clause subsists even if the principal with it that of the penal clause. (Art. 1230, NCC)
obligation cannot be enforced:
XPNs: The penal clause subsists even if the principal
1. When the penalty is undertaken by a third obligation cannot be enforced:
person precisely for an obligation which is
unenforceable, voidable, or natural, in 1. When the penalty is undertaken by a third
which case, it assumes the form of a person precisely for an obligation which is
guaranty which is valid, under Art. 2052 of unenforceable, voidable, or natural, in which
the NCC; and case, it assumes the form of a guaranty which
is valid, under Art. 2052 of the NCC; and
2. When the nullity of the principal obligation
itself gives rise to the liability of the debtor 2. When the nullity of the principal obligation
for damages. itself gives rise to the liability of the debtor
for damages.
Instances where Penalty may be Reduced by the
Courts (P-I-U) Instances where Penalty may be Reduced by the
Courts (P-I-U)
1. Partial performance of the obligation;
2. Irregular performance of the obligation; and 1. Partial performance of the obligation;
3. Penalty is Unconscionable even if there has 2. Irregular performance of the obligation;
been no performance. 3. Penalty is Unconscionable even if there has
been no performance.
When Creditor can Demand Enforcement of
Penalty When Creditor can Demand Enforcement of
Penalty
Only when the non-performance is due to the fault
or fraud of the debtor that the creditor can demand Only when the non-performance is due to the fault
enforcement of the penalty. But the creditor does or fraud of the debtor that the creditor can demand
not have to prove that there was fault or fraud of the enforcement of the penalty. But the creditor does
debtor. The non-performance gives rise to the not have to prove that there was fault or fraud of the
presumption of fault; and in order to avoid the debtor. The non-performance gives rise to the
payment of penalty, the debtor has the burden of presumption of fault; and in order to avoid the
proving an excuse – either that the failure of the payment of penalty, the debtor has the burden of
performance was due to force majeure or to the acts proving an excuse – either that the failure of the
of the creditor himself.
CIVIL LAW
performance was due to force majeure or to the acts Mutual desistance as another mode of
of the creditor himself. extinguishing obligations
NOTE: When there are several debtors in an It is a concept derived from the principle that since
obligation with a penal clause, the divisibility of the mutual agreement can create a contract, mutual
principal obligation among the debtors does not disagreement by the parties can likewise cause its
necessarily carry with it the divisibility of the extinguishment. (Saura v. Development Bank of the
penalty among them. Phils., G.R. No. L-24968, 27 Apr. 1972)
1. PAYMENT
D. EXTINGUISHMENT OF OBLIGATIONS
a) CONCEPT OF PAYMENT
Modes of Extinguishment of an Obligation Payment (1998, 2009 BAR)
1. Principal modes (Pa-Co-Co-Me-Lo-N) Payment is the fulfillment of the obligation by the

realization of the purposes for which it was
a. Payment or performance; constituted. (Jurado, 2010)
b. Loss of the thing due;
c. Condonation or remission of debt or waiver; Payment is defined as not only the delivery of
d. Confusion or Merger; money but also the performance, in any other
e. Compensation; and manner, of an obligation. It is the satisfaction or
f. Novation. (Art. 1231, NCC) fulfillment of a prestation that is due, resulting in the
extinguishment of the obligation of the debtor.
2. Other Modes (P-A-R-F) (Pineda, 2009)
a. Annulment;
b. Rescission; Payment means not only the delivery of money but
c. Fulfillment of a resolutory condition; and also the performance, in any other manner, of an
d. Prescription. (Art. 1231, NCC) obligation (Art. 1232, NCC)
NOTE: The enumeration is not exclusive. Modes of Extinguishing Payment
3. Other causes not expressly mentioned 1. Delivery of money; or

(FoRDA-I-Change-Mu-Co) 2. Performance of the obligation
a. Death – in obligations which are of purely Characteristics of Payment

personal character;
b. Arrival of resolutory period; 1. Integrity – The payment of the obligation must
c. Change of Civil Status; be completely made;
d. Compromises;
e. Mutual dissent; 2. Identity – The payment of the obligation must
f. Impossibility of fulfillment; or consist in the performance of the very thing
g. Fortuitous events. (Paras, 2021) due; and
3. Indivisibility – The payment of the obligation

must be in its entirety.
2023 GOLDEN NOTES
I. OBLIGATIONS
Integrity NOTE: In an obligation to do or not to do, an act or

forbearance cannot be substituted by another act or
GR: Payment or performance must be complete. forbearance against the obligee’s will.
(Art. 1233, NCC)
Indivisibility
XPNs:
1. Substantial performance performed in good GR: Debtor cannot be compelled by the creditor to
faith; (Art. 1234, NCC) perform obligation in parts and neither can the
debtor compel the creditor to accept obligation in
2. When the obligee accepts the performance, parts.
knowing its incompleteness or irregularity and
without expressing any protest or objection; or XPNs : When:
(Art. 1235, NCC) 1. Partial performance has been agreed upon;
2. Part of the obligation is liquidated and part
3. Debt is partly liquidated and partly is unliquidated; or
unliquidated, but the liquidated part of the debt 3. To require the debtor to perform in full is
must be paid in full. impractical.
Substantial Performance Doctrine Acceptance by a Creditor of a Partial Payment

NOT an Abandonment of its Demand for Full
It provides the rule that if a good faith attempts to Payment
perform does not precisely meet the terms of an
agreement or statutory requirements, the When creditors receive partial payment, they are
performance will still be considered complete if the not ipso facto deemed to have abandoned their prior
essential purpose is accomplished. (Black’s Law demand for full payment.
Dictionary, 2009)
To imply that creditors accept partial payment as
Requisites complete performance of their obligation, their
acceptance must be made under circumstances that
1. Attempt in good faith to comply with obligation; indicate their intention to consider the performance
and complete and to renounce their claim arising from
the defect.
2. Slight deviation from the obligation; and the
omission or defect of the performance is NOTE: While Art. 1248 of the NCC states that
technical and unimportant; and does not creditors cannot be compelled to accept partial
pervade the whole, or is not material that the payments, it does not prohibit them from accepting
object which the parties intended to accomplish the same. (Selegna Management and Development
is not attained. (Tolentino, 2002) Corp. v. UCPB, G.R. No. 165662, 03 May 2006)
Identity of the Thing Requisites of a Valid Payment
GR: Thing paid must be the very thing due and 1. The person who pays the debt must be the
cannot be another thing even if of the same or more debtor;
quality and value.
2. The person to whom payment is made must be
XPNs: the creditor;
1. Dation in payment;
2. Novation of the obligation; and
3. Obligation is facultative.
CIVIL LAW
3. The thing to be paid or to be delivered must be Rights of a Third Person who made the Payment
the precise thing or the thing required to be
delivered by the creditor; 1. If the payment was made with knowledge and
consent of the debtor:
4. The manner (if expressly agreed upon), time,
and place of payment, etc.; and a. Can recover the entire amount paid
(absolute reimbursement); or
5. Acceptance by the creditor. b. Can be subrogated to all rights of the
creditor.
Kinds of payment
2. If the payment was made without the
1. Normal - When the debtor voluntarily knowledge or against the will of the debtor –
performs the prestation stipulated; and Can recover only insofar as payment has been
beneficial to the debtor (right of conditional
2. Abnormal- When he is forced by means of a reimbursement).
judicial proceeding, either to comply with the
prestation or to pay the indemnity. (Tolentino, NOTE: Payment made by a third person who does
1991) not intend to be reimbursed by the debtor is
deemed to be a donation, which requires the
Person who pays debtor's consent. But the payment is in any case
valid as to the creditor who has accepted it. (Art.
The following persons may effect payment and 1238, NCC)
compel the creditor to accept the payment:
Persons to whom payment is made
1. Debtor himself;
2. His heirs and assigns; Persons entitled to receive the payment:
3. His agents and representatives; or 1. The person in whose favor the obligation has
4. Third persons who have a material interest in been constituted;
the fulfillment of the obligation. (Art. 1236(1), 2. His successor in interest; or
NCC) 3. Any person authorized to receive it. (Art. 1240,
NCC)
Payment made by Third Persons
NOTE: Payment made to one having apparent
GR: The creditor is not bound to accept payment or authority to receive the money will, as a rule, be
performance by a third person. treated as though actual authority had been given
for its receipt. Likewise, if payment is made to one
XPNs: who by law is authorized to act for the creditor, it
1. When made by a third person who has will work as a discharge. (Sps. Miniano v. Concepcion,
interest in the fulfillment of the obligation; G.R. No. 172825, 11 Oct. 2012)
and
Payment to an Unauthorized person
2. Contrary stipulation. (Art. 1236, NCC)
GR: Payment to an unauthorized person is not a
NOTE: The rules on payment by a third person (Art. valid payment. (Art. 1241, NCC)
1236 to 1238, NCC) cannot be applied to the case of
a third person who pays the redemption price in XPNs:
sales with right of repurchase. This is so because the 1. Payment to an incapacitated person if:
vendor a retro is not a debtor within the meaning of a. He kept the thing delivered; or
the law. (Jurado, 2010)
2023 GOLDEN NOTES
I. OBLIGATIONS
b. It has been beneficial to him (Art. 1241, 4. Tender of payment - Voluntary act of the
NCC); debtor whereby he offers to the creditor for
acceptance the immediate performance of
2. Payment to a third person insofar as it the former’s obligation to the latter.
redounded to the benefit of the creditor; and
5. Consignation - Act of depositing the object of
Benefit to the creditor need not be proved: the obligation with the court or competent
(R-R-E) authority after the creditor has unjustifiably
refused to accept the same or is not in a
a. If after the payment, the third person position to accept it due to certain reasons or
acquires the creditor’s Rights; circumstances.
b. If the creditor Ratifies the payment to the Dation in Payment (Dacion En Pago) (2009 BAR)
third person; or
The delivery and transmission of ownership of a
c. If by the creditor’s conduct, the debtor has thing by the debtor to the creditor as an accepted
been led to believe that the third person equivalent of the performance of the obligation. The
had authority to receive the payment property given may consist not only of a thing but
(Estoppel). (Art. 1241, NCC) also of a real right. (Tolentino, 2002)
3. Payment in good faith to the possessor of Dacion en pago is the delivery and transmission of
credit. (Art. 1242, NCC) ownership of a thing by the debtor to the creditor as
an accepted equivalent of the performance of an
NOTE: Payment made to the creditor by the debtor existing obligation. It is a special mode of payment
after the latter has been judicially ordered to retain where the debtor offers another thing to the
the debt shall not be valid. (Art. 1243, NCC) creditor who accepts it as equivalent to the payment
of an outstanding debt. (Rockville Excel Intl. Exim
Special Forms of Payment Corp. v. Sps. Culla, G.R. No. 155716, 12 Oct. 2009)
1. Dacion en pago - Alienation by the debtor of For dacion en pago to exist, the following elements
a particular property in favor of his creditor, must concur:
with the latter’s consent, for the satisfaction a. existence of a money obligation;
of the former’s money obligation to the latter, b. the alienation to the creditor of a property by
with the effect of extinguishing the said the debtor with the consent of the former;
money obligation. and
c. satisfaction of the money obligation of the
2. Application of payment – Designation of the debtor. (Ibid.)
particular debt being paid by the debtor who
has two or more debts or obligations of the NOTE: The debtor cannot compel the creditor to
same kind in favor of the same creditor to receive a different object (Art. 1244, NCC)
whom the payment is made.
Q: Cebu Asiancars Inc., with the conformity of
3. Payment by cession - Debtor cedes his the lessor, used the leased premises as collateral
property to his creditors so the latter may sell to secure payment of a loan which Asiancars
the same and the proceeds realized applied may obtain from any bank, provided that the
to the debts of the debtor. proceeds of the loan shall be used solely for the
construction of a building which, upon the
termination of the lease or the voluntary
surrender of the leased premises before the
CIVIL LAW
expiration of the contract, shall automatically of Agreement where they agreed that some
become the property of the lessor. Meeting parcels of the land mortgaged would be released
financial difficulties and incurring an and sold. The proceeds amounting to
outstanding balance on the loan, Asiancars P15,000,000.00 were deposited with
conveyed ownership of the building on the Metrobank. Elite Union and Metrobank entered
leased premises to MBTC, by way of "dacion en into a Loan Sale and Purchase Agreement where
pago." Is the dacion en pago by Asiancars in the latter sold G & P’s loan account to Elite
favor of MBTC valid? Union. Metrobank claims that it is still entitled
to the P15,000,000.00 proceeds despite the sale
A: YES. MBTC was a purchaser in good faith. MBTC of G & P’s loan account to Elite Union. Is
had no knowledge of the stipulation in the lease Metrobank entitled to the P15,000,000.00
contract. Although the same lease was registered deposit?
and duly annotated, MBTC was charged with
constructive knowledge only of the fact of the lease A: NO. Through the assignment of credit, the new
of the land and not of the specific provision creditor is entitled to the rights and remedies
stipulating transfer of ownership of the building to available to the previous creditor. Moreover, under
the Jaymes upon termination of the lease. While the Art. 1627 of the NCC, "the assignment of a credit
alienation was in violation of the stipulation in the includes all the accessory rights, such as a guaranty,
lease contract between the Jaymes and Asiancars, mortgage, pledge, or preference." The Loan Sale and
MBTC’s own rights could not be prejudiced by Purchase Agreement entitled Elite Union to all the
Asiancars’ actions unknown to MBTC. Thus, the rights and interests that petitioner had as a creditor
transfer of the building in favor of MBTC was valid of respondent G & P, including the securities of the
and binding. (Jayme v. CA, G.R. No. 128669, 04 Oct. loan account. What was sold to Elite Union under
2002) the Loan Sale and Purchase Agreement was
respondent G & P's total loan obligation inclusive of
Assignment of Credit the remaining securities and proceeds from the sale
of some of the securities as stated in the first MOA.
An agreement by virtue of which the owner of a (MBTC v. G & P Builders, Incorporated, G.R. No.
credit, known as the assignor, by a legal cause, such 189509, 23 Nov. 2015)
as sale, dation in payment, exchange or donation,
and without the consent of the debtor, transfers his Form of Payment
credit and accessory rights to another, known as the
assignee. The assignee acquires the power to enforce 1. Payment in cash –All monetary obligations
it to the same extent as the assignor could enforce it shall be settled in Philippine currency.
against the debtor. It may be in the form of a sale, However, the parties may agree that the
but at times it may constitute a dation in payment, obligation be settled in another currency at the
such as when a debtor, in order to obtain a release time of payment; (Sec. 1, R.A. No. 8183) and
from his debt, assigns to his creditor a credit he has
against a third person. As a dation in payment, the 2. Payment in check or other negotiable
assignment of credit operates as a mode of instrument –Not considered payment, they are
extinguishing the obligation; the delivery and not considered legal tender and may be refused
transmission of ownership of a thing (in this case, by the creditor.
the credit due from a third person) by the debtor to
the creditor is accepted as the equivalent of the XPNs:
performance of the obligation. a. the document has been encashed; or
b. it has been impaired through the fault of the
Q: G & P Builders obtained a loan from creditor. (Art. 1249, NCC)
Metrobank and mortgaged parcels of land as
collateral. The parties executed a Memorandum
2023 GOLDEN NOTES
I. OBLIGATIONS
Legal Tender; Payment in Cash (2008 BAR) discharged in Philippine currency based on the
prevailing rate at the time of payment. It is just and
Legal tender means such currency which in a given fair to preserve the real value of the foreign
jurisdiction can be used for the payment of debts, exchange-incurred obligation to the date of its
public and private, and which cannot be refused by payment. (C.F. Sharp & Cp., Inc. v. Northwest Airlines,
the creditor. (Tolentino, 2002) Inc., G.R. No. 133498, 18 Apr. 2002).
The legal tender covers all notes and coins issued by When Payment by a Negotiable Instrument
the Bangko Sentral ng Pilipinas and guaranteed by produces effect of payment (2008 BAR)
the Republic of the Philippines. The amount of coins
that may be accepted as legal tender are: (1) Only when it is encashed; or
(2) when through the fault of the creditor, they have
1. One-Peso, Five-Pesos, 10-Pesos coins in been impaired. (Art. 1249(2), NCC)
amount not exceeding P1,000.00; and
A check does not constitute as a legal tender, thus a
2. 25 centavos or less in an amount not exceeding creditor may validly refuse it. However, this does
P100. 00. (BSP Circular No. 537, Series of 2006, not prevent a creditor from accepting a check as
18 July 2006) payment – the creditor has the option and the
discretion of refusing or accepting it. (Far East Bank
Q: Northwest Airlines, through its Japan Branch, & Trust Company v. Diaz Realty, Inc., G.R. No. 138588,
entered into an International Passenger Sales 23 Aug. 2001)
Agency Agreement with CF Sharp, authorizing
the latter to sell its air transport tickets. CF NOTE: While it is true that the delivery of a check
Sharp failed to remit the proceeds of the ticket produces the effect of payment only when it is
sales, thus, Northwest Airlines filed a collection cashed, pursuant to Art. 1249 of the NCC, the rule is
suit before the Tokyo District Court which otherwise if the debtor is prejudiced by the
rendered judgment ordering CF Sharp to pay creditor's unreasonable delay in presentment. The
83,158,195 Yen and damages for the delay at the acceptance of a check implies an undertaking of due
rate of 6% per annum. Unable to execute the diligence in presenting it for payment, and if he from
decision in Japan, Northwest Airlines filed a case whom it is received sustains loss by want of such
to enforce said foreign judgment with the RTC of diligence, it will be held to operate as actual
Manila. What is the rate of exchange that should payment of the debt or obligation for which it was
be applied for the payment of the amount? given. It has, likewise, been held that if no
presentment is made at all, the drawer cannot be
A: The repeal of R.A. No. 529 by R.A. No. 8183 has held liable irrespective of loss or injury unless
the effect of removing the prohibition on the presentment is otherwise excused. This is in
stipulation of currency other than Philippine harmony with Article 1249 of the NCC under which
currency, such that obligations or transactions may payment by way of check or other negotiable
now be paid in the currency agreed upon by the instrument is conditioned on its being cashed,
parties. Just like R.A. No. 529, however, the new law except when through the fault of the creditor, the
does not provide for the applicable rate of exchange instrument is impaired. The payee of a check would
for the conversion of foreign currency-incurred be a creditor under this provision and if its no-
obligations in their peso equivalent. It follows, payment is caused by his negligence, payment will
therefore, that the jurisprudence established in R.A. be deemed effected and the obligation for which the
No. 529 regarding the rate of conversion remains check was given as conditional payment will be
applicable. Thus, in Asia World Recruitment, Inc. v. discharged. (Evangelista v. Screenex, Inc., G.R. No.
NLRC (G.R. No. 113363, 24 Aug. 1999), the SC, 211564, 20 Nov. 2017)
applying R.A. No. 8183, sustained the ruling of the
NLRC that obligations in foreign currency may be
CIVIL LAW
Q: Diaz & Company obtained a loan from Pacific or beyond the common fluctuation in the value of
Banking Corp which was secured by a real estate said currency, and such decrease or increase could
mortgage. ABC rented an office space in the not have been reasonably foreseen or was
building constructed on the properties covered manifestly beyond the contemplation of the parties
by the mortgage contract. The parties then at the time of the establishment of the obligation.
agreed that the monthly rentals shall be paid (Tolentino, 2002)
directly to the mortgagee for the lessor's
account. Thereafter, FEBTC purchased the credit In case an extraordinary inflation or deflation of the
of Diaz & Company in favor of PaBC, but it was currency stipulated should supervene, the value of
only after two years that Diaz was informed the currency at the time of the establishment of the
about it. Diaz asked the FEBTC to make an obligation shall be the basis of payment unless there
accounting of the monthly rental payments is an agreement to the contrary. (Art. 1250, NCC)
made by Allied Bank. Diaz tendered to FEBTC
the amount of P1, 450, 000. 00 through an The doctrine of unforeseen risks can be applied
Interbank check, in order to prevent the when the currency is devaluated in terms beyond
imposition of additional interests, penalties and what could have been reasonably foreseen by the
surcharges on its loan but FEBTC did not accept parties, and the effects of the devaluation should not
it as payment, instead, Diaz was asked to deposit be borne by the creditor alone. The revaluation of
the amount with the FEBTC’s Davao City Branch the credit in such cases must be made according to
Office. Was there a valid tender of payment? the principles of good faith and in view of the
circumstances of each particular case, recognizing
A: YES, there was a valid tender of payment. the real value of the credit as in consonance with the
Jurisprudence holds that, generally, a check does intent of the parties.
not constitute legal tender and that a creditor may
validly refuse it. It must be emphasized, however, Requisites for Application of Art. 1250,
that this dictum does not prevent a creditor from
accepting a check as payment. In other words, the 1. That there was an official declaration of extra-
creditor has the option and the discretion of refusing ordinary inflation or deflation from the BSP;
or accepting it. (FEBTC v. Diaz Realty Inc., G.R. No.
138588, 23 Aug. 2001) 2. That the obligation was contractual in nature;
and
Burden of proving payment in an action for sum
of money 3. That the parties expressly agreed to consider
the effects of the extraordinary inflation or
In civil cases, the one who pleads payment has the deflation. (Rabuya, 2017)
burden of proving payment. The burden of proving
payment, thus, rests on the defendant once proof of Place of Payment
indebtedness is established. When the existence of
a debt is fully established, the burden of proving GR: Payment must be made in the place designated
that it has been extinguished by payment devolves in the obligation. (Art. 1251, NCC)
upon the debtor who offers such defense to the
claim of the creditor. (Decena v. SPV-AMC, Inc., G.R. XPN: If there is no express designation or
No. 239418, 12 Oct. 2020) stipulation in the obligation:
Extraordinary Inflation or Deflation (2001 BAR) 1. At the place where the thing might be at
the time the obligation was constituted –
Extraordinary inflation or deflation exists when If the obligation is to deliver a determinate
there is a decrease or increase in the purchasing thing; or
power of the Philippine currency which is unusual
2023 GOLDEN NOTES
I. OBLIGATIONS
2. At the domicile of the debtor – In any other he cannot impair the rights granted by law to the
case (Art. 1251, NCC) creditor. (Tolentino, 2002)
NOTE: Governs only unilateral obligations since XPN: Debtor’s failure to ascertain which debt his
reciprocal obligations are governed by special rules. payment is to be applied. – The right of the debtor
(Jurado, 2010) to choose to which debt his payment will be applied
against may be transferred to the creditor when he
Moreover, if the debtor changes his domicile in bad fails to make the application, and subsequently, he
faith or after he has incurred in delay, the additional accepts a receipt from the creditor evidencing the
expenses shall be borne by him. latter’s choice of application. Under this
circumstance, the debtor cannot complain of the
The foregoing are without prejudice, however, to application made by the creditor unless there be a
the venue under the Rules of Court. cause for invalidating such act.
Application of Payments The right of the debtor to apply payment is merely

directory in nature and must be promptly exercised,
It is the designation of the debt to which the lest, such right passes to the creditor. (Sps. Tan v.
payment must be applied when the debtor has China Banking Corp., G.R. No. 200299, 17 Aug. 2016)
several obligations of the same kind in favor of the
same creditor. (Art. 1252, NCC) Limitation upon right to apply payment
Requisites: If the debt produces interests, payment of the

principal shall not be deemed to have been made
1. There is only one debtor and creditor; until the interest has been covered. (Art. 1253, NCC)
2. The debtor owes the creditor two or more
debts; NOTE: Interest must be paid first. The debtor
3. Debts are of the same kind or identical nature; cannot insist that his payment be credited to the
principal. Reduction in the principal would result in
e.g., both debts are money obligations obtained the decrease of the total interest collectible.
on different dates;
Legal Application of Payment
4. All debts are due and demandable;
If both the creditor and the debtor failed to exercise
XPN: the right of application of payment or legal
a. When there is mutual agreement application of payment will now be governed.
between the parties (Tolentino, 2002);
and Rules on Legal Application of Payment
b. The application is made by the party for The payment should be applied to the more onerous
whose benefit the term has been debts:
constituted. (Art. 1252(1), NCC)
1. When a person is bound as principal in one
5. The payment made is not sufficient to cover all obligation and as surety in another, the former
obligations. Right of the debtor in the is more onerous.;
application of payments.
2. When there are various debts, the oldest ones
GR: The law grants the debtor a preferential right to are more burdensome.;
choose the debt to which his payment is to be
applied. But the right of the debtor is not absolute;
CIVIL LAW
3. Where one bears interest and the other does If the offer is not accepted by the creditors, the same
not, even if the latter is the older obligation, the end may be attained by a proceeding in insolvency
former is considered more onerous.; instituted in accordance with Insolvency Law.
4. Where there is an encumbrance, the debt with a Circumstances Evidencing Payment by Cession
guaranty is more onerous than that without
security.; Debtor abandons all of his property for the benefit
of his creditors in order that from the proceeds
5. With respect to indemnity for damages, the thereof, the latter may obtain payment of credits.
debt which is subject to the general rules on
damages is less burdensome than that in which Requisites:
there is a penal clause.;
1. Plurality of debts;
6. The liquidated debt is more burdensome than 2. Partial or relative insolvency of the debtor; and
the unliquidated one.; and 3. Acceptance of the cession by the creditors.
7. An obligation in which the debtor is in default is Payment by Cession vs. Dation in Payment
more onerous than one in which he is not.
(Tolentino, 2002) PAYMENT BY DATION IN
CESSION PAYMENT
NOTE: The payment shall be applied As to Number of creditors
proportionately if it happens that the debt is of the Does not require
same nature and burden. Plurality of creditors.
plurality of creditors
As to Financial condition of the debtor
Effect of Creditor’s Refusal
Debtor must be Not necessarily in
If the debtor makes a proper application of partially or relatively state of financial
payment, but the creditor refuses to accept it insolvent. difficulty.
because he wants to apply it to another debt, such As to Object
creditor will incur in delay. (Tolentino, 1991)
Thing delivered is
Universality or
considered as the
b) PAYMENT BY CESSION vs. DATION IN property of debtor is
equivalent of
PAYMENT what is ceded.
performance.
Cession As to Extent of the Extinguishment
Payment extinguishes
Assignment or cession is the abandonment of the obligation to the
universality of the property of the debtor for the Merely releases debtor
extent of the value of
benefit of his creditors in order that such property for net proceeds of
the thing delivered as
may be applied to the payment of the credits. things ceded or
agreed upon, proved,
assigned, unless there
or implied from the
The initiative comes from the debtor, but it must be is contrary intention.
conduct of the
accepted by the creditors in order to become creditor.
effective. A voluntary assignment cannot be
imposed upon a creditor who is not willing to accept As to Transfer of Ownership
it. Ownership is
Ownership is not
transferred to creditor
transferred.
upon delivery.
2023 GOLDEN NOTES
I. OBLIGATIONS
As to Novation NOTE: Once the consignation has been duly made,

Not an act of novation. An act of novation the debtor may ask the judge to order the
cancellation of the obligation. (Art. 1260, NCC)
As to Presumption of Insolvency
Presupposes Does not presuppose Requisites of Consignation
insolvency insolvency.
1. There was a debt due;
c) TENDER OF PAYMENT AND CONSIGNATION
2. Valid prior trades of payment, unless the
Tender of Payment consignation was made because of some legal
cause provided in Art. 1256;
The definitive act of offering to the creditor what is
due to him together with the demand that the 3. The previous notice of the consignation had
been given to the person interested in the
creditor accepts the same. (Cinco v. CA, G.R. No.
151903, 09 Oct. 2009) performance of the obligation;
Tender of payment which is the manifestation by 4. The amount or thing due was placed at the
the debtor to the creditor of his desire to comply disposal of the court; and
with his obligation, with the offer of immediate
performance. (Del Carmen v. Sabordo, G.R. No. 5. That after the consignation had been made, the
181723, 11 Aug. 2014) persons interested were notified thereof.
NOTE: When a creditor refuses the debtor’s tender NOTE: Requirement No. 5 may be complied
of payment, the law allows the consignation of the with by the service of summons upon the
thing or the sum due. (Cinco v. CA, G.R. No. 151903, defendant creditor together with a copy of the
09 Oct. 2009) complaint.
There must be a fusion of intent, ability, and 6. After this notice, the creditor may:
capability to make good such offer, which must be a. Accept the thing or amount deposited, in
absolute and must cover the amount due. (FEBTC v. which case the matter of the payment is
Diaz Realty Inc., G.R. No. 138588, 23 Aug. 2001) terminated; or
Tender of payment is a preparatory act which b. Refuse to accept the thing or amount, in
precedes consignation. The tender of payment by which case a trial must be held to
itself does not cause the extinguishment of the determine the validity of consignation.
obligation unless completed by consignation.
(Tolentino, 1991) 7. The creditor may neither accept nor refuse in
which case the debtor may ask the court to
Consignation cancel the obligation after showing that the
requisites of consignation have been complied
Act of depositing the object of the obligation with with. (Art. 1260, NCC)
the court or competent authority after the creditor
has unjustifiably refused to accept the same or is not NOTE: Tender of payment must be valid and
in a position to accept it due to certain reasons or unconditional. (Sps. Rayos v. Reyes, G.R. No. 150913,
circumstances. (Pineda, 2000) 20 Feb. 2003)
Substantial compliance is not enough. The giving of

notice to the persons interested in the performance
of the obligation is mandatory. Failure to notify the
CIVIL LAW
persons interested in the performance of the XPNs: It shall, however, not produce the same effect
obligation will render the consignation void. (Dalton in the following cases. When: (T-I-T-A-R)
v. FGR Realty and Development Corp., G.R. No.
172577, 19 Jan. 2011) 1. Creditor is Absent or unknown, or doesn’t
appear at the place of payment;
Consignation is necessarily judicial. Art. 1258 of the 2. Creditor Refuses to issue a receipt without just
CC Art. 1258 of the CC specifically provides that cause;
consignation shall be made by depositing the thing 3. Title of the obligation has been lost;
or things due at the disposal of judicial authority. 4. Creditor is Incapacitated to receive payment at
The said provision clearly precludes consignation in the time it is due; or
venues other than the courts. (Sps. Cacayorin v. 5. Two or more persons claim the right to collect.
Armed Forces and Police Mutual Benefit Association, (Art. 1256, NCC)
Inc., G.R. No. 171298, 15 Apr. 2013)
NOTE: The expenses of consignation, when
Consignation and tender of payment must not be properly made, shall be charged against the
encumbered by conditions. (Sps. Rayos v. Reyes, G.R. creditor. (Art. 1259, NCC)
No. 150913, 20 Feb. 2003)
Right of the Debtor to Withdraw the Thing
Q: Dorotea leased portions of her 2,000 sq. m. lot Deposited
to Monet, Kathy, Celia and Ruth for five (5) years.
Two (2) years before the expiration of the lease Before the creditor has accepted the consignation,
contract, Dorotea sold the property to PM Realty or before a judicial declaration that the consignation
and Development Corp. The following month, has been properly made, the debtor may withdraw
Dorotea and PM Realty stopped accepting rental the thing or the sum deposited, allowing the
payments from all the lessees because they obligation to remain in force. (Art. 1260, NCC)
wanted to terminate the lease contracts. Due to
the refusal to accept rental payments, the NOTE: If the consignation having been made, the
lessees, Ruth, et al., filed a complaint for creditor should authorize the debtor to withdraw
consignation of the rentals before the RTC of the same, he shall lose every preference which he
Manila without notifying Dorotea. Is the may have over the thing. The co-debtors,
consignation valid? (2014 BAR) guarantors, and sureties shall be released. (Art.
1261, NCC)
A: NO, the consignation is not valid. Art. 1257 of the
NCC provides that in order for the consignation of Tender of Payment vs. Consignation
the thing due to release the obligor, it must first be
announced to the persons interested in the TENDER OF
CONSIGNATION
fulfillment of the obligation. Moreover, Art. 1258 of PAYMENT
the same code provides that consignation having Nature
been made, the interested parties shall also be
Antecedent of Principal or
notified thereof. In this case, Dorotea, an interested
consignation or consummating act for
party, was not notified of the consignation. The
preliminary act to the extinguishment of
consignation is therefore not valid for non-
consignation. the obligation.
compliance with Art. 1257, NCC.
Effect
Effectivity of Consignation as Payment
It does not by itself It extinguishes the
GR: Consignation shall produce effects of payment extinguish the obligation when
only if there is a valid tender of payment. obligation. declared valid.
2023 GOLDEN NOTES
I. OBLIGATIONS
Character payment of the balance of the purchase price and

consignation. In fact, even before the filing of the
Judicial for it requires
consignation case, Y never notified X of their offer to
the filing of a
Extrajudicial. pay. (Sps. Benos v. Sps. Lawilao, G.R. No. 172259, 05
complaint in court.
Dec. 2006)
(Pineda, 2000)
2. LOSS OF THE THING DUE

Q: In an ejectment case, X refused to vacate the
land, alleging that Y had sold to him the
additional area, the payment of which would be a) CONCEPT OF LOSS
effected five years after the execution of a formal
deed of sale. However, the parties failed to Loss here is not contemplated in its strict and legal
execute a deed of sale. During the pendency of meaning and is not limited to obligations to give, but
the action, X deposited the payment for the extends to those which are personal, embracing,
additional area with the court. Is there a valid therefore, all causes which may render impossible
consignation? the performance of the prestation. In some Codes,
this is designated as impossibility of performance.
A: NO, there is no valid consignation. Under Art.
1257 of the NCC, consignation is proper only in cases NOTE: The impossibility of performance must be
where an existing obligation is due. In this case, the subsequent to the execution of the contract in order
contracting parties agreed that full payment of to extinguish the obligation; if the impossibility
purchase price shall be due and payable within five already existed when the contract was made, the
years from the execution of a formal deed of sale. At result is not extinguishment but inefficacy of the
the time Rodriguez deposited the amount in court, obligation under Arts. 1348 and 1493 of the NCC.
no formal deed of sale had yet been executed by the
parties, and, therefore, the five-year period during b) REQUISITES
which the purchase price should be paid had not
commenced. In short, the purchase price was not When a Thing is Considered Lost (P-E-D-O)
yet due and payable. (Heirs of San Andres v.
Rodriguez, G.R. No. 135634, 31 May 2000) 1. It Disappears in such a way that its existence is
unknown;
Q: Under a pacto de retro sale, X sold to Y his lot 2. It goes Out of commerce;
and the building erected thereon. They agreed 3. It Perishes; or
that half of the consideration shall be paid to the 4. Its Existence is unknown or if known, it cannot
bank to pay off the loan of X. After paying the be recovered.
first installment, Y, instead of paying the loan to
the bank, restructured it twice. Eventually, the Effect of Loss of the Thing/Object of the
loan became due and demandable. Thus, X paid Obligation
the bank. On the same day, Y also went to the
bank and offered to pay the loan, but the bank If the obligation is a:
refused to accept the payment. Y then filed an
action for consignation without notifying X. Is 1. Determinate obligation to give:
there a valid consignation by Y of the balance of
the contract price? Requisites:
a. The thing lost must be determinate;
A: NO, there is no valid consignation by Y of the b. The thing lost is without fault of the debtor;
balance of the contract price. Y filed the petition for and
consignation against the bank without notifying X, c. The thing is lost before the debtor has
resulting to the former’s failure to prove the incurred delay. (Art. 1262, NCC)
CIVIL LAW
GR: The obligation is extinguished when the 2. Physical impossibility – Act stipulated could
object of the obligation is lost or destroyed. (Art. not be physically performed by the obligor due
1262, NCC) to reasons subsequent to the execution of the
contract. (Pineda, 2000)
XPNs: (L-A-S-C-D-P-C-G)
a. Law provides otherwise (Art. 1262, NCC); NOTE: The impossibility must be after the
b. Nature of the obligation requires the constitution of the obligation. If it was before,
Assumption of risk; there is nothing to extinguish.
c. Stipulation to the contrary;
d. Debtor Contributed to the loss; Effect of Partial Loss
e. Loss the of the thing occurs after the debtor
incurred in Delay; 1. Due to the fault or negligence of the debtor –
f. When debtor Promised to deliver the same Creditor has the right to demand the rescission
thing to two or more persons who do not of the obligation or to demand specific
have the same interest; and (Art. 1165, performance, plus damages, in either case.; and
NCC);
g. When the debt of a certain and determinate 2. Due to fortuitous event:
thing proceeds from a Criminal offense; and a. Substantial loss – Obligation is
(Art. 1268, NCC); and extinguished.; and
h. When the obligation is Generic. (Art. 1263, b. Unsubstantial loss – The debtor shall
NCC) deliver the thing promised in its impaired
condition. (Art. 1264, NCC)
2. Generic obligation to give: Effect when the Thing is Lost in the Possession of
GR: The obligation is not extinguished because a the Debtor
generic thing never perishes (genus nunquam
perit). (Art. 1263, NCC) GR: It is presumed that loss is due to debtor’s fault.
The obligation is not extinguished.
XPNs:
a. In case of generic obligations whose object XPN: Presumption shall not apply in case loss is due
is a particular class or group with specific to earthquake, flood, storm, or other natural
or determinate qualities (delimited generic calamity. (Art. 1262, NCC)
obligation); and
XPN to the XPN: Debtor still liable even if loss
b. In case the generic thing has already been is due to fortuitous event when:
segregated or set aside, in which case, it has
become specific. 1. Debtor incurred in delay; or
3. An obligation to do – The obligation is 2. Debtor promised to deliver the thing to two

extinguished when the prestation becomes or more persons with different interests.
legally or physically impossible without the (Art. 1165(3), NCC)
fault of the obligor. (Art. 1266, NCC)
Effect of Unforeseen Difficulty of Fulfilment
Types of Impossibility to Perform an Obligation
To Do When the service has become so difficult as to be
manifestly beyond the contemplation of the parties,
1. Legal impossibility – Act stipulated to be the obligor may also be released therefrom, in
performed is subsequently prohibited by law.; whole or in part. (Art. 1267, NCC) The impossibility
and of performance of an obligation to do shall release
the obligor.
2023 GOLDEN NOTES
I. OBLIGATIONS
Rebus sic stantibus business reverses which it ascribed to the 1997

Asian Financial Crisis, Comglasco insists that
A principle in international law which means that an under Article 1267 of the NCC, it is exempted
agreement is valid only if the same conditions from its obligation, because its business setback
prevailing at the time of contracting continue to is the “cause” contemplated in their lease. Is
exist at the time of performance. It is the basis of the Comglasco correct?
principle of unforeseen difficulty of service. (Art.
1267, NCC) A: NO, Comglasco is not correct. The payment of
lease rentals does not involve a prestation “to do”
NOTE: Principle of unforeseen events applies when envisaged in Arts. 1266 and 1267. Art. 1267 speaks
the service has become so difficult as to be of a prestation involving service which has been
manifestly beyond the contemplation of the parties, rendered difficult by unforeseen subsequent events
the obligor may also be released therefrom in whole as to be manifestly beyond the contemplation of the
or in part. (Art. 1267, NCC) However, this principle parties. Additionally, the Asian Currency Crisis
cannot be applied absolutely in contractual befell from July 1997 and for some time thereafter,
relations since parties are presumed to have but Comglasco cannot be permitted to blame its
assumed the risk of unfavorable developments. difficulties on the said regional economic
(Pineda, 2000) This rule also does not apply to phenomenon because it entered into the subject
obligations for the payment of a sum of money when lease only on August Aug. 2000, more than three
there is a change in the value of the stipulated years after it began, and by then Comglasco had
currency. In such case, Art. 1250 will apply. known what business risks it assumed when it
(Tolentino, 2002) opened a new shop in Iloilo City. (Comglasco Corp. v.
Santos Car Check Center Corp., G.R. No. 202989, 25
Requisites in order to Relieve the Debtor from Mar. 2015)
his Obligation, in whole or in part, based on
Unforeseen Difficulty of Fulfillment Debt which proceeds from a Criminal Offense
1. Event or change in circumstance could not have GR: Debtor shall not be exempted from the payment
been foreseen at the time of the execution of the of his obligation regardless of the cause of the loss.
contract;
2. Such event makes the performance extremely XPN: The thing having been offered by debtor to the
difficult but not impossible; person who should receive it, the latter refused
3. The event must not be due to the act of any of without justification to accept it. (Art. 1268, NCC)
the parties; and
4. The contract is for a future prestation. NOTE: Offer referred in Art. 1268 is different from
(Tolentino, 2002) consignation, the former refers to the
extinguishment of obligation through loss, while the
Q: The parties entered into a lease agreement latter refers to the payment of the obligation.
whereby Santos Car Check Center agreed to
lease a property to Comglasco Corp. for five (5) Creditor’s Right of Action
years. However, a year after, Comglasco advised
Santos Car Check Center that it will be pre- The obligation, having been extinguished by the loss
terminating the contract, to which the latter of the thing, the creditor shall have all the rights of
refused. Despite refusal, Comglasco vacated the action which the debtor may have against third
property and stopped paying rentals. Santos Car persons by reason of the loss. (Art. 1269, NCC)
Check then filed a suit for breach of contract.
Comglasco relied on the provision of the lease This refers not only the rights and actions which the
contract whereby pre-termination is allowed debtor may have against third persons, but also to
with cause in the first three years. Citing
CIVIL LAW
any indemnity which the debtor may have already Form of Implied Remission
received.
The Code is silent with respect to the form of
c) FORCE MAJEURE implied remission. There must be acceptance by the
obligor or debtor. (Jurado, 2010)
GR: Debtor is presumed to be at fault in instances
where loss of the thing due occurs. Manner and Kinds of Remission:
XPN: Presumption does not apply in case of: 1. Total – Refers to the remission of the whole of
the obligation;
1. Earthquake;
2. Flood; 2. Partial – Remission of the part of the
3. Storm; or obligation: to the amount of indebtedness or to
4. Other natural calamity. (Art. 1265, NCC) an accessory obligation only (such as pledge or
interest), or to some other aspect of the
obligation (such as solidary);
3. CONDONATION
3. Inter vivos - Effective during the lifetime of the

An act of liberality by virtue of which the creditor, creditor;
without receiving any price or equivalent,
renounces the enforcement of the obligation, as a 4. Mortis causa - Effective upon death of the
result of which it is extinguished in its entirety or in creditor. In this case, the remission must be
that part or aspect of the same to which the contained in a will or testament; (Tolentino,
condonation or remission refers. (Pineda, 2000) 1991)
Remission or Condonation is the gratuitous 5. Express – When it is made formally, it should be

abandonment by the creditor of his right. (Paras, in accordance with the forms of ordinary
2021) donations with regard to acceptance, amount,
and revocation; and
Requisites of Condonation (G-A-I-D-E)
6. Implied – When it can be inferred from the acts
1. Must be Gratuitous; of the parties.
2. Acceptance by the debtor;
3. Must not be Inofficious; Effect of Delivery of Evidence of Credit to Debtor
4. Formalities provided by law on Donations must
be complied with if condonation is express; and If the creditor voluntarily delivers the private
5. An Existing demandable debt at the time the document evidencing the credit to the debtor, there
remission is made. is a presumption that he renounces his right of
action against the latter for the collection of the said
NOTE: Remission or condonation of a debt is in credit. (Jurado, 2010)
reality a donation. (Jurado, 2010)
NOTE: The presumption here is only prima facie
Form of Express Remission and may be overcome by contrary evidence.
(Tolentino, 1991)
It must comply with the forms of donation. (Art.
1270, NCC) Requisites
1. The document evidencing the credit must have

been delivered by the creditor to the debtor;
2023 GOLDEN NOTES
I. OBLIGATIONS
2. The document must be a private document; and 4. CONFUSION

3. The delivery must be voluntary. (Art. 1271, NCC)
There is confusion when there is a meeting in one

NOTE: If the document is public, the presumption
person of the qualities of a creditor and debtor of
does not arise considering the fact that the public
the same obligation. (4 Sanchez Roman 421)
character of the document would always protect the
interest of the creditor. (Jurado, 2010)
Requisites of Confusion or Merger of Rights
Effect of Remission in General

1. It must take place between the creditor and the
principal debtor; (Art. 1276, NCC)
It extinguishes the obligation in its entirety or in the
part or aspect thereof to which the remission refers.
2. The very same obligation must be involved (for
(Jurado, 2010)
if the debtor acquires rights from the creditor,
but not the particular obligation in question,
Effect of the Remission of the Principal Debt
there will be no merger); and
with respect to the Accessory Obligation and
vice versa
3. The confusion must be total or as regards with
the entire obligation.
The renunciation of the principal debt shall
extinguish the accessory, but the waiver of the latter
Effect of Confusion or Merger of Rights
shall leave the former in force. (Art. 1273, NCC)
The creditor and debtor become the same person

NOTE: It is presumed that the accessory obligation
involving the same obligation. Hence, the obligation
of pledge has been remitted when the thing pledged,
is extinguished. (Art. 1275, NCC)
after its delivery to the creditor, is found in the
possession of the debtor, or of a third person who
If the debtor is his own creditor, enforcement of the
owns the thing. (Art. 1274, NCC)
obligation becomes absurd since one cannot claim
against himself (8 Manresa 349).
Effect of Inofficious Condonation
There can be partial confusion
It may be totally revoked or reduced depending on
whether or not it is totally or only partly inofficious.
It will be definite and complete up to the extent of
(Pineda, 2000)
the concurrent amount or value, but the remaining
obligation subsists. (Pineda, 2000)
The obligation remitted is considered inofficious if
it impairs the legitime of the compulsory heirs. (Art.
Effect of Confusion or Merger in relation to the
752, NCC)
Guarantors
Acceptance by the Debtor

1. Merger which takes place in the person of the
principal debtor or principal creditor benefits
The acceptance by the debtor is required. There can
the guarantors. The contract of guaranty is
be no unilateral condonation. This is because
extinguished; and
condonation or remission is an act of liberality. It is
a donation of an existing credit, considered a
2. Confusion which takes place in the person of
property right, in favor of the debtor, it is required
any of the guarantors does not extinguish the
that the debtor gives his consent thereto by making
an acceptance. If there is no acceptance, there is no
condonation. (Pineda, 2009)
CIVIL LAW
Effect of Confusion or Merger in One Debtor or a) REQUISITES

Creditor in a Joint Obligation
Requisites of Compensation (1998, 2002, 2008,
GR: Joint obligation is not extinguished since 2009 BAR)
confusion is not definite and complete with regard
to the entire obligation. A part of the obligation still For the compensation to be proper, it is necessary
remains outstanding. that (Art. 1279, NCC):
XPN: Obligation is extinguished with respect only to 1. Each one of the obligors must be bound
the share corresponding to the debtor or creditor principally, and that he be at the same time a
concerned. In effect, there is only partial principal creditor of the other except guarantor
extinguishment of the entire obligation. (Art. 1277, who may set up compensation as regards what
NCC; Pineda, 2000) the creditor may owe the principal; (Arts. 1279-
1280, NCC)
Effect of Confusion or Merger in One Debtor or
Creditor in a Solidary Obligation 2. Both debts consist in sum of money, or if the
things due are consumable, they be of the same
If a solidary debtor had paid the entire obligation, kind and also of the same quality if the latter has
the obligation is totally extinguished without been stated;
prejudice to the rights of the solidary debtor who
paid, to proceed against his solidary co-debtors for 3. Both debts are due;
the latter’s individual contribution or liability. (Art.
1215, NCC) 4. Both debts are liquidated and demandable;
Revocation of Confusion or Merger of Rights 5. Neither debt must be retained in a controversy

commenced by third person and communicated
If the act which created the confusion is revoked for in due time to the debtor (neither debt is
some causes such as rescission of contracts or garnished); and (Art. 1279, NCC)
nullity of the will or contract, the confusion or
merger is also revoked. The subject obligation is 6. Compensation must not be prohibited by law.
revived in the same condition as it was before the (Art. 1290, NCC)
confusion.
NOTE: When all the requisites mentioned in Art.
NOTE: During such interregnum, the running of the 1279 of the CC are present, compensation takes
period of prescription of the obligation is effect by operation of law, and extinguishes both
suspended. (Pineda, 2000) debts to the concurrent amount, even though the
creditors and debtors are not aware of the
5. COMPENSATION compensation. (Art. 1290, NCC)
Effects of compensation
It is a mode of extinguishing obligations that take
place when two persons, in their own right, are
1. Both debts are extinguished;
creditors and debtors of each other. (Art. 1278, NCC)
2. Interests stop accruing on the extinguished
obligation or the part extinguished;
It is the offsetting of the respective obligation of two
3. The period of prescription stops with respect to
persons who stand as principal creditors and
the obligation or part extinguished; and
debtors of each other, with the effect of
4. All accessory obligations of the principal
extinguishing their obligations to their concurrent
obligation which has been extinguished are also
amount.
extinguished. (4 Salvat 353)
2023 GOLDEN NOTES
I. OBLIGATIONS
Q: Team Image and Solar Team both breached Q: Foodmasters, Inc. (FI) had outstanding loan
each other’s duties in their compromise obligations to both Union Bank’s predecessor-
agreement. As a result, both owe each other in-interest, Bancom Development Corporation
2,000,000. Is compensation proper? (Bancom), and to DBP. On 21 May 1979, FI and
DBP, among others, entered into a Deed of
A: YES. In order that compensation may be proper, Cession of Property in Payment of Debt (dacion
it is necessary: (1) That each one of the obligors be en pago) whereby the former ceded in favor of
bound principally, and that he be at the same time a the latter certain properties (including a
principal creditor of the other; (2) That both debts processing plant in Marilao, Bulacan
consist in a sum of money, or if the things due are [processing plant]) in consideration of the
consumable, they be of the same kind, and also of following: (a) the full and complete satisfaction
the same quality if the latter has been stated; (3) of FI’s loan obligations to DBP; and (b) the direct
That the two debts be due; (4) That they be assumption by DBP of FI’s obligations to Bancom
liquidated and demandable; (5) That over neither of in the amount of ₱17,000,000.00 (assumed
them there be any retention or controversy, obligations).
commenced by third persons and communicated in
due time to the debtor. (Team Image Entertainment, On the same day, DBP, as the new owner of the
Inc., And Felix S. Co. v. Solar Team Entertainment, Inc., processing plant, leased back for 20 years the
G.R. No. 191652, 13 Sept. 2017) said property to FI (Lease Agreement) which
was, in turn, obliged to pay monthly rentals to be
Q: X, who has a savings deposit with Y Bank in shared by DBP and Bancom. DBP also entered
the sum of P1,000,000.00, incurs a loan into a separate agreement with Bancom
obligation with the said bank in the sum of (Assumption Agreement) whereby the former:
P800,000.00 which has become due. When X (a) confirmed its assumption of FI’s obligations
tried to withdraw his deposit, Y Bank allowed to Bancom; and (b) undertook to remit up to
only P200,000.00 to be withdrawn, less service 30% of any and all rentals due from FI to
charges, claiming that compensation has Bancom (subject rentals) which would serve as
extinguished its obligation under the savings payment of the assumed obligations, to be paid
account to the concurrent amount of X's debt. X in monthly installments.
contends that compensation is improper when
one of the debts, as here, arises from a contract Claiming that the subject rentals have not been
of deposit. Assuming that the promissory note duly remitted despite its repeated demands,
signed by X to evidence the loan does not Union Bank filed, on 20 June 1984, a collection
provide for compensation between said loan case against DBP before the RTC, docketed as
and his savings deposit, who is correct? (1998 Civil Case No. 7648. In opposition, DBP
BAR) countered, among others, that the obligations it
assumed were payable only out of the rental
A: Y Bank is correct. All the requisites of Art. 1279, payments made by FI. Thus, since FI had yet to
Civil Code are present. Compensation shall take pay the same, DBP’s obligation to Union Bank
place when two persons are reciprocally creditor had not arisen. In addition, DBP sought to
and debtor of each other. In this connection, it has implead FW as third party-defendant in its
been held that the relation existing between a capacity as FI’s assignee and, thus, should be
depositor and a bank is that of creditor and debtor. held liable to Union Bank. Was there legal
As a general rule, a bank has a right of set off of the compensation?
deposits in its hands for the payment of any
indebtedness to it on the part of a depositor. (Gullas A: NO, there was no legal compensation. The rule on
v. PNB, G.R. No. L-43191, 13 Nov. 1935) Hence, legal compensation is stated in Article 1290 of the
compensation took place between the mutual NCC which provides that "when all the requisites
obligations of X and Y Bank. mentioned in Art. 1279 are present, compensation
CIVIL LAW
takes effect by operation of law, and extinguishes that his credit was extinguished by the
both debts to the concurrent amount, even though compensation; because to that extent, he is deemed
the creditors and debtors are not aware of the to have made a payment.
compensation." Therefore, compensation could not
have taken place between these debts for the Compensation vs. Payment
apparent reason that requisites 3 and 4 under Art.
1279 of the NCC are not present. Since DBP’s COMPENSATION PAYMENT
assumed obligations to Union Bank for remittance As to Definition
of the lease payments are – in the Court’s words –
“contingent on the prior payment thereof by FW to A mode of
DBP," it cannot be said that both debts are due. (Art. extinguishing to the
1279(3), NCC) concurrent amount,
Payment means not
the obligations of those
only delivery of money
Also, the Court observed that any deficiency that persons who in their
but also performance
DBP had to make up for the full satisfaction of the own right are
of an obligation.
assumed obligations, "cannot be determined until reciprocally debtors
after the satisfaction of FW’s obligation to DBP." In and creditors of each
this regard, it cannot be concluded that the same other.
debt had already been liquidated, and thereby As to the necessity of the capacity of the
became demandable. (4th requisite of Art. 1279 of the parties
NCC) Thus, CA correctly upheld the denial of Union
Bank’s motion to affirm legal compensation. (Union Debtor must have
Capacity of parties not
Bank Of The Philippines v. Development Bank Of The capacity to dispose of
necessary.
Philippines, G.R. No. 191555, 20 Jan. 2014) the thing paid; and
Reason: Compensation
Creditor must have
operates by law, not by
Parties may agree upon the Compensation of capacity to receive
the act of the parties.
Debts NOT Due payment.
As the susceptibility of partial extinguishment

Under Art. 1282 of the NCC, conventional or
voluntary compensation is not limited to The performance must
There can be partial
obligations which are not yet due. The parties may be complete and
extinguishment of the
compensate by agreement any obligations, in which indivisible unless
obligation.
the objective requisites provided for legal waived by the creditor.
compensation are not present. It is necessary,
As to the operation of extinguishing the
however, that the parties should have the capacity
obligation
to dispose of credits which they compensate,
because the extinguishment of the obligations in Legal compensation
Takes effect by the act
this case arise from their wills and not from law. takes place by
of the parties and
operation of law
involves delivery or
b) COMPENSATION OF RESCISSIBLE AND without simultaneous
action.
VOIDABLE DEBTS delivery.
As to the relationship of the parties

Although a rescissible or voidable debt can be
compensated before it is rescinded or annulled, the It is not necessary that
Parties must be
degree of rescission or annulment is retroactive, the parties be mutually
mutually debtors and
and the compensation must be considered as debtors and creditors
creditors of each other.
cancelled. And as rescission or annulment requires of each other.
mutual restitution, the party whose obligation is
annulled or rescinded can thus recover to the extent
2023 GOLDEN NOTES
I. OBLIGATIONS
Compensation vs. Confusion 6. Certain obligations in favor of government. (e.g.,

Taxes, fees, duties, and others of a similar in
COMPENSATION CONFUSION nature).
Arts. 1278-1279, NCC Arts. 1275-1277, NCC
There can be no off-setting of taxes against the
Two persons who are One person where claims that the taxpayer may have against the
mutual debtors and qualities of debtor and government. A person cannot refuse to pay a tax on
creditors of each other. creditor are merged. the ground that the government owes him an
amount equal to or greater than the tax being
At least two
One obligation. collected. Internal revenue taxes cannot be the
obligations.
subject of compensation because government and
taxpayer are not mutually creditors and debtors of
Compensation vs. Counterclaim or Set-off
each other. Taxes are not in the nature of contracts
between parties. (Francia v. IAC, G.R. No. L-67649, 28
COUNTERCLAIM/
COMPENSATION Jun 1988)
SET-OFF
Need not be pleaded;
NOTE: Compensation takes place by operation of
and
law, even though the debts may be payable at
different places, but there shall be an indemnity for
Takes place by
expenses of exchange or transportation to the place
operation of law and
It must be pleaded to of payment. (Art. 1286, NCC)
extinguishes
be effectual.
reciprocally the two
If all the requisites under Art. 1279 are present,
debts as soon as they
compensation takes place by operation of law.
exist simultaneously,
The parties need not to notify each other that they
to the amount of their
intend to have their debts compensated. (Sta. Maria,
respective sums.
2017)
Generally, both debts Does not require that
must be liquidated. debts are liquidated. When Compensation NOT Proper
Judicial compensation
provided that the Under Art. 1287 of the NCC, compensation shall not
Legal or conventional
requirements of Rules be proper when one of the debts arises from a
compensation
of Court, particularly depositum or from the obligations of a depositary or
governed by the Civil
on Counterclaims of a bailee in commodatum. Neither can
Code.
and/or Cross-claims compensation be set up against a creditor who has
are observed. a claim for support due by gratuitous title without
prejudice to the provisions of Art. 301 (2).
c) NON-COMPENSABLE DEBTS
NOTE: Only the depositary and the borrower in
1. Debts or obligations arising from contracts of commodatum cannot set up compensation. The
depositum; (Art. 1287, NCC); depositor can set up his deposit against the
2. Debts arising from obligations of a depositary; depositary, and the lender can set up his loan
3. Debts arising from obligations of a bailee in against a credit of the borrower.
commodatum;
4. Claims for support due by gratuitous title; Neither shall there be compensation if one of the
5. Obligations arising from criminal offenses; and debts consists in civil liability arising from a penal
(Art. 1288, NCC); and offense.
CIVIL LAW
NOTE: The person who has the civil liability arising from the same CFI of Manila in another civil case.
from crime is the only party who cannot set up the Was there legal compensation?
compensation; but the offended party is entitled to
indemnity can set up his claim in compensation of A: YES. MPCC and Pacweld were creditors and
his debt. debtors of each other, their debts to each other
consisting in final and executory judgments of the
Kinds of Compensation CFI in two separate cases. The two obligations,
therefore, respectively offset each other,
1. Legal compensation – By operation of law; compensation having taken effect by operation of
2. Conventional – By agreement of the parties; law and extinguished both debts to the concurrent
3. Judicial (set-off) – By judgment of the court amount of P10,000.00, pursuant to the provisions of
when there is a counterclaim duly pleaded, and Articles 1278, 1279 and 1290 of the Civil Code, since
the compensation decreed; and all the requisites provided in Art. 1279 of the said
4. Facultative – May be claimed or opposed by Code for automatic compensation "even though the
one of the parties. creditors and debtors are not aware of the
compensation" were present. (Mindanao Portland
Q: De Leon sold and delivered to Silahis various Cement Corp. v. CA, G.R. No. L-62169, 28 Feb. 1983)
merchandise. Due to Silahis' default, De Leon
filed a complaint for the collection of said Conventional Compensation
accounts. Silahis asserts, as affirmative defense,
a debit memo as unrealized profit for a It is one that takes place by agreement of the parties.
supposed commission that Silahis should have
received from De Leon from the sale made Effectivity of Conventional Compensation
directly to DOLE Philippines, Inc. (DOLE). Was
there legal compensation? For compensation to become effective:
GR: The mutual debts must be both due. (Art. 1279,
A: NONE. Silahis admits the validity of his NCC)
outstanding accounts with De Leon. But whether De
Leon is liable to pay Silahis a commission on the XPN: The parties may agree that their mutual debts
subject sale to DOLE is disputed. This circumstance be compensated even if the same are not yet due.
prevents legal compensation from taking place. (Art. 1282, NCC)
(Silahis Marketing Corp. v. IAC, G. R. No. L-74027, 7
Dec. 1989) Judicial Compensation
NOTE: Compensation is not proper where the claim If one of the parties to a suit over an obligation has
of the person asserting the set-off against the other a claim for damages against the other, the former
is not clear or liquidated; compensation cannot may set it off by proving his right to said damages
extend to unliquidated, disputed claim existing from and the amount thereof. (Art. 1283, NCC)
breach of contract. (Ibid.)
NOTE: For judicial set-off to apply, the amount of
Q: Atty. Laquihon, in behalf of Pacweld, filed a damages or the claim sought to be compensated
pleading addressed to MPCC titled “motion to must be duly proven. (Ong v. CA, G.R. No. 75819, 08
direct payment of attorney's fee”, invoking a Sept. 1989)
decision wherein MPCC was adjudged to pay
Pacweld the sum of P10, 000. 00 as attorney's All the requisites mentioned in Art. 1279 must be
fees. MPCC filed an opposition stating that the present, except that at the time of filing the pleading,
said amount is set-off by a like sum of P10, 000. the claim need not be liquidated. The liquidation
00, collectible in its favor from Pacweld also by must be made in the proceedings.
way of attorney's fees which MPCC recovered
2023 GOLDEN NOTES
I. OBLIGATIONS
Facultative Compensation in. Since there was still a balance due on the PN
after applying the rentals, XYZ foreclosed the
One of the parties has a choice of claiming or real estate mortgage over Ricardo’s property.
opposing the compensation but waives his Ricardo opposed the foreclosure on the ground
objection thereto such as an obligation of such party that he is only a co-signatory; that no demand
is with a period for his benefit alone and he was made upon him for payment, and assuming
renounces the period to make the obligation he is liable, his liability should not go beyond
become due. half of the balance of the loan. Further, Ricardo
said that when the bank invoked compensation
Facultative compensation is unilateral and does not between the rentals and the amount of the loan,
require mutual agreement; voluntary or it amounted to a new contract or novation, and
conventional compensation requires mutual had the effect of extinguishing the security since
consent. he did not give his consent (as owner of the
property under the real estate mortgage)
Example: X owes Y P100,000 demandable and due thereto.
on 01 Apr. 2012. Y owes X P100, 000 demandable
and due on or before 15 Apr. 2012. Y, who was given a. Can XYZ Bank validly assert legal
the benefit of the term, may claim compensation on compensation?
01 Apr. 2012. On the other hand, X, who demands
compensation, can be properly opposed by Y A: NO. XYZ Bank may validly assert the partial
because Y could not be made to pay until 15 Apr. compensation of both debts, but it should be
2012. facultative compensation because not all of the five
requisites of legal compensation are present. (Art.
NOTE: Compensation can be renounced either at 1279, NCC) The payment of the rentals by XYZ Bank
the time an obligation is contracted or afterwards. is not yet due, but the principal obligation of loan
(Tolentino, 1991) It can be renounced expressly or where both Eduardo and Ricardo are bound
impliedly. solidarily and therefore any of them is bound
principally to pay the entire loan, is due and
Examples of Implied Renunciation: demandable without need of demand. XYZ Bank
may declare its obligation to pay rentals as already
1. By not setting it up in the litigation; due and demand payment from any of the two
2. By consenting to the assignment of credit under debtors.
Art. 1285 of the NCC; or
3. By paying debt voluntarily, with knowledge b. Can Ricardo’s property be foreclosed to
that it has been extinguished by compensation. pay the full balance of the loan?
(Tolentino, 1991)
A: NO, because there was no prior demand on
Q: Eduardo was granted a loan by XYZ Bank for Ricardo, depriving him of the right to reasonably
the purpose of improving a building which XYZ block the foreclosure by payment. The waiver of
leased from him. Eduardo executed the prior demand in the PN is against public policy and
promissory note in favor of the bank, with his violates the right to due process. Without demand,
friend Ricardo as cosignatory. In the PN, they there is no default and the foreclosure is null and
both acknowledged that they are “individually void. Since the mortgage, insofar as Ricardo is
and collectively” liable and waived the need for concerned is not violated, a requirement under Art.
prior demand. To secure the PN, Ricardo 3135 for a valid foreclosure of real estate mortgage
executed a real estate mortgage on his own is absent.
property. When Eduardo defaulted on the PN,
XYZ stopped payment of rentals on the building
on the ground that legal compensation had set
CIVIL LAW
In the case of DBP v. Licuanan (G.R. No. 150097, 26 If one or both Debts are Rescissible or voidable
Feb. 2007), it was held that: “the issue of whether
demand was made before the foreclosure was When one or both debts are rescissible or voidable,
effected is essential. If demand was made and duly they may be compensated against each other before
received by the respondents and the latter still did they are judicially rescinded or avoided. (Art. 1284,
not pay, then they were already in default and NCC) If the prescriptive period had already lapsed,
foreclosure was proper. However, if demand was there is automatic compensation and the same will
not made, then the loans had not yet become due not be disturbed anymore. Whereas, if the debt is
and demandable. This meant that the respondents rescinded or annulled, compensation shall be
had not defaulted in their payment and the restitution of what each party had received before
foreclosure was premature.” the rescission or annulment.
c. Does Ricardo have basis under the Civil Effects of Assignment on Compensation of Debts
Code for claiming that the original
contract was novated? (2008 Bar) 1. After the compensation took place
A: NO. Since none of the three kinds of novation is GR: Ineffectual; useless act since there is
applicable. There is no objective novation, whether nothing more to assign.
express or implied, because there is no change in the
object or principal conditions of the obligation. XPN: When the assignment was made with the
There is no substitution of debtors, either. consent of the debtor.
Compensation is considered as abbreviated or
simplified payment and since Ricardo bound NOTE: Such consent operates as a waiver of the
himself solidarily with Eduardo, any facultative rights to compensation.
compensation which occurs does not result in XPN to the XPN: At the time he gave his
partial legal subrogation. Neither Eduardo nor consent, he reserved his right to the
Ricardo is a third person interested in the obligation compensation.
under Art. 1302, NCC.
2. Before compensation took place
Obligations subject to Facultative Compensation
a. With the consent of the debtor –
When one of the debts arises from: Compensation cannot be set up except
1. Depositum; when the right to compensation is
2. Obligations of a depositary; reserved.;
3. Obligations in commodatum;
4. Support b. With the knowledge but without consent
of the debtor – Compensation can be set
GR: Claim of support due to gratuitous title. up regarding debts previous to the cession
XPN: Future support; and or assignment but not subsequent ones.;
and
5. Civil liability from a crime.
c. Without the knowledge of debtor - Can
NOTE: Art. 1288 of the NCC prohibits compensation set up compensation as a defense for all
if one of the debts consists in civil liability arising debts maturing prior to his knowledge of
from a penal offense. However, the victim is allowed the assignment.
to claim compensation.
2023 GOLDEN NOTES
I. OBLIGATIONS
6. NOVATION b) EXPRESSED AND IMPLIED NOVATION
Express Novation
a) CONCEPT OF NOVATION
Takes place only when the intention to effect a
Novation (1994, 2008 BAR)
novation clearly results from the terms of the
agreement or is shown by a full discharge of the
Novation is another way of extinguishing an
original debt. (Jurado, 2010)
obligation. Novation under the NCC refers to
extinctive novation and not modificatory novation.
Implied Novation
(Sta. Maria, 2017)
Implied novation necessitates that the
It is the substitution or change of an obligation by
incompatibility between the old and new obligation
another, resulting in its extinguishment or
be total on every point such that the old obligation
modification, either by changing the object or
is completely superseded by the new one. The test
principal conditions, or by substituting another in
of incompatibility is whether they can stand
the place of the debtor or by subrogating a third
together, each one having an independent
person to the rights of the creditor. (Pineda, 2000)
existence; if they cannot and are irreconcilable, the
subsequent obligation would also extinguish the
NOTE: Novation is not one of the means recognized
first. (Interport Resources Corp. v. Securities
by the RPC whereby criminal liability can be
Specialist, Inc., G.R. No. 154069, 06 June 2016)
extinguished.
NOTE: Novation is never presumed and the animus
Subsequent Void Obligation
novandi (intent to make a new obligation) whether
totally or partially, must appear by express
A subsequent void obligation intended to novate an
agreement of the parties or by their acts that are too
old one has no legal effect and is considered as if the
clear and unequivocal to be mistaken.
parties have not agreed upon it in the first place. The
original obligation shall subsist.
(1) REQUISITES
However, if in coming up with the new but void

Requisites of Novation (S-I-N-C-O)
obligations, parties agree that it shall in any event
extinguish the old obligation, such old obligation
1. Valid Old obligation;
will not be revived. (Art. 1297, NCC)
XPNs:
Presumption of Novation
a. When the annulment may be claimed
only by the debtor and he consented to
Novation is never presumed; it must be proven as a
the novation; and
fact either by:
b. When ratification validates acts which
are voidable.
1. Explicit declaration – If it be so declared in
unequivocal terms; or
2. Intent to extinguish or to modify the old
obligation;
2. Material incompatibility – That the old and the
new obligations be on every point incompatible
3. Capacity and consent of all the parties to the
with each other. (Art. 1292, NCC)
new obligation (except in case of expromission
where the old debtor does not participate);
CIVIL LAW
4. Substantial difference of the old and new b. Expromission – The substitution

obligation – on every point incompatible with of the old debtor by a new debtor
each other (implied novation); and is upon the initiative or proposal
of a third person.; or
5. Valid New obligation.
c. Mixed – when the change of the
Two-fold Functions of Novation object or principal conditions of
an obligation occurs at the same
1. It extinguishes the old obligation; and time with the change of either
2. Creates a new obligation in lieu of the old one. person of the debtor or creditor.
(Sta. Maria, 2017, citing Ajax
Kinds of Novation (1996, 2001 BAR) Marketing & Development
Corporation v. CA, G.R. No.
1. As to essence 118585, 14 Sept. 1995)
a. Objective or Real Novation – Changing the ii. Subrogating a third person to the
object or principal conditions of the rights of the creditor (active novation).
NOTE: If it is the creditor who initiated
NOTE: In payment of sum of money, the the change of debtor, it is considered
first obligation is not novated by a second expromission.
obligation that:
2. As to form of their constitution
1. Expressly recognizes the first
obligation; a. Express – The parties declared in
2. Changes only the terms of payment; unequivocal terms that the obligation is
3. Adds other obligation not incompatible extinguished by the new obligation.; and
with the old ones; or
4. Merely supplements the first one. b. Implied – No express declaration that the
old obligation is extinguished by the new
b. Subjective or Personal Novation – Change one. The old and new obligations are
of the parties. incompatible on every material point. (Art.
1292, NCC)
i. Substituting the person of the debtor
(passive novation) – may be made 3. As to extent of their effects
without the knowledge of or against
the will of the latter, but not without a. Total or Extinctive – Obligation is
the consent of the creditor. originally extinguished.
a. Delegacion – The substitution is NOTE: Four requisites of extinctive

initiated by the old debtor novation:
himself (delegante) by
convincing another person 1. A previous valid obligation;
(delegado) to take his place and 2. An agreement of all parties concerned
to pay his obligation to the to a new contract;
creditor.; 3. The extinguishment of the old
obligation; and
2023 GOLDEN NOTES
I. OBLIGATIONS
4. The birth of a valid new obligation. c) EXPROMISSION AND DELEGACION

(Sps. Celones v. Metropolitan Bank and DISTINGUISHED
Trust Co., G.R. No. 215691, 21 Nov. 2018)
Expromission
The extinctive novation would thus have
the twin effects of first, extinguishing an In expromission, the initiative comes from the third
existing obligation and second, creating a person. It is essential that the old debtor be released
new one in its stead. from his obligation, otherwise there will be no
expromission, no novation. (Paras, 2021)
b. Partial or Modificatory – Original
obligation is not extinguished but merely Delegacion
modified.
This is defined as a method of novation caused by
4. As to their origin the replacement of the old debtor by a new debtor,
who has proposed him to the creditor, and which
a. Legal Novation – By operation of law.; and replacement has been agreed to by said creditor and
(Arts. 1300 and 1302, NCC) by said new debtor. Here, the initiative comes from
b. Conventional Novation – By agreement of the old debtor himself. (Paras, 2021)
the parties. (Arts. 1300-1301, NCC)
Delegacion vs. Expromission
5. As to presence of absence of condition
DELEGACION EXPROMISSION
a. Pure – New obligation is not subject to a As to Person who Initiated the Substitution
condition.; and Old debtor Third person
b. Conditional – When the creation of the new
obligation is subject to a condition. As to Consent of the Creditor
It may be express or implied from his acts but not
Rights of the new debtor from his mere acceptance of payment by a third
party.
1. With the debtor’s consent – Right of
As to Consent of the Old debtor
reimbursement and subrogation; and
With the consent of the With or without the
2. Without the consent of the old debtor or old debtor (since he knowledge of the
against his will – Right to beneficial initiated the debtor or against the
reimbursement. substitution). will of the old debtor.
As to Consent of Third Person
Novation by Substitution of Debtor
Consent is needed but
it need not be given Consent is needed.
The consent of the creditor is mandatory both in
simultaneously.
delegacion and expromission. (Art. 1293, NCC) It may
be expressed or implied from his acts but not from As to Intention of Substitution
his mere acceptance of payment by a third party, for Released from the obligation with the consent of
there is no true transfer of debt. the creditor.
As to Rights of the New debtor
NOTE: Creditor’s consent or acceptance of the With the debtor’s With the debtor’s
substitution of the old debtor by a new one may be consent – right of consent – right of
given at any time and in any form while the reimbursement and reimbursement and
agreement of the debtor subsists. (Babst v. CA, G.R. subrogation. subrogation.
No. 99398, 26 Jan. 2001)
CIVIL LAW
Without the consent Requisites of expromission

of the old debtor or
against his will – right 1. Substitution is upon the initiative or proposal of
to beneficial a third person who will step into the shoes of the
reimbursement. debtor;
As to Insolvency or Nonfulfillment of the
obligation of the New debtor 2. Creditor must give his consent to the proposal
of the third person; and
With the debtor’s
consent - If the old 3. Old debtor must be released from the obligation
Shall not revive the debtor gave his with the consent of the creditor.
action of the latter consent and the new
against the original debtor could not fulfill (2) EFFECT OF INSOLVENCY OF NEW DEBTOR
obligor. the obligation, the old
debtor should be liable Insolvency of the New Debtor in delegación
Original debtor shall for the payment of his
be held liable. original obligation. GR: Insolvency of the new debtor (delegado), who
has been proposed by the original debtor
Insolvency of the new Without the consent (delegante) and accepted by the creditor
debtor was already of the old debtor or (delegatario), shall not revive the action of the latter
existing and of public against his will – the against the original obligor. (Art. 1295, NCC)
knowledge or known new debtor’s
to the original debtor insolvency or non- XPNs: Original debtor shall be held liable; if:
at the time of the fulfillment of the
delegation of the debt obligation shall not 1. Insolvency was already existing and of public
to the new debtor. give rise to any liability knowledge or known to the debtor; or (Art.
on the part of the 1295, NCC)
original debtor.
2. Insolvency of the new debtor was already
existing and known to the original debtor at the
(1) CONSENT REQUIRED time of the delegation of the debt to the new
debtor. (Art. 1295, NCC)
Requisites of delegación
NOTE: In both cases, the creditor must NOT know
1. Substitution is upon the initiative or proposal of that the new debtor is insolvent; otherwise, the
the old debtor himself by proposing to the creditor would be considered estopped.
creditor the entry of another (third person) as
the new debtor who will replace him in In both cases, the insolvency must have existed at
payment of the obligation; the time the old debtor delegated his debt. (Sta.
Maria, 2017)
2. The creditor accepts and the new debtor agrees
to the proposal of the old debtor; and Insolvency of the New Debtor in expromission
3. The old debtor is released from the obligation If substitution is without the knowledge or against
with the consent of the creditor. the will of the debtor, the new debtor’s insolvency
or non-fulfillment of the obligation shall not give
rise to any liability on the part of the original debtor.
(Art. 1294, NCC)
2023 GOLDEN NOTES
I. OBLIGATIONS
NOTE: If the old debtor gave his consent and the and NDC entered into a Memorandum of
new debtor could not fulfill the obligation, the old Agreement, where NDC and Galleon undertook
debtor should be liable for the payment of his to prepare and sign a share purchase agreement
original obligation. covering 100% of Galleon's equity for
P46,740,755.00. The share purchase agreement
Q: The Arco and Lim allegedly agreed that Arco also provided for the release of Sta. Ines, Cuenca,
would either pay Lim the value of the raw Tinio and Construction Development
materials or deliver to him their finished Corporation of the Philippines from the
products of equivalent value. Lim alleged that personal counter-guarantees they issued in
when he delivered the raw materials, Arco DBP's favor under the Deed of Undertaking. Sta.
issued a post-dated check as partial payment. Ines, Cuenca, Tinio, Cuenca Investment, and
When he deposited the check, however, it was Universal Holdings claimed that DBP can no
dishonored for being drawn against a closed longer go after them for any deficiency
account. Thereafter, Arco and Sy executed a judgment since NDC had been subrogated in
memorandum of agreement where Arco bound their place as borrowers, hence the Deed of
themselves to deliver their finished products to Undertaking between Sta. Ines, Cuenca
Megapack Container Corporation owned by Sy. Investment, Universal Holdings, Cuenca, and
According to the memorandum, the raw Tinio and DBP had been extinguished and
materials would be supplied by Lim. Was the novated." Did the Memorandum of Agreement
obligation between Arco and Lim novated novate the Deed of Undertaking executed
because of the agreement entered into by Arco between DBP and Sta. Ines, Cuenca Investment,
and Sy? Universal Holdings, Cuenca, and Tinio?
A: NO. Novation must be stated in clear and A: NO. It should be noted that in order to give
unequivocal terms to extinguish an obligation. It novation its legal effect, the law requires that the
cannot be presumed and may be implied only if the creditor should consent to the substitution of a new
old and new contracts are incompatible on every debtor. The general rule is that, “in the absence of an
point. In this case, Lim was not privy to the authority from the board of directors, no person, not
memorandum of agreement, thus, his conformity to even the officers of the corporation, can validly bind
the contract need not be secured. If the the corporation.” Aside from Ongpin being the
memorandum of agreement was intended to novate concurrent head of DBP and NDC at the time the
the original agreement between the parties, Lim Memorandum of Agreement was executed, there
must have first agreed to the substitution of Sy as was no proof presented that Ongpin was duly
his new debtor. The memorandum of agreement authorized by the DBP to give consent to the
must also state in clear and unequivocal terms that substitution by NDC as a co-guarantor of Galleon’s
it has replaced the original obligation of petitioner debts. Ongpin is not DBP, therefore, it is wrong to
Arco to Lim. Neither of these circumstances is assume that DBP impliedly gave its consent to the
present in this case. Since there was no novation, substitution simply by virtue of the personality of its
petitioner Arco’s obligation to respondent remains Governor.
valid and existing. Petitioner Arco Pulp and Paper,
therefore, must still pay respondent the full amount. Novation is never presumed. The animus novandi,
(Arco Pulp and Paper Co., Inc. v. Lim, G.R. No. 206806, whether partial or total, “must appear by express
25 June 2014) agreement of the parties, or by their acts which are
too clear and unequivocal to be mistaken.” There
Q: DBP guaranteed Galleon’s foreign loans. In was no such animus novandi in the case at bar
return, Galleon undertook to secure a first between DBP and respondents, thus, respondents
mortgage on its five new vessels and two have not been discharged as Galleon’s co-
second-hand vessels. Pursuant to Letter of guarantors under the Deed of Undertaking and they
Instructions No. 1155, Galleon's stockholders remain liable to DBP. (Development Bank of the
CIVIL LAW
Philippines v. Sta. Ines Melale Forest Products Corp., loan transactions, they being separate and distinct
G.R. No. 193068, 01 Feb. 2017) sources of obligations. Metro’s loan obligations to
Allied Bank remain subsisting for the basic reason
Q: Metro Corporation obtained a loan from that the former has not been able to prove that the
Allied Bank covered by promissory notes, same had already been paid or, in any way,
letters of credit, and trust receipts. By way of extinguished. (Metro Concast Steel Corporation, Sps.
security, Metro’s officers individually executed a Dychiao v. Allied Bank Corporation, G.R. No. 177921,
continuing guaranty in favor of Allied Bank. 04 Dec. 2013)
Metro’s officers failed to settle their obligations
prompting Allied Bank to demand for payment Q: SDIC issued to Danilo a Diners Card (credit
to no avail. In order to settle their debts, they card) with Jeannete as his surety. Danilo used
offered the sale of Metro’s remaining assets this card and initially paid his obligations to
(machines and equipment) to the Bank which SDIC. Thereafter, Danilo wrote SDIC a letter
the latter refused. Meanwhile, Starpeak requesting it to upgrade his Regular Diners Club
Corporation, acting through Allied Bank’s Card to a Diamond (Edition) one. As a
counsel, entered into an agreement with Metro requirement of SDIC, Danilo secured from
to buy the machines that were reduced to mere Jeanette her approval and the latter obliged.
scraps of metals. Starpeak, unfortunately, Danilo's request was granted and he was issued
reneged on its obligation to Metro. In this a Diamond (Edition) Diners Club Card. Danilo
regard, Metro asseverates that their failure to had incurred credit charges plus appropriate
pay their outstanding loan obligations to Allied interest and service charge. However, he
Bank must be considered as force majeure, and defaulted in the payment of this obligation. Was
since Allied Bank was the party, through their the upgrading a novation of the original
counsel, that accepted the terms and conditions agreement governing the use of Danilo Alto's
of payment proposed by Starpeak, petitioners first credit card, as to extinguish that obligation?
must therefore be deemed to have settled their
obligations to Allied Bank. Were the loan A: YES. Novation, as a mode of extinguishing
obligations under the promissory notes, letters obligations, may be done in two ways: by explicit
of credit, and trust receipts have already been declaration, or by material incompatibility. There is
extinguished? no doubt that the upgrading was a novation of the
original agreement covering the first credit card
A: NO. Art. 1231 of the NCC states that obligations issued to Danilo Alto, basically since it was
are extinguished either by payment or performance, committed with the intent of cancelling and
the loss of the thing due, the condonation or replacing the said card. However, the novation did
remission of the debt, the confusion or merger of the not serve to release Jeanette from her surety
rights of creditor and debtor, compensation or obligations because in the surety undertaking she
novation. Starpeak and Metro’s agreement is a sale expressly waived discharge in case of change or
of assets contract, while Metro’s obligations to novation in the agreement governing the use of the
Allied Bank arose from various loan transactions. first credit card. (Molino v. Security Diners
Absent any showing that the terms and conditions International Corp., G.R. No. 136780, 16 Aug. 2001)
of the latter transactions have been, in any way,
modified or novated by the terms and conditions in Q: J.C. Construction bought steel bars from
the Starpeak-Metro agreement, said contracts Matibay Steel Industries (MSI) which is owned
should be treated separately and distinctly from by Buddy Batungbacal. J.C. failed to pay the
each other, such that the existence, performance or purchased materials worth P500,000 on due
breach of one would not depend on the existence, date. J.C. persuaded its client Amoroso with
performance or breach of the other. The whom it had receivables to pay its obligation to
performance or breach of the agreement bears no MSI. Amoroso agreed and paid MSI the amount
relation to the performance or breach of the subject
2023 GOLDEN NOTES
I. OBLIGATIONS
of P50,000. After 2 other payments, Amoroso 2. If old obligation is:

stopped making further payments.
a. Void – Novation is void; (Art. 1298,
Buddy filed a complaint for collection of the NCC)
balance of the obligation and damages against
J.C. J.C. denied any liability claiming that its b. Voidable – Novation is valid
obligation was extinguished by reason of provided that the annulment may
novation which took place when MSI accepted be claimed only by the debtor or
partial payments from Amoroso on its behalf. when ratification validates acts; or
Was the obligation of JC to MSI extinguished by (Art. 1298, NCC)
novation? Why? (2014 Bar)
c. If the old obligation was subject to
A: NO. Under Art. 1292 of the NCC, in order that an a suspensive or resolutory
obligation may be extinguished by another which condition, the new obligation shall
substitute the same, it is imperative that it be so be under the same condition,
declared in unequivocal terms, or that the old and unless it is otherwise stipulated.
the new obligations be on every point be (Art. 1299, NCC)
incompatible with each other. Novation by
substitution of the debtor requires the consent of 3. If old obligation is conditional and the
the creditor as provided in Art. 1293. This new obligation is pure:
requirement is not present in this case.
a. If resolutory and it occurred – Old
It was ruled that the mere fact that the creditor obligation already extinguished;
received payment from a third person does not no new obligation since nothing to
constitute novation and does not extinguish the novate; and
obligation of the original debtor. Thus, the
obligation of JC to MSI subsists. (Magdalena Estates b. If suspensive and it did not occur
Inc., v. Rodriguez, G.R. No. L-18411, 17 Dec. 1966) – It is as if there is no obligation;
thus, there is nothing to novate.
Effects of Novation
4. If the new obligation is:
1. Extinguishment of principal also
extinguishes the accessory a. Void – Original one shall subsist,
unless the parties intended that the
XPNs: former relation should be
a. Mortgagor, pledgor, surety or extinguished in any event; (Art.
guarantor agrees to be bound by 1297, NCC)
the new obligation (Tolentino,
1999); or b. Voidable – Novation can take
place, except when such new
b. Stipulation made in favor of a third obligation is annulled. In such case,
person such as stipulation pour old obligation shall subsist;
autrui (Art. 1311, NCC) unless
beneficiary consents to the c. Pure obligation – Conditions of
novation. Art. 1296, NCC) old obligation deemed attached to
the new, unless otherwise
stipulated.; (Tolentino, 1999)
CIVIL LAW
d. Conditional Obligation: d) LEGAL AND CONVENTIONAL SUBROGATION
i. If resolutory – Valid until Subrogation

the happening of the
condition; and (Art. 1181, It is the active subjective novation characterized by
NCC) the transfer to a third person of all rights
appertaining to the creditor in the transaction
ii. If suspensive and did not concerned including the right to proceed against the
materialize – No novation, guarantors or possessors of mortgages and similar
old obligation is enforced. others subject to any applicable legal provision or
(Art. 1181, NCC) any stipulation agreed upon by the parties in
conventional subrogation.
NOTE: Novation is not a mode of extinguishing
criminal liability under the penal laws of the NOTE: Whoever pays on behalf of the debtor
country. (Degaños v. People, G.R. No. 162826, 14 Oct. without the knowledge or against the will of the
2013) latter cannot compel the creditor to subrogate him
in his rights, such as those arising from a mortgage,
Q: Will a contract of suretyship, which is guaranty, or penalty. (Art. 1237, NCC)
secondary to a principal obligation, be
extinguished when novation occurs? Kinds of subrogation
A: It depends. A surety is released from its 1. As to their creation

obligation when there is a material alteration of the
principal contract in connection with which the a. Legal subrogation – constituted by virtue
bond is given, such as a change which imposes a new of a law and does not proceed from an
obligation on the promising party, or which takes agreement of the parties; (Arts. 1300 &
away some obligation already imposed, or one 1302, NCC)
which changes the legal effect of the original
contract and not merely its form. (Philippine Charter b. Voluntary or Conventional Subrogation –
Insurance Corporation v. Petroleum Distributors & created by the parties by their voluntary
Service Corporation, G.R. No. 180898, 18 Apr. 2012) agreement; and (Art. 1300, NCC)
Furthermore, a surety is not released by a change in NOTE: In legal subrogation, the law which
the contract, which does not have the effect of forms the basis of the subrogation must be
making its obligation more onerous. (Stronghold clearly identified and invoked to enforce
Insurance Company, Inc. v. Tokyu Construction the rights pertinent thereto. (Sta. Maria,
Company, G.R. Nos. 158820-21, 05 June 2009) As 2017)
such, a contract is only extinguished by novation
when there is a material alteration in the principal c. Conventional subrogation of a third
contract or if it has the effect of making the person requires the consent of the original
obligation more onerous. parties and of the third person. (Art. 1301,
NCC)
2. As to their extent
a. Total subrogation – credits or rights of

the creditor in the transaction are totally
transferred to the third person.; and
2023 GOLDEN NOTES
I. OBLIGATIONS
b. Partial subrogation – only part of the Conventional Subrogation vs Assignment of

credit or rights of the creditor in the Credits
transaction are transferred to the third
person. CONVENTIONAL ASSIGNMENT OF
SUBROGATION CREDITS OR RIGHTS
NOTE: A creditor, to whom partial As to Governing Law
payment has been made, may exercise his Article 1300-1304 Article 1624-1627
right for the remainder and he shall be As to Effect
preferred to the person who has been The transfer of the
subrogated in his place in virtue of the credit or right does not
partial payment of the same credit. (Art. It extinguishes the extinguish or modify
1304, NCC) original obligation and the obligation. The
creates a new one. transferee becomes
Presumption of Legal Subrogation the new creditor for
the same obligation.
GR: Legal subrogation is not presumed. (Art. 1300,
As to Need for Consent of Debtor
NCC)
The consent of the
debtor is not
XPN: In cases expressly mentioned in the law:
The consent of the necessary. Notification
debtor is necessary. is enough for the
1. When a creditor pays another creditor who is
(NCC, Art. 1301) validity of the
preferred, even without the debtor’s
assignment. (NCC, Art.
knowledge;
1626)
As to Effectivity
2. When a third person, not interested in the
Begins from the Begins from
obligation, pays with the express or tacit
moment of notification of the
approval of the debtor; or
subrogation. debtor.
As to Curability of Defect or Vice
3. When, even without the knowledge of the debtor,
The defect in the old
a person interested in the fulfillment of the The defect in the credit
obligation may be
obligation pays, without prejudice to the effects or rights is not cured
cured such that the
of confusion as to the latter’s share. (Art. 1302, by its mere assignment
new obligation
NCC) to a third person.
becomes valid.
As to Defense
Debtor cannot set up a
The debtor can still set
defense against the
up the defense
new creditor which he
(available against the
could have availed
old creditor) against
himself of against the
the new creditor.
old creditor.
NOTE: In the law of subrogation, active subjective

novation is stricter than passive subjective
novation. In the latter, the consent of the old debtor
is not even required in expromission.
CIVIL LAW
2. ELEMENTS OF A CONTRACT
II. CONTRACTS
Elements of a Contract (E-N-A):
1. Essential elements – Without them a

A. GENERAL PROVISIONS contract cannot exist (consent, subject
matter, cause or consideration;
2. Natural Elements – Those found in certain

1. DEFINITION OF A CONTRACT contract, and presumed to exist, unless the
contrary has been stipulated; and
Contract
3. Accidental elements – They may be
A contract is a meeting of minds between two present or absent depending upon whether
persons whereby one binds himself, with respect to or not the parties have agreed upon them
the other, to give something or to render some (stipulation to pay interest, designation of a
service. (Art. 1305, NCC) place for delivery or payment)
A contract is a meeting of the minds between two or a) ESSENTIAL ELEMENTS

more parties, whereby one party binds himself with
respect to the other, or where both parties bind Essential Elements
themselves reciprocally, in favor of one another, to
fulfill a prestation to give, to do or not to do. (Pineda, 1. Consent or meeting of the minds as to the
2009) subject matter;
2. Determinate subject matter; and
Meeting of the minds 3. Price certain in money or its equivalent.
Speaks of the intention of the parties in entering b) NATURAL ELEMENTS

into the contract respecting the subject matter and
the consideration thereof. As a rule therefore, a Natural Elements
contract is perfected by mere consent. It does not
require any special form, as a rule, and is binding 1. Warranty against eviction;
from the moment that the essential requisites are 2. Warrant against hidden defects of title;
present. Thus, the meeting of the minds between the 3. Warranty against non-apparent servitude;
parties rise to the binding contract although they and
have not affixed their signature to its written form. 4. Warranty of the right to sell.
(Rabuya, 2017)
Stages in the Making of a Contract
Obligation v. Contract
Three stages in the making of a contract (C-P-C):
While a contract is one of the sources of obligations,
an obligation is the legal tie or relations itself that 1. Conception or Generation – The first stage
exists after a contract has been entered into. Hence, where the parties begin their initial
there can be no contract if there is no obligation. But negotiation and bargaining for the
an obligation may exist without a contract. (De Leon, formation of the contract ending at the
2010) moment of agreement of the parties;
2023 GOLDEN NOTES
II. CONTRACTS
2. Perfection or Birth – Here, the parties had c. Formal – Those which cannot be
a meeting of minds as to the object, cause or perfected without compliance with
consideration and other terms and the special formalities required by law
conditions of the contract; and such as donations and mortgages of
real property. They are also called
3. Consummation or fulfillment – This the solemn contracts because they have to
last stage which consists in their comply with the formalities or
performance or fulfillment by the parties of solemnities required by law,
their obligations under the term of the otherwise, they are void.
perfected contract.
i. Donations of real estate or of
Classification of Contracts movables if the value exceeds
P5,000;
1. According to their names:
ii. Partnership to which immovables
a. Nominate – Those which have been are contributed;
given particular names or
denominations by law; and iii. Contract of antichresis – Requires
that the amount of principal and
b. Innominate – Those which have not interest be specified;
been given any particular name and
not regulated by special provision of iv. Sale of piece of land or interest
law. therein is through an agent;
2. According to their subject matter: v. Stipulation to charge interest;
a. Contracts covering things – Such a vi. Stipulation limiting common

contract of sale, deposit, pledge; carrier's duty of extraordinary
diligence to ordinary diligence;
b. Contracts covering services – Such as
contract of carriage whether common vii. Chattel mortgage; or
or simple; agency, deposit; and
viii. Transfer of large cattle. (Sec. 22,
c. Contract covering transmissible R.A. No. 1147; Art. 1581, NCC)
rights or credits – Such as a contract
of usufruct, assignment of credits. 4. According to cause:
3. According to formation or perfection: a. Onerous – Those contracts providing

for exchange of valuable
a. Consensual – Those perfected by considerations such as sale where the
mere consent such as sale and lease; seller delivers the object of the
(Art. 1305, NCC) (2005 BAR) contract and the buyer pays the
purchase price therefor;
b. Real – Those which cannot be
perfected without delivery such as b. Gratuitous – Those contracts where
commodatum, depositum, pledge and one of the parties give something or
loan; renders service to the other without
receiving any equivalent or
compensation such as pure donation
CIVIL LAW
and commodatum. This is also called a shall pay.
lucrative contract because it provides
a gain to the other party for free; or 7. According to completion of performance:
c. Remunerative – Those contracts a. Executed – Those contracts which are

where one party gives something or already completed when formally
renders service to another in entered into such as a sale of a thing
consideration of a previous or past which has already been delivered and
deeds of the other. paid for. There can be a partially
executed contract when there was
5. According to the vinculum produced or already partial payment; and
according to the party or parties
obligated: b. Executory – Those contracts where
the prestation promised by the parties
a. Unilateral – Those where only one of have yet to be fulfilled at some future
the parties is bound to fulfill an date such as a unilateral promise to
obligation such as: sell which has been accepted. The sale
is not yet executed.
i. commodatum where the borrower
must preserve the property and 8. According to the dependence of one
return it to the lender at the contract upon the other:
appointed time; and
a. Principal – Those contracts which can
ii. a promissory note where only the exist by themselves alone without
promisor had signed it. depending upon another such as sale,
lease, deposit, commodatum;
b. Bilateral – Those where both parties
have reciprocally bound themselves to b. Accessory – Those contracts which
fulfill their obligations in favor of the cannot exist alone but must depend
other such as sale. These are also upon another contract such as
known as synallagmatic contracts. mortgage, which depends upon the
existence of a contract of loan. The
6. According to the certainty of fulfillment: principal contract is the loan while the
mortgage is the accessory contract;
a. Commutative – Those contracts and
where the contracting parties
contemplate the assured fulfillment of c. Preparatory – Those contracts
the terms and conditions of their entered into for the creation of
agreement such as contracts of another contract such as a contract of
mortgage and pledge. Generally, there agency, as agency does not stop with
is no risk to anticipate; and the agency because the purpose is to
enter other contracts (Rabuya, 2017).
b. Aleatory – Those contracts where the A partnership is also an example of
fulfillment is dependent upon chance preparatory contract.
or event which may not happen within
the period stipulated such as an
insurance contract. Here, the loss
contemplated may or may not happen.
If it happens, the insurance company
2023 GOLDEN NOTES
II. CONTRACTS
9. According to the number of person/s or not to accept such as an insurance
actually participating in the contract: contract which is already printed.
a. Ordinary – Those contracts where 12. According to the evidence needed to

two (or more) parties are represented prove their existence:
by different persons such as in sale.
There is a seller and a buyer; and a. Contracts covered by Statute of
Frauds – Those contracts which
b. Auto-Contracts – Where the two require a written evidence, note or
opposite parties are represented by memorandum to prove their
the one and the same person, who existence; and (Art. 1403(2), NCC)
represents and acts in different
capacities-such as an agent b. Contracts which can be proven by
representing his principal who oral or parol evidence such a lease
authorized him to borrow money, may contract for a period of less than one
himself lend the money but not the year; a contract of sale where there
other way around. The agent, if was already full or partial payment.
authorized to lend money, cannot be
the borrower without the consent of 13. According to the personality of the
the principal. (Art. 1890, NCC) Auto- parties:
contracts are allowed, unless there is a
specific law prohibiting them. a. Personal – Those contracts where the
person of the party is essential to the
10. According to the dignity accorded by law: existence of the contract such as a
contract for life insurance where the
a. Institutional – Those contracts which contract shall cease to exist upon the
are given special dignity by law such death of the insured; and
as a contract of marriage which is
considered a "social inviolable b. Impersonal – Those contracts where
institution" and as such is considered the person/s of a part or parties are
as the foundation of the family by the not essential to the continuity of the
Constitution (Sec. 2, Art. XV, 1987 contract such as contract of lease. The
Constitution) and the Family Code; death of the lessor or the lessee will
(Art. 1, FC) and not necessarily terminate the contract.
The heirs may continue the contract.
b. Ordinary – Those which are not
institutional such as sale, lease, 14. According to the manner the consent is
deposit, etc. given:
11. According to the freedom of bargain: a. Express – Those contracts where the
consent of the parties is given
a. Ordinary – Those where both parties expressly in writing or verbally;
are place on equal footing in the
negotiation and perfection of the b. Implied – Those contracts where the
contract; and consent of the parties is not given
expressly but is deducible from the
b. Contracts of adhesion – Those where conduct or acts of the parties such as
one of the parties had drafted the an implied agency when the principal
contract for the other party to accept fails to repudiate the acts of the person
CIVIL LAW
acting in his behalf, knowing such a Requisites for the Application of the Principle
situation; (Art. 1869, NCC) and
Before a contract may be considered obligatory, it is
c. Presumed – Those contracts where necessary that:
the consent was not given by the
parties but is presumed or provided 1. It is perfected;
by the law itself, to prevent unjust 2. It is valid; and
enrichment on the part of one party to 3. It is enforceable. (Rabuya, 2017)
the prejudice of the other, such as
quasi-contracts. (Pineda, 2009) Persons affected by a Contract
GR:
B. BASIC PRINCIPLES OF CONTRACTS 1. Parties to the contract; and
2. Their corresponding successors.
XPNs:
Characteristics of a Contract (C-A-M-O-R)
1. Contracts containing a stipulation in favor of
a third person (pour autrui); (Art. 1311, NCC)
1. Autonomy; (Art. 1306, NCC)
2. Contracts containing real rights; (Art. 1312,
2. Mutuality; (Art. 1308, NCC)
NCC)
3. Obligatoriness; (Art. 1315, NCC)
3. Contracts entered into to defraud creditors;
4. Relativity; and (Art. 1311, NCC)
(Art. 1313, NCC)
5. Consensuality (Art. 1315, NCC)
4. Contracts which have been violated at the
inducement of 3rd persons; and (Art. 1314,
1. OBLIGATORY FORCE OF A CONTRACT NCC)
5. Quasi-contract of negotiorum gestio. (Art.
Obligations arising from contracts have the force of 2150, NCC)
law between the contracting parties and should be
complied with in good faith. (Art. 1159, NCC) Liability of heirs for the obligation contracted by
the decedent
The contract must bind both contracting parties; its
validity or compliance cannot be left to the will of The heirs are liable for the obligation contracted by
one of them. (Art. 1308, NCC) the decedent when the rights and obligations
arising from the contract are transmissible:
Contracts are perfected by mere consent and from
that moment, the parties are bound not only to the 1. By their nature;
fulfillment of what has been expressly stipulated 2. By stipulation; or
but also to all consequences which according to 3. By provision of law. (Art. 1311, NCC)
their nature may be keeping in good faith, usage,
and law. (Art. 1315, NCC) Requisites in order that a Third Person may
Demand the Fulfillment of the Contract
Contracts shall be obligatory, in whatever form they
may have been entered into, provided all the 1. The contracting parties must have clearly
essential requisites for validity are present. (Art. and deliberately conferred a favor upon the
1356, NCC) third person;
2. The third person’s interest or benefit in such

fulfillment must not be merely incidental;
and
2023 GOLDEN NOTES
II. CONTRACTS
3. Such third person communicated his one of the parties, or alter them for the benefit of
acceptance to the obligor before the one party and to the detriment of the other, or by
stipulations in his favor are revoked. construction, relieve one of the parties from terms
which he voluntarily consented to, or impose on him
2. FREEDOM TO STIPULATE those which he did not. (Ka Kuen Chua v. Colorite
(AUTONOMY OF THE WILL) AND ITS Mktg. Corp., G.R. No. 193969-193970, 05 July 2017)
LIMITATIONS
3. BINDING EFFECT OF A CONTRACT
Autonomy (or Freedom to Contract) (1996,
2004 BAR) Mutuality (2001, 2004, 2008 BAR)
The contracting parties may establish such The contract must bind both contracting parties; its
stipulations, clauses, terms, and conditions as they validity or compliance cannot be left to the will of
may deem convenient, provided they are not one of them. (Art. 1308, NCC)
contrary to law, morals, good customs, public order,
or public policy. (Art. 1306, NCC) The principle of mutuality is the essential equality
of the parties. It is repugnant to bind one party, and
If the stipulation which violates the limitations set yet leave the other free (Garcia v. Rita Legarda, Inc.,
forth in the foregoing provision constitute the cause, L-20175, 30 Oct 1967)
object, or purpose of the contract, such contract is
denied legal existence, and thus, shall be deemed Applicability to Contract Modifications:
void from the beginning. (Casis, 2016)
Contract changes must be made with the consent of
Contracting parties may establish any agreement, the contracting parties. The minds of all the parties
term, and condition they may deem advisable, must meet as to the proposed modification,
provided they are not contrary to law, morals, or especially when it affects and important aspect of
public policy. The right to enter lawful contracts the agreement. Thus, any change must be mutually
constitutes one of the liberties guaranteed by the agreed upon; otherwise, it produces no binding
Constitution. It cannot be struck down or arbitrarily effect. (Lara’s Gifts & Decors, Inc. v. Midtown
interfered with without violating the freedom to Industrial Sales, Inc., G.R. No. 225433, 28 Aug. 2019)
enter into lawful contracts. (Gateway Electronics
Corporation v. Land Bank, G.R. No. 155217 and GR: Any contract which appears to be heavily
156393, 30 July 2003) weighed in favor of one of the parties so as to lead
to an unconscionable result is void. Any stipulation
It is necessary for the existence of a contract that regarding the validity or compliance of the contract
two distinct parties enter it (auto-contracts). The which is left solely to the will of one of the parties is
existence of a contract is not determined by the likewise invalid. (Sps. Limso v. PNB, G.R. No. 158622,
number of persons who intervene in it, but by the 27 Jan. 2016)
number of parties; not by the number of individual
wills but by the number of declarations of will. As XPN: The legality of contracts which is left to the
long as there are two distinct patrimonies, even if will of either of the parties may be upheld if there
they are represented by the same person, the was a finding of the presence of essential equality of
contract will be valid, e.g., an agent representing the parties to the contracts, thus preventing the
both the buyer and the seller. perpetration of injustice on the weaker party. (GF
Equity v Valenzona, G.R. No. 156841, 30 June 2005)
NOTE: Courts cannot make for the parties better or
more equitable agreements than they themselves
have been satisfied to make, or rewrite contracts
because they operate harshly or inequitably as to
CIVIL LAW
The determination of the performance may be left 4. PRIVITY OF CONTRACT
to a third party as long as:
a) CONCEPT
1. The decision has been made known to
booth contracting parties; (Art. 1309, NCC)
Under Art. 1311 of the NCC, contracts take effect only
and
between the parties, their assigns, and heirs.
2. The determination is not evidently
Therefore, its terms cannot determine the rights of
inequitable (Art. 1310, NCC). If it is
third persons.
inequitable, the court shall decide what is
equitable under the circumstances.
Principle of Relativity or Principle of Limited
Effectivity of Contracts (2011 BAR)
If a party alleges defects in the contract so that it
could be set aside, he must prove conclusively the
GR: Contracts take effect only between the parties
existence of the defects because the validity and
or their assigns and heirs.
fulfillment of the contract cannot be left to the will
of one of the contracting parties. (Pineda, 2009)
Res inter alios acta aliis neque nocit prodest (a thing
done between others does not harm or benefit
The binding effect of any agreement between
others) – a contract can only obligate the parties
parties to a contract is premised on two settled
who entered into it, or their successors who
principles: (1) that any obligation arising from
assumed their personalities, and that,
contract has the force of law between the parties;
concomitantly, a contract can neither favor nor
and (2) that there must be mutuality between the
prejudice third persons. (Vitug, 2006)
parties based on their essential equality. Any
contract which appears to be heavily weighed in
NOTE: With respect to the heir, he shall not be liable
favor of one of the parties so as to lead to an
beyond the value of the property he received from
unconscionable result is void. Any stipulation
the decedent. (Art. 1311, NCC)
regarding the validity or compliance of the contract
which is left solely to the will of one of the parties, is
Contracts take effect only between parties, their
likewise, invalid. (Sps. Limso v. PNB, G.R. No. 158622,
assigns and heirs, EXCEPT in case where the rights
27 Jan. 2016)
and obligations arising from the contract are not
transmissible by their:
NOTE: A contract containing a condition whose
efficacy or fulfillment is dependent solely on the
(1) nature;
uncontrolled will of one of the parties is void.
(2) by stipulation; or
(Floirendo, Jr. v. Metropolitan Bank and Trust Co., G.R.
(3) by provision of law. The heir is not liable
No. 03 Sept. 2007)
beyond the value of the property he received
from the decedent. (Art. 1311, Par. 1, NCC)
However, the termination of the contract does not
necessarily require mutuality, and it can even be
No one may contract in the name of another without
validly left to one party by agreement or under a
being authorized by the latter, or unless he has by
resolutory facultative condition. (Vitug, 2006)]
law a right to represent him. (Art. 1317, NCC)
A contract entered in the name of another by one

who has no authority or legal representation or who
has acted beyond his powers, shall be
unenforceable, unless it is ratified expressly or
impliedly by the person on whose behalf it has been
executed, before it is revoked by the other
contracting party. (Art. 1317, NCC)
2023 GOLDEN NOTES
II. CONTRACTS
b) EXCEPTIONS TO THE RULE ON PRIVITY OF obligation owing from the promise to the
CONTRACTS third person. (Rabuya, 2017)
Contracts may bind and affect strangers in the 2. Accion directa –The creditor is authorized
following cases: by the statute to sue on his debtor’s
contract.
1. Stipulations Pour Autrui (Art. 1311(2),
NCC) – Stipulation in favor of a third person. Examples:
Benefits clearly and deliberately conferred a) Lessor against Sublessee; and (Arts.
by parties to a contract upon third persons 1651, 1652, NCC)
and which stipulation is merely part of a b) Laborers of Contractor against Owner of
contract entered into by the parties, neither the work (Art. 1729, NCC)
of whom acted as agents of the third person
and which favor can be demanded by the 3. Third Person in Possession of Object of Contract
third person if duly accepted by him before (Art. 1312, NCC)
it could be revoked.
In contracts creating real rights, third persons
Requisites of stipulation pour atrui: who come into possession of the object of the
contract are bound thereby, subject to the
a. Stipulation in favor of a third person; provisions of the Mortgage Law and the Land
Registration Laws.
b. Stipulation is just part and not the
whole obligations of the contract; 4. Fraud of Creditors by Contracting Parties
(Accion Pauliana) (Art. 1313, NCC)
c. Contracting parties must have clearly
and deliberately conferred a favor Creditors are protected in cases of contracts
upon a third person; intended to defraud them. Creditors of the
contracting parties may rescind contracts
d. Favor or benefit conferred is not just intended to defraud them although they did not
an incidental benefit or interest; intervene therein. (Reyes and Puno, 1964)
e. Third person must have 5. Tortious Interference (Art. 1314, NCC) (1991,
communicated his acceptance; and 1998 BAR)
f. Neither of the contracting parties Any third person who induces another to
bears the legal representation or violate his contract shall be liable for damages
authorization of the third person. to the other contracting party (even though the
(OSPA v. CA, G.R. No. 156660, 24 Aug. third person is not bound by the stipulations).
2009)
NOTE: This tort or wrongful conduct is known
NOTE: The fairest test to determine as “interference with contractual relations.”
whether the interest of third person in a
contract is a stipulation pour autrui or The word "induce" refers to situations where a
merely an incidental interest is to rely upon person causes another to choose one course of
the intention of the parties as disclosed by conduct by persuasion or intimidation.
their contract. In applying this test, it
matters not whether the stipulation is in
the nature of a gift or whether there is an
CIVIL LAW
Requisites: A: NO. A stipulation pour autrui to be appreciated, it
is indispensable that there be a stipulation
1. Existence of a valid contract; deliberately conferring a benefit or favor to a third
person. The requisites of a stipulation pour autrui
2. The third person’s knowledge of the third are the following:
person of the existence of the contract; and
1. There is a stipulation in favor of a third person;
NOTE: Knowledge alone is not sufficient to
make a third person liable for tortuous 2. The stipulation is a part, not the whole, of the
interference. To sustain a case for tortuous contract;
interference, the defendant must have acted
with malice or must have been driven by purely 3. The contracting parties clearly and deliberately
impious reasons to injure the plaintiff. conferred a favor to the third person — the
favor is not an incidental benefit;
NOTE: A third person can be held liable for tort
interference even if he does not know the 4. The favor is unconditional and uncompensated;
identity of one of the contracting parties. The
interference with lawful contracts by strangers 5. The third person communicated his or her
thereto gives rise to an action for damage in acceptance of the favor before its revocation;
favor of the injured person. The law does not and
require that the responsible person shall have
known the identity of the injured person. 6. The contracting parties do not represent, or are
(Rabuya, 2017) not authorized by, the third party.
3. Interference by third person without legal The Compromise Agreement executed between
justification or excuse. (Inocencio v. Hospicio De Benedicto and PCGG does not contain any express
San Jose, G.R. No. 201787, 25 Sept. 2013) stipulation that confers the benefit of absolute
immunity to Africa. Absent any express stipulation
Q: PCGG filed a complaint for reconveyance, in favor of a third person, the rule on relativity of
reversion, accounting, restitution, and damages contract must be applied i.e., that the contract only
before the Sandigan Bayan against Ferdinand takes effect between the parties, their assigns or
and Imelda Marcos, and several of their cronies heirs. (Republic v. Legal Heirs of Jose L. Africa, G.R.
including Benedicto and Africa. PCGG, through No. 205722, 19 Aug. 2015)
its Chairman, David M. Castro, entered into a
Compromise Agreement with Benedicto where 5. CONSENSUALITY OF CONTRACTS
the latter undertook to cede to the government
properties listed in the agreement and transfer
to the government whatever rights he may have a) CONCEPT AND COVERAGE
in the assets of the corporations listed in the
same agreement. The SB dismissed the case Contracts are perfected by mere consent and from
against Africa and ruled that since that act being that moment, the parties are bound not only to the
complained of constituted a quasi-delict or tort fulfillment of what has been expressly stipulated
and the obligation of the defendants were but also to all consequences which according to
solidary therefore the obligation of Africa has their nature may be keeping in good faith, usage,
been extinguished by the Compromise and law. (Art. 1315, NCC)
Agreement. Did the Compromise Agreement
between PCGG and Benedicto extinguish the Consensual contracts are perfected from the
liability of Africa? moment there is agreement (consent) on the subject
2023 GOLDEN NOTES
II. CONTRACTS
matter, and the cause or consideration. (Paras, a. Mistake;
2021) b. Accident;
c. Relative simulation;
b) EXCEPTIONS d. Fraud; or
e. Inequitable conduct
Real contracts, such as deposit, pledge and
commodatum, are not perfected until the delivery of 4. The facts upon which relief by way of
the object of the obligation (Art. 1316, NCC). And reformation of the instrument is sought are
solemn contracts, which are perfected by put in issue by the pleadings; and
compliance with the formalities required by law.
5. There is strong, clear, and convincing proof
Real contracts require consent, subject matter, of M-A-R-F-I.
cause or consideration, and delivery. (Paras, 2021)
Distinctions between Reformation and
c) REFORMATION OF INSTRUMENTS Annulment
It is a remedy to conform to the real intention of the REFORMATION ANNULMENT

parties due to mistake, fraud, inequitable conduct, As to meeting of the minds
accident. (Art. 1359, NCC) There is meeting of the
minds between the There is no meeting of
It is a remedy of amending or rectifying the parties as to the object the minds. Consent is
instrument which purports to be the agreement of and cause of the vitiated.
the parties to express their real intention, when the contract.
same is not expressed therein by reason of mistake, As to cause of reformation or annulment
fraud, inequitable conduct, or accident. The meeting of the
The instrument failed minds was prevented
Reformation is a remedy in equity by means of to express the true by reason of mistake,
which a written instrument is made or construed to intention of the parties fraud, inequitable
express or confirm the real intention of the parties due to mistake, fraud, conduct or accident
when some error or mistake is committed. (Pineda, inequitable conduct, perpetrated by one
2009) or accident. party against the
other.
Rationale: It would be unjust and inequitable to
As to purpose
allow the enforcement of a written instrument
which does not reflect or disclose the real meeting The purpose of
of the minds of the parties. (Report of the Code reformation is to The purpose of
Commission) establish the true annulment is to render
agreement of the inefficacious the
Requisites in Reformation of Instruments parties, and not to contract in question.
create a new one.
1. There is meeting of the minds of the parties
to the contract; NOTE: When there is no meeting of the minds, the
proper remedy is annulment, and not reformation.
2. The parties’ true intention is not expressed (Pineda, 2000)
in the instrument;
The fundamental distinction between reformation
3. Such failure of the instrument to express of an instrument and annulment of a contract is that
the parties’ intention is by reason of: the first presupposes a perfectly valid contract in
(M-A-R-F-I) which there has been a valid meeting of the minds
CIVIL LAW
of the contracting parties, while the second is based the contracting parties. The rationale is that it
on a defective contract in which there has been no would be unjust to enforce a written instrument
meeting of the minds because the consent is which does not truly reflect the real agreement of
vitiated. (Jurado, 2010) the parties. In reforming an instrument, no new
contract is created for the parties, rather, the
Q: Multi-Realty Development Corporation reformed instrument establishes the real
(Multi-Realty) built Makati Tuscany, a 26-storey agreement between the parties as intended, but for
condominium building located at the corner of some reason, was not embodied in the original
Ayala Avenue and Fonda Street, Makati City. instrument.
Makati Tuscany had a total of 160 units, with
156 ordinary units from the 2nd to the 25th MATUSCO does not deny that it stayed silent when
floors and four (4) penthouse units on the 26th Multi-Realty sold the parking slots on several
floor. It also had 270 parking slots which were occasions or that it offered to buy the parking slots
apportioned as follows: one (1) parking slot for from Multi-Realty on at least two (2) occasions. It
each ordinary unit; two (2) parking slots for excuses itself by saying that just like Multi-Realty, it
each penthouse unit; and the balance of 106 "also labored under a mistaken appreciation of the
parking slots were allocated as common areas. nature and ownership of the ninety-eight (98)
parking slots in question."
Pursuant to R.A. No. 4726, or the Condominium
Act, Multi-Realty created and incorporated Both parties recognized Multi-Realty's ownership of
Makati Tuscany Condominium Corporation the parking slots. MATUSCO initially respected
(MATUSCO) to hold title over and manage Multi-Realty's ownership despite the Master Deed's
Makati Tuscany's common areas. That same and Deed of Transfer's stipulations. It was
year, Multi-Realty executed a Deed of Transfer MATUSCO that changed its position decades after it
of ownership of Makati Tuscany's common acted as if it accepted Multi-Realty's ownership.
areas to MATUSCO. (Makati Tuscany Condominium Corporation v. Multi-
Realty Development Corporation, G.R. 185530, 18
Multi-Realty filed a complaint for damages Apr. 2018)
and/or reformation of instrument with prayer
for TRO and/or preliminary injunction against Operation and Effect of Reformation
MATUSCO. Multi-Realty alleged in its complaint
that of the 106 parking slots designated in the It relates back to, and takes effect from, the time of
Master Deed as part of the common areas, only its original execution, especially as between the
eight (8) slots were intended to be guest parking parties. (Tolentino, 2002)
slots; thus, it retained ownership of the
remaining 98 parking slots. Reformation of instruments may be availed of
judicially or extrajudicially.
Multi-Realty claimed that its ownership over the
98 parking slots was mistakenly not reflected in Basis and Nature of the Remedy
the Master Deed "since the documentation and
the terms and conditions therein were all of first The remedy of reformation of an instrument is
impression," considering that Makati Tuscany based on the principle of equity where, to express
was one of the first condominium developments the true intention of the contracting parties, an
in the Philippines. Is there is a need to reform instrument already executed is allowed by law to be
the Master Deed and the Deed of Transfer? reformed. The right of reformation is necessarily an
invasion or limitation of the parol evidence rule,
A: NO. Reformation of an instrument is a remedy in since, when a writing is reformed, the result is that
equity where a valid existing contract is allowed by an oral agreement is by court decree, made legally
law to be revised to express the true intentions of effective. The remedy, being an extraordinary one,
2023 GOLDEN NOTES
II. CONTRACTS
must be subject to the limitations as may be 5. Right of repurchase – If the parties agree
provided by law. A suit for reformation of an upon the mortgage or pledge of real or
instrument must be brought within the period personal property, but the instrument
prescribed by law, otherwise, it will be barred by states that the property is sold absolutely
the mere lapse of time. (Bentir v. Leanda, G.R. or with a right of repurchase. (Art. 1365,
128991, 12 Apr. 2000) NCC)
When Remedy Allowed When Remedy NOT Allowed
1. Mutual mistake – When the mutual 1. Simple, unconditional donations inter vivos;
mistake of the parties causes the failure of 2. Wills;
the instrument to disclose their agreement; 3. When the agreement is void; (Art. 1366, NCC)
(Art. 1361, NCC) 4. When an action to enforce the instrument is
filed (by doctrine of estoppel);
Requisites:
a. The mistake should be of fact; 5. If mistake, fraud, inequitable conduct, or
accident has prevented a meeting of the minds
b. The same should be proved by of the parties; and
clear and convincing evidence; and
NOTE: The remedy here is annulment of
c. The mistake should be common to contract.
both parties to the instrument.
(BPI v. Fidelity Surety, Co. G.R. No. L- 6. When the contract is unenforceable because of
26743, 19 Oct. 1927) failure to comply with the statute of frauds.
2. Mistake on one party and fraud on the Prescriptive Period

other – In such a way that the instrument
does not show their true intention, the Within 10 years from the date of the execution of the
party mistaken or defrauded may ask for instrument, since the suit is based on a written
the reformation of the instrument; (Art. document.
1362, NCC)
Persons who can Ask for the Reformation of the
3. Mistake on one party and concealment on Instrument
the other – When one party was mistaken
and the other knew or believed that the It may be ordered at the instance of:
instrument did not state their real
agreement, but concealed that fact from the 1. If the mistake is mutual – either party or his
former; (Art. 1363, NCC) successor-in-interest may file an action.; or
4. Ignorance, lack of skill, negligence or bad 2. If the cause of reformation is on some other
faith – When through the ignorance, lack of ground, such as vitiated consent or fraud – the
skill, negligence or bad faith on the part of injured party or his heirs and assigns are the
the person drafting the instrument or of the only person given legal standing to sue.
clerk or typist, the instrument does not
express the true intention of the parties; NOTE: In reformation of contracts, what is
and (Art. 1364, NCC) reformed is not the contract itself, but the
instrument embodying the contract. It follows that
whether the contract is disadvantageous or not, is
irrelevant to reformation and therefore, cannot be
CIVIL LAW
an element in the determination of the period for that it remained unaccepted by Gammon. On 19
prescription of the action to reform. (Pineda, 2000) June 1998, Gammon qualifiedly accepted the
Fourth Notice to Proceed. MRT treated
Gammon’s qualified acceptance as a new offer.
C. ESSENTIAL REQUISITES OF A CONTRACT In a Letter dated 22 June 1998, MRT rejected
Gammon’s qualified acceptance and informed
Gammon that the contract would be awarded
instead to Filsystems if Gammon would not
The following are the essential requisites of
accept the Fourth Notice to Proceed within five
contracts: (C-O-C)
(5) days. In a Letter dated 8 July 1998, Gammon
wrote MRT, acknowledging the latter’s intent to
1. Consent;
grant the Fourth Notice to Proceed to another
2. Object certain or subject matter; and
party despite having granted the First Notice to
3. Cause or consideration. (Art 1318, NCC)
Proceed to Gammon. Thus, it notified MRT of its
claims for reimbursement for costs, losses,
NOTE: These three requisites are, therefore, the
charges, damages, and expenses it had incurred
essential elements of a consensual contract. In real
due to the rapid mobilization program in
contracts, however, in addition to the above, the
response to MRT’s additional work instructions,
delivery of the object of the contract is required as a
suspension order, ongoing discussions, and the
further requisite. Solemn or formal contracts
consequences of its award to another party. In a
require compliance with the formalities provided
letter dated 15 July 1998, MRT expressed its
by law.
disagreement with Gammon and its amenability
to discussing claims for reimbursement.
NOTE: absence of any of the requisites creates an
Whether or not there is a perfected contract
inexistent contract. It produces no effect. (Sta.
between MRT and Gammon Philippines?
Maria, 2017)
A: YES, there is a perfected contract between MRT

Elements of a Contract
and Gammon. MRT has already awarded the
contract to Gammon, and Gammon’s acceptance of
1. Natural Elements – Those which are
the award was communicated to MRT before MRT
derived from the very nature of the
rescinded the contract. The first Letter shows that
contract, and as a consequence, ordinarily
Gammon fully consented to the contents and
accompany the same;
accepted the prestations of the First Notice to
Proceed. Gammon’s acceptance is also manifested in
2. Essential Elements – Those without which
its undertakings to mobilize resources, to prepare
there can be no contract; and
the Performance and Advance Payment Bonds, and
to procure materials necessary for the Project. All
3. Accidental Elements – those which exist
that remained was the formality of returning the
only when the contracting parties
contract documents and the Letter of Comfort,
expressly provide for them. (De Leon, 2010)
which eventually was complied with by Gammon.
Thus, there is already mutual consent on the object
Q: MRT thru Parsons Inc., had invited Gammon
of the contract and its consideration, and an
Philippines to bid on the construction of the
absolute acceptance of the offer. (Metro Rail Transit
Podium structure of the MRT 3 and it later won
Development Corporation v. Gammon Philippines
the bidding. Then the two parties signed the
Inc., G.R. No. 200401, 17 Jan. 2018)
contract where it stated that there would be
three notices that would be sent to Gammon for
the project to proceed. But later on Parsons
informed Gammon that MRT was temporarily
rescinding the Third Notice to Proceed, noting
2023 GOLDEN NOTES
II. CONTRACTS
1. CONSENT NOTE: Intelligence in consent is vitiated by
error; freedom by violence, intimidation or
undue influence; and spontaneity by fraud.
Consent (2005 BAR)
4. The conformity must be Real, not simulated or

Consent is manifested by the meeting of the offer
fictitious.
and the acceptance upon the thing and the cause
which are to constitute the contract. The offer must
Offer
be certain and the acceptance absolute. A qualified
acceptance constitutes a counter-offer. (Art. 1319,
An offer is defined as an expression of willingness to
NCC)
contract on certain terms, made with the intention
that it shall become binding as soon as it is accepted
It is the concurrence of the wills of the contracting
by the person to whom it is addressed. (Rabuya,
parties with respect to the object and cause, which
2017)
shall constitute the contract. (De Leon, 2010)
NOTE: The offerer will not be bound by an

NOTE: Consent is essential to the existence of a
acceptance made by the acceptor in any other
contract; and where it is wanting, the contract is
manner than that specified by the offerer, unless the
non-existent.
offerer acquiesces in the change. (Sta. Maria, 2017)
Requisites of Consent (L-M-C-R)

Elements of a Valid Offer and Acceptance
1. Legal capacity of the contracting parties;

1. Definite – unequivocal;
2. Intentional; and
NOTE: The parties must have full civil capacity.
3. Complete – unconditional.
Hence, if any one party to a supposed contract
was already dead at the time of its execution,
NOTE: It must be so complete that its absolute
such contract is undoubtedly simulated and
acceptance will form an agreement containing all
false and, therefore, null and void by reason of
the terms necessary and intended by the parties.
its having been made after the death of the
(Sta. Maria, 2017)
party who appears as one of the contracting
parties therein. The death of a person
Requisites of an Effective Offer
terminates contractual capacity. (Vda. De
Cabalu. v. Sps. Tabu, G.R. No. 188417, 24 Sept.
1. The one offering must have a serious intention
2012)
to become bound by his offer;
2. Manifestation of the conformity of the
2. The terms of the offer must be reasonably
contracting parties;
certain, definite and complete, so that the
parties and the court can ascertain the terms of
NOTE: Manifestation may be in writing bearing
the offer; and
the signature or marks of the parties, or it may
be implied from the conduct of the parties like
3. The offer must be communicated by the offeror
the acceptance of payment.
to the offeree, resulting in the offeree’s
knowledge of the offer. (Rabuya, 2017)
3. Parties’ Conformity to the object, cause, terms
and condition of the contract must be
Q: The husband assumed sole administration of
intelligent, spontaneous and free from all vices
the family’s mango plantation since his wife
of consent; and
worked abroad. Subsequently, without his
wife’s knowledge, the husband entered into an
CIVIL LAW
antichretic transaction with a company, giving it Requisites of a Valid Acceptance
possession and management of the plantation
with power to harvest and sell the fruits and to 1. Must be absolute; a qualified acceptance
apply the proceeds to the payment of a loan he constitutes a counter-offer; and (Art. 1319, NCC)
got. What is the standing of the contract? (2011
BAR) 2. No specified form but when the offeror specifies
a particular form, such must be complied with.
A: It is considered a continuing offer by the parties;
perfected only upon the wife’s acceptance or the NOTE: Offer or acceptance, or both, expressed in
court’s authorization. electronic form, is valid, unless otherwise agreed by
the parties (electronic contracts).
NOTE: The person making the offer may fix the
time, place and manner of acceptance, all of which Acceptance not made in a manner as directed by the
must be complied with. (Art. 1321, NCC) offeror constitutes a counter-proposal which
extinguishes the offer and this may not be accepted
Rules on Advertisements as Offers by the original offeror. (Pineda, 2009)
1. Business advertisements – Not a definite offer, A conditional acceptance is a counter-offer which

but mere invitation to make an offer, unless it extinguishes the offer. If not accepted by the offeror,
appears otherwise; and (Art. 1325, NCC) there is no contract.
NOTE: If the advertisement contains all the An acceptance may be express or implied. (Art.
necessary date need in a contract, it is a definite 1320, NCC)
offer for the sale of the thing advertised.
Otherwise, it is not a definite offer, it is a mere Mirror Image Rule in Law on Contracts
invitation to make offer.
This is a common law concept which states that in
2. Advertisement for bidders – Simply invitation order for there to be an acceptance, the offeree must
to make proposals and advertiser is not bound accept the terms as stated in the offer. Our courts
to accept the highest or lowest bidder unless also adhere to the “mirror-image rule.” Thus, it has
the contrary appears. (Art. 1326, NCC) been ruled that acceptance must be identical in all
respects with that of the offer so as to produce
Grounds rendering the Offer Ineffective consent of meeting of the minds. (Rabuya, 2017)
1. Death, civil interdiction, insanity or insolvency Period for Acceptance

of either party before acceptance is conveyed;
(Art. 1323, NCC) 1. Stated fixed period in the offer:
2. Express or implied revocation of the offer by the
offeree; a. Must be made within the period given by
3. Qualified or conditional acceptance of the offer, the offeror.; and
which becomes counter-offer;
4. Subject matter becomes illegal or impossible b. As to withdrawal of the offer:
before acceptance is communicated; and
5. Period given to the offeree to signify his GR: It can be made by communicating such
acceptance has already lapsed. withdrawal at any time before the
acceptance is made
XPN: When the option is founded upon a

consideration, as something paid or
2023 GOLDEN NOTES
II. CONTRACTS
promised, since partial payment of the 3. Minors (Art. 1327, NCC).
purchase price is considered as proof of the
perfection of the contract. (Art 1324, NCC) XPNs:
a. Contracts for necessaries ; (Art. 1489,
2. No stated period: NCC);
a. Offer is made to a person present – b. Contracts by guardians or legal

acceptance must be made immediately.; or representatives and the court having
jurisdiction had approved the same;
b. Offer is made to a person absent –
acceptance may be made within such time c. When there is active
that, under normal circumstances, an misrepresentation on the part of the
answer can be expected from him. minor (minor is estopped);
NOTE: If there was an acceptance already, the d. Contracts of deposit with the Postal
offeror cannot just withdraw his offer unilaterally. Savings Bank provided that the minor
He will be liable for damages. (Pineda, 2009) is over 7 years of age;
Option Contract e. Contract of an insurance for life, health

and the accident on the minor’s life;
It is a contract between the offeror and the offeree and
whereby the former grants the latter, for a valuable
consideration, the privilege to buy or not to buy f. Upon reaching age of majority, they
certain objects at anytime within a specified period ratify the same.
and for a fixed price.
NOTE: Because the law incapacitates them to give
NOTE: The privilege granted to the offeree must be their consent to a contract, the only way by which
supported by a consideration, the option is just any one of those enumerated above can enter into a
considered an “offer to sell” to the offeree which is contract is to act through a parent or guardian. If
not binding until accepted. (Pineda, 2009) this requirement is not complied with, the result is
a defective contract. If only one of the contracting
Earnest Money parties is incapacitated to give his consent, the
contract is voidable. If both of them are
It is the payment made to a seller by the buyer to incapacitated to give their consent, the contract is
show his good faith. It will constitute as part of the unenforceable. (Art. 1390(1) & 1403(3), NCC)
purchase price, if the sale is finally consummated. If
the sale is not concluded, the earnest money shall be Vices of Consent
returned to the would-be-buyer unless there is a
contrary stipulation. 1. Mistake;
2. Intimidation;
Persons Incapacitated to Give Consent (D-I-M) 3. Violence;
4. Undue influence; and
1. Deaf-mutes who do not know how to read and 5. Fraud
write (illiterates);
NOTE: A threat to enforce a just or legal claim
2. Insane or demented persons, unless the through a competent authority does not amount to
contract was entered into during a lucid intimidation nor vitiate consent. (Art. 1335, NCC)
interval; and
CIVIL LAW
Mistake Q: Leonardo is the only legitimate child of the
late Sps. Tomasina and Balbino. She only
GR: Mistake as a vice of consent refers to mistake of finished Grade Three and did not understand
facts and not of law, thus rendering the contract English. The Sebastians, on the other hand, are
voidable. (Jurado, 2010) illegitimate children. Leonardo filed an action to
declare the nullity of the extrajudicial
XPN: When mistake of law involves mutual error as settlement of the estate of her parents, which
to the legal effect of an agreement when the real she was made to sign without the contents
purpose of the parties is frustrated. (Art. 1334, NCC) thereof, which were in English, explained to her.
She claims that her consent was vitiated because
Mistake distinguished from Ignorance she was deceived into signing the extrajudicial
settlement. Is the extra-judicial settlement of
Mistake is a false impression on something, while estate of Tomasina valid?
Ignorance is absence of any notion or impression
about a particular thing. A: NO. When one of the parties is unable to read, or
if the contract is in a language not understood by
Requisites him, and mistake or fraud is alleged, the person
enforcing the contract must show that the terms
1. Mistake must be with respect to the legal thereof have been fully explained to the former.
effect of the agreement; (Art. 1332). Leonardo was not in a position to give
2. It must be mutual; and her free, voluntary and spontaneous consent
3. Real purpose of the parties must have been without having the document, which was in English,
frustrated. explained to her. Therefore, the consent of
Leonardo was invalidated by a substantial mistake
Kinds of Mistakes of Fact which Vitiate Consent or error, rendering the agreement voidable. The
extrajudicial partition between the Sebastians and
1. Mistake as to the nature of the contract; Leonardo should be annulled and set aside on the
2. Mistake as to object of the contract; ground of mistake. (Leonardo v. CA, G.R. No. 125485,
3. Mistake as to the quality or principal 13 Sept. 2004)
conditions of the thing;
4. Mistake or error in quantity; NOTE: Burden rests upon the party who seeks to
5. Mistake as to identity of the person; and enforce the contract to show that the other party
6. Mistake as to the identity or qualifications of fully understood the contents of the document. If he
one of the parties will vitiate consent only fails to discharge this burden, the presumption of
when such identity or qualifications have mistake, if not, fraud, stands unrebutted and
been the principal cause of the contract. controlling. (Mayor v. Belen, G.R. No. 151035, 03 June
2004)
For mistake (as to the qualification of one of the
parties) to vitiate consent, two requisites must Mutual Error
concur:
Mutual error as to the legal effect of an agreement
a. The mistake must be either regarding the when the real purpose of the parties is frustrated,
identity or with regard to the qualification of may vitiate consent. (Art. 1334, NCC)
one of the contracting parties; and
Intimidation
b. The identity or qualification must have been
the principal consideration for the celebration There is intimidation when one of the contracting
of the contract. (The Roman Catholic Church v. parties is compelled by a reasonable and well-
Pante, G.R. No. 174118, 11 Apr. 2012) grounded fear of an imminent and grave evil upon
2023 GOLDEN NOTES
II. CONTRACTS
his person or property, or upon the person or A threat to enforce one’s claim through competent
property of his spouse, descendants or ascendants, authority, if the claim is just or legal, does not vitiate
to give his consent. (Art. 1335(2), NCC) consent. (NCC, Art. 1335(4))
Requisites of Intimidation (C-I-C-U) NOTE: Violence or intimidation shall annul the

obligation, although it may have been employed by
1. One of the parties is compelled to give his a third person who did not take part in the contract.
Consent by a reasonable and well-grounded (Art. 1336, NCC)
fear of an evil;
2. The evil must be Imminent and grave; The contracting party who is not the subject of the
3. It must be Unjust; and violence or the intimidation may not even know that
4. The evil must be the determining Cause for the the other party has been coerced. (Sta. Maria, 2017)
party upon whom it is employed in entering Undue Influence
into the contract. (Art. 1335, NCC)
There is undue influence when a person takes
NOTE: To determine the degree of the intimidation, improper advantage of his power over the will of
the age, sex and condition of the person shall be another, depriving the latter of a reasonable
borne in mind. (Art. 1335, NCC) freedom of choice. (Art. 1337, NCC)
A threat to enforce one’s claim through competent It must in some measure destroy the free agency of
authority, if the claim is just or legal, does not vitiate a party and interfere with the exercise of that
consent. (Sta. Maria, 2017) independent discretion. (Tolentino, 2002)
Validity of a Contract if Consent is Reluctant Circumstances to be Considered for the

Existence of Undue Influence
A contract is valid even though one of the parties
entered into it against his wishes and desires or 1. Confidential, family, spiritual and other
even against his better judgment. Contracts are also relations between the parties;
valid even though they are entered into by one of the 2. Mental weakness;
parties without hope of advantage or profit. 3. Ignorance; and
(Martinez v. HSBC Corp., G.R. No. L-5496, 19 Feb. 4. Financial distress. (Art. 1337, NCC)
1910)
NOTE: The enumeration is NOT exclusive. Moral
Violence dependence, indigence, mental weakness, tender
age or other handicap are some of the
There is violence when in order to wrest consent, circumstances to consider undue influence.
serious or irresistible force is employed. (Art. 1335,
NCC) Determination of Undue Influence
Requisites of Violence The test to determine whether there is undue

influence which will invalidate a contract is to
1. Physical force employed must be serious or determine whether or not the influence exerted has
irresistible; and so overpowered and subjugated the mind of the
contracting party as to destroy his free agency,
2. The determining cause for the party upon making him express the will of another rather than
whom it is employed in entering into the his own. (Jurado, 2011)
contract.
CIVIL LAW
Due Influence does NOT Vitiate Consent Kinds of Fraud
When influence consists in persuasive arguments or 1. Fraud in the perfection of the contract:
in appeals to the affections which are not prohibited
by law or morals, the consent is not vitiated at all. a. Causal fraud (dolo causante) – It is
(Pineda, 2009) employed by one party prior to or
simultaneous with the creation or
Influence obtained by persuasion or argument or by perfection of the contract to secure the
appeals to the affections is not prohibited either by consent of the other; and
law or morals and is not obnoxious even in courts of
equity. Such may be termed “due influence.” (Bañez b. Incidental fraud (dolo incidente) – It is
v. CA, G.R. No. L-30351, 11 Sept. 1974) the fraud committed in the in the
performance of an obligation, and its
Reverential Fear existence merely results in breach of an
already existing contract, which entitles
The fear of displeasing persons to whom respect the injured party to damages.
and obedience are due does not vitiate consent.
2. Fraud in the performance of an obligation. (Art.
Fraud 1170, NCC)
There is fraud when through the insidious words or Requisites of Fraud to Vitiate Consent (in the
machinations of one of the contracting parties, the sense of Dolo Causante)
other is induced to enter a contract which, without
them, he would not have agreed to. (Art. 1338, NCC) 1. It was applied or utilized by one contracting
party upon the other;
NOTE: The term “insidious words” refers to a 2. It must be serious deception;
deceitful scheme or plot with an evil design, or a 3. It must have induced the victim to enter the
fraudulent purpose. (Pineda, 2000) contract without which he would not have
agreed to;
Failure to disclose facts, when there is a duty to 4. It must have induced the victim to enter the
reveal them, as when the parties are bound by contract, which he would not have agreed to,
confidential relations, constitutes fraud. (Art. 1339, absent the employment of such fraud; and
NCC) 5. It must have resulted in damage or injury.
NOTE: There is fraud under the special and Q: Santos’ lease contract was about to expire but
particular circumstances of the following: it was extended, thus, he continued to occupy
the leased premises beyond the extended term.
1. When a legal or equitable duty is imposed upon Samson offered to buy Santos’ store and his right
the dominant party to reveal certain facts to the lease. Santos stated that the lease contract
material to the transaction; and between him and the lessor was impliedly
renewed, and that the formal renewal thereof
2. When there is a confidential relationship would be made upon the arrival of a certain
between the parties. (Sta. Maria, 2017) Tanya Madrigal, based on the letter to him given
by the lessor. When Samson occupied the
premises, he was forced to vacate due to Santos’
failure to renew his lease. Samson filed an action
for damages against Santos for fraud and bad
faith, claiming that the misrepresentation
2023 GOLDEN NOTES
II. CONTRACTS
induced him to purchase the store and the Q: Alejandro filed several Complaints against
leasehold right. Decide. respondents to have the promissory note he
executed in favor of Sterling Shipping Lines, Inc.
A: Santos was not neither guilty of fraud nor bad to be declared as null and void and that he be
faith in claiming that there was implied renewal of absolved from any liability. According to him,
his contract of lease with his lessor. The letter given Ruperto exercised deceit and fraud in causing
by the lessor led Santos to believe and conclude that him to bind himself jointly and severally to pay
his lease contract was impliedly renewed, and that DBP the amount of the mortgage loan.
the formal renewal thereof would be made upon the Additionally, when he was made director and
arrival of Tanya Madrigal. Thus, from the start, it stockholder of SSL, he was invited to attend the
was known to both parties that, insofar as the board meeting only once and he was never
agreement regarding the transfer of Santos’ compensated. Furthermore, none of the
leasehold right to Samson was concerned, the object conditions he set were complied with. Can the
thereof relates to a future right. It is a conditional promissory note be declared null and void on
contract, the efficacy of which depends upon an the grounds of deceit and fraud?
expectancy of the formal renewal of the lease
contract between Santos and lessor. The efficacy of A: NO. The promissory note Alejandro executed
the contract between the parties was thus made cannot be declared null and void as only incidental
dependent upon the happening of this suspensive fraud exists in this case. There was no dolo causante
condition. (Samson v. CA, G.R. No. 108245, 25 Nov. or fraud used to obtain the petitioner's consent to
1994) enter the contract. Petitioner had the opportunity to
become aware of the facts that attended the signing
Acts considered NOT Fraudulent of the promissory note. He even admitted that he
has a lawyer-son who the petitioner had hoped
1. Principle of Tolerated Fraud – The usual would assist him in the administration of Sterling
exaggerations in trade and when the other Shipping Lines, Inc. The totality of the facts on
party had an opportunity to know the facts are record belies petitioner's claim that fraud was used
not in themselves fraudulent; (Art. 1340, NCC) to obtain his consent to the contract given his
personal circumstances and the applicable law.
2. Expert Opinion – A mere expression of an However, in refusing to allow petitioner to
opinion does not signify fraud, unless made by participate in the management of the business,
an expert and the other party has relied on the respondent Ruperto V. Tankeh was liable for the
former’s special knowledge; (Art. 1341, NCC) commission of incidental fraud. In Geraldez, this
Court defined incidental fraud as "those which are
3. Misrepresentation by a third person does not not serious in character and without which the
vitiate consent, unless such misrepresentation other party would still have entered into the
has created substantial mistake and the same is contract."
mutual; and (Art. 1342, NCC)
Although there was no fraud that had been
4. Misrepresentation made in good faith is not undertaken to obtain petitioner's consent, there
fraudulent but may constitute error. (Art. 1343, was fraud in the performance of the contract. The
NCC) records showed that petitioner had been unjustly
excluded from participating in the management of
NOTE: The contract just the same is voidable, not the affairs of the corporation. This exclusion from
because of the misrepresentation but because of the management in the affairs of Sterling Shipping
substantial error. In order that fraud may make a Lines, Inc. constituted fraud incidental to the
contract voidable, it should be serious, and should performance of the obligation. (Alejandro Tankeh v.
not have been employed by both contracting DBP, et al., G.R. No. 171428, 11 Nov. 2013)
parties. (Art 1344, NCC)
CIVIL LAW
Simulation of Contract The primary consideration in determining the true
nature of a contract is the intention of the parties.
It is the declaration of a fictitious will, deliberately Such intention is determined from the express
made by agreement of the parties to produce, for the terms of their agreement as well as from their
purpose of deception, the appearance of a juridical contemporaneous and subsequent acts. (Liam v.
act which does not exist or is different from that UCPB, G.R. No. 194664, 15 June 2016)
which was executed. (Tolentino, 2002)
NOTE: If the parties state a false cause in the
Kinds of Simulation of Contract contract to conceal their real agreement, the
contract is only relatively simulated, and the parties
1. Absolute (simulados) – The contracting parties are still bound by their real agreement. Hence,
do not intend to be bound by the contract at all, where the essential requisites of a contract are
thus the contract is void. (Arts. 1345-1346, NCC). present and the simulation refers only to the
In absolute simulation, there is a colorable content or terms of the contract, the agreement is
contract but it has no substance as the parties absolutely binding and enforceable between the
have no intention to be bound by it. The main parties and their successors in interest.
characteristic of an absolute simulation is that
the apparent contract is not desired or intended Q: May the owner-simulator recover?
to produce legal effect or in any way alter the
juridical situation of the parties. As a result, a A: If the absolutely simulated contract does not have
simulated or fictitious contract is void, and the any illegal purpose, the interested party may prove
parties may recover from each other what they the simulation in order to recover whatever he
may have given under the contract.; and (G. might have given under the fictitious contract. In the
Holdings, Inc. v. CEPALCO, G.R. No. 226213, 27 event it is intended for an illegal purpose, the
Sept. 2017) contract is void and the parties have no cause of
action. (Pineda, 2009)
NOTE: Absolutely simulated contracts lack the
element of true consent. Q: Private respondent Tiro is a holder of an
ordinary timber license issued by the Bureau of
2. Relative (disimulados) – The contracting Forestry. He executed a deed of assignment in
parties conceal their true agreement; (Art. 1345, favor of the petitioners Javiers. At the time the
NCC and the parties are bound by their real said deed of assignment was executed, Tiro had
agreement when it does not prejudice third a pending application for an additional forest
persons or is not intended for any purpose concession. Hence, they entered into another
contrary to law, morals, good customs, public agreement. Afterwards, the Javiers, now acting
order or public policy. (Art. 1346, NCC) as timber license holders by virtue of the deed of
assignment, entered into a forest consolidation
If the concealed contract is lawful, it is absolutely agreement with other ordinary timber license
enforceable, provided it has all the essential holders. For failure of the Javiers to pay the
requisites: consent, object, and cause. (Arts. 1345- balance due under the two deeds of assignment,
1346, NCC) Tiro filed an action against them. Are the deeds
of assignment null and void for total absence of
As to third persons without notice, the apparent consideration and non-fulfillment of the
contract is valid for purposes beneficial to them. As conditions?
to third persons with notice of the simulation, they
acquire no better right to the simulated contract A: NO. They are not null and void per se. The parties
than the original parties to the same. are to be bound by their real agreement. The true
cause or consideration of said deed was the transfer
of the forest concession of private respondent to
2023 GOLDEN NOTES
II. CONTRACTS
petitioners for P120,000.00. This finding is consideration is not null and void per se. Under Art.
supported by the following considerations, viz: 1346 of the NCC, a relatively simulated contract,
when it does not prejudice a third person and is not
1. Both parties, at the time of the execution of the intended for any purpose contrary to law, morals,
deed of assignment knew that the good customs, public order or public policy binds
Timberwealth Corporation stated therein was the parties to their real agreement. (Javier v. CA, G.R.
non-existent; No. L-48194, 15 Mar. 1990)
2. In their subsequent agreement, private 2. OBJECT

respondent conveyed to petitioners his
inchoate right over a forest concession covering
It is the subject matter of the contract. It can be a
an additional area for his existing forest
thing, right or service arising from a contract.
concession, which area he had applied for, and
his application was then pending in the Bureau
NOTE: Only rights which are not intransmissible
of Forestry for approval;
can be the object of the contract. (Art. 1347, NCC)
3. Petitioners, after the execution of the deed of

Requisites of an Object (D-E-Li-C-T-G)
assignment, assumed the operation of the
logging concessions of private respondent;
1. Determinate as to kind (even if not
determinate, provided it is possible to
4. The statement of advances to respondent
determine the same without the need of a new
prepared by petitioners stated: “P55,186.39
contract);
advances to L.A. Tiro be applied to succeeding
shipments. Based on the agreement, we pay
NOTE: To qualify as an object for purposes of a
P10,000.00 every after (sic) shipment. We had
contract to exist:
only 2 shipments”; and
a. The object must at least be Generic;

5. Petitioners entered into a Forest Consolidation
b. Existing or has the potential to exist
Agreement with other holders of forest
subsequent to the contract;
concessions on the strength of the questioned
c. Must be Licit;
deed of assignment.
d. Within the Commerce of man; and
e. Transmissible.
The contemporaneous and subsequent acts of Tiro
and the Javiers reveal that the cause stated in the
Object of Contracts
first deed of assignment is false. It is settled that the
previous, simultaneous and subsequent acts of the
GR: All things or services may be the object of
parties are properly cognizable indicia of their true
contracts.
intention. Where the parties to a contract have given
it a practical construction by their conduct as by acts
XPNs:
in partial performance, such construction may be
1. Things outside the commerce of men; (Art.
considered by the court in construing the contract,
1347, NCC);
determining its meaning and ascertaining the
2. Intransmissible rights;
mutual intention of the parties at the time of
3. Future inheritance, except in cases expressly
contracting.
authorized by law;
4. Services which are contrary to law, morals,
The first deed of assignment is a relatively
good customs, public order or public policy;
simulated contract which states a false cause or
5. Impossible things or services; and
consideration, or one where the parties conceal
6. Objects which are not possible of
their true agreement. A contract with a false
determination as to their kind.
CIVIL LAW
NOTE: The most evident and fundamental requisite NOTE: Although the cause is not stated in the
in order that a thing, right or service may be the contract, it is presumed that it exists and is lawful
object of a contract is that it should be in existence unless the debtor proves the contrary. (Art. 1354,
at the moment of the celebration of the contract, or NCC)
at least, it can exist subsequently or in the future. (De
Leon, 2010) Kinds of Cause
Future Inheritance 1. Cause of onerous contracts – The cause is

understood to be for each contracting party, the
GR: Future inheritance cannot be the object of a prestation or promise of a thing or service by
contract because its extent, amount and quantity the other; (e.g. Contract of Sale)
cannot be determined. (Sta. Maria, 2017)
XPNS: 2. Cause of remuneratory contracts – The
service or benefit remunerated; (e.g. Donation
1. Under Art. 130 of the FC, which allows the future in consideration of a past service which does
spouses to give or donate to each other in their not constitute a demandable debt)
marriage settlement their future property to
take effect upon the death of the donor and to 3. Cause of gratuitous contracts – The mere
the extent laid down by the provisions of the liberality of the donor or benefactor; it does not
NCC relating to testamentary succession; and involve any material thing but rather it involves
only the generosity of the benefactor; and
2. Under Art. 1080 of the NCC, which allows a
person to make a partition of his estate among 4. Accessory – Identical with cause of principal
his heirs by an act inter vivos, provided that the contract, from which the accessory derived its
legitime of the compulsory heirs is not life and existence. (e.g. mortgage or pledge)
prejudiced. (Jurado, 2009; De Leon 2010).
Cause vs. Motive
NOTE: Except in cases authorized by law, future
inheritance cannot be an object of contract because CAUSE MOTIVE
its extent, amount or quantity is not determinable. As to Proximate Reason
(Sta. Maria, 2003) Direct and most
Indirect or remote
proximate reason of a
reason
3. CAUSE OR CONSIDERATION contract
As to the Kind of Reason
Cause is the essential or more proximate purpose Objective and juridical Psychological or purely
reason which moves the contracting parties to enter reason of a contract personal reason
into the contract. It is the immediate and direct As to the Legal Effect
which justifies the creation of an obligation through Legality or illegality of Legality or illegality of
the will of the contracting parties. (SM Land, Inc. v. cause affects the motive does not affect
BCDA, G.R. No. 203655, 18 Mar. 2015) existence or validity of the existence or validity
the contract. of contract.
Requisites of a Cause: As to the Parties
Cause is always the same
Motive differs for each
It must: (Li-T-Ex) for each contracting
contracting party.
party.
1. Exist; As to its Knowability
2. Be True; and May be known to the
Always known
3. Be Licit. other
2023 GOLDEN NOTES
II. CONTRACTS
NOTE: The motive may be regarded as the cause Q: May a moral obligation constitute a sufficient
when the realization of such motive or particular cause to support an onerous contract?
purpose has been made a condition upon which the
contract is made to depend. (Phil. National Const. A: Where the moral obligation arises wholly from
Corp. v. CA, G.R. No. 116896, 05 May 1997) ethical considerations, unconnected with any civil
obligation, and as such is demandable only in
False Cause conscience, and not in law, it cannot constitute a
cause to support an onerous contract. Where such
GR: A false cause in a contract makes the contract moral obligation, however, is based upon a previous
void. civil obligation which has already been barred by
the statute of limitations at the time when the
XPN: If it is proven that the false cause was founded contract is entered into, it constitutes a sufficient
upon another cause which is true and lawful. (Art. cause or consideration to support said contract.
1353, NCC) (Villaroel v. Estrada G.R. No. L-47362, 19 Dec. 1940)
Example: When a contract, through stating a false Rules on the Form of Contracts
consideration, has in fact a real consideration, the
contract is not void, and is considered valid. GR: Form is not required in consensual contracts.
(Provided, all the essential requisites for their validity
Rules relating to Cause on Contracts are present.)
1. Absence of cause – Confers no right and XPNs: When the law requires a contract be in
produces no legal effect; writing for its:
1. Validity (formal contracts);
2. Failure of cause – Does not render the contract 2. Enforceability (under Statute of Frauds); or
void; 3. For the convenience of the parties.
3. Illegality of cause – Contract is null and void; NOTE: The parties may compel each other to reduce
the verbal agreement into writing. (2006 BAR)
4. Falsity of cause – Contract is void; unless the
parties show that there is another cause which The Parties may be Required to Observe the
is true and lawful; and Form Required for their Convenience
5. Lesion or inadequacy of cause – does not The contracting parties may compel each other to
invalidate the contract, unless: observe the required form once the contract has
a. There is fraud, mistake, or undue been perfected and is enforceable under the statute
influence; of frauds. This is one of the rights of the creditor.
b. When the parties intended a donation or The right to demand the execution of the document
some other contract; or required under Art. 1358 is not imprescriptible. It is
subject to prescription. It must be pursued within
c. In cases specified by law the period prescribed by law, which is five (5) years.
(Pineda, 2009)
(e.g., contracts entered by guardian with
court approval, when the ward suffers NOTE: The right must be exercised once the
lesion of more than 25%. If there is no contract has been perfected, otherwise, the exercise
court approval, the contract is void will be considered as premature.
regardless of the amount of lesion.)
CIVIL LAW
Formalities required in Specific Contracts 6. Stipulation limiting common carrier's duty
of extraordinary diligence to ordinary
1. Donations: diligence:
a. Personal property – if the value exceeds a. Must be in writing, signed by shipper or
P5,000, the donation and acceptance must owner;
both be written.; (Art. 748, NCC)
b. Supported by valuable consideration
b. Real property: other than the service rendered by the
i. Donation must be in a public common carrier; and
instrument, specifying therein the
property donated and value of c. Reasonable, just, and not contrary to
charges which donee must satisfy.; public policy. (Art. 1744, NCC)
ii. Acceptance must be written, either in Contracts which must be In Writing to be Valid
the same deed of donation or in a
separate instrument.; 1. Donation of personal property whose value
exceeds five thousand pesos– the donation and
iii. Acceptance may either be in the same acceptance must be in writing; (Art. 748, NCC)
deed of donation, or in a separate
public instrument, but it shall not take 2. Sale of a piece of land or any interest therein
effect unless it is done during the through an agent – the authority of the agent
lifetime of the donor.; and shall appear in writing; (Art. 1874, NCC)
iv. If acceptance is in a separate 3. Agreements regarding payment of interest in

instrument, the donor shall be contracts of loan; and (Art. 1956, NCC)
notified thereof in an authentic form,
and this step shall be noted in both 4. Antichresis – the amount of the principal and
instruments. (Art. 749, NCC) the interest shall be specified in writing. (Art.
2134, NCC)
2. Partnership where real property
contributed: Contracts which must Appear in a Public
a. There must be a public instrument Document
regarding the partnership; and
1. Donation of real properties; (Art. 719-749,
b. The inventory of the realty must be made, NCC);
signed by the parties, and attached to the
public instrument. (Art. 1773, NCC) 2. Partnership where immovable property or real
rights are contributed to the common fund;
3. Antichresis – the amount of the principal and (Arts. 1171 & 1773, NCC);
interest must be in writing; (NCC, Art. 2134)
3. Acts and contracts which have for their object
4. Agency to sell real property or an interest the creation, transmission, modification or
therein – authority of the agent must be in extinguishment of real rights over immovable
writing; otherwise, the sale shall be void; (Art. property; sale of real property or of an interest
1874, NCC) therein is governed by Arts. 1403(2) and 1405;
(Art. 1358(1), NCC);
5. Stipulation to charge interest – interest must
be stipulated in writing.; and (Art. 1956, NCC)
2023 GOLDEN NOTES
II. CONTRACTS
4. The cession, repudiation, or renunciation of those upon which the parties intended to agree.
hereditary rights or of those of the conjugal (Art. 1372, NCC)
partnership of gains; (Art. 1358(2), NCC);
If some stipulation of any contract should admit of
5. The power to administer property or any other several meanings, it shall be understood as bearing
power which has for its object an act appearing that import which is most adequate to render it
or which should appear in a public document or effectual. (Art. 1373, NCC)
should prejudice a third person; and (Art.
1358(3), NCC); and Duty of Courts in Interpreting Contracts
6. The cession of actions or rights proceeding It is not the province of the court to alter a contract
from an act appearing in a public document. by construction or to make a new contract for the
(Art. 1358(4), NCC) parties. Its duty is confined to the interpretation of
the one which they have made for themselves
NOTE: Art. 1358 of the NCC which requires the without regard to its wisdom or folly as the court
embodiment of certain contracts in a public cannot supply material stipulations or read into the
instrument, is only for convenience, and contract words which it does not contain. (Sps.
registration of the instrument only adversely affects Pascual v. Ramos, G.R. No. 144712, 04 July 2002)
third parties. Formal requirements are, therefore,
for the benefit of third parties. Non-compliance Q: Federico Alferez died without leaving any
therewith does not adversely affect the validity of will. He was survived by his spouse Teodora, and
the contract nor the contractual rights and their children, namely: Ma. Concepcion, Antonio,
obligations of the parties thereunder. (Fule v. CA, and Esperanza. Since Alferez left several bank
G.R. No. 112212, 02 Mar. 1998) debts, Ma. Concepcion, as Alferez's daughter and
administratrix of his estate, filed a motion to sell
Contracts that Must be Registered a part of the estate of Alferez. The Deed of Sale
executed by Ma. Concepcion with Spouses Sps.
1. Real Estate Mortgage; and (Art. 2125, NCC) Canencia shows that Ma. Concepcion, without
2. Sale or transfer of large cattle. (Cattle qualification, sold, transferred, and conveyed to
Registration Act) respondents the parcels of land, without any
mention of their alleged intention to only offer
Interpretation of Contracts half of the said property.
If the terms of a contract are clear and leave no Ma. Concepcion filed action for Annulment
doubt upon the intention of the contracting parties, and/or Declaration of Nullity of Deed of Sale,
the literal meaning of its stipulations shall control. among others, asserting that during
negotiations with Sps. Canencia, they were clear
If the words appear to be contrary to the evident that the land forming part of Alferez’s estate was
intention of the parties, the latter shall prevail over not entirely for sale; what they intended to sell
the former. (Art. 1370, NCC) was only the half of Federico. The Sps. Canencia
argued that the provisions of the Deed did not
In order to judge the intention of the contracting even remotely suggest that Ma. Concepcion was
parties, their contemporaneous and subsequent only selling half of the parcels of land thereof; in
acts shall be principally considered. (Art. 1371, NCC) fact, there were no doubtful provisions therein
that could have indicated a different intention
However general the terms of a contract may be, on the part of the petitioners. Thus, Ma.
they shall not be understood to comprehend things Concepcion should be bound by the terms and
that are distinct and cases that are different from conditions of the Deed and should not be
allowed to escape the obligatory force of their
CIVIL LAW
contractual commitment by contending that the Disfavor of Interpretation leading to Loss of
Deed failed to correctly embody their true Rights
intention. Is the contention of the Spouses
correct? The construction of the terms of a contract leading
to the impairment or loss of the right is not favored.
A: YES. It is basic that a contract is the law between
the parties. Obligations arising from contracts have Principle of Effectiveness
the force of law between the contracting parties and
should be complied with in good faith. Unless the Pursuant to this principle, where two
stipulations in a contract are contrary to law, interpretations of the same contract language are
morals, good customs, public order or public policy, possible, one interpretation having the effect of
the same are binding as between the parties. Being rendering the contract meaningless (and one of the
the law between the parties, courts have no choice parties merely dishonest for receiving
but to enforce such contracts. Simply put, courts consideration thereunder without parting with
cannot stipulate for the parties or amend the latter's any), while the other interpretation would give
agreement, for to do so would be to alter the real effect to the contract as a whole, the latter
intention of the contracting parties when the interpretation must be adopted. (PNB v. Utility
contrary function of courts is to give force and effect Assurance & Surety, Co., Inc., G.R. No. L-39215, 01
to the intention of the parties. Sept. 1989)
It can be seen from the Deed that Ma. Concepcion The various stipulations of a contract shall be
without qualification, sold, transferred, and interpreted together, attributing to the doubtful
conveyed to the Spouses the parcels of land, without ones that sense which may result from all of them
any mention of their alleged intention to only offer taken jointly. (Art. 1374, NCC)
half of the said property. The provisions thereof are
categorical and admits of no other interpretation; The various stipulations in a contract must be read
the sale, transfer, and conveyance of the parcels of together to give effect to all. (North Negros Sugar Co.
land covered by the aforementioned titles appear v. Compania Gen. De Tabacos, G.R No. L-9277, 29 Mar.
absolute, there being no reservation of ownership of 1957)
half of the lots therein described, nor a stipulation
making mention of Teodora' specific share of the Complementary-Contracts-Construed-Together
said properties. Doctrine
As mandated by Art. 1370 of the NCC, if the terms of The various stipulations of a contract shall be
the contract are clear and leave no doubt, the literal interpreted together, attributing to the doubtful
meaning of its stipulations shall control. The Deed, ones that sense which may result from all of them
as the agreement between the parties, is the formal taken jointly. (Art. 1374, NCC)
expression of the parties' rights, duties, and
obligations. It is the best evidence of the intention of When there are several provisions in a contract, the
the parties. Thus, when the terms of an agreement construction to be adopted should be that one
have been reduced to writing, it is considered as which will give effect to all provisions. A contract
containing all the terms agreed upon and there can must be read in its entirety. (BPI v. Sabrino, G.R. No.
be no evidence of such terms other than the L-36524, 06 Feb. 1933). Piecemeal interpretation
contents of the written agreement between the must be avoided.
parties and their successors in interest. (Alferez v.
Sps. Canencia, G.R. No. 244542, 28 June 2021) Under this doctrine, an accessory contract must be
read in its entirety and together with the principal
agreement. (Rabuya, 2017)
2023 GOLDEN NOTES
II. CONTRACTS
E.g., A promissory note and a deed of chattel awarded to it only at such time that the bid had
mortgage must be construed together; and the already expired, and instructed it to proceed
surety contract, being an accessory contract, must with excavation work.
be interpreted with its principal contract, for
instance, a loan agreement. (Ibid.) While no formal documents were prepared for
the contract although construction was already
Words which may have different significations shall underway, ACI introduced major changes in the
be understood in that which is most in keeping with plans and specifications, changing it into a
the nature and object of the contract. (Art. 1375, straight construction contract from a former
NCC) design-and-construct scheme. ACI decided to
change and take over the design, such as the
The usage or custom of the place shall be borne in change from concrete to structural steel
mind in the interpretation of the ambiguities of a framing, and took out certain equipment from
contract, and shall fill the omission of stipulations the scope of the contract.
which are ordinarily established. (Art. 1376, NCC)
Meanwhile, the price levels of cement and steel
The interpretation of obscure words or stipulations products had increased, of which CECON
in a contract shall not favor the party who caused notified ACI, with a stern warning that further
the obscurity. (Art. 1377, NCC) delays in the formal award of the contract might
affect the contract sum. It was only on 2 June
When it is absolutely impossible to settle doubts by 2003 that ACI finally wrote a letter to CECON,
the rules established in the preceding articles, and indicating its acceptance of the latter’s 30 Aug.
the doubts refer to incidental circumstances of a 2002 tender, but still no formal contracts were
gratuitous contract, the least transmission of rights executed. With the many changes to the project
and interest shall prevail. If the contract is onerous, coupled with ACI’s delays in delivering drawings
the doubt shall be settled in favor of the greatest and specifications, CECON increasingly found
reciprocity of interests. itself unable to complete the project on time,
noting that it had to file a total of 15 requests for
If the doubts are cast upon the principal object of the time extension, all of which ACI failed to timely
contract in such a way that it cannot be known what act on.
may have been the intention or will of the parties,
the contract shall be null and void. Exasperated, CECON filed with the Construction
Industry Arbitration Commission (“CIAC”) its
The principles of interpretation stated in Rule 123 request for adjudication, praying for project
of the Rules of Court shall likewise be observed in cost adjustment. In the meantime, CECON
the construction of contracts. (Art. 1378, NCC) completed the project and turned over Gateway
Mall to ACI, which had its blessing on 26 Nov.
NOTE: The provisions of Rule 123 of the ROC 2004. Could ACI insist on the initial bid price of
referred to are Secs. 58-67, now Secs. 8-17, Rule CECON under the supposed lump-sum fixed
130, ROC. price arrangement of the construction contract?
Q: In response to Araneta Center Inc.’s (“ACI”) A: NO. CECON and ACI should not be bound by the
invitation to bid on the design and construction supposed lump-sum fixed price arrangement. There
of the Gateway Mall under a lump-sum, fixed was never a meeting of minds on the contract price,
price arrangement, CE Construction and the contention of ACI with regard to supposed
Corporation (“CECON”) submitted its proposal immutability of the stipulated contract sum should
on 30 Aug. 2002, which bid was made valid for fall. Advertisements for bidders are simply
acceptance only for ninety days. However, ACI invitations to make proposals, and the advertiser is
informed CECON that the contract was being not bound to accept the highest or lowest bidder,
CIVIL LAW
unless the contrary appears. The exchanges of offers Requisites for Rescission
between CECON and ACI failed to satisfy the
requirement of absolute and unqualified acceptance 1. There must be, at the beginning, either a valid
as to comply with the essential requisite of consent or voidable contract;
in the perfection of a contract. 2. There is an economic or financial prejudice to
someone; and
In order to judge the intention of the contracting 3. Requires mutual restitution. (Paras, 2016)
parties, their contemporaneous and subsequent
acts shall be principally considered. It should be Two (2) Kinds of Rescission
mentioned that ACI had drastically changed the
scope and character of the agreement. To tie down 1. The rescission mentioned in Art. 1380 of the
CECON to the unit prices for the proposal for a NCC; and
different scope of work would be grossly unfair.
Reference to prevailing industry practices in the 2. The rescission mentioned in Art. 1391 of the
valuation of the project cost was also warranted and NCC as the new Code used the term
necessary because of the absence of definitive "resolution." (Paras, 2016)
governing instruments. Under Arts. 1375 and 1376
of the NCC, the nature and object of the contract as These are contracts validly constituted but
well as the usage or custom of the place shall be nevertheless maybe set aside due to a particular
borne in mind in the interpretation of the economic damage or lesion caused to either to one
ambiguities of the contract, and shall fill the of the parties or to a third person. It may be set aside
omission of stipulations which are ordinarily in whole or in part, or up to the extent of the damage
established. (CE Construction Corp. v. Araneta caused. (Art. 1381, NCC)
Center, Inc., G.R. 192735, 09 Aug. 2017)
Contracts That may be Rescinded
D. DEFECTIVE CONTRACTS 1. Under Art. 1381, those –
a. Entered into by guardians whenever the

wards whom they represent suffer lesion
1. RESCISSIBLE CONTRACTS by more than ¼ of value of the property;
(Art. 1381(1), NCC)
Rescissible Contracts
If a guardian alienates properties of the
These are contracts which contain all the essential ward without judicial approval, the
requisites of a contract which make it valid, but by contract is “unenforceable” for lack of
reasons of injury or damage to either of the authority.; (Art. 1403(1), NCC)
contracting parties or to third persons such as
creditors, may be rescinded. (Pineda, 2009) b. Agreed upon in representation of
absentees, if absentee suffers lesion by
In a rescissible contract, all of the essential more than ¼ of value of property; (Art.
requisites of a contract exist and the contract is 1381(2), NCC)
valid, but by reason of injury or damage to either of
the contracting parties or to third persons, such as c. Contracts where rescission is based on
creditors, it may be rescinded. (Jurado, 2010) fraud committed on creditor and cannot
collect the claim due (accion pauliana);
(Art. 1381(3), NCC)
2023 GOLDEN NOTES
II. CONTRACTS
NOTE: Contracts which are rescissible and alienation of the property) to one of the
under the third paragraph of Art. 1381 are contracting parties or to a third person;
valid contracts, although undertaken in 3. It is valid and effective until rescinded;
fraud of creditors. If the contract is 4. It can be attacked only directly.; and
‘‘absolutely simulated’’, the contract is not 5. It is susceptible of convalidation only by
merely rescissible but inexistent, although prescription. (De Leon, 2010)
undertaken as well in fraud of creditors. In
the former, the remedy is rescission; in the Nature of an Action for Rescission
latter, the remedy is an action to declare the
contract inexistent which action is The action for rescission is subsidiary. It cannot be
imprescriptible. (Rabuya, 2017) instituted except when the party suffering damage
has no other legal means to obtain reparation for
d. Contracts where the object involved is the the same. (Art. 1383, NCC). Hence, it must be availed
subject of litigation; contract entered into of as the last resort, availed only after all legal
by defendant without knowledge or remedies have been exhausted and proven futile.
approval of litigants or judicial authority; (Anchors Savings Bank v. Furigay, G.R. No. 191178, 13
(Art. 1381(4), NCC) Mar. 2013)
e. Payment by an insolvent – on debts which Rationale: In order not to disturb other contracts
are not yet due; prejudices the claim of and to comply with the principle of relativity of
others; and (Art. 1382, NCC) contracts.
f. Provided for by law. (Arts. 1526, 1534, 1538, However, if it can be proven that the property
1539, 1542, 1556, 1560, 1567 & 1659, NCC) alienated was the only property of the debtor at the
time of the transaction, the action for rescission is
NOTE: Items c, d, and e are contracts which certainly maintainable because it is clear that the
are not necessarily entered into by persons creditor has no other remedy under the
exercising fiduciary capacity. In Art. circumstances. (Pineda, 2009)
1381(1) and (2), the contract must be of
administration and representation. NOTE: Rescission shall be only to the extent
necessary to cover the damages. (Art. 1384, NCC)
2. Payments made in state of insolvency; (Art. 1382,
NCC): Persons who may Institute an Action for the
Rescission of a Rescissible Contract
a. Plaintiff has no other means to maintain
reparation; The action for rescission may be instituted by the:
b. Plaintiff must be able to return whatever he
may be obliged to return due to rescission; 1. Injured party;
c. The things must not have been passed to 2. Contracts entered into by guardians – by the
third persons in good faith;; and ward, or by the guardian ad litem of ward
d. It must be made within 4 years. (Art 1382, during the latter’s incapacity in an action
NCC) against the original guardian;
3. Contracts in representation of absentees – by
Characteristics of Rescissible Contract the absentee;
4. Contracts defrauding creditors – by the
1. It has all the elements of a valid contract.; creditors;
2. It has a defect consisting of an injury (generally 5. Contracts referring to things in litigation – by
in the form of economic damage or lesion, fraud, the party litigant;
6. Their representatives;
CIVIL LAW
7. Their heirs; and Statutory Presumptions of Fraud in Art. 1387
8. Their creditors by virtue of subrogatory action
defined in Art. 1177, of the NCC. (Jurado, 2009) 1. Alienation by gratuitous title – When a debtor
donates his property without reserving
Prescriptive Period of Action for Rescission sufficient property to pay all his pre-existing
debts, the law presumes that the gratuitous
1. Under Art. 1381(1) – within 4 years from the dispositions are made in fraud of creditors.; and
time the termination of the incapacity of the
ward; 2. Alienation by onerous title – The contract is
presumed fraudulent if at the time of alienation,
2. Under Art. 1381(2) – within 4 years from the some judgement has been rendered against
time the domicile of the absentee is known; or him, whether it is on appeal or has already
become final and executory; or some writ of
3. Under Art. 1381(3) and (4) & Art. 1382 – attachment has been issued against him in any
within 4 years from the time of the discovery of case.
fraud. (Art. 1389, NCC)
NOTE: The decision or writ of attachment need not
Requisites that must Concur before a Contract refer to the very property subject of alienation. The
may be Rescinded on the ground of Lesion person who obtained the judgement or writ of
attachment need not be the same person seeking
Whether the contract is entered into by a guardian the rescission.
in behalf of his ward or by a legal representative in
behalf of an absentee, before it can be rescinded on These presumptions are rebuttable, which means,
the ground of lesion, it is indispensable that the they may be overcome by clear, strong and
following requisites must concur: convincing evidence.
1. The contract must be entered into by the An alienation made during the pendency of a suit is
guardian in behalf of his ward or by the legal not enough. There must be a decision or a writ of
representative in behalf of an absentee.; attachment.
2. The ward or absentee suffered lesion of more Requisites before a Contract Entered into in
than 1/4 of the value of the property which is Fraud of the Creditors may be Rescinded
object of the contract.;
1. There must be a credit existing prior to the
3. The contract must be entered into without constitution of the said fraudulent contract;
judicial approval.;
2. There must be fraud, or at least, the intent to
4. There must be no other legal means for commit fraud to the prejudice of the creditor
obtaining reparation for the lesion.; seeking rescission;
5. The person bringing the action must be able to 3. The creditor cannot in any legal manner collect
return whatever he may be obliged to restore.; his credit (subsidiary character of rescission);
and and
6. The object of the contract must not be legally in 4. The object of the contract must not be legally in
the possession of a third person who did not act possession of a third person in good faith.
in bad faith.
2023 GOLDEN NOTES
II. CONTRACTS
NOTE: If the object of the contract is legally in the Resolution vs. Rescission
possession of a third person who did not act in bad
faith, the remedy available to the creditor is to RESOLUTION RESCISSION
proceed against the person causing the loss for ART. 1191, NCC ART. 1381, NCC
damages. Such person is solidarily liable with that of Both presuppose contracts validly entered into
transferring creditor as both of them are guilty of and subsisting and both require mutual
fraud. restitution when proper.
Nature
The action to rescind contracts in fraud of creditors Principal action;
is known as accion pauliana. For this action to Retaliatory in Subsidiary remedy
prosper, the following requisites must be present: character
Grounds
1. The plaintiff asking for rescission has a credit 5 grounds under Art.
prior to the alienation; Non-performance of 1381. (lesions or fraud
2. The debtor has made a subsequent contract obligation (only of creditors);
conveying a patrimonial benefit to a third ground) Non-performance is
person; not important.
3. The creditor has no other legal remedy to Applicability
satisfy his claim; Applies to both
4. The act being impugned is fraudulent; and Only to reciprocal
unilateral and
5. The third person who received the property obligations
reciprocal obligations
conveyed, if it is by onerous title, has been an Prescriptive Period
accomplice in fraud. (Sps. Lee v. Bangkok Bank, 10 years from accrual
G.R. No. 173349, 09 Feb. 2011) of right of action for
written contracts;
Badges of Fraud 4 years (Art. 1389,
6 years for verbal
NCC)
contracts (Arts.
1. Consideration for the conveyance of the 1144(2) and 1145(1),
property is inadequate or fictitious; NCC)
2. Transfer was made by the debtor after a suit has
Person who can Initiate the Action
commenced and during its pending against him;
Even third persons
3. Sale upon credit by an insolvent debtor; Only the injured party
prejudiced by the
4. The presence of evidence of large indebtedness to the contract
contract
or complete insolvency of the debtor;
Fixing of Period by the Court
5. Transfer of all his property by a debtor when he
Court may fix a period
is financially embarrassed or insolvent;
or grant extension of
6. Transfer is made between father and son, where
time for the fulfillment
there are present some or any of the above Court cannot grant
of the obligation when
circumstances; and extension of time
there is sufficient
7. Failure of the vendee to take exclusive
reason to justify such
possession of the property. (Pioneer Insurance
extension
Surety Corp. v. Morning Star Travel & Tours, Inc.,
Purpose
G.R. No. 198436, 08 July 2015)
Reparation for damage
or injury, allowing
Cancellation of the
partial rescission of
contract
contract. (Pineda,
2000)
CIVIL LAW
NOTE: While Art. 1191 uses the term “rescission,” want to deposit the 10M to the court because
the original term which was used in the old Civil according to him, he has the “right to use,
Code, from which the article was based, was possess and enjoy” of the money as its owner
“resolution.” (The Wellex Group, Inc., v. U-Land before the contract to sell is rescinded. Is Reyes’
Airlines, Co., Ltd., G.R. No. 167519, 14 Jan. 2015) contention correct?
Effect of Rescission A: NO. There is also no plausible or justifiable

reason for Reyes to object to the deposit of the P10
1. Obligation of mutual restitution (but not million down payment in court. The contract to sell
absolute); can no longer be enforced because Reyes himself
2. Abrogation of contract (absolute); and subsequently sold the property. Both Lim and Reyes
3. Obligation of third person to restore (if third are seeking for rescission of the contract. By seeking
person has nothing to restore, Article does not rescission, a seller necessarily offers to return what
apply). (De Leon, 2016) he has received from the buyer. Such a seller may
not take back his offer if the court deems it
Mutual Restitution equitable, to prevent unjust enrichment and ensure
restitution, to put the money in judicial deposit.
Rescission of contract creates an obligation of
mutual restitution of the objects of the contract, NOTE: In this case, it was just, equitable and proper
their fruits, and the price with interest. for the trial court to order the deposit of the down
payment to prevent unjust enrichment by Reyes at
NOTE: Rescission is possible only when the person the expense of Lim. Depositing the down payment in
demanding rescission can return whatever he may court ensure its restitution to its rightful owner.
be obliged to restore. A court of equity will not Lim, on the other hand, has nothing to refund, as he
rescind a contract unless there is restitution, that is, has not received anything under the contract to sell.
the parties are restored to the status quo ante. (Art. (Reyes v. Lim, Keng, G.R. No. 134241, 11 Aug. 2003)
1385, NCC)
Q: Goldenrod offered to buy a mortgaged
When Mutual restitution is NOT applicable property owned by Barreto Realty to which it
paid an earnest money amounting to P1 million.
1. Creditor did not receive anything from It was agreed upon that Goldenrod would pay
contract; or the outstanding obligations of Barreto Realty
with UCPB. However, Goldenrod did not pay
2. Thing already in possession of third persons UCPB because of the bank’s denial of its request
in good faith; subject to indemnity only, if for the extension to pay the obligation.
there are two or more alienations – liability of Thereafter, Goldenrod, through its broker,
first infractor. informed Barreto Realty that it could not go
through with the purchase of the property and
Q: Reyes (seller) and Lim (buyer) entered into a also demanded the refund of the earnest money
contract to sell a parcel of land. Harrison it paid.
Lumber occupied the property as lessee. Reyes
offered to return the P10 million downpayment In the absence of a specific stipulation, may the
to Lim because Reyes was having problems in seller of real estate unilaterally rescind the
removing the lessee from the property. Lim contract and, as a consequence, keep the earnest
rejected Reyes’ offer. Lim learned that Reyes money to answer for damages in the event the
had already sold the property to another. sale fails due to the fault of the prospective
buyer?
Both Reyes and Lim are now seeking rescission
of the contract to sell. However, Reyes does not
2023 GOLDEN NOTES
II. CONTRACTS
A: NO. Goldenrod and Barretto Realty did not intend Classes of Voidable Contracts
that the earnest money or advance payment would
be forfeited when the buyer should fail to pay the 1. Those where one of the parties is incapable of
balance of the price, especially in the absence of a giving consent; and
clear and express agreement thereon.
NOTE: If both parties are incapacitated to give
Moreover, Goldenrod resorted to extrajudicial consent, the contract is unenforceable and not
rescission of its agreement with Barretto Realty. merely voidable.
Under Art. 1385 of the NCC, rescission creates the
obligation to return the things which were the 2. Those where the consent is vitiated by mistake,
object of the contract together with their fruits and violence, intimidation, undue influence or
interest. Therefore, by virtue of the extrajudicial fraud. (Art. 1390, NCC)
rescission of the contract to sell by Goldenrod
without opposition from Barretto Realty, which in Q: Sometime in March 2001, Poole-Blunden
turn, sold the property to other persons, Barretto came across an advertisement of Unit 2-C of T-
Realty, had the obligation to return the earnest Tower Condominium. The Unit was advertised
money which formed part of the purchase price plus to have an area of 95 square meters (sqm).
legal interest from the date it received notice of Thinking that it was sufficient and spacious
rescission. It would be most inequitable if Barretto enough for his residential needs, Poole-Blunden
Realty would be allowed to retain the money at the won the bid and entered into a Contract to Sell
same time appropriate the proceeds of the second with Union Bank. Poole-Blunden started
sale made to another. (Goldenrod, Inc. v. CA, G.R. No. occupying. Thereafter, he decided to construct
126812, 24 Nov. 1998) two (2) additional bedrooms in the Unit. Upon
examining it, he noticed apparent problems in
2. VOIDABLE CONTRACTS its dimensions. He took rough measurements of
the Unit, which indicated that its floor area was
just about 70 sqm, not 95 sqm, as advertised by
Voidable contracts are those where consent is
Union Bank. Poole-Blunden wrote to Union
vitiated either by the incapacity of one of the
Bank, informing it of the discrepancy. He asked
contracting parties or by mistake, violence,
for a rescission of the Contract to Sell, along with
intimidation, undue influence or fraud. These
a refund of the amounts he had paid, in the event
contracts are binding, unless they are annulled by a
that it was conclusively established that the area
proper action in court. It is susceptible of
of the unit was less than 95 sqm, but the same
ratification. (Art. 1390, NCC)
was denied by the Union Bank. Aggrieved, he
filed an action for rescission of the Contract to
NOTE: Annulment may be had even if there be no
Sell under Art. 1390 of the Civil Code. Will the
damage to the contracting parties. (BAR 2004)
action prosper?
Characteristics of a Voidable Contract

A: YES. Art. 1390 of the NCC stipulates that a
contract is voidable or annullable even if there is no
1. Effective until set aside;
damage to the contracting parties where "consent is
2. Can be ratified;
vitiated by mistake, violence, intimidation, undue
3. Can be assailed only by the party whose consent
influence or fraud." Under Art. 1338 of the NCC Art.
was defective or his heirs or assigns.; and
1338 of the NCC, "[t]here is fraud when, through
4. A voidable contract, unlike unenforceable and
insidious words or machinations of one of the
void contracts may be attacked indirectly or
contracting parties, the other is induced to enter
collaterally, by way of defense to an action
into a contract which, without them, he would not
under the contract by way of a counterclaim.
have agreed to."
(De Leon, 2016)
CIVIL LAW
The fraud required to annul or avoid a contract In an obligation to render services, the
"must be so material that had it not been present, value thereof shall be the basis for
the defrauded party would not have entered into the damages. (Art. 1398, NCC)
contract." Poole-Blunden's contention on how
crucial the dimensions and area of the Unit are to his NOTE: No restitution – The party
decision to proceed with the purchase is well-taken. incapacitated is not obliged to make any
As he emphasized, he opted to register for and restitution except insofar as he has been
participate in the auction for the Unit only after benefited by the thing or the price received
determining that its advertised area was spacious by him. (Art. 1399, NCC)
enough for his residential needs. Therefore, there is
fraud for the reason that had Poole-Blunden been XPN: If and when the application of mutual
informed by the Union Bank that the floor area was restitution will result in unjust enrichment
actually less than the stipulated, he would not have of one party at the expense of another.
entered the Contract to Sell. (Poole-Blunden v. UBP, (Tolentino, 1991)
G.R. No. 205838, 29 Nov. 2017)
b. Whenever the person obliged by the decree
Who may Institute an Action for Annulment of annulment to return the thing cannot do
so because it has been lost through his fault,
1. Real party in interest – All who are principally he shall return the fruits received and the
or subsidiarily liable; and value of the thing at the time of the loss, with
interest from the same date. (Art. 1400,
2. One not responsible for the defect of the NCC)
contract.
Causes of Extinction of Action to Annul
NOTE: An action for annulment may be instituted
by all who are thereby obliged principally or 1. Prescription – the action for annulment must
subsidiarily. He who has capacity to contract may be commenced within 4 years depending on the
not invoke the incapacity of the party with whom he ground stated;
has contracted nor can those who exerted
intimidation, violence or undue influence or 2. Ratification – cleanses the contract of its
employed fraud or caused mistake base their action defects from the moment it was constituted;
upon these flaws of the contract. and (Art. 1396, NCC)
Effects of Annulment of a Contract 3. By loss of the thing which is the object of the
contract through fraud or fault of the person
1. If contract not yet consummated – parties who is entitled to annul the contract. (Art. 1401,
shall be released from the obligations arising NCC)
therefrom.; or
NOTE: If the right of action is based upon the
2. If contract has already been consummated – incapacity of any one of the contracting parties, the
rules provided in Arts. 1398-1402 shall govern. loss of the thing shall not be an obstacle to the
success of the action, unless it took place through
a. Restitution the fraud or fault of the plaintiff. (Art. 1401, NCC)
GR: Mutual restitution – the contracting

parties shall restore to each other things
which have been the subject matter of the
contract, with their fruits and the price with
its interest except in case provided by law.
2023 GOLDEN NOTES
II. CONTRACTS
Prescriptive Period for an Annulment of a Party who may Ratify
Voidable Contract
1. In contracts entered into by incapacitated
The action for annulment shall be brought within 4 persons –
years, reckoned from: a. Guardian; and
b. Injured party himself, provided he is
1. In cases of intimidation, violence or undue already capacitated.
influence, from the time the defect of the
consent ceases; 2. In contracts voidable on the ground of
mistake – party whose consent was vitiated.
2. In case of mistake or fraud, from the time of the (De Leon, 2016)
discovery of the same; and
Kinds of Ratification
3. When the action refers to contracts entered into
by minors or other incapacitated persons, from 1. Express – the desire of the innocent party to
the time the guardianship ceases. (Art. 1391, convalidate the contract, or his waiver or
NCC) renunciation of his right to annul the contract is
clearly manifested verbally or formally in
Ratification writing; and (Pineda, 2000)
Ratification may be effected expressly or tacitly. It is 2. Implied (tacit) – it is the knowledge of the
understood that there is a tacit ratification if, with reason which renders the contract voidable and
knowledge of the reason which renders the contract such reason having ceased, the person who has
voidable and such reason having ceased, the person a right to invoke it should execute an act which
who has a right to invoke it should execute an act necessarily implies an intention to waive his
which necessarily implies an intention to waive his right. (Art. 1393, NCC)
right. (Art. 1393, NCC)
Effects of Ratification
NOTE: Ratification extinguishes the action to annul
a voidable contract. (Art. 1392, NCC) Ratification cleanses the contract from all its defects
from the moment it was constituted, thereby
Requisites of Ratification extinguishing the action to annul a voidable
contract. It results therefore that after a contract is
1. The contract involved must be voidable; validly ratified, no action to annul the same can be
2. Person ratifying must know the reason for the maintained based upon defects relating to its
voidability; original validity. (Rabuya, 2017)
3. The cause for the voidability must immediately
cease after the ratification; and Retroactivity in Ratification of Contracts
4. Ratification must be express or through an act
implying a waiver of the action to annul;. GR: Retroactivity applies in ratification of contracts.
NOTE: Ratification entered into by the XPN: When the rights of innocent third persons will
incapacitated person may be effected by the be prejudiced, ratification will not take effect.
guardian of the incapacitated person. (NCC, Art.
1394) However, this rule does not pertain to a NOTE: Ratification does not require the conformity
rescissible contract entered into by the of the contracting party who has no right to bring
guardian in behalf of his ward. The right to the action for annulment.
ratify is transmitted to the heirs of the party
entitled to such right. (Tolentino, 2002)
CIVIL LAW
Q: The Senior Vice President of TERP Voidable Contract vs. Rescissible Contract
Construction Corp., Escalona, made a
commitment to Banco Filipino Savings and VOIDABLE RESCISSIBLE
Mortgage Bank that TERP Corp. would pay As to the Kind of Defect Present
interest differentials to the same. However, Defect is intrinsic. Defect is external.
after TERP Corp. subsequently paid the interests As to the Source of Defect
as agreed upon, it thereafter refused to pay its The damage or
unpaid balance arguing that Escalona was not prejudice suffered by
authorized to make such commitment. Is the act Vitiated consent makes one of the contracting
of Escalona, as Senior Vice President of TERP the contract voidable. parties or a third person
Corp. binding upon it? makes the contract
rescissible.
A: YES. Here, TERP Corp.'s subsequent act of twice As to the Necessity of Damage
paying the additional interest Escalona committed Damage / prejudice
to Banco Filipino Bank is considered a ratification of Damage is immaterial.
is material.
Escalona's acts. Moreover, Escalona likewise had As to the Source of Remedy
apparent authority to transact on behalf of Annullability of the Rescissibility of the
petitioner. Here, Banco Filipino Bank relied on contract is based contract is based
Escalona’s apparent authority to promise interest on law. on equity.
payments, considering that Escalona was TERP As to the Kind of Interest Predominates
Corp.’s then Senior Vice President. His apparent
Public interest Private interest
authority was further demonstrated by TERP Corp.
predominates predominates.
paying Banco Filipino Bank after Escalona promised
As to the Susceptibility of Ratification
it. (Terp Construction Corporation v. Banco Filipino
Susceptible of Not susceptible of
Savings and Mortgage Bank, G.R. No. 221771, 18 Sept.
ratification ratification
2019)
As to Sanction or Remedy
It is a sanction. It is a remedy.
Confirmation vs. Recognition
As to Who Can Avail the Remedy
Third persons who are
CONFIRMATION RECOGNITION Only parties to the
affected may file
It is an act whereby a contract can assail it.
the action.
defect of proof is cured
As to the Kind of Sanction
such as when an oral
It is a principal action. It is a subsidiary action.
It is an act by which a contract is put into
voidable contract is writing or when a
cured of its vice or private instrument is 3. UNENFORCEABLE CONTRACTS
defect. converted into a public
instrument. (Luna v. Unenforceable contracts are those contracts which
Linatoc, G.R. No. L- cannot be enforced by action or complaint, unless
48403, 28 Oct. 1942) they have been ratified by the party or parties who
did not give consent thereto. (Jurado, 2009)
Characteristics of Unenforceable Contracts
1. It cannot be enforced by a proper action in

court;
2. It may be ratified;
3. It cannot be assailed by third person;
2023 GOLDEN NOTES
II. CONTRACTS
4. May only be assailed as a way of defense, not by Two Types of Void Contracts
direct action; and
1. Where one of the elements in Art. 1318 is not
5. The defect of an unenforceable contract is of a present, such as “conveyances by virtue of a
permanent nature and it will exist as long as the forged document” which are bereft of the
contract is not duly ratified. The mere lapse of elements of consent and cause; and
time cannot give efficacy to the contract.
(Rabuya, 2017) 2. Those provided under Art. 1409 of the NCC,
such as contracts prohibited by law or those
NOTE: An unenforceable contract is valid although where the object is beyond the human
it produces no legal effect. (Tolentino, 2002) commerce. (Sta. Maria, 2017)
Kinds of Unenforceable Contracts The following Contracts are Inexistent and Void
from the beginning
The following contracts are unenforceable unless
they are ratified: 1. Those whose cause, object or purpose is
contrary to law, morals, good customs, public
1. Those entered into the name of another person order or public policy;
by one who has been given no authority/legal
representation or acted beyond his powers; 2. Those which are absolutely simulated or
“Unauthorized contracts”; fictitious;
NOTE: A contract of sale over a piece of land 3. Those whose cause or object did not exist at the
entered by an agent whose authority is not in time of the transaction;
writing, even if he acted beyond the scope of his
authority is void, not merely unenforceable. 4. Those whose object is outside the commerce of
(Art. 1874, NCC) men;
2. Those that do not comply with the Statute of 5. Those which contemplate an impossible
Frauds; and service;
3. Those where both parties are incapable of 6. Those where the intention of the parties
giving consent to a contract. (Art. 1403, NCC) relative to the principal object of the contract
cannot be ascertained; and
4. VOID CONTRACTS
7. Those expressly prohibited or declared void by
law. (Art. 1409, NCC)
A void or inexistent contract is one which has no
force and effect from the very beginning, as if it had
Characteristics of Void Contracts
never been entered into, and which cannot be
validated by either by time or ratification. This
1. The contract produces no effect whatsoever
definition includes not only those contracts in which
either against or in favor of anyone; hence it
one of the essential requisites is totally wanting, but
does not create, modify, or extinguish the
also those which are declared by positive provision
juridical relation to which it refers;
of law or statute. A void or inexistent contract is
equivalent to nothing; it is absolutely wanting in
2. No action for annulment is necessary, because
civil effects. (Tolentino, 2002)
the nullity exists ipso jure; a judgment of nullity
would merely be declaratory;
CIVIL LAW
3. It cannot be confirmed or ratified; and
4. If it has been performed, the restoration of what

has been given is in order. (Tolentino, 2002)
NOTE: The defect of inexistence of a contract is

permanent. It cannot be cured by ratification nor
prescription.
Good Faith, Immaterial
The good faith of a party in entering into a contract

is immaterial in determining whether it is valid or
not. Good faith, not being an essential element of a
contract, has no bearing on its validity. No amount
of good faith can validate an agreement which is
otherwise void. A contract which the law denounces
as void is necessarily no contract at all and no effort
or act of the parties to create one can bring about a
change in its legal status. (Ballesteros v. Abion, G.R.
No. 143361, 09 Feb. 2006)
Parties Affected
Any person may invoke the inexistence of the

contract whenever juridical effects founded thereon
are asserted against him. (Tolentino, 2002)
2023 GOLDEN NOTES
II. CONTRACTS
Rescissible vs. Voidable vs. Unenforceable vs. Void Contracts
RESCISSIBLE VOIDABLE UNENFORCEABLE VOID/ INEXISTENT

Origin of the Defect
Entered without authority
Economic damage or
or in excess thereof; non- Illegality (void) or
lesion to either one of the Incapacity of one of
compliance with Statute absence of any of essential
parties or to the 3rd parties to give consent or
of Frauds; incapacity of requisites of a contract
persons; declaration by vitiated consent
both parties to give (inexistent)
law
consent
Necessity of Damage/ Prejudice
As to the other
Suffered by either one of
contracting party – not Not necessary Not necessary
parties or third person
necessary
Curable by Prescription
Curable Curable Not curable Not Curable
Legal Effect
Inoperative until ratified;
Valid & legally Valid & legally
not enforceable in court
enforceable until enforceable until None
without proper
judicially rescinded judicially annulled
ratification
Remedy
Rescission or Declaration of nullity of
Annulment of contract Only personal defense
rescissory action. contract
Nature of Action
Can be attacked directly
Must be a direct action Direct action needed Indirect attack allowed
or indirectly
Who Can File the Action
Third persons cannot file
GR: Contracting party;
Contracting party Contracting party unless their interest are
XPN: Defrauded Creditors
directly affected
Susceptibility of Ratification
Susceptible but not of
Susceptible Susceptible Not Susceptible
ratification proper
Susceptibility of Prescription
Action for recovery,
specific performance, or Action for declaration of
Action for rescission Action for annulment damages prescribes in 10 nullity or putting of
prescribes after 4 years prescribes after 4 years years if based on a written defense of nullity does
contract; 6 years if NOT prescribe
unwritten
CIVIL LAW
If the debtor, despite the lapse of the period

III. NATURAL OBLIGATIONS and knowing that the debt has already
prescribed, pays the creditor, such debtor can
no longer recover the payment. (Sta. Maria,
2017)
Natural obligations, not being based on positive
law but on equity and natural law, do not grant a
2. 3rd person paying against the will of the
right of action to enforce their performance, but
debtor
after voluntary fulfillment by the obligor, they
authorize the retention of what has been delivered
When without the knowledge or against the
or rendered by reason thereof. (Art. 1423, NCC)
will of the debtor, a 3rd person pays a debt
which the obligor is not legally bound to pay
Rationale
because the action thereon has prescribed, but
the debtor later voluntarily reimburses the 3rd
1. On the part of the payor – It gives rise to a
person, such debtor can no longer recover such
moral, rather than a legal duty to pay or
payment. (Art. 1425, NCC)
perform, but the person performing feels that
in good conscience he should comply with his
e.g., A is indebted to Z but the collection of such
undertaking, which is based on moral grounds;
debt has already prescribed and therefore can
and
no longer be collected. If M pays the debt to Z
and later on, A voluntarily reimburses M, such
2. On the part of the payee – The payee is obliged
payment shall be considered valid and A
to return the amount received by him because
cannot recover such amount from Z on the
the payor was not legally bound to make the
ground that M should not have paid him. (Sta.
payment. (1947 Code Commission)
Maria, 2017)
NOTE: The foundation of natural law are equity,

3. Contract made by a minor
morality and natural justice. (Sta. Maria, 2017)
An incapacitated person is not obliged to make

Examples of Natural Obligations
any restitution except insofar as he has been
benefited by the thing or price received by him.
1. Paying despite extinctive prescription
(Arts. 1426 & 1427, NCC)
When a right to sue upon a civil obligation has
NOTE: A person who is between 18 and 21
lapsed by extinctive prescription, the obligor
years of age is NOT a minor. In present time, the
who voluntarily performs the contract cannot
age of majority is 18. (R.A. No. 6809)
recover what he has delivered or the value of
the service he has rendered. (Art. 1424, NCC)
However, if the law is applicable, the minor
who voluntarily makes payment or restitution
e.g., The prescriptive period to file a case based
of what he has obtained by contract even
on a written agreement is 10 years from the
though he has no legal obligation to make any
time the right of the action accrues. If the
payment or restitution, can no longer recover
creditor does not collect the amount of the loan
what he has returned. (Sta. Maria, 2017)
after 10 years from the time it should be paid,
such creditor can no longer collect from the
debtor.
2023 GOLDEN NOTES
III. NATURAL OBLIGATIONS
4. Performance by winning party.
When, after an action to enforce a civil

obligation has failed the defendant voluntarily
performs the obligation, he cannot demand
return of what he has delivered or the payment
of the value of the service he has rendered.
(Art. 1428, NCC)
e.g., If A is indebted to B for P1,000.00 and a

civil suit is filed to collect the amount but such
suit is dismissed, A need not to pay said
amount but if he voluntarily makes payment,
he can no longer recover such payment. (Sta
Maria, 2017)
5. Voluntary payment of an heir in excess of

inherited property (Art. 1429, NCC)
e.g., A is indebted to B for P10,000.00. A later

dies, with C as his heir who is entitled only to
P5,000.00 from the estate of A. If C voluntarily
pays B P10,000.00, C can no longer recover
such amount. (Sta. Maria, 2017)
6. Payment of a void legacy. (Art. 1430, NCC)
e.g., M provided in his holographic will that his

car shall go to his driver X. Later, the
holographic will turns out to be partly
typewritten and therefore it is void as such will
should be wholly handwritten by the testator.
If despite the nullity of the will, M’s heir, Z,
voluntarily gives the legacy of the car to X, it
shall be valid and cannot be revoked anymore.
(Sta. Maria, 2017)
NOTE: Examples of natural obligations under Title

III are NOT exclusive. (Sta. Maria, 2017)
CIVIL LAW
the part of the vendee, for which the vendor

may exercise his legal remedies. (Rabuya, 2017)
SPECIAL CONTRACTS
2. Bilateral – The seller will deliver and transfer a
determinate thing to the buyer and the latter
will pay an ascertained price (or its equivalent).
It imposes obligations on both the seller and
I. SALES
buyer. The obligations of each party are the
cause for the obligation of the other.
Each party is simultaneously a debtor and

A. DEFINITION AND ESSENTIAL REQUISITES creditor of the other. (Villanueva, 2018)
3. GR: Commutative – The thing sold is

Sale (2001 BAR) considered the equivalent of the price paid and
the price paid is the equivalent of the thing sold.
Sale is a contract where one party (seller or vendor) (De Leon, 2014)
obligates himself to transfer the ownership of and to
deliver a determinate thing, while the other party NOTE: There is no requirement that the price
(buyer or vendee) obligates himself to pay for said should be equal to the exact value of the subject-
thing a price certain in money or its equivalent. (Art. matter of the sale. All that is required is that the
1458, NCC) parties believed that they will receive good
value in exchange for what they will give.
The primary consideration in determining the true (Villanueva, 2018)
nature of a contract is the intention of the parties. If
the words of a contract appear to contravene the XPN: However, the contract may be aleatory as
evident intention of the parties, the latter shall in the case of the sale of a hope such as
prevail. Such intention is determined not only from sweepstakes ticket. (De Leon, 2014)
the express terms of their agreement, but also from
the contemporaneous and subsequent acts of the Aleatory – The consideration is not equivalent
parties. (Liam v. UCPB, G.R. No. 194554, 15 June of what has been received in the case of
2016) purchase of a lotto ticket. If the ticket wins, the
prize is much more than the price of the ticket.
Characteristics
4. Principal – Its existence does not depend upon
1. Consensual – A sale is perfected by mere the existence and validity of another contract.
consent, which is manifested by the meeting of (Ibid.)
the minds as to the offer and acceptance thereof
on the subject matter, price and terms of 5. Onerous – The thing sold is conveyed in
payment. consideration of the purchase price, and vice
versa. (Ibid.)
NOTE: Delivery of the thing bought or payment
of the price is not necessary for the protection 6. Nominate – It is given a special name or
of the contract, and failure of the vendee to pay designation in the Civil Code, namely, “sale.”
the price after the execution of the contract (Ibid.)
does not make the sale null and void for lack of
consideration but results at most in default on 7. Title, not a mode – The contract of sale is not a
mode, but merely a title. The sale itself does not
2023 GOLDEN NOTES
I. SALES
transfer or affect ownership, what it does is to pay the purchase price in full. Will the complaint
create the obligation to transfer ownership. prosper?
NOTE: A contract of sale may be absolute or A: NO. The agreement is a mere contract to sell, the
conditional. full payment of the purchase price partakes of a
suspensive condition. The non-fulfillment of the
Absolute Sale condition prevents the obligation to sell from
arising. Thus, ownership is retained by the seller
A sale is absolute when no condition is imposed and without further remedies by the buyer. Without full
ownership passes to the vendee upon delivery of payment, there can be no breach of contract to
the thing subject of the sale. (Art. 1497, NCC) speak of because the vendor has no obligation yet to
turn over the title. JCEC has no right to compel Sps.
A contract of sale is absolute when the title to the Mendoza to deliver the titles over the subject
property passes to the vendee upon delivery of the property because it failed to pay the purchase price
thing sold. (Rabuya, 2017) in full. (Jovil Construction and Equipment Corp. v.
Sps. Mendoza, G.R. Nos. 250321 & 250343, 03 Feb.
Instance when a Deed of Sale considered 2021)
Absolute in Nature
Conditional Sale v. Absolute Sale (2001 BAR)
A deed of sale is considered absolute in nature
where there is neither a stipulation in the deed that CONDITIONAL SALE ABSOLUTE SALE
title to the property sold is reserved in the seller The title to the property
The seller is granted the
until the full payment of the price, nor one giving the is not reserved to the
right to unilaterally
vendor the right to unilaterally resolve the contract seller or if the seller is
rescind the contract
the moment the buyer fails to pay within a fixed not granted the right to
predicated on the
period. rescind the contract
fulfillment or non-
based on the fulfillment
fulfillment, as the case
Conditional Sale or non-fulfillment, as
may be, of the
the case may be, of the
prescribed condition.
It is conditional where the sale contemplates a prescribed condition.
contingency, and in general, where the contract is
subject to certain conditions, usually in the case of Effect of the Non-Performance of the Condition
the vendee, the full payment of the agreed purchase
price, and in the case of the vendor, the fulfillment Where the obligation of either party to a contract of
of certain warranties. (De Leon, 2013) sale is subject to any condition which is not
performed, such party may:
The full payment of the purchase price partakes of a
suspensive condition, and non-fulfillment of the 1. Refuse to proceed with the contract; or
condition prevents the obligation to sell from 2. Waive performance of the condition.
arising. (Nuñez v. Moises-Palma, G.R. No. 224466, 27
Mar. 2019) Unlike in a non-fulfillment of a warranty, which
would constitute a breach of the contract, the non-
Q: JCEC filed a Complaint for Specific happening of the condition, although it may
Performance with Damages against Sps. extinguish the obligation upon which it is based,
Mendoza which sought the delivery of the clean generally does not amount to a breach of a contract
certificates of title and peaceful possession of six of sale.
(6) contiguous parcels of land registered in the
name of Sps. Mendoza. It must be noted the
contract is a contract to sell and JCEC failed to
CIVIL LAW
Instance when a Conditional Sale considered an compelled to pay the purchase price. Should ACE
Absolute Sale Company pay MTCL for the purchase price of the
machines?
A deed of sale is absolute in nature although
denominated as a “Deed of Conditional Sale” where A: YES. Considering its consensual nature, a
nowhere in the contract in question is a proviso or contract of sale had been perfected at the precise
stipulation to the effect that title to the property moment ACE Company accepted the latter’s
sold is reserved in the vendor until full payment of proposal to sell the machines in consideration of the
the purchase price, nor is there a stipulation giving purchase price of ₱5,000,000.
the vendor the right to unilaterally rescind the
contract the moment the vendee fails to pay within From that point in time, the reciprocal obligations of
a fixed period. (Dignos v. CA, G.R. No. L-59266, 29 Feb. the parties – i.e., on the one hand, of MTCL to deliver
1988) the said machines to ACE Company, and, on the
other hand, of ACE Company to pay the purchase
Q: A contract of sale of a lot stipulates that the price therefor after delivery – already arose and
“payment of the full consideration based on a consequently may be demanded. From that
survey shall be due and payable in 5 years from moment, the parties may reciprocally demand
the execution of a formal deed of sale.” Is this a performance, subject to the provisions of the law
conditional contract of sale? governing the form of contracts. (Ace Foods, Inc. v.
Micro Pacific Technologies, G.R. No. 200602, 11 Dec.
A: NO. The stipulation is not a condition which 2013)
affects the efficacy of the contract of sale. It merely
provides the manner by which the full consideration Formal Requirement for the Validity of a
is to be computed and the time within which the Contract of Sale
same is to be paid but it does not affect in any
manner the effectivity of the contract. (Heirs of Jesus GR: A contract of sale may be made in writing, or by
Mascuña v. CA, G.R. No. 158646, 23 June 2005) word of mouth , or partly in writing and partly by
word of mouth, or may be inferred from the conduct
Q: MTCL sent a letter-proposal for the delivery of the parties. (Art. 1483, NCC)
and sale of the machines to be installed at
various offices of ACE Company to which the Contracts shall be obligatory, in whatever form they
latter agreed for a purchase price of ₱5,000,000. have been entered into, provided all the essential
Thereafter, it delivered several machineries at requisites for their validity are present. (Art. 1356,
ACE Company’s premises and installed the same. NCC)
MTCL Company demanded payment from ACE XPNs:

Company. However, they have sent a letter to 1. If the law requires a document or other special
MTCL Company stating that they have been form, the contracting parties may compel each
returning the machines to them thru one of their other to observe that form. (Art. 1357, NCC)
sales representatives who has agreed to pull the
machines out but failed to do so. 2. Under Statute of Frauds, the following
contracts must be in writing; otherwise, they
ACE Company filed a complaint against MTCL shall be unenforceable:
Company praying that the latter pull out from its
premises the subject machines. In its defense, a. Sale of personal property at a price not
MTCL Company posits that ACE Company less than P500;
refused to pay the purchase price therefor b. Sale of a real property or an interest
despite the latter’s use of the machines. As such, therein;
MTCL Company prays that ACE Company be
2023 GOLDEN NOTES
I. SALES
c. Sale of property not to be performed NOTE: Rules on forms, and of validity and
within a year from the date thereof; or enforceability of contracts of sale, are strictly kept
d. When an applicable statute requires that within the contractual relationship of the seller and
the contract of sale be in a certain form. buyer pursuant to the characteristic of relativity of
(Art. 1403(2), NCC) every contract, and do not necessarily apply to third
parties whose rights may be affected by the terms of
3. Sale of large cattle which requires that the a sale.
same be recorded with the city/municipal
treasurer and that a certificate of transfer be Essential Requisites
issued. Otherwise, the sale is not valid. (Art.
1851, NCC) 1. Essential elements – for validity: CDC
NOTE: The contract of sale of real properties, even a. Consent – meeting of the minds to transfer
if not complete in form, so long as the essential ownership in exchange for the price (Art.
requisites of consent of the contracting parties, 1475, NCC);
object, and cause of the obligation concur and they
were clearly established to be present, is valid and NOTE: There could be sale against the will
effective between the parties. of the owner in case of expropriation of
property for public use.
Under Art. 1357 of the NCC, its enforceability is
recognized as each contracting party is granted the b. Determinate subject matter –
right to compel the other to execute the proper determinate thing which is the object of the
public instrument so that the valid contract of sale contract (Art. 1460, NCC); and
of registered land can be truly registered and can
bind third persons. (Rabuya, 2017) c. Consideration – price certain in money or
its equivalent. (Art. 1458, NCC) This
Instances where the Statute of Frauds is NOT includes the manner of payment and it is
Essential for the Enforceability of a Contract of presumed that a contract has sufficient
Sale consideration. (De Leon, 2014)
1. When there is a note or memorandum in writing 2. Natural elements – inherent in the contract
and subscribed to by the party or his agent and are deemed to exist in the contract in the
(contains essential terms of the contract) (Art. absence of any contrary provision. (De Leon,
1403, NCC); 2014)
2. When there has been partial Examples:

performance/execution (seller delivers with the a. Warranty against eviction; and
intent to transfer title/receives price) (Art. 1405, b. Warranty against hidden defects.
NCC);
3. Accidental elements – dependent on parties’
3. When there has been failure to object to stipulations; (De Leon, 2014)
presentation of evidence aliunde as to the
existence of a contract without being in writing Examples:
and which is covered by the Statute of Frauds a. Conditions;
(Art. 1405, NCC); or b. Payment of Interest;
c. Time and Place of Payment; and
4. When sales are effected through electronic d. Penalty.
commerce. (Villanueva, 2014; Sec. 12, R.A. No.
8792, Electronic Commerce Act of 2000)
CIVIL LAW
Effect of Absence of Any of the Essential Fausto C. Ignacio v. Home Bankers Savings and
Elements Trust Company, G.R. No. 177783, 23 Jan. 2013)
The contract of sale is void. Absent proof of the It is important to consider that at this stage,
concurrence of all the essential elements of a there is freedom to contract, which signifies
contract of sale, the giving of earnest money cannot the right to choose with whom to contract and
establish the existence of a perfected contract of what to contract. Thus, an owner of a property
sale. (Manila Metal Container Corp. v. PNB, G.R. is free to offer the subject property for sale to
No. 166862, 20 Dec. 2006) any interested person, and is not duty bound to
sell the same to the occupant thereof, absent
Effect of Reluctant Consent any prior agreement vesting the occupants the
right of first priority to buy. (Villanueva, 2018)
Consent when reluctantly given is not vitiated
consent. There is no difference in law where a 2. Perfection or birth – takes place when the
person gives his consent reluctantly and even parties agree upon the essential elements of the
against his good sense and judgment as when he contract; and
acts voluntarily and freely. (De Leon, 2014)
NOTE: From the point of perfection, parties
Perfection (2002, 2006 BAR) may reciprocally demand performance, subject
to the provisions of the law governing the form
GR: It is deemed perfected at the moment there is of contracts.
meeting of minds upon the thing which is the object
of the contract and upon the price. (Art. 1475(1), Not all contracts of sale becomes automatically
NCC) and immediately effective upon perfection. A
suspensive condition or period suspends the
NOTE: The acceptance of the offer must be absolute. demandability of the obligation, but the
It must be plain, unequivocal, unconditional and contract is still perfected. (Villanueva, 2018)
without variance of any sort from the proposal.
3. Consummation – occurs when the parties fulfill
Upon the perfection of the contract, the parties may or perform the terms agreed upon in the
reciprocally demand performance. (Rabuya, 2017) contract culminating in the extinguishment
thereof. (SM Investments Corp. v. Posadas, G.R.
XPN: When the sale is subject to a suspensive No. 200901, 07 Dec. 2015)
condition by virtue of law or stipulation.
PERFECTION CONSUMMATION
Stages of a Contract of Sale From the moment
there is a meeting of From the time of
1. Negotiation (or Policitacion) Stage – begins minds upon the things mutual delivery by the
from the time the prospective contracting promised by each contracting parties of
parties manifest their interest in the contract party in consideration the things promised
and ends at the moment of agreement of the of the other
parties. A negotiation is formally initiated by an
offer, which must be certain;
To convert the offer into a contract, the

acceptance must be absolute and must not
qualify the terms of the offer; it must be plain,
unequivocal, unconditional and without
variance of any sort form the proposal. (Heirs of
2023 GOLDEN NOTES
I. SALES
Rules in the Conception Stage about the Offer Rule on Refusal to Accept Goods by Buyer
RULES The buyer is not bound to return the goods to the

seller and it is sufficient that he notifies the seller of
Prior to acceptance, may be his refusal in the absence of a contrary stipulation.
Offer is
withdrawn at will by offeror but no (Art. 1587, NCC)
floated
authority to modify it.
Must be accepted within the period, NOTE: If the refusal is without just cause, the title
otherwise, extinguished at the end of passes to the buyer from the moment the goods are
With a placed at his disposal. (Art. 1588, NCC)
period and may be withdrawn at will
period
by offeror but must not be arbitrary,
otherwise, liable for damages. Effect of a Qualified Acceptance
With a Extinguished by happening or non- It constitutes merely a counter-offer which must in

condition happening of condition. turn be accepted to give rise to a valid and binding
Without Continues to be valid depending contract. (Villanueva, 2009)
period/ upon circumstances of time, place
condition and person. Q: Licup, through a letter, offered to buy parcels
of land to The Holy See and Philippine Realty
With a
Corporation (PRC). He enclosed a check for
counter- Original offer is extinguished.
P100,000.00 to “close the transaction” and
offer
accepted the responsibility of removing
informal settlers. Msgr. Cirilos, representative
Consummation Stage of the Holy See and PRC signed the conforme
portion of the letter and accepted the check. A
Consummation stage in a contract of sale takes place stop-payment order was issued by Licup and the
by the delivery of the thing together with the latter requested that the titles to the land
payment of the price. instead be given to SSE.
NOTE: The ownership of the thing is acquired by the Msgr. Cirilos wrote SSE requesting to remove the
buyer in any of the ways specified by law or in any informal settlers, otherwise, the P100,000.00
manner agreed upon by the parties. would be returned. SSE replied with an “updated
proposal” that they will comply provided that
The Buyer is Deemed to have Accepted the the purchase price is lowered. The proposal was
Goods rejected. The parcel of land was sold to another
third person. Is there a perfected contract of sale
1. When he communicates to the seller that he has between the two parties?
accepted them;
A: NO. When Msgr. Cirilos affixed his signature on
2. When the goods have been delivered and he that letter, he expressed his conformity to the terms
does any act inconsistent with the ownership of of Licup’s offer appearing on it. There was meeting
the seller; and of the minds as to the object and consideration of
the contract. But when Licup ordered a stop-
3. When, after the lapse of reasonable time, he payment on his deposit and proposed in his 26 Apr.
retains the goods without intimating to the 1988 letter to Msgr. Cirilos that the property be
seller that he rejected them. (Art. 1585, NCC) instead transferred to SSE, a subjective novation
took place. The proposed substitution of Licup by
SSE opened the negotiation stage for a new contract
of sale as between SSE and the owners. (Starbright
CIVIL LAW
Sales v. Phil. Realty Corp., G.R. No. 177936, 18 Jan.

2012) B. CONTRACT OF SALE
Q: Spouses Biong and Linda wanted to sell their

house. They found a prospective buyer, Ray.
Linda negotiated with Ray for the sale of the 1. CONTRACT TO SELL
property. They agreed on a fair price of P2
Million. Ray sent Linda a letter confirming his CONTRACT OF SALE CONTRACT TO SELL
intention to buy the property. Later, another As regards transfer of ownership
couple, Bernie and Elena, offered a similar Ownership is
house at a lower price of P1.5 Million. But Ray transferred to the Ownership is
insisted on buying the house of Biong and Linda buyer upon delivery of transferred upon full
for sentimental reasons. Ray prepared a deed of the object to him. payment of the
sale to be signed by the couple and a manager’s purchase price.
check for P2 Million. After receiving the P2 NOTE: Vendor has lost
Million, Biong signed the deed of sale. However, and cannot recover NOTE: Prior to full
Linda was not able to sign it because she was ownership until and payment, ownership is
abroad. On her return, she refused to sign the unless the contract is retained by the seller.
document saying she changed her mind. Linda resolved or rescinded.
filed suit for nullification of the deed of sale and As to numbers of contracts involved
for moral and exemplary damages against Ray. There are two
Will the suit prosper? (2006 BAR) contracts:
1. The contract to
A: NO, the suit will not prosper. The contract of sale sell, i.e.,
was perfected when Linda and Ray agreed on the There is only one preparatory sale
object of the sale and the price (Art. 1475, NCC). contract executed 2. The deed of
There is therefore consent on her part as the between the seller and absolute sale
consent need not be given in any specific form. the buyer.
Hence, her consent may be given by implication, NOTE: The principal
especially since she was aware of, and participated contract is executed
in the sale of the property (Pelayo v. Perez, G.R. No. after full payment of
141323, 08 June 2005). Her action for moral and the purchase price.
exemplary damages will also not prosper because Payment as a condition
the case does not fall under any of those mentioned Full payment of the
in Arts. 2219 and 2232 of the NCC. purchase price is a
positive suspensive
condition that gives
rise to the prospective
Non-payment of the seller’s obligation to
purchase price is a convey title.
resolutory condition
that entitles the seller NOTE: Failure to fully
to rescind the sale. pay the price is not a
breach but an event
that prevents the
obligation of the
vendor to convey title
from becoming
2023 GOLDEN NOTES
I. SALES
effective. allowed widowed Dolores to pay the down

Remedies available payment stated in the contract to sell and,
1. Specific instead, allowed her to pay amounts as her
Performance 1. Rescission; or means would permit.
2. Rescission; or 2. Damages
3. Damages The total payments made by Dolores and
petitioners amounted to P952,152.00, more
Contract to Sell than the agreed purchase price of P347,760.00,
including the 12% interest p.a. thereon
A bilateral contract whereby the prospective seller, computed on the outstanding balance.
while expressly reserving the ownership of the
subject property despite delivery thereof to the When Dolores’ children demanded the
prospective buyer, binds himself to sell the said execution of the corresponding deed of sale, Sps.
property exclusively to the prospective buyer upon Endaya refused. Should Sps. Endaya execute a
fulfillment of the condition agreed upon, that is, full deed of sale over the subject properties in favor
payment of the purchase price. (Solid Homes, Inc. v. of Dolores’ children?
Sps. Jurado, G.R. No. 219673, 20 Sept. 2019)
A: NO. Sps. Endaya had no obligation to petitioners
NOTE: In a contract to sell, the payment of the to execute a deed of sale over the subject properties.
purchase price is a positive suspensive condition A contract to sell is defined as a bilateral contract
that gives rise to the prospective seller's obligation whereby the prospective seller, while expressly
to convey title. However, non-payment is not a reserving the ownership of the subject property
breach of contract but “an event that prevents the despite delivery thereof to the prospective buyer,
obligation of the vendor to convey title from binds himself to sell the said property exclusively to
becoming effective.” The contract would be deemed the latter upon his fulfillment of the conditions
terminated or cancelled, and the parties stand “as if agreed upon, i.e., the full payment of the purchase
the conditional obligation had never existed.” price and/or compliance with the other obligations
(Racelis v. Sps. Javier, G.R. No. 189609, 29 Jan. 2018) stated in the contract to sell.
Q: Dolores Ventura entered into a Contract to Given its contingent nature, the failure of the
Sell with Spouses Eustacio and Trinidad Endaya prospective buyer to make full payment and/or
for the purchase of two parcels of land located in abide by his commitments stated in the contract to
Marian Road II, Marian Park, Parañaque City. sell prevents the obligation of the prospective seller
The contract to sell provides that the purchase to execute the corresponding deed of sale to effect
price of P347,760.00 shall be paid by Dolores the transfer of ownership to the buyer from arising.
through: (a) down payment of P103,284.00 (Ventura v. Heirs of Sps. Endaya, G.R. No. 190016, 02
upon execution of the contract; and (b) the Oct. 2013)
balance of P244,476.00 within a 15-year period,
plus 12% interest per annum on the outstanding Instances when a Contract to Sell may be
balance and 12% interest per annum on Resorted to:
arrearages.
1. Where subject matter is indeterminate; (Arts.
Dolores’ children, Frederick Ventura, Marites 1458 & 1460, NCC) and
Ventura-Roxas, and Philip Ventura filed a 2. Sale of future goods except future inheritance.
Complaint and, thereafter, an Amended (Art. 1462, NCC)
Complaint for specific performance, seeking to
compel Sps. Endaya to execute a deed of sale Q: Project Movers Realty and Development
over the subject properties. They argued that Corporation (PMRDC) was indebted to Keppel
their parents’ close friendship with Sps. Endaya, Bank for P200M. To pay the debt, PMRDC
CIVIL LAW
conveyed to the bank 25 properties. Adao a deed of absolute sale upon the completion by the
occupies one of the properties conveyed. The buyer of the payment of the purchase price, the
bank demanded Adao to vacate the property but contract is only a contract to sell even if their
he refused. Hence, an ejectment case was filed agreement is denominated as a Deed of Conditional
against him. In his defense, Adao claimed that he Sale, as in this case. In a contract to sell, there being
entered into a Contract to Sell with PMRDC. To no previous sale of the property, a third person
prove full payment of the property, he buying such property despite the fulfillment of the
presented an affidavit. Is Keppel bank bound by suspensive condition such as the full payment of the
the contract to sell between PMRDC and Adao? purchase price, for instance, cannot be deemed a
buyer in bad faith and the prospective buyer cannot
A: NO. The contract to sell does not by itself give seek the relief of reconveyance of the property. The
Adao the right to possess the property. Unlike in a action for reconveyance shall fail. Roque v. Aguado,
contract of sale, here in a contract to sell, there is yet G.R. No. 193787, 07 Apr. 2014)
no actual sale nor any transfer of title, until and
unless, full payment is made. The payment of the Distinctions Of Contract Of Sale With Other
purchase price is a positive suspensive condition. Contracts
Adao’s lone affidavit is self-serving, and cannot be
considered as substantial evidence to prove that 1. Sale vs. Donation
there was full payment made. (Keppel Bank Phils.
Inc., v. Adao, G.R. No. 158227, 19 Oct. 2005) SALE DONATION
As to its nature
Q: Spouses Roque and the original owners of an May be gratuitous or
Onerous
unregistered lot executed a 1997 Deed of onerous (Art. 726, NCC)
Conditional Sale over a portion of a lot for As to type of contract
P30,775.00. After the deed’s execution, Spouses Consensual Formal contract
Roque took possession and introduced As to governing law
improvements on the subject portion which
Law on Sales Law on Donation
they utilized as a balut factory. Sabug, Jr, applied
for a free patent over the entire lot and was
NOTE: It is important to know the distinction when
eventually issued an OCT in his name.
the consideration for the transfer is not clear.
Sabug, Jr., through the 1999 Deed of Absolute

When the price of sale is simulated, the sale is void,
Sale, sold the lot to Aguado for P2,500,000.00,
but the act may be shown to be a donation or some
who, in turn, caused the cancellation of the OCT
other act, other than, Art. 1471 of the NCC (relative
and the issuance of a TCT. Aguado obtained an
simulation).
P8,000,000.00 loan from the Land Bank secured
by a mortgage over the lot. When she failed to
Relative simulation – that the contract may be
pay her loan obligation, Land Bank commenced
called a sale, but it may turn out to be really a
extra-judicial foreclosure proceedings and
donation and will govern as such. (Villanueva, 2018)
eventually tendered the highest bid in the
auction sale. Upon Aguado’s failure to redeem
2. Sale vs. Barter
the subject property, Land Bank consolidated its
ownership and a TCT was issued in its name.
SALE BARTER
Spouses Roque then filed an action for
As to nature
reconveyance before the RTC. Will the action for
A thing is given in
reconveyance prosper? A thing is given in
exchange of a price
exchange of another
certain in money or its
A: NO. This case involves a contract to sell. The thing.
equivalent.
Court held that where the seller promises to execute
2023 GOLDEN NOTES
I. SALES
As to if consideration is partly in money and 4. Sale vs. Dacion en Pago

partly in another thing
The transaction is characterized by the manifest SALE DACION EN PAGO
intention of the parties. As to Existence of Credit
If intention is not clear, Contract where
If intention is not clear,
and the value of thing is property is alienated to
and the value of thing is No pre-existing credit.
equal or less than extinguish pre-existing
more than amount of
amount of money = credit or debt.
money = Barter
Sale As to Relationship
As to applicable Law Novates creditor-
Buyer-seller
Both are governed by law on sales. debtor relationship into
relationship.
seller-buyer.
3. Sale vs. Agency to Sell As to Obligation
Obligations are Obligations are
SALE AGENCY TO SELL created. extinguished.
As to Obligation as Regards the Price As to Consideration
Agent not obliged to pay On the part of the debtor:
Buyer pays for price of for price; must account Extinguishment of the
On the part of the
object. for the proceeds of the debt;
seller: Price;
sale.
As to Transfer of Ownership On the part of the
On the part of the
Principal remains the creditor: The
Buyer becomes owner buyer: Acquisition of
owner even if the object acquisition of the object
of thing. the object.
delivered to agent. offered in lieu of the
As to Warranty original credit.
Agent assumes no As to Determination of the Price
personal liability as Greater freedom. Limited freedom.
Seller warrants.
long as within authority As to Payment of Price
given. The debtor receives the
Buyer still has to
As to Revocability payment before the
pay the price.
May be revoked contract is perfected.
Not unilaterally
unilaterally even
revocable.
without ground. 5. Sale vs. Lease
As to Profit
Agent is not allowed to SALE LEASE
Seller receives profit.
profit. As to the purpose
As to Contract Use of thing is for
Obligation to
Real contract Personal contract specified period only
absolutely transfer
with obligation to
ownership of thing.
NOTE: To differentiate Sale and Agency to sell, the return.
essential clauses of the whole instrument shall be As to the consideration
considered. (Art. 1466, New Civil Code) Consideration is the Consideration is the
price. rental.
As to the personality of the seller or lessor
Seller needs to be
Lessor need not be
owner of thing to
owner.
transfer ownership.
CIVIL LAW
NOTE: Lease with option to buy is really a contract the obligation to give a determinate thing. While in
of sale but designated as lease in name. a contract for piece-of-work (personal obligation),
an action for specific performance is NOT applicable
6. Sale vs. Contract for piece-of-work since what is involved is an obligation to do.
(Villanueva, 2018)
CONTRACT FOR
SALE
PIECE-OF-WORK 7. Contract of Sale vs. Option Contract
As to Existence
Manufacturing in the Manufacturing upon CONTRACT OF SALE OPTION CONTRACT
ordinary course of special order of a As to Consideration
business. customer. Must be a price certain May be anything of
As to Whom Made in money value
Not for the general As to Bilateral/ Unilateral
For the general market. market, but especially Bilateral Contract Unilateral Contract
for the customer. As to Subject Matter
As to Applicability of Statute of Frauds The “option to
Subject matter if the
Governed by the Not within the Statute purchase” is the
contract of sale itself
Statute of Frauds. of Frauds. subject matter.
As to Risk of Loss
Borne by the worker or 2. OPTION CONTRACT
Borne by the buyer. contractor, not by the
employer.
Option Contract (2002, 2005 BAR)
Rules in Determining if the Contract is One of

An option contract is a continuing offer or contract
Sale or a Piece of Work
by which the owner stipulates with another that the
latter shall have the right to buy the property at a
1. Sale
fixed price within a certain time, or under, or in
a. If ordered or manufactured in the
compliance with, certain terms and conditions, or
ordinary course of business (Art. 1467,
which gives to the owner of the property the right to
NCC);
sell or demand a sale. (Villanueva, 2009)
b. It involves the sale of a thing or right; and

Nature of an Option Contract
The obligation of seller is a real obligation
or an obligation to give.
An option contract is a separate and distinct
contract from a contract of sale. It is a preparatory
2. Piece of work
contract in which one party grants to another, for a
a. If manufactured especially for the
fixed period and at a determined price, the privilege
customer and upon his special order, and
to buy or sell, or to decide whether or not to enter
not for the general market (Art. 1469,
into a principal contract.
NCC);
b. It involves lease of service; and
NOTE: If the option is perfected, it does not result in
c. The obligation of seller is personal or
the perfection or consummation of the sale. It is
obligation to do.
binding upon the promissor if the promise is
supported by a consideration distinct from the
NOTE: Distinction is important when it comes to the
price.
remedy needed in case of non-performance. In a
Sale (real obligation), action for specific
performance is applicable since what is involved is
2023 GOLDEN NOTES
I. SALES
Period within which to Exercise the Option Elements of a Valid Option Contract
1. Within the term stipulated; and 1. Consent;

2. If there is no stipulation, the court may fix the
term. 2. Subject Matter – An option right to an
unaccepted unilateral offer to sell/ accepted
Exercise of an Option unilateral promise to sell or an unaccepted
unilateral offer to buy/ accepted unilateral
In an option to buy, the party who has an option may promise to buy a determinate or determinable
validly and effectively exercise his right by merely object for a price certain including the manner
notifying the owner of the former’s decision to buy of payment; and
and expressing his readiness to pay the stipulated
price. (De Leon, 2011) 3. Prestation – A consideration separate and
distinct from the purchase price for the option
A notice of acceptance must be communicated to given. (Villanueva, 2009)
offeror even without actual payment as long as
payment is delivered in the consummation stage Obligations of the Offeror
provided it still within the period provided.
1. Not to offer to any third party the sale of the
Effect of the Presence and Absence of a Separate object of the option during the option period;
Consideration in an Option Contract
2. Not to withdraw the offer or option during the
1. With separate consideration: option period; and
a. Contract is valid;
b. Offeror cannot withdraw offer until after 3. To hold the subject matter for sale to the offeree
expiration of the option; and in the event that the latter exercises his option
c. Is subject to rescission and damages but during the option period.
not specific performance.
Effect of Acceptance and Withdrawal of the Offer
2. Without separate consideration:
a. The option contract is not deemed If the offer had already been accepted and such
perfected; and acceptance has been communicated before the
b. Offer may be withdrawn at any time prior withdrawal is communicated, the acceptance
to acceptance. creates a perfected contract, even if no
NOTE: Even though the option was not supported consideration was as yet paid for the option. In
by a consideration, the moment it was accepted, which case, if the offeror does not perform his
contract of sale is perfected. (Art. 1324, NCC) obligations under the perfected contract, he shall be
liable for all consequences arising from the breach
An option imposes no binding obligation on the thereof based on any of the available remedies such
person holding the option aside from the as specific performance, or rescission with damages
consideration for the offer. Until accepted, it is not in both cases.
treated as a sale. (Tayag v. Lacson, G.R. No. 134971,
25 Mar. 2004) 3. RIGHT OF FIRST REFUSAL
It is a contractual grant, not of the sale of a property,

but of the first priority to buy the property in the
event the owner sells the same. (PUP v. Golden
CIVIL LAW
Horizon Realty Corp., G.R. Nos. 183612 and 184260, Alternatively, she asked the court to extend the
15 Mar. 2010) lease for another 2 years on the same terms. Can
Iris seek rescission of the sale of the property to
NOTE: Where a time is stated in an offer for its Dux’s mother? (2008 BAR)
acceptance, the offer is terminated at the expiration
of the time given for its acceptance. (Pineda, 2010) A: YES. The right of first refusal is included in the
contract signed by the parties. Only if the lessee
Basis of the Right of First Refusal failed to exercise the right of first refusal could the
lessor lawfully sell the subject property to others,
It is based on the current offer to sell of the seller or under no less than the same terms and conditions
offer to purchase of any prospective buyer. Only previously offered to the lessee. Granting that the
after the optionee fails to exercise its right of first mother is not a third party, this would make her
priority under the same terms and within the period privy to the agreement of Dux and Iris, aware of the
contemplated could the owner validly offer to sell right of first refusal. This makes the mother a buyer
the property to a third person, again, under the in bad faith, hence giving more ground for rescission
same terms as offered to the optionee. (Tanay of the sale to her. (Equatorial Realty Development,
Recreation Center & Development Corp. v. Fausto, Inc. v. Mayfair Theater, Inc., supra)
G.R. No. 140182, 12 Apr. 2005)
Option Contract vs. Right of First Refusal
Effect of Sale of a Property in Violation of the
Right of First Refusal RIGHT OF FIRST
OPTION CONTRACT
REFUSAL
The resulting contract is rescissible by the person in As to Nature
whose favor the right of first refusal was given and Principal contract; Accessory; cannot
even though no particular price is stated in the stands on its own stand on its own
covenant granting the right of first refusal, the same As to Consideration
price by which the third-party buyer bought the Needs separate Does not need separate
property shall be deemed to be the price by which consideration consideration
the right of first refusal shall therefore be As to Subject matter and Price
exercisable. (Equatorial Realty Development, Inc. v. There must be subject
Mayfair Theater, Inc., G.R. No. 106063, 11 Nov. 1996) Subject matter and
matter but price not
price must be valid.
important.
Q: Dux leased his house to Iris for a period of 2 As to Condition
years, at the rate of P25,000.00 monthly, Not conditional Conditional
payable annually in advance. The contract As to Offer to Sell
stipulated that it may be renewed for another 2-
There is no offer to sell,
year period upon mutual agreement of the
but only an
parties. The contract also granted Iris the right
opportunity for the There is an offer to sell.
of first refusal to purchase the property at any
buyer to enter into a
time during the lease, if Dux decides to sell the
contract of sale.
property at the same price that the property is
As to Subjectivity to Specific Performance
offered for sale to a third party.
Not subject to specific Subject to specific
performance performance
23 months after execution of the lease contract,
Dux sold the house. Dux said there was no
breach because the property was sold to his
mother who is not a third party. Iris filed an
action to rescind the sale and to compel Dux to
sell the property to her at the same price.
2023 GOLDEN NOTES
I. SALES
Right of First Refusal must be Contained in a Availment of Sublessee of the Right of First
Written Contract Refusal of the Lessee
The right of first refusal be embodied in a written GR: The sublessee is a stranger to the lessor who is
contract and the grant of such right must be clear bound to respect the right of first refusal in favor of
and express. the lessee only.
NOTE: It is applicable only to executory contracts XPN: When the contract of lease granted the lessee
and not to contracts which are totally or partially the right to assign the lease, the assignee would be
performed. entitled to exercise such right as he steps into the
shoes of the original assignee. (Villanueva, 2009)
Q: Pozzolanic entered into a long-term contract
with the National Power Corporation (NPC) for Q: Tess leased her 1,500 sq. m. lot in Antipolo
the purchase of all fly ash to be produced by the City to Ruth for a period of three (3) years to
latter’s future power plants. In the contract, NPC February 2013. On March 19, 2011, Tess sent a
granted Pozzolanic a right of first refusal to letter to Ruth, part of which read as follows:
purchase the fly ash that may be generated in “I am offering you to buy the property you are
the future. When NPC’s two new power plants presently leasing at P5,000.00 per sq. m. or for a
started operation, it published an invitation to total of P7,500,00.00. You can pay the contract
interested buyers for the purchase of the fly ash. price by installment for two (2) years without
Pozzolanic sent letters to NPC reminding its interest. I will give you a period of one (1) year
right of first refusal. NPC deferred its public from the receipt of this letter to decide whether
bidding with the first power plant’s fly ash but it you will buy the property.”
nevertheless continued with the bidding of the
second power plant’s fly ash. Pozzolanic filed a After the expiration of the lease contract, Tess
complaint, but during the pendency of the case, sold the property to her niece for a total
NPC decided to likewise dispose the fly ash from consideration of P4 Million. Ruth filed a
the first power plant without allowing complaint for the annulment of the sale,
Pozzolanic to exercise its right of first refusal. reconveyance and damages against Tess and her
Can Pozzolanic exercise its right of first refusal? niece. Ruth alleged that the sale of the leased
property violated her right to buy under the
A: NO. The right of first refusal granted in favor of principle of right of first refusal. Is the allegation
Pozzolanic is invalid for being contrary to public of Ruth tenable? (2014 BAR)
policy as the same violates the requirement of
competitive public bidding in the award of A: NO, the allegation of Ruth is not tenable. The
government contracts. In this jurisdiction, public letter written by Tess did not grant a right of first
bidding is the established procedure in the grant of refusal to Ruth. At most, it is to be construed as an
government contracts. (PSALM Corp., v. Pozzolanic, option contract whereby Ruth was given the right to
G.R. No. 183789, 24 Aug. 2011) buy or not to buy the leased property. An option is
itself not a purchase, but it merely secures the
Right of First Refusal may be Waived privilege to buy. However, the option is not valid
because it was not supported by cause or
Like other rights, the right of first refusal may be consideration distinct from the price of the
waived. For a waiver of right to exist, three elements property. (Art. 1479, NCC) Also, Ruth does not
are essential: (a) existence of a right; (b) the appear to have exercised her option before the offer
knowledge of the evidence thereof; and (c) an was withdrawn by the subsequent sale of the
intention to relinquish such right. (Sps. Valderama v. property to the niece of Tess.
Macalde, G.R. No. 165005, 16 Sept. 2005)
CIVIL LAW
PROPERTY INVOVLED STATUS OF SALE RATIFICATION

Agents
Can be ratified after the inhibition has ceased.
Reason: the only wrong that subsists is the private wrong

Property entrusted to
to the ward, principal or estate; and can be condoned by the
them for administration
private parties themselves.
or sale.
Unenforceable
NOTE: Contracts entered by guardian in behalf of ward are
XPN: When principal
rescissible if ward suffers lesion by more than ¼ of value of
gave his consent.
property. Sale by guardian of property belonging to a ward
without Court approval is void regardless of the lesion,
hence, cannot be ratified.
Guardian

Property of the ward private parties themselves.
during period of Voidable
guardianship NOTE: Contracts entered by guardian in behalf of ward are
Executors and Administrators

private parties themselves.
Property of the estate
Voidable
under administration.
NOTE: Contracts entered by guardian in behalf of ward are
2023 GOLDEN NOTES
I. SALES
Court Officers and Employees
Property and rights in

Cannot be ratified.
litigation or levied upon
on execution before the Void
Reason: It is not only a private wrong, but also a public
court under their
wrong. (Villanueva, 2014)
jurisdiction
Others Specially Disqualified by Law
Cannot be ratified.
- Void
wrong. (Ibid.)
Public Officers and Employees
Cannot be ratified.
Property of the State
entrusted to them for Void
administration.
wrong. (Ibid.)
CIVIL LAW
Effect of Rescission on Earnest Money Received

C. EARNEST MONEY
When the seller seeks to rescind the sale, he is
obliged to return the thing which was the object of
the contract along with fruits and interest. (Art.
Option Money
1385, NCC)
It is the distinct consideration in case of an option

Option Money vs. Earnest Money
contract. It does not form part of the purchase price
hence; it cannot be recovered if the buyer did not
OPTION MONEY EARNEST MONEY
continue with the sale. (Art. 1479, NCC)
As to Money Given
Money given as distinct
NOTE: Option contract’s distinguishing Forms part of the
consideration for an
characteristic is that it imposes no binding purchase price.
option contract.
obligation on the person holding the option, aside
from the consideration for the offer. (Capalla v. As to Perfection
COMELEC, G.R. Nos. 201112, 201121, 201127, Applies to a sale not yet Given only when there
201413, 13 June 2012) perfected. is already a sale.
Obligation of the Buyer Upon
Consideration of Payment as Option Money Payment of Consideration
When given, the buyer
Prospective buyer is
Payment is considered option money when it is is bound to pay the
not required to buy.
given as a separate and distinct consideration from balance.
the purchase price. As to Recovery
If sale did not
If buyer does not
Earnest Money or “arras” (2002 BAR) materialize, it must be
decide to buy, it cannot
returned. (Villanueva,
be recovered.
This is the money given to the seller by the 2014; Pineda, 2010)
prospective buyer to show that the latter is truly As to Transfer of Ownership
interested in buying the property, and its aim is to Ownership is reserved
Title passes to the
bind the bargain (Pineda, 2010). It is actually a to the seller and is not
buyer upon delivery of
partial payment of the purchase price and is to pass until full
the thing sold.
considered as proof of the perfection of the contract. payment.
(De Leon, 2011) Effect of Non-payment
Action for specific Action for specific
NOTE: Option money may become earnest money if performance can be performance or
the parties agree. (De Leon, 2011) filed. rescission can be filed.
Significance of Giving Earnest Money Remedy when Seller Refuses to Complete the
Sale Transaction despite Down Payment of the
It is considered as: Buyer
1. Part of the purchase price – earnest money is
deducted from the total price; and The action for specific performance will lie. There is
2. Proof of perfection of the contract. (Art. 1482, a perfected contract of sale because there was a
NCC) binding agreement of sale, not just an option
contract. The sale was perfected upon acceptance
by the seller of the down payment from the buyer.
2023 GOLDEN NOTES
I. SALES
Seller’s Refusal to Proceed with the Sale despite XPNs:

Down Payment of Buyer on the ground that the 1. Estoppel or when the owner of the goods is by
Transaction is Disadvantageous to Him (Seller) his conduct precluded from denying the
seller’s authority to sell (Art. 1505, NCC);
The seller cannot justify his refusal to proceed with
the sale by the fact that the deal is financially 2. When the contrary is provided for in recording
disadvantageous to him. Having made a bad bargain laws (Art. 1505, NCC);
is not a legal ground for pulling out of a binding
contract of sale, in the absence of some actionable 3. When the sale is made under statutory power
wrong by the other party. (Legaspi y Navera v. of sale or under the order of a court of
People, G.R. No. 225753, 15 Oct. 2018) competent jurisdiction (Art. 1505, NCC);
Sale of a Thing by a Person NOT its Owner 4. When the sale is made in a merchant’s store in
accordance with the Code of Commerce and
Ownership by the seller on the thing sold at the time special laws (Art. 1505, NCC);
of the perfection of the contract of sale is not an
element for its perfection. What the law requires is 5. When a person who is not the owner sells and
that the seller has the right to transfer ownership at delivers a thing, and subsequently acquired
the time the thing sold is delivered. A perfected title thereto (Art. 1434, NCC);
contract of sale cannot be challenged on the ground
of non-ownership on the part of the seller at the 6. When the seller has a voidable title which has
time of its perfection. Hence, the sale is still valid. not been avoided at the time of the sale (Art.
(Quijada v. CA, G.R. No. 126444, 04 Dec. 1998) 1505, NCC);
Right to Transfer Ownership 7. Sale by co-owner of the whole property or a

definite portion thereof (Art. 493, NCC); or
It is during the delivery that the law requires the
seller to have the right to transfer ownership of the 8. Special rights of unpaid seller. (Arts. 1526-
thing sold. In general, a perfected contract of sale 1533, NCC)
cannot be challenged on the ground of the seller’s
non-ownership of the thing sold at the time of the Q: Henry Ysaac leased out portions of the
perfection of the contract. (Alcantara-Daus v. Sps. De property to several lessees. Juan Cabrera, one of
Leon, G.R. No. 149750, 16 June 2003) the lessees, leased a 95 sq. m. portion of the land
beginning in 1986. On 06 May 1990, Henry Ysaac
This rule is in accord with a well-known principle of needed money and offered to sell the 95 sq. m.
law that one cannot transmit or dispose of that piece of land to Juan Cabrera. He told Henry
which he does not have — nemo dat quod non-habet. Ysaac that the land was too small for his needs
because there was no parking space for his
NOTE: Future inheritance cannot be the subject of vehicle. Juan Cabrera accepted the new offer.
sale. Henry Ysaac and Juan Cabrera settled on the
price of ₱250.00 per sq. m., but Juan Cabrera
Legal Effect of Sale by a Non-owner stated that he could only pay in full after his
retirement on 15 June 1992. Henry Ysaac agreed
GR: The buyer acquires no better title to the goods but demanded for an initial payment of
than the seller had; caveat emptor (buyer beware). ₱1,500.00, which Juan Cabrera paid. On 15 June
(Art. 1505, NCC) 1992, Juan Cabrera tried to pay the balance of
the purchase price to Henry Ysaac. However, at
that time, Henry Ysaac was in the United States.
The only person in Henry Ysaac’s residence was
CIVIL LAW
his wife who refused to accept Juan Cabrera’s only sell the undivided interest of the co-owned
payment. property. As summarized in Lopez v. Ilustre, “if he is
the owner of an undivided half of a tract of land, he
On 21 Sept. 1994, Henry Ysaac’s counsel wrote a has a right to sell and convey an undivided half, but
letter addressed to Juan Cabrera’s counsel, he has no right to divide the lot into two parts, and
informing the latter that his client is formally convey the whole of one part by metes and bounds.”
rescinding the contract of sale because Juan (Cabrera v. Ysaac, G.R. No. 166790, 19 Nov. 2014)
Cabrera failed to pay the balance of the purchase
price of the land between May 1990 and May
1992. The letter also stated that Juan Cabrera’s D. DOUBLE SALES
initial payment of ₱1,500.00 and the subsequent
payment of ₱6,100.00 were going to be applied
as payment for overdue rent of the parcel of land
There is double sale when the same object of the
Juan Cabrera was leasing from Henry Ysaac. Due
sale is sold to different vendees. (Art. 1544, NCC)
to Juan Cabrera’s inability to enforce the
contract of sale between him and Henry Ysaac,
Requisites of Double Sales (Art. 1544, NCC)
he decided to file a civil case for specific
performance. Was there a valid contract of sale
1. Two (2) or more sales transactions must
between Ysaac and Cabrera?
constitute valid sales transactions;
A: NO. There was no valid contract of sale between

2. Two (2) or more sales transactions must
petitioner and respondent as the contract was null
pertain to exactly the same subject matter;
ab initio. The object of the sales contract between
petitioner and respondent was a definite portion of
3. Two (2) or more buyers at odds over the
a co-owned parcel of land. At the time of the alleged
rightful ownership of the subject matter must
sale between petitioner and respondent, the entire
each represent conflicting interests; and
property was still held in common. The rules allow
respondent to sell his undivided interest in the
4. Two (2) or more buyers at odds over the
coownership. However, this was not the object of
rightful ownership of the subject matter must
the sale between him and petitioner. The object of
each have bought from the very same seller.
the sale was a definite portion. Even if it was
(Sps. Manlan v. Sps. Beltran, G.R. No. 222530, 16
respondent who was benefiting from the fruits of
Oct. 2019)
the lease contract to petitioner, respondent has "no
right to sell or alienate a concrete, specific or
Rules on Preference (Art. 1544, NCC)
determinate part of the thing owned in common,
because his right over the thing is represented by
1. Movable / personal property – Owner who is
quota or ideal portion without any physical
first to possess in good faith;
adjudication. Sale of a portion of the property is
considered an alteration of the thing owned in
2. Immovable / real property –
common.
a. First to register in good faith. (Fudot v.
Cattleya Land Inc., G.R. No. 171008, 13 Sept.
Under the NCC, such disposition requires the
2007)
unanimous consent of the other co-owners.
However, the rules also allow a co-owner to alienate
b. No registration – first to possess in good
his or her part in the co-ownership. These two rules
faith.
are reconciled through jurisprudence. If the
alienation precedes the partition, the co-owner
c. No registration & no possession in good
cannot sell a definite portion of the land without
faith – person who presents oldest title in
consent from his or her co-owners. He or she could
2023 GOLDEN NOTES
I. SALES
good faith. (Martinez v. CA, G.R. No. 123547, Principle of prius tempore, potior jure – first in
21 May 2001) time, stronger in right
NOTE: Art. 1544 of the Civil Code has no application Knowledge gained by the first buyer of the second
to lands not registered with the Torrens system. If sale cannot defeat the first buyer’s rights except
the sale is not registered, it is binding only as only as provided by the NCC and that is where the
between the seller and the buyer; it does not affect second buyer first registers in good faith the second
innocent third persons. (De Leon, 2011) sale ahead of the first. (Jurado, 2019)
Villanueva (2009) proffers that the rules on double Conversely, knowledge gained by the second buyer
sales for immovables under Art, 1544 are applicable of the first sale defeats his rights even if he is first to
to unregistered land, but only insofar as they do not register, since such knowledge taints his
undermine speciﬁc rules and legislations that have registration with bad faith to merit the protection of
a higher hierarchical enforcement value, such as the Art. 1544(2) of NCC, the second realty buyer must
“without prejudice to a better right” provision act in good faith in registering his deed of sale.
under Act No. 3344, now Sec. 113 of the Property
Registration Decree. (Villanueva, 2009) NOTE: Where one sale is absolute and the other is a
pacto de retro transaction where the period to
Purchaser in Good Faith redeem has not yet expired, Art. 1544 of NCC will
not apply. (Pineda, 2010)
1. Buys the property without notice that some
other person has a right to, or interest in such Q: Does prior registration by the second buyer of
property; and a property subject of a double sale confer
ownership or preferred right in his favor over
2. Pays a full and fair price for the same at the time that of the first buyer?
of such purchase, or before he has notice of the
claim or interest of some other person in the A: Principle of caveat emptor – buyer beware. It
property. (Uy v. Fule, G.R. No. 164961, 30 June literally means, ‘Let the buyer beware’. The rule
2014) requires the purchaser to be aware of the supposed
title of the vendor and one who buys without
NOTE: Partial payment is not enough. Full checking the vendor’s title takes all the risks and
payment is a requirement for purposes of losses consequent to such failure. (Agcaoili, 2015)
acquiring right over the rules of double sale.
Application of Caveat Emptor in particular Sale
NOTE: This principle applies in a situation where Transactions
not all the requisites are present which would
warrant the application of Art. 1544 of NCC. The 1. Sales of animals (Art. 1574, NCC);
only requisite of this rule is priority in time. In other 2. Double sales (Art. 1574, NCC);
words, the only one who can invoke this is the first 3. In sheriff’s sales; and
vendee. Undisputedly, he is a purchaser in good 4. Tax sales.
faith because at the time he brought the real
property, there was still no sale to a second vendee. NOTE: In the above sales, there is no warranty of
(Rabuya, 2017) title or quality on the part of the seller. The
purchaser who buys without checking the title of
the vendor is assuming all risks of eviction.
In sheriff’s sales, the sheriff does not guarantee the

title to real property and it is not incumbent upon
CIVIL LAW
him to place the buyer in possession of such Effect when the loss occurred before perfection
property. (Pineda, 2010) (1999 BAR)
Caveat Emptor NOT Applicable in Sales of GR: The thing perishes with the owner – Res perit
Registered Land domino. (NCC, Art. 1504)
The purchaser of a registered land under the XPNs:

Torrens system is merely charged with notice of the 1. Where the delivery has been made either to the
burdens and claims on the property which are buyer or to the bailee for the buyer, but
inscribed on the face of certificate of title. (Pineda, ownership in the goods has been retained by
2010) the seller merely to secure performance by the
buyer of his obligations under the contract;
Application of Caveat Emptor in Judicial Sales (Art. 1504(1), NCC)
Caveat emptor is applicable in judicial sales. The 2. Where actual delivery has been delayed
purchaser in a judicial sale acquires no higher or through the fault of either the buyer or seller,
better title or right than that of the judgment debtor. the goods are at the risk of the party at fault
If it happens that the judgment debtor has no right, (Art. 1504(2), NCC); and
interest, or lien on and to the property sold, the
purchaser acquires none. (Pineda, 2010) 3. Where goods are sent by the seller to the buyer
under circumstances in which the seller knows
Effect of Subsequent Foreclosure to a Prior or ought to know that it is usual to insure, the
Purchaser in Good Faith (2008 BAR) seller must give such notice to the buyer as may
enable him to insure them during their transit,
The purchaser in good faith has better title to the and, if the seller fails to do so, the goods shall be
property sold even if subsequently foreclosed by a deemed to be at his risk during such transit.
mortgagor. (Art. 1504(3), NCC)
NOTE: The seller still owns the thing because there

E. RISK OF LOSS is no delivery or transfer of ownership yet. Hence,
the seller bears the risk of loss. (Villanueva, 2004)
Effect when the loss occurred at the time of

A thing is considered as lost
perfection of the contract of sale
GR: It is understood that the thing is lost when it:

GR: Contract is considered void or inexistent
1. Perishes;
because the object did not exist at the time of the
2. Goes out of commerce; or
transaction. (Pineda, 2010)
3. Disappears in such a way that its existence is
unknown or cannot be recovered. (Art. 1189(2),
XPN: In case of partial loss, the buyer may choose
NCC)
between withdrawing from the contract and
demanding the remaining part. If he chooses the
XPN: In an obligation to deliver a generic thing, the
latter, he shall pay the remaining part’s
loss or destruction of anything of the same kind
corresponding price in proportion to the total sum
does not extinguish the obligation. (NCC, Art. 1263)
agreed upon. (Art. 1493, NCC)
2023 GOLDEN NOTES
I. SALES
Options of the buyer with regard to the sale in Second view: Res perit domino or seller bears the
the total or partial loss or deterioration of a risk of loss. (Tolentino, Jurado, Baviera, and
mass of specific goods without the knowledge of Villanueva)
the seller
In reciprocal obligations, the extinguishment of the
1. He may treat the sale as avoided or cancelled; or obligation due to loss of the thing affects both
2. He may continue with the sale with respect to debtor and creditor; the entire juridical relation is
the available or remaining goods. (NCC, Art. extinguished. Under this view, the rule on loss under
1494) Article 1189 of the Civil Code would be different
from the rule on deterioration – the loss would be
Effect if the buyer chooses to continue with the for the account of the seller, while deterioration
sale of the remaining goods would be for the account of the buyer. (Tolentino,
2002)
The remaining goods shall pass in ownership to the
buyer but subject to proportionate reduction of the This view would make Articles 1480 and 1538 of the
price. But this is applicable only if the goods are Civil Code consistent with the provisions of Article
divisible or capable of being divided. (Pineda, 2010) 1504 of the Civil Code. (Villanueva, 2009)
If indivisible, the only option available is the
avoidance of the sale. Ownership is transferred only after delivery,
further, the contract is reciprocal. If the vendee
Effect when the loss occurred after perfection cannot have the thing, it is illogical and unjust to
but before delivery make him pay the price. (Pineda, 2010)
GR: Who bears the risk of loss is governed by the Effect when loss occurred after delivery
stipulations in the contract.
GR: Res perit domino applies – the buyer is now the
In the absence of stipulation: there are two owner; hence, the buyer bears the risk of loss. (NCC,
conflicting views: Art. 1504)
First view: Res perit creditori or buyer bears the XPNs:

risk of loss. (Paras, Vitug, Padilla, and De Leon)
1. Where the delivery has been made either to the
Article 1504 of the Civil Code, which embodies res buyer or to the bailee for the buyer, but
perit domino, only covers goods. The obligation to ownership in the goods has been retained by
pay on the part of the buyer is not extinguished. the seller merely to secure performance by the
(Villanueva, 2009) buyer of his obligations under the contract; and
NOTE: Pursuant to Art. 1537 of the NCC, the vendee 2. Where actual delivery has been delayed
must also bear the resulting disadvantages before through the fault of either the buyer or seller,
the delivery but after the contract has been the goods are at the risk of the party at fault.
perfected. This theory is an exception to the rule of (Art. 1504, NCC)
res perit domino. On the other hand, pursuant to
Article 1262 of the Civil Code, if the thing is lost or
destroyed without the fault of the seller, the
obligation to deliver is extinguished but the
obligation to pay subsist. (Pineda, 2010)
CIVIL LAW
Person who bears the risk of loss or NOTE: The mere delivery of a negotiable
deterioration instrument does not ipso facto extinguish the
obligation of the buyer to pay because the
instrument which has been delivered may be
Before SELLER is the owner so seller dishonored. In which case, the seller is still an
Perfection bears risk of loss. unpaid seller. (US v. Bedoya, G.R. No. 5100, 03
Nov. 1909)
Contract shall be without any

Moreover, bills of exchange or mercantile
effect – the SELLER bears the
documents shall produce the effect of payment
At Perfection loss since the buyer is relieved
only when they have been cashed or when
of his obligation under the
through the fault of the creditor, they have been
contract.
impaired.
TWO CONFLICTING VIEWS The term “seller” includes any person who is in the
After Perfection
but Before position of the seller, such as (a) an agent of the
Deterioration & fruits – Buyer seller to whom the bill of lading has been indorsed;
Delivery
bears loss. (Tolentino, 2002) or (b) a consignor or agent who has himself paid, or
is directly responsible for the price. (Jurado, 2019)
Buyer becomes the owner so
BUYER bears risk of loss. Q: When is a seller considered unpaid despite
After Delivery the title of the goods passing to the buyer?
Delivery extinguish ownership
vis-à-vis the seller & creates a A: Whenever the seller was only paid partially, he
new one in favor of the buyer. remains an unpaid seller. (Pineda, 2010)
Remedies of an Unpaid Seller
F. BREACH OF CONTRACT OF SALE

I. Ordinary / General Remedies
1. Action for Price (Art. 1595, NCC)

REMEDIES OF AN UNPAID SELLER
Exercised when:
Unpaid Seller a. Ownership has passed to buyer and he
wrongfully neglects or refuses to pay
One is considered as unpaid seller when: for the price;
1. The whole of the price has not been paid or b. Price is payable on a day certain and
tendered; or the buyer wrongfully neglects to pay
such price, whether or not ownership
2. A bill of exchange or other negotiable has passed; or
instrument has been received as conditional
payment, and the condition on which it was c. Goods cannot readily be resold for
received has been broken by reason of the reasonable price and the buyer
dishonor of the instrument, the insolvency of wrongfully refuses to accept the goods,
the buyer, or otherwise. (Art. 1525, NCC) whether or not ownership has passed
and Art. 1596 of NCC is inapplicable.
2023 GOLDEN NOTES
I. SALES
2. Action for Damages (Art. 1596, NCC) – In NOTE: When part of goods delivered, may
case of wrongful neglect or refusal by the still exercise right on goods undelivered.
buyer to accept or pay for the thing sold.
GR: Where an unpaid seller has made part
NOTE: The measure of damages is the delivery of the goods, he may exercise his
estimated loss directly and naturally right of lien on the remainder.
resulting in the ordinary course of events
from the buyer’s breach of contract. XPN: Unless such part delivery has been
made under such circumstances as to show
a. Where there is an available market for an intent to waive the lien or right of
the goods in question, the measure of retention. (Art. 1528, NCC)
damages is, in the absence of special
circumstances showing proximate Moreover, when title to the property has
damage of a different amount, the passed to the buyer, but possession
difference between the contract price remains in the hands of the seller, the latter
and the market or current price at the is necessarily holding the goods for the
time or times when the goods ought to buyer. For his protection, the seller is
have been accepted, or, if no time was entitled to possess the same until he has
fixed for acceptance, then at the time of been fully paid, or a tender of the price has
the refusal to accept. been made.
b. Where the labor or expense of material A lien based on a writ of attachment is

amount is necessary on the part of the inferior to that of the unpaid seller’s right of
seller to fulfill his obligations under the preference under Art. 2241 of the Civil
contract of sale and the buyer Code.
repudiates the contract or notifies the
seller to proceed no further therewith – Instances when Possessory Lien is Lost
labor performed or expenses made
before receiving notice of the buyer's The unpaid seller loses his lien on the goods
repudiation or countermand and whenever:
unrealized profit.
a. Seller delivers the goods to a carrier or other
II. Special Remedies (Art. 1526, NCC*) bailee for the purpose of transmission to buyer
without reserving the ownership in the goods
1. Possessory Lien (Art. 1527, NCC) – seller is or the right to possession thereof;
not bound to deliver the object of the
contract of sale if buyer has not paid him b. The buyer or his agent lawfully obtains
the price. This remedy presupposes that possession of the goods; or
the sale is on credit. It is exercisable only in
following circumstances: c. By waiver thereof. (Art. 1529, NCC)
a. Where the goods have been sold 2. Loss of Lien (Art. 1529, NCC)
without any stipulation as to credit;
a. When he delivers the goods to the
b. Where the goods have been sold on carrier or other bailee for purpose of
credit, but term of credit has expired; transmission to the buyer without
or reserving the ownership in the goods
or the right to the possession thereof;
c. Where the buyer becomes insolvent.
CIVIL LAW
b. When the buyer or his agent lawfully If the buyer, beforehand, knew of the insolvency of
obtains possession of the goods; or the buyer, he cannot exercise the right of stoppage
c. By waiver thereof. in transitu because he is under estoppel.
3. Right of Stoppage in Transitu (Art. 1530, However, the right is not impaired even if the
NCC) insolvency of the buyer has been existing at the time
of the perfection of the sale as long as the seller was
Requisites: (I-S-E-N-T-U) not aware of it.
a. Insolvent buyer; (Art. 1530, NCC) When Goods are in Transit
b. Seller must Surrender the negotiable 1. From the time when they are delivered to a
document of title, if any; (Art. 1532, carrier or other bailee until the buyer, or his
NCC) agent in that behalf, takes delivery of them from
such carrier or other bailee; and
c. Seller must bear the Expenses of
delivery of the goods after the exercise 2. If the goods are rejected by the buyer, and the
of the right; (Art. 1532, NCC) carrier or other bailee continues in possession
of them, even if the seller has refused to receive
d. Seller must either actually take them back. (Art. 1531(1), NCC)
possession of the goods sold or give
Notice of his claim to the carrier or When Goods are No Longer in Transit
other person in possession; (Art. 1532,
NCC) 1. If the buyer, or his agent, obtains delivery of the
goods before their arrival at the appointed
e. Goods must be in Transit; (Art. 1531, destination;
NCC) and
2. If, after the arrival of the goods at the appointed
f. Unpaid seller. (Art. 1525, NCC) destination, the carrier or other bailee
acknowledges to the buyer or his agent that he
NOTE: Buyer’s insolvency need not be holds the goods on his behalf and continues in
judicially declared. A person is insolvent possession of them as bailee for the buyer or his
who either has ceased to pay his debts in agent;
the ordinary course of business or cannot
pay his debts as they become due, 3. If the carrier or other bailee wrongfully refuses
whether insolvency proceedings have to deliver the goods. (Art. 1531, NCC)
been commenced or not. (Art. 1636(2)
NCC) The unpaid seller may resume possession of the
goods at any time while they are in transit, and he
Basis of Right of Stoppage in Transitu will then become entitled to the same rights in
regard to the goods as he would have had if he had
The injustice of allowing the buyer to acquire never parted with the possession. (Art. 1530, NCC)
ownership and possession of the goods when he has
not paid and, owing to his insolvency, cannot pay Thereafter, the seller may exercise the following
the price which was to be given in return for the rights:
goods. (De Leon, 2014) 1. Right of lien (Art. 1527, NCC);
2. Right to resell (Art. 1533, NCC); and
3. Right to rescind the transfer of title. (Art.
1534, NCC)
2023 GOLDEN NOTES
I. SALES
Effect of Exercising the Special Right of Resale 5. Special Right to Rescind (Art. 1597, NCC)
The unpaid seller shall not be liable to the original Requisites:

buyer upon the sale or for any profit made by such a. Goods have not been delivered to the
resale, but may recover from the buyer damages for buyer; and
any loss occasioned by the breach of the sale. (Art. b. Buyer has repudiated the contract of
1533, NCC) sale; or
c. Has manifested his inability to
NOTE: The seller cannot, however, directly or perform his obligations thereunder;
indirectly buy the goods. or
d. Has committed a breach thereof,
Notice to the Defaulting Buyer which must be substantial.
GR: Notice to the defaulting buyer NOT required in NOTE: Here, the seller may thereafter
the resale of goods totally rescind the contract of sale by giving
notice of his election to do so to the buyer.
XPN: Where the right to resell is not based on the
perishable nature of the goods or upon an express When Available
provision of the sale.
When the unpaid seller has:
NOTE: Notice of time and place of resale is not 1. The right of lien; or
essential to the validity of such resale. (Art. 1533, 2. Stopped the goods in transit
NCC) a. Where he expressly reserved the right
to rescind in case the buyer should make
4. Special Right to Resell the Goods (Art. 1533, default, or
NCC) b. Where the buyer has been in default in
the payment of the price for an
Exercised when: unreasonable time. (Art. 1534, NCC)
a. Goods are perishable in nature,
b. The seller has expressly reserved the REMEDIES OF THE BUYER
right of resale in case of default; or
c. The buyer has been in default in Immovables
payment for an unreasonable time.
1. Suspension of payment – applicable in case
NOTE: It is essential before the resale can be of:
made that the unpaid seller should have a a. if he is disturbed in the possession or
right of lien or should have stopped the goods ownership of the thing acquired; or
in transitu. (Jurado, 2019)
b. if he has reasonable grounds to fear
Art. 1533 of the Civil Code provides that the such disturbance, by a vindicatory
seller having the right “may resell the goods.” action or a foreclosure of mortgage.
The language is permissive in nature rather (Art. 1590, NCC)
than mandatory. (De Leon, 2014)
NOTE: In case of subdivision or
condominium projects, if real estate
developer fails to comply with obligation
according to approved plan, the buyer may
rescind or suspend payment until the seller
complies. (Secs. 23& 24, P.D. No. 957)
CIVIL LAW
2. In the sale of immovable property, even b. Accept goods & maintain action
though it may have been stipulated that upon against seller for damages; (Art.
failure to pay the price at the time agreed 1599(3), NCC)
upon the rescission of the contract shall of
right take place, the vendee may pay, even c. Action or counterclaim for damages
after the expiration of the period, as long as – refuse to accept goods & maintain
no demand for rescission of the contract has action against seller for damages (Art.
been made upon him either judicially or by a 1599(3), NCC); or
notarial act. (Art. 1592, NCC)
d. Rescission – rescind contract of sale &
NOTE: Art. 1592 of the NCC is not applicable refuse to receive goods/return them
to: when already received and recover
the price or any part which has been
a. Sale on installment of real estate in paid. (Art. 1599(4), NCC)
which the parties have laid down the
procedure to be followed in the event 3. Disturbed in possession or with
the vendee failed to fulfill his reasonable grounds to fear disturbance
obligation. (Albea v. Inquimboy, G.R. (anticipatory breach) – Suspend
No. L-1601, 20 May 1950) payment until the seller has caused the
disturbance or danger to cease. (Art. 1590,
b. Contract to sell/conditional sale of NCC)
real estate where the title remains
with the vendor until fulfillment of a NOTE: When the buyer has claimed and been
positive condition, such as full granted a remedy in any of these ways, no other
payment of the price. (Roque v. remedy can thereafter be granted, without
Lapuz, G.R. No. L-32811, 31 Mar. prejudice to the buyer’s right to rescind, even if
1980) previously he has chosen specific performance
when fulfillment has become impossible.
Movables (Villanueva, 2011; in relation to Art. 1191(2),
NCC)
1. Failure of seller to deliver – Action for
specific performance without giving the Rule when the Seller Delivers Goods Less Than
seller the option of retaining the goods on What He has Contracted to Sell
payments of damages. (Art. 1598, NCC)
a. The buyer may reject the goods delivered and
2. Breach of seller’s warranty – The buyer he shall have no liability; or
may, at his election, avail of the following
remedies: b. The buyer may accept the goods delivered, but
he will pay the contract rate, if he has knowledge
a. Recoupment – Accept goods and set that the seller is not going to deliver all the
up breach of warranty by way of goods contracted for; or
recoupment in diminution or
extinction of the price; c. If, however, the buyer has used or disposed of
the goods delivered before he knows that the
NOTE: The Theory of Recoupment is seller is not going to perform his contract in full,
that the seller’s damages are cut the buyer shall not be liable for more than the
down to an amount which will fair value to him of the goods so received. (Art.
compensate him for the value of 1522, NCC)
what he has given. (De Leon, 2013)
2023 GOLDEN NOTES
I. SALES
Rule when the Seller Delivers Goods GREATER Rule when the Sale of Immovable is by Unit of
than what he has Contracted to Sell Measure or Number
1. The buyer may accept only the goods which GR: The seller must deliver all that may have been
were included in the contract and reject the stated in the contract.
excess; or
2. The buyer may accept the entire goods XPN: If impossible to deliver all, the buyer may
delivered and he shall pay for them at the choose between:
contract rate. (Art. 1522, NCC)
a. Proportional reduction of the price; or
Rule when the seller delivers goods which are b. Rescission of the contract, provided that the
mixed with other goods of different description deficiency is not less than 1/10 of the area
not included in the contract stated in the contract. (Art. 1539, NCC)
1. The buyer may accept the goods which are in NOTE: The buyer is entitled to rescind the contract
accordance with the contract and reject the rest in the following cases:
(Art. 1522, NCC); or
1. The lack in area is at least 1/10th than that
2. The buyer may also accept them all if he so stated or stipulated in the contract;
desires, but he must pay for them all.
2. The deficiency in the quality specified in the
Rule if the Subject Matter is Indivisible contract exceeds 1/10th of the price agreed
upon; and
The buyer may reject the whole of the goods. (Art.
1522, NCC) 3. The buyer would not have bought the
immovable had he known of its smaller area or
Duty of the Seller with regard to Accessions and inferior quality irrespective of the extent of the
Accessories lack in area or quality. (Art. 1539, NCC; De Leon,
2011)
The seller has the duty to preserve the thing and its
accessions and accessories from the time of the Prescriptive Period for the Action of Rescission
perfection of the contract of sale. (Art. 1537, NCC) of Contract
But all the fruits shall pertain to the vendee from the Six (6) months from the day of delivery. (Art. 1543,
day on which the contract was perfected. NCC)
NOTE: In case of loss or deterioration, the seller is How Payment is Made by the Buyer
liable for damages or the buyer may seek rescission
with damages. However, if loss or deterioration is Price is paid at the time and place stipulated in the
due to a fortuitous event, the seller is not liable. (Art. contract. It is made to the person in whose favor the
1538, NCC) obligation has been constituted or his successor in
interest, or any person authorized to receive.
In accordance with Art. 1480 of the Civil Code, if the (Villanueva, 2009)
thing is lost after perfection but before its delivery
(i.e., before the ownership of the thing is transferred
to the vendee), the risk of loss is shifted to the
vendee as an exception to the general rule of res
perit domino.
CIVIL LAW
1. RECTO LAW Alternative Remedies in case of Sale of Personal

Property in Installments
Installment Sales Law (1999, 2000 BAR)

1. Specific Performance: Exact fulfillment should
the buyer fail to pay
Act No. 4122 was passed by the Philippine
Legislature on 09 Dec. 1939, otherwise known as
GR: If availed of, the unpaid seller cannot
the “Installment Sales Law” or the “Recto Law.” It is
anymore choose other remedies.
embodied in Art. 1484 of the NCC, which provides
for the remedies of a seller in the contracts of sale of
XPN: If after choosing specific performance, it
personal property by installments.
has become impossible to perform it, rescission
Application of Recto Law
may be pursued. (Villanueva, 2016)
This law covers contracts of sale of personal

NOTE: If vendor elected fulfillment or specific
property by installment (Act No. 4122). It is also
performance:
applied to contracts purporting to be leases of
personal property with option to buy, when the
a. The filing of collection suit barred the
lessor has deprived the lessee of the possession or
foreclosure of the mortgage. A mortgagee
enjoyment of the thing. (PCI Leasing and Finance,
who files a suit for collection abandons the
Inc. v. Giraffe-X Creative Imaging, Inc., G.R. No.
remedy of foreclosure of the chattel
142618, 12 July 2007)
mortgage constituted over the personal
properties or security for the debt or value
NOTE: Recto Law applies only to sale payable in
of the promissory note which he seeks to
installments and not to a sale where there is an
recover in the said suit.
initial payment and the balance is payable in the
future, because such is a straight sale, not a sale by
b. Filing of B.P. Blg. 22 does not bar
installments.
foreclosure of mortgage. (Sps. Torres v.
Medina, G.R. No. 166730, 10 Mar. 2010)
Rationale of Recto Law
However, in Chieng v. Sps. Santos (G.R. No.
169647, 31 Aug. 2007), it was held that the
To remedy the abuses committed in connection
filing of the B.P. Blg. 22 case is equivalent
with the foreclosure of chattel mortgages and to
to the filing of a collection suit for the
prevent mortgagees from seizing the mortgaged
recovery of the mortgage-loan. The Court
property, buying it at foreclosure sale for a low price
explained that the civil action for the
and then bringing suit against the mortgagor for a
recovery of the amount of the dishonored
deficiency judgment. (Magna Financial Services
checks is impliedly instituted in the
Group, Inc. v. Colarina, G.R. No. 158635, 09 Dec. 2005)
criminal action. Hence, the impliedly
instituted civil action in the criminal case
Requisites of Recto Law:
for violation of B.P. Blg. 22 is, in effect, a
collection suit or suit for recovery of
1. Valid contract of sale;
mortgage debt.
2. Subject matter is personal property;
3. Payable in installments; and
c. Action for recovery of possession with
4. In the case of the second and third remedies,
replevin as provisional remedy
that there has been a failure to pay two or more
preparatory to extrajudicial foreclosure is
installments. (Art. 1484, NCC)
not an action for collection much less for
foreclosure.
2023 GOLDEN NOTES
I. SALES
But if the action for replevin culminated in XPN: If the remedy first chosen was not completed
the foreclosure of the chattel mortgage or not fully exercised as when there was voluntary
and the sale of the personal property at desistance, the vendor may still avail himself of
the public auction, then Art. 1484 now another remedy.
applies. (Rabuya, 2017)
NOTE: In ordinary alternative obligations, a mere
2. Rescission: Cancel the sale if buyer fails to pay choice categorically and unequivocally made and
2 or more installments. Deemed chosen when: then communicated by the person entitled to
exercise his option concludes the parties. The
a. Notice of rescission is sent; creditor may not thereafter exercise any other
b. Takes possession of subject matter of sale; option unless the chosen alternative proves to be
and ineffectual or unavailing due to no fault on his part.
c. Files action for rescission. (Borbon II v. Servicewide Specialists, Inc., G.R. No.
106418, 11 July 1996)
NOTE: The stipulation that the installments or
rents already paid shall not be returned to the Effect of Filing an Action for Specific
vendee shall be valid insofar as the same may Performance in case of Default in the Payment of
not be unconscionable under the an Installment Sale Secured by a Chattel
circumstances. Mortgage on the Subject of the Sale
3. Foreclosure: Foreclose on chattel mortgage if The seller can collect from the buyer for the sum of
buyer fails to pay two (2) or more installments. money the buyer failed to pay. In case the sum
He shall have no further action against the collected is insufficient, the court can still order for
purchaser to recover any unpaid balance of the the levy of the property subject of the sale
price. Any agreement to the contrary shall be transaction to cover the balance. Moreover, if the
void. (Art. 1484) action instituted is for specific performance and the
mortgaged property is subsequently attached and
NOTE: Of the three remedies, only this third sold, the sale thereof does not amount to a
remedy bars the recovery of unpaid balance. foreclosure of the mortgage. Hence, the seller-
Moreover, payment of damages and attorney’s creditor is entitled to a deficiency judgment.
fees are also barred. (Industrial Finance Corp. v. Ramirez, G.R. No. L-
43821, 26 May 1977)
GR: Actual foreclosure is necessary to bar
recovery of balance. Q: A mortgaged a diamond ring to M as a security
for a loan which was to be paid 2 years
XPN: Mortgagor refuses to deliver property to thereafter. Since A failed to pay M, she then
effect foreclosure; expenses incurred in foreclosed the mortgaged property. However, it
attorney’s fees in obtaining the property may be turned out that the proceeds of the sale were
recovered by the vendor. insufficient; thus, M filed an action for specific
performance. A contends that this is a violation
The Remedies are Alternative, NOT Cumulative of the Recto law since the foreclosure of the
chattel bars subsequent recovery. Is this
GR: The election of one remedy is a waiver of the correct?
right to resort to the other remedies. If the creditor
chooses one remedy, he cannot avail himself of the A: NO. A is not correct in invoking the Recto law
other two. (Delta Motor Sales Corp. v. Niu Kim Duna, since it is only applicable in case of sale of personal
G.R. No. 61043, 02 Sept. 1992) property through installment. In the given case, the
amount being claimed by A was to be paid 2 years
CIVIL LAW
thereafter as a lump sum, not through installments. debtor-mortgagor and petitioner as the creditor-
Moreover, the transaction is a loan, not a sale. mortgagee.
Recto Law Does NOT Cover a Contract to Sell of Thus, ESB is justified in filing his Complaint before
Movables the RTC seeking for either the recovery of
possession of the subject vehicle so that it can
There will be nothing to rescind if the suspensive exercise its rights as a mortgagee, i.e., to conduct
condition (payment of full purchase price) upon foreclosure proceedings over said vehicle; or in the
which the contract is based fails to materialize. event that the subject vehicle cannot be recovered,
(Villanueva, 2009) to compel respondent to pay the outstanding
balance of her loan. Since it is undisputed that ESB
Q: Palces purchased a Hyundai Starex through a had regained possession of the subject vehicle, it is
loan granted by Equitable Savings Bank (ESB). In only appropriate that foreclosure proceedings be
connection therewith, Palces executed a commenced in accordance with the provisions of
Promissory Note with Chattel Mortgage in favor “The Chattel Mortgage Law,” as intended.
of the ESB. Eventually, Palces failed to pay the Otherwise, Palces will be placed in an unjust
monthly installments prompting ESB to demand position where she is deprived of possession of the
for the payment of the entire balance which subject vehicle while her outstanding debt remains
remained unheeded. Thus, ESB filed a case for unpaid, either in full or in part, all to the undue
Recovery of Possession with Replevin with advantage of petitioner – a situation which law and
Alternative Prayer for Sum of Money. equity will never permit. (Equitable Savings Bank v.
Palces, G.R. No. 214752, 09 Mar. 2016)
In order to update her installment payments,
Palces paid ESB P70,000 on 08 Mar. 2007 and 2. MACEDA LAW
P33,000 on 20 Mar. 2007 (March 2007
payments). Despite the aforesaid payments, ESB
Realty Installment Buyer Act (2000, 2002 BAR)
filed the instant complaint, resulting in the
sheriff taking possession of the subject vehicle.
Commonly known as the “Maceda Law,” embodied
The RTC ruled in favor of ESB. The CA affirmed
in Sec. 2, R.A. No. 6552 thereof declares as “public
the RTC ruling; however, it ordered ESB to
policy to protect buyers of real estate on installment
return the amounts paid on March 2007 by
payments against onerous and oppressive
Palces. It ruled that, under Art. 1484 of the NCC,
conditions.”
ESB had already waived its right to recover any
unpaid installments when it sought a writ of
Transactions/Sale covered by the Maceda Law
replevin in order to regain possession of the
subject vehicle. As such, petitioner is no longer
The law involves the sale or financing of immovables
entitled to receive respondent’s late partial
(real estate) on installment payments. (Sec. 3, R.A. No.
payments. Is the CA’s ruling correct?
6552)
A: NO. In this case, there was no vendor-vendee

Coverage: Residential Condominium Apartments
relationship between respondent and petitioner. A
judicious perusal of the records would reveal that
Excluded:
respondent never bought the subject vehicle from
1. Industrial lots;
petitioner but from a third party, and merely sought
2. Commercial buildings (and commercial lots by
financing from petitioner for its full purchase price.
implication);
Indubitably, a loan contract with the accessory
3. Sale to tenants under agrarian laws; and
chattel mortgage contract - and not a contract of sale
4. Sale of lands payable in straight terms. (Sec. 3,
of personal property in installments - was entered
R.A. No. 6552)
into by the parties with respondent standing as the
2023 GOLDEN NOTES
I. SALES
NOTE: The enumeration of the transactions not NOTE: Essentially, the said provision provides
covered by the Maceda Law is NOT exclusive, since for three requisites before the seller may
other transactions over immovables, although not actually cancel the subject contract: first, the
within the enumerated exclusions are to be seller shall give the buyer a 60-day grace period
considered as excluded because they are not within to be reckoned from the date the installment
the clearly expressed coverage. An example would became due; second, the seller must give the
be the sale on installment of commercial or office buyer a notice of cancellation/demand for
condominium units. (Villanueva, 2009) rescission by notarial act if the buyer fails to pay
the installments due at the expiration of the said
Q: What are the so-called “Maceda” and “Recto” grace period; and third, the seller may actually
laws in connection with sales on installments? cancel the contract only after thirty (30) days
Give the most important features on each law. from the buyer’s receipt of the said notice of
(1999 BAR) cancellation/demand for rescission by notarial
act. (Optimum Dev. Bank v. Sps. Jovellanos, G.R.
A: The Maceda Law is applicable to sales of No. 189145, 04 Dec. 2013)
immovable property on installments. The most
important features are: NOTE: According to the Supreme Court, the vendor
could go to the court and demand judicial rescission
1. After having paid installments for at least two in lieu of a notarial act of rescission. An action for
years, the buyer is entitled to a mandatory grace annulment of contract which is a kindred concept of
period of one month for every year of rescission by notarial act will also suffice. (Rabuya,
installment payments made, to pay the unpaid 2017)
installments without interest.
Q: The case involves three parcels of land
If the contract is cancelled, the seller shall located in Barangay Baliok, Talomo, Davao City
refund to the buyer the cash surrender value previously registered in the name of Star Asset
equivalent to 50% of the total payments made, under three TCTs with a combined area of
and after five years of installments, an 300,000 sqm. On 12 Dec. 2012, Star Asset filed a
additional 5% every year but not to exceed 90% Petition for Cancellation of Adverse Claim in
of the total payments made. said TCTs before the trial court. Star Asset
asserted that the subject properties were
NOTE: This requires a notarial act of rescission previously owned by Goldland which were
and the refund to the buyer of the full payment however mortgaged to PBCO. The properties
of the cash surrender value of the payments on were foreclosed by PBCOM and later, the
the property. Failure to comply with the ownership of the same was transferred to
mandatory twin requirement shall result into Unimark. Star Asset claimed that it eventually
the contract remaining to be valid and acquired the properties from Unimark.
subsisting. (Rabuya, 2017)
In the meantime, after the foreclosure of the
2. In case the installments paid were less than two properties, Goldland impugned the validity of
(2) years, the seller shall give the buyer a grace the foreclosure proceedings which prompted
period of not less than 60 days. If the buyer fails Star Asset to enter into a Compromise
to pay the installments due at the expiration of Agreement with the former with an undertaking
the grace period, the seller may cancel the to sell back the properties to Goldland under the
contract after 30 days from receipt by the buyer following schedule. Star Asset claimed that
of the notice of cancellation or demand for Goldland failed to comply with its obligation
rescission by notarial act. under the compromise agreement, hence, Star
Asset was constrained to cancel said
compromise agreement.
CIVIL LAW
One day after the cancellation of the reason, the Court find that Foothills Realty is taking
Compromise Agreement, Foothills Realty, as an incongruous position by invoking the Maceda
successor-in-interest of Goldland, caused the law in as much as the said law was enacted precisely
annotation of its adverse claim on the subject to guard against its practice.
TCTs. In its application to cancel the adverse
claim, Star Asset argued that the cancellation is Since the compromise agreement is validly
in order because the compromise agreement, cancelled, the cancellation of the compromise
upon which Foothills Realty's right was agreement no longer supports the continued
anchored was already terminated. Moreover, annotation of the adverse claim on the TCTs of the
Star Asset asserted that the adverse claim was subject properties. (Star Asset Mgmt. Ropoas, Inc. v.
only valid for 30 days, such that after the lapse RD of Davao City, G.R. No. 233737. 03 Feb. 2021)
of said period, the adverse claim must be
cancelled without any positive action on the part Rights of the Buyer
of Star Asset. Thus, Star Asset prayed for the
cancellation and removal of Foothills Realty's a. If buyer has paid at least 2 years of
adverse claim annotated on the TCTs of the installments:
subject properties. Star Asset moved that it be
substituted by Dallas Energy because its The buyer is entitled to the following rights in
interests over the properties were already sold case he defaults in the payment of succeeding
to the latter. TCTs were issued in Dallas Energy’s installments:
name whereby the same adverse claim was
carried over and annotated therein. i. To pay, without additional interest, the
unpaid installments due within the total
Foothills Realty also argued that there should grace period earned by him which is hereby
have been a notarial act of rescission as fixed at the rate of one (1) month grace
required by the Maceda Law and failure to serve period for every one (1) year of installment
the same will not be tantamount to cancellation payments made;
of the compromise agreement. Is the annotation
of the adverse claim anchored on the ii. If the contract is cancelled, the seller shall
compromise agreement proper? refund to the buyer the cash surrender
value of the payments on the property
A: NO. The cancellation of the compromise equivalent to fifty percent (50%) of the
agreement despite lack of notarial act of rescission total payments made, and, after five (5)
is valid because the subject controversy is not years of installments, an additional five
covered by the Maceda Law hence there is no need percent (5%) every year but not to exceed
for a notarial act of recission. In this case, the buyer ninety percent (90%) of the total payments
under the compromise agreement, Foothills Realty, made. (Sec. 3, R.A. No. 6552)
is a company based in Davao City that is engaged in
the business of real estate development, b. If the buyer has paid less than two (2) years
undertaking, establishing, or managing subdivision of installments:
housing problems, industrial or commercial estates,
golf course projects, resort projects and other real The seller shall give the buyer a grace period of
estate developments. The properties subject of this not less than sixty (60) days from the date the
case have an aggregate land area of 300,000 sqm. By installment became due.
its sheer size, the subject properties can hardly be
classified as residential properties as to be covered If the buyer fails to pay the installments due at
by the Maceda law. As aforesaid, the Maceda the expiration of the grace period, the seller
law was enacted to curb out the bad practices of real may cancel the contract after thirty (3) days
estate developers like Foothills Realty. For that from receipt by the buyer of the notice of
2023 GOLDEN NOTES
I. SALES
cancellation or the demand for rescission of the performance against Honorio invoking the
contract by a notarial act. (Sec. 4, R.A. No. 6552) application of the Maceda Law. If you are the
judge, how will you decide the case? (2014 BAR)
Q: Orbe purchased land from Filinvest. She paid
a total of P608,648.20 for the past two years and A: I will rule in favor of Honorio. The invocation of
later on failed to pay the balance. She claims that the Maceda Law is misplaced. The law applies only
she is entitled to get 50% of her payments to sale or financing of realty on installment
because she paid for at least 2 years. However, payments including residential units or residential
Filinvest denied her claim, alleging that what condominium apartments and does not apply to
she paid did not really amount to two years’ sales of industrial units or industrial lands like in the
worth of payments. Is Orbe allowed to get the case presented.
50%?
The sale to the Spouses Dakila is not a sale on
A: NO. When Act R.A. No. 6552 or the Maceda Law installment but more of a straight sale where a
speaks of paying “at least two years of installments” down payment is to be made and the balance to be
in order for the benefits under its Sec. 3 to become paid in a relatively short period of three months.
available, it refers to the buyer's payment of two (2)
years’ worth of the stipulated fractional, periodic Q: Priscilla purchased a condominium unit in
payments due to the seller. (Orbe v. Filinvest Land, Makati City from the Citiland Corporation for a
Inc., G.R. No. 208185, 06 Sept. 2017) price of P10 million, payable P3 million down
and the balance with interest thereon at 14%
Other Rights Granted to a Buyer under the per annum payable in 60 equal monthly
Maceda Law installments of P198,333.33.
1. Sell or assign rights to another; They executed a Deed of Conditional Sale in

2. Reinstate contract by updating within 30 days which it is stipulated that should the vendee
before and cancellation; fail to pay three successive installments, the sale
3. Deed of Sale to be done by notarial act; shall be deemed automatically rescinded
4. Pay full installment in advance the balance of without the necessity of judicial action and all
price anytime without interest; and payments made by the vendee shall be
5. Have full payment annotated in certificate of forfeited in favor of the vendor by way of rental
title. for the use and occupancy of the unit and as
liquidated damages.
NOTE: Applies to contracts even before the law was
enacted. Stipulation to the contrary is void. For 46 months, Priscilla paid the monthly
installments religiously, but on the 47th and
Q: Spouses Dakila entered into a contract to sell 48th months, she failed to pay. On the 49th
with Honorio Cruz over a parcel of industrial month, she tried to pay the installments due but
land in Valenzuela, Bulacan for a price of the vendor refused to receive the payments
P3,500,000.00. The spouses would give a down tendered by her.
payment of P500,000.00 upon the signing of the
contract, while the balance would be paid for the The following month, the vendor sent her a
next 3 consecutive months in the amount of notice that it was rescinding the Deed of
P1,000,000.00 per month. The spouses paid the Conditional Sale pursuant to the stipulation for
first 2 installments but not the last installment. automatic rescission, and demanded that she
vacate the premises. She replied that the
After one year, the spouses offered to pay the contract cannot be rescinded without judicial
unpaid balance which Honorio refused to demand or notarial act pursuant to Art. 1592 of
accept. The spouses filed a complaint for specific the NCC. (2000, 2014 BAR)
CIVIL LAW
1. Is Art. 1592 applicable? prompted Optimum to file an unlawful

detainer case against the spouses. Was the
A: NO. Art. 1592 of the NCC does not apply to a cancellation of the contract to sell valid?
conditional sale. Art.1592 applies only to a
contract of sale and not to a Deed of Conditional A: YES. The Maceda Law, R.A. No. 6552,
Sale where the seller has reserved title to the recognizes in conditional sales of all kinds of real
property until full payment of the purchase price. estate (industrial, commercial, residential) the
The law applicable is the Maceda Law. (Jurado, right of the seller to cancel the contract upon non-
2019) payment of an installment by the buyer, which is
simply an event that prevents the obligation of the
2. Can the vendor rescind the contract? vendor to convey title from acquiring binding
force. It also provides the right of the buyer on
A: NO, the vendor cannot rescind the contract under installments in case he defaults in the payment of
the circumstances. Under the Maceda Law, which succeeding installments.
is the law applicable, the seller on installment
may not rescind the contract till after the lapse of Three (3) requisites before the seller may actually
the mandatory grace period of 30 days for every cancel the contract must exist: first, the seller shall
one year of installment payments, and only after give the buyer a 60-day grace period to be
30 days from notice of cancellation or demand for reckoned from the date the installment became
rescission by a notarial act. due; second, the seller must give the buyer a
notice of cancellation/demand for rescission by
In this case, the refusal of the seller to accept notarial act if the buyer fails to pay the
payment from the buyer on the 49th month was not installments due at the expiration of the said grace
justified because the buyer was entitled to 60 days period; and third, the seller may actually cancel
grace period, and the payment was tendered the contract only after thirty (30) days from the
within that period. Moreover, the notice of buyer’s receipt of the said notice of
rescission served by the seller on the buyer was not cancellation/demand for rescission by notarial
effective because the notice was not by a notarial act. act.
Besides, the seller may still pay within 30 days from
such notarial notice before rescission may be It was only after the expiration of the 30-day
effected. All these requirements for a valid period did Optimum treat the contract to sell as
rescission were not complied with by the seller. effectively cancelled – making as it did a final
Hence, the rescission is invalid. demand upon Sps. Jovellanos to vacate the subject
property only on May 25, 2006. Thus, based on the
Q: Sps. Jovellanos entered into a Contract to foregoing, there was a valid and effective
Sell with Palmera Homes for the purchase of a cancellation of the Contract to Sell and since Sps.
residential house and lot payable for a period Jovellanos had already lost their right to retain
of 10 years. Later, Palmera Homes assigned all possession of the subject property as a
its rights, title, and interest in favor of consequence of such cancellation, their refusal to
Optimum Bank. vacate and turn over possession to Optimum
makes out a valid case for unlawful detainer.
After some time, Optimum issued a Notice of (Optimum Development Bank v. Sps. Jovellanos, G.R.
Delinquency and Cancellation of the Contract No. 189145, 04 Dec. 2013)
to Sell on 10 Apr. 2006 for the spouses’ failure
to pay their monthly payments. Thereafter, a
final Demand Letter dated 25 May 2006, was
issued by Optimum requesting the Sps.
Jovellanos to vacate and deliver the properties
which, however, remained unheeded. This
2023 GOLDEN NOTES
I. SALES
1. CONVENTIONAL REDEMPTION
G. EXTINGUISHMENT OF THE SALE
Seller reserves the right to repurchase thing sold
coupled with the obligation to return the purchase
Causes for Extinguishment of Sale price of the sale, expenses incurred under the
contract, other legitimate payments made by reason
A contract of sale is extinguished by: of the sale as well as the necessary & useful
expenses made on the thing sold. (Art. 1601 in
1. Same causes as how an obligation is relation to Art. 1616, NCC)
extinguished, namely: (Arts. 1231 & 1600, NCC)
a. Payment or performance; How Conventional Redemption takes Place
b. Loss of the thing due;
c. Condonation or remission of the debt; It shall take place when the vendor reserves the
d. Confusion or merger of the rights of right to repurchase the thing sold, with the
creditor and debtor; obligation to:
e. Compensation;
f. Novation; a. Return the price of the sale;
g. Annulment; b. Shoulder the expenses of the contract and any
h. Rescission; other legitimate payments made by the buyer
i. Fulfillment of resolutory condition; or by reason of the sale;
j. Prescription c. Pay the value of the necessary and useful
expenses made on the thing; and
2. Conventional Redemption (Arts. 1601-1618, d. Comply with other stipulations agreed upon.
NCC); or (Art. 1601, NCC)
3. Legal redemption. (Arts. 1619-1623, NCC)
Other person can exercise the right to
Redemption repurchase
It is a mode of extinguishment wherein the seller The right to repurchase may be exercised by any
has the right to redeem or repurchase the thing sold person to whom the right of repurchase may be
upon return of the price paid. transferred, or in case of legal redemption, by the
person so entitled by law. (Villanueva, 2009)
Kinds of Redemption
NOTE: Right to repurchase must be reserved at the
1. Legal; and time of perfection of sale. (Pineda, 2010)
2. Conventional
Reservation of right to repurchase
Incorporation of Right to Redeem in Every
Contract of Sale The right to repurchase is reserved by a stipulation
to that effect in the contract of sale. Because it is not
The right of the vendor to redeem/repurchase must a right granted to the vendor by the vendee, but is a
appear in the same instrument. However, parties right reserved by the vendor.
may stipulate on the right of repurchase in a
separate document but in this case, it is valid only Reservation CANNOT be made in an instrument
between the parties and not against third persons. different from that of the contract of sale. Once the
(Pineda, 2010) instrument of absolute sale is executed, any right
thereafter granted the vendor in a separate
instrument cannot be a right of repurchase but
CIVIL LAW
some other right like the option to buy. (Villanueva, Reservation CANNOT be made in an instrument
2009) different from that of the contract of sale. Once the
instrument of absolute sale is executed, any right
Parol evidence in proving right of repurchase thereafter granted the vendor in a separate
instrument cannot be a right of repurchase but
The right of repurchase may be proved by parol some other right like the option to buy. (Villanueva,
evidence when the contract of sale has been 2009)
reduced in writing, or when no objection to such Parole Evidence in Proving Right of Repurchase
parol evidence was made during trial. (Mactan Cebu
International Airport Authority v. CA, G.R. No. The right of repurchase may be proved by parol
121506, 30 Oct. 1996) evidence when the contract of sale has been
reduced in writing, or when no objection to such
Effect on the reserved right to repurchase if the parol evidence was made during trial. (MCIAA v. CA,
principal contract of sale is void G.R. No. 121506, 30 Oct. 1996)
Since the underlying contract of sale was Effect on the Reserved Right to Repurchase if the
inoperative and consequently void, then the Principal Contract of Sale is Void
reserved right of repurchase would also be void.
(Villanueva, 2009) Since the underlying contract of sale was
inoperative and consequently void, then the
Period of Redemption reserved right of repurchase would also be void.
(Villanueva, 2009)
The period of redemption cannot be agreed upon to
exceed 10 years. Instances of legal redemption (2000, 2002 BAR)
1. If it exceeds 10 years – agreement is valid for 1. Sale of a co-owner of his share to a stranger (Art.
the first 10 years; 1620, NCC);
2. If there is no period agreed upon – 4 years; 2. When a credit or other incorporeal right in
3. If the period is unclear – 10 years; litigation is sold; (Art. 1634, NCC)
4. If the period is void – 10 years. (Villanueva, 3. Sale of an heir of his hereditary rights to a
2009) stranger; (Art. 1088, NCC)
4. Sale of adjacent rural lands not exceeding 1
2. LEGAL REDEMPTION hectare (Art. 1621, NCC); and
5. Sale of adjacent small urban lands bought
merely for speculation. (Art. 1622, NCC)
The right to repurchase may be exercised by any
person to whom the right of repurchase may be
Right of legal redemption of co-owner
transferred, or in case of legal redemption, by the
person so entitled by law. (Villanueva, 2009)
Requisites:
NOTE: Right to repurchase must be reserved at the

1. There must be co-ownership of a thing;
time of perfection of sale. (Pineda, 2010)
2. There must be alienation of all or of any of the
shares of the other co-owners;
Reservation of Right to Repurchase
3. The sale must be to a third person or stranger;
and
The right to repurchase is reserved by a stipulation
4. The sale must be before partition
to that effect in the contract of sale. Because it is not
a right granted to the vendor by the vendee, but is a
right reserved by the vendor.
2023 GOLDEN NOTES
I. SALES
Right of legal redemption of adjacent owners of Other instances when the right of legal
rural lands redemption is also granted
Requisites: 1. Redemption of homesteads;

2. Redemption in tax auction sales;
1. Both the land of the one exercising the right of 3. Redemption by judgment debtors;
redemption and the land sought to be redeemed 4. Redemption in extrajudicial foreclosure;
must be rural; 5. Redemption in judicial foreclosure of mortgage;
2. The lands must be adjacent; 6. Foreclosures by banking institutions;
3. There must be an alienation 7. Foreclosures by rural banks; and
4. The piece of rural land alienated must not 8. Redemption under the Agrarian Reform Code.
exceed one (1) hectare;
5. The grantee or vendee must already own any Basis of legal redemption
other rural land; and
6. The rural land sold must not be separated by It is created partly for reason of public policy and
brooks, drains, ravines, roads, and other partly for the benefit and convenience of the
apparent servitudes from the adjoining lands. redemptioner to afford him a way out of what might
be a disagreeable or inconvenient association into
NOTE: In case two or more adjacent owners desire which he has been in trust. It is intended to
to exercise the right of redemption, the following minimize co-ownership. (Pineda, 2010)
rules on preference is applied:
Running of period of legal redemption
a. When the lands have different land area –
the owner of the adjoining land of smaller The right of legal redemption shall not be exercised
area. except within 30 days from the notice in writing by
the prospective seller, or seller, as the case may be.
b. When the lands have similar land area – The deed of sale shall not be recorded in the
the owner who first requested the Registry of Property unless accompanied by an
redemption. (De Leon, 2011) affidavit of the seller that he has given written
notice thereof to all possible redemptioners. (NCC,
Requisites of Right of pre-emption and legal Art. 1623)
redemption of adjacent owners of urban lands
Written notice indispensable (2001, 2002 BAR)
1. The one exercising the right must be an
adjacent owner; The right of legal pre-emption or redemption shall
not be exercised except within 30 days from the
2. The piece of land sold must be so small and notice in writing by the prospective vendor, or by
so situation that a major portion thereof the vendor, as the case may be. (NCC, Art. 1623)
cannot be used for any practical purpose
within a reasonable time; and NOTE: Knowledge is insufficient – the mere fact that
the redemptioner – the person who has the right to
3. Such urban land was bought by its owner redeem – is already aware of the existence of the
merely for speculation sale will not excuse the written notice. Mere
knowledge does not satisfy the requirement; there
NOTE: In case two or more adjoining owners desire must still be written notice despite such knowledge.
to exercise the right of legal redemption, the law (Barcellano v. Banas, et al., G.R. No. 165287,
prefers the owner whose intended use of the land September 14, 2011)
appears best justified.
CIVIL LAW
The right of redemption of co-owners excludes that

of adjoining owners. (NCC, Art. 1623) This means H. EQUITABLE MORTGAGE
that co-owners are preferred if the property is to be
redeemed by a co-owner and an adjoining owner.
It is one which lacks the proper formalities, form or

Pre-emption
words or other requisites prescribed by law for a
mortgage, but shows the intention of the parties to
Redemption presupposes that the property was
make the property subject of the contract as
already sold or transferred to another. In pre-
security for a debt and contains nothing impossible
emption, the right is present before the sale; there is
or contrary to law. (Aludos v. Suerte, G.R. No. 165285,
a right to purchase ahead of or before it can be sold
18 June 2012)
or transferred to other persons.
Essential Requisites of Equitable Mortgage

E.g., whenever a piece of urban land which is so
small and so situated that a major portion thereof
1. Parties entered into a contract denominated as
cannot be used for any practical purpose within a
one of sale; and
reasonable time, having been bought merely for
speculation, is about to be re-sold, the owner of any
2. Their intention was to secure an existing debt
adjoining land has a right of pre-emption at a
by way of a mortgage. (Molina v. CA, G.R. No.
reasonable price. (NCC, Art. 1620)
125755, 24 Feb. 2003)
Pre-emption vs. Redemption

Presumption of an Equitable Mortgage (2005
BAR)
PRE-EMPTION REDEMPTION
As to when it arises
A sale with conventional redemption is deemed to
Arises before sale Arises after sale be an equitable mortgage in any of the following
As to availability of rescission cases. (Art. 1602, NCC) (A-I-R-S-T-A-R)
Rescission is There can be rescission
inapplicable. of original sale. 1. Price of the sale with right to repurchase is
As to whom the action is directed unusually Inadequate;
Action is directed
Action is directed
against prospective 2. Seller Remains in possession as lessee or
against buyer.
seller. otherwise;
3. 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. Purchaser Retains for himself a part of the

purchase price;
5. Seller binds himself to pay the Taxes on the

thing sold;
6. In any other case where the real intention of the

parties is that the transaction shall Secure the
2023 GOLDEN NOTES
I. SALES
payment of a debt or the performance of any 3. The court may decree that “vendor” pay his
other obligation; or outstanding loan to the “vendee;” (Banga v.
Bello, G.R. No. 156705, 30 Sept. 2005) and
7. Art. 1602 shall also apply to a contract
purporting to be an Absolute sale. (Art. 1604, 4. A remand of the case to the trial court where the
NCC) latter did not pass upon the mortgagor’s claim
that he had paid his mortgage obligation, only
NOTE: In case of doubt in determining whether it is for the purpose of the determining whether
equitable mortgage or sale a retro (with right of said obligation has been paid, and if not, how
repurchase); it shall be construed as equitable much should still be paid. (Ibid.)
mortgage. The remedy is reformation.
Q: John borrowed P3 Million from Lourdes,
Inadequacy of Price and Equitable Mortgage secured by a Real Estate Mortgage Contract over
a parcel of land and a building thereon with a
Inadequacy of price does NOT constitute proof market value of P40 Million. Immediately after
sufficient to declare a contract as one of equitable the execution of the REM Contract, Lourdes
mortgage. Mere inadequacy of the price is not asked John to execute an undated Deed of
sufficient. The price must be grossly inadequate, or Absolute Sale with a stated consideration in the
purely shocking to the conscience. (Diaz, 2010) amount of P5 Million, supposedly for the
purpose of providing additional security for the
The Decisive Factor in Evaluating whether or loan. John claimed that they verbally agreed that
not a Deed of Sale Absolute in Form is a the mode of payment for the said loan would be
Mortgage Lourdes’ collection of rental payments from the
tenants of the subject property in the total
In determining whether a deed absolute in form is a amount of P70,000 per month for five (5) years.
mortgage, the court is not limited to the written John remained in possession of the property. To
memorials of the transaction. The decisive factor in the surprise of John, he was informed that the
evaluating such agreement is the intention of the ownership of the property had been transferred
parties, as shown not necessarily by the to Lourdes. John argued that the undated Deed
terminology used in the contract but by all the of Absolute Sale is void for being an equitable
surrounding circumstances, such as the relative mortgage. Is John correct?
situation of the parties at that time, the attitude acts,
conduct, declarations of the parties, the A: YES. An equitable mortgage is defined as one
negotiations between them leading to the deed, and which although lacking in some formality, or form
generally, all pertinent facts having a tendency to fix or words, or other requisites demanded by a statute,
and determine the real nature of their design and nevertheless reveals the intention of the parties to
understanding. (Sps. Raymundo. v. Sps. Bandong, G.R. charge real property as security for a debt, and
No. 171250, 04 July 2007) contains nothing impossible or contrary to law. Its
essential requisites are: (1) that the parties entered
Effects when Sale is adjudged as an Equitable into a contract denominated as a contract of sale;
Mortgage (2005 BAR) and (2) that their intention was to secure an existing
debt by way of a mortgage.
1. The apparent seller may ask for the reformation
of the instrument; (Art. 1605, NCC) The purported contract of sale between John and
Lourdes is an equitable mortgage and not a
2. Money, fruit or other benefit to be received by legitimate contract of sale. First, it is not disputed by
the buyer as rent or otherwise shall be any party that the supposed vendor of the property,
considered as interest; (Art. 1602, NCC) John, remains to be in possession of the subject
property despite purportedly selling the latter to
CIVIL LAW
Lourdes. Second, the purchase price of the The release of additional loans on the basis of the
purported sale indicated in the undated Deed of same security, coupled with the fact that
Absolute Sale is inadequate. Third, the evidence on respondents never filed an action to consolidate
record shows that respondent Lourdes retained for ownership over the subject property under Art.
herself the supposed purchase price. Fourth, John 1607, evidently shows that for 19 years,
established that the real intention of the parties is respondents expressly recognized: 1) that
for the purported contract of sale to merely secure petitioners continued to own the subject property
the payment of their debt owing to respondent De and 2) that the loan and equitable mortgage
Vera Navarro. (Sps. Sy v. De Vera-Navarro, G.R. No. subsisted. Thus, petitioners' cause of action to
239088, 03 Apr. 2019) recover the subject property can be said to have
accrued only in 2004, that is, when respondents
Q: On 27 Dec. 1987, petitioners obtained a loan rejected petitioners' offers to pay and extinguish
of P3,500.00 from Felipe Marquito, the father of the loan and to recover the mortgaged property as
respondents. Petitioners used their land as it was only at this time that respondents manifested
collateral for the loan obligation. On said date, their intention not to comply with the true
respondents' father began occupying the land. agreement of the parties. Undoubtedly, the filing of
In March 2003, petitioner Ogatia borrowed an the complaint in 2005 was made well-within the
additional P6,000.00, and again used her 10-year prescriptive period. (Saclolo v. Marquito,
aliquot share of the land as collateral for the G.R. No. 229243, 26 June 2019)
loan. In June 2004, petitioner Saclolo also
borrowed an additional amount of P10,000.00 Pactum Commissorium
from respondents, using her aliquot share of the
land as collateral. A stipulation for automatic vesting of title over the
security in the creditor in case of debtor’s default.
In Oct. 2004, petitioners verbally informed (Villanueva, 2009)
respondents of their intention to "redeem" the
property. Respondents, however, refused. Thus, Under Art. 2088 of the NCC, the creditor cannot
petitioners were constrained to file a Complaint appropriate the things given by way of pledge or
for redemption of mortgaged properties, mortgage or dispose of them; any stipulation to the
specific performance with damages before the contrary is null and void because that would result
RTC. Both the RTC and the CA held that while in pactum commissorium.
the transaction was one of equitable mortgage,
petitioners could no longer repurchase or NOTE: Arts. 2088 and 2141 of the NCC were
redeem the subject property as the period for repealed by R.A. No. 11057, otherwise known as the
redemption under Art. 1606 of the NCC has “Personal Property Security Act.” Previously, the
lapsed. Did petitioners’ action to redeem the creditor has no right to appropriate to himself the
subject property prescribe? things given by way of pledge or mortgage or
dispose of them because he or she is permitted only
A: NO. Since the true transaction between the to recover credit from the proceeds of the sale of the
parties was an equitable mortgage and not a sale property at a public auction through a public officer
with right of repurchase, there is no "redemption" in the manner prescribed in Sec. 14 of Act No. 1508.
or "repurchase" to speak of and the periods
provided under Art. 1606 do not apply. Instead, the
prescriptive period under Art. 1144 of the NCC is
applicable. In other words, the parties had 10 years
from the time the cause of action accrued to file the
appropriate action.
2023 GOLDEN NOTES
I. SALES
Redemption vs. Option to Buy 3. When period to redeem has expired & there
has been a previous suit on the nature of the
REDEMPTION OPTION TO BUY contract – seller still has 30 days from final
As to nature judgment on the basis that contract was a sale
Principal and with pacto de retro; and
Forms part of the preparatory contract.
contract of sale. The May exist prior to or Rationale: No redemption due to erroneous
right must be after the perfection of belief that it is equitable mortgage which can be
imbedded in a contract the sale or be imbedded extinguished by paying the loan.
of sale upon its in another contract
perfection. upon that contract’s 4. When period has expired & seller allowed the
perfection. period of redemption to expire – seller is at
As to necessity of separate consideration fault for not having exercised his rights so he
Does not need a A separate should not be granted a new period. (i.e., if the
separate consideration consideration is needed issue before the court is one whether the
to be valid and for it to be valid and contract is an absolute sale or a sale a retro)
effective. effective.
As to period NOTE: Tender of payment is sufficient, but it is not
Redemption period Period for an option in itself a payment that relieves the seller from his
cannot exceed 10 right may exceed 10 liability to pay the redemption price.
years. years.
As to notice requirement Running of Period of Legal Redemption
Notice is required for
its exercise, 1. Right of legal pre-emption or redemption
Only notice for the shall be exercised within 30 days from
accompanied with by a
exercise is required. written notice by the vendor or the
tender of payment or
consignment. prospective vendor – deed of sale not to be
As to effect recorded in Registry of Property unless
accompanied by affidavit of the vendor that he
Its exercise Its exercise results into
has given notice to all possible redemptioners;
extinguishes an the perfection of a
or
existing contract of contract of sale.
sale. (Villanueva, 2009)
2. When there is actual knowledge, no need to
give written notice; and the doctrine of laches
NOTE: Once the instrument of absolute sale is
may apply, or when the redemptioner acted as
executed, the seller can no longer reserve the right
a middleman or intermediary to effect the sale
of repurchase, and any right thereafter granted the
to a third party, the period of redemption
seller by the buyer cannot be a right of repurchase
begins to run from actual knowledge.
but some other rights, like that of an option to buy.
Q: The subject property was mortgaged to Dura

Period of Redemption
Tire and Rubber Industries, Inc. as security for
credit purchases to be made by Move Overland
1. No period agreed upon – Four (4) years from
Venture and Exploring, Inc. Under the mortgage
date of contract; (Art. 1606, NCC)
agreement, Dura Tire was given the express
authority to extrajudicially foreclose the
2. When there is agreement – should not exceed
property should Move Overland fail to pay its
10 years; but if it exceeded, valid only for the
credit purchases.
first 10 years; (Art. 1606, NCC)
CIVIL LAW
On 05 June 1992, A&A Swiss sold the property to mortgage intended merely to give the mortgagor
Mahinay. In the Deed of Absolute Sale, Mahinay more time to redeem the mortgaged property.
acknowledged that the property had been
previously mortgaged by A&A Swiss to Dura With Mahinay failing to redeem the property within
Tire, holding himself liable for any claims that the one (1)-year period of redemption, his right to
Dura Tire may have against Move redeem had already lapsed. As discussed, the
Overland. Thereafter, Mahinay sought to pay pendency of an action to annul the foreclosure sale
Move Overland's obligation to release the or to enforce the right to redeem does not toll the
property from the mortgage. Dura Tire, running of the period of redemption. The trial court
however, ignored Mahinay's request. correctly dismissed the Complaint for judicial
declaration of right to redeem. (Makilito Mahinay v.
For Move Overland's failure to pay its credit Dura Tire & Rubber Industries, Inc., G.R. No. 194152,
purchases, Dura Tire applied for extrajudicial 05 June 2017)
foreclosure of the property. Mahinay protested
the impending sale and filed a third-party claim Extension of the Time to Redeem
before the Office of the Provincial Sheriff of
Cebu. Despite the protest, Sheriff Romeo Laurel Parties may extend the period to redeem as long as
proceeded with the sale and issued a Certificate the total period shall not exceed ten (10) years.
of Sale in favor of Dura Tire, the highest bidder However, such extension can only be granted when
at the sale. The property was purchased at the original period has not yet expired. Otherwise,
₱950,000.00, and the Certificate of Sale was there exists only a promise to sell on the buyer’s
registered on 20 Feb. 1995. part. (Pineda, 2010)
Relying on the Court of Appeals’ finding that he Obligations of the Vendor A Retro If He Desires
was a “substitute mortgagor,” Mahinay filed a to Redeem
Complaint for judicial declaration of right to
redeem. The RTC dismissed Mahinay’s The vendor a retro must pay or reimburse the
Complaint for judicial declaration of right to vendee a retro the following:
redeem. Was the one-year period of redemption
tolled when Mahinay filed his Complaint for 1. Price of the sale;
annulment of foreclosure sale? 2. Expenses of the contract;
3. Other legitimate expenses made by reason of
A: NO. The right of redemption being statutory, the the sale; and
mortgagor may compel the purchaser to sell back 4. Necessary and useful expenses made on the
the property within the one (1)-year period under thing sold. (Art. 1616, NCC; Pineda, 2010)
Act No. 3135. If the purchaser refuses to sell back
the property, the mortgagor may tender payment to Written Notice Mandatory for the Right of
the Sheriff who conducted the foreclosure Redemption to Commence
sale. Here, Mahinay should have tendered payment
to Sheriff Laurel instead of insisting on directly Written notice is mandatory for the right of
paying Move Overland's unpaid credit purchases to redemption to commence and the notice must be in
Dura Tire. Since the period of redemption is fixed, it writing stating the execution of the sale and its
cannot be tolled or interrupted by the filing of cases particulars. It may be made in a private or public
to annul the foreclosure sale or to enforce the right document. (Pineda, 2010)
of redemption.
Conversely, the filing of the suit for ejectment or
To rule otherwise would constitute a dangerous collection of rentals against a co-owner actually
precedent. A likely offshoot of such a ruling is the dispenses with the need for a written notice, and
institution of frivolous suits for annulment of must be construed as commencing the running of
2023 GOLDEN NOTES
I. SALES
the period to exercise the right of redemption, since Pacto de retro vs. Mortgage
the filing of the suit amounted to actual knowledge
of the sale from which the 30-day period of PACTO DE RETRO MORTGAGE
redemption commences to run. (Villanueva, 2016)
As to ownership nature
Tender of Payment NOT necessary for
Ownership is Ownership is not
Redemption to Take Effect
transferred but the transferred but the
ownership is subject to property is merely
Tender of payment is not necessary and offer to
the condition that the subject to a charge or
redeem is enough only when the amount of
seller might recover the lien as security for the
repurchase is uncertain and depends upon an
ownership within a compliance of a
accounting of the vendee who has not yet made such
certain period of time. principal obligation.
accounting. (Tolentino, 1999)
As to interest
Effect of Failure to Redeem
If the seller does not
Mortgagor does not lose
There must be judicial order before ownership of repurchase the property
his interest in the
real property is consolidated to the buyer a retro. upon the very day
property if he fails to
named in the contract,
pay the debt at its
Vendor a retro CANNOT be Compelled to he loses all interest
maturity.
Redeem thereon.
As to foreclosure and redemption
There is no obligation on the part of the vendor a
retro to repurchase. He may or may not exercise the It is the duty of the
right to repurchase. (Pineda, 2010) mortgagee to foreclose
There is no obligation the mortgage if he
resting upon the wishes to secure a
I. PACTO DE RETRO SALES purchaser to foreclose. perfect title thereto.
Neither does the vendor
have any right to After the maturity of the
redeem the property debt secured by the
A sale with pacto de retro transfers the legal title to
after the maturity of the mortgage and before
the vendee a retro. The essence of a pacto de retro
debt. foreclosure, the
sale is that the title and ownership of the property
mortgagor has a right to
sold are immediately vested in the vendee a retro,
redeem. (De Leon, 2013)
subject to the resolutory condition of repurchase by
a vendor a retro within the stipulated period.
(Cadungog v. Yap, G.R. No. 161223, 12 Sept. 2005) Subsequent Sale of Property by Vendor a retro
A sale subsequently made by the vendor to an

innocent purchaser for value could defeat the
vendee’s title and right to possession if the latter’s
right is not properly registered or annotated. (De
Leon, 2013
CIVIL LAW
and in case of disagreement, the court shall fix

II. LEASE the terms thereof. (Art. 448, NCC)
2. Object certain which is the subject matter of

the contract; and
Lease (1997 BAR)
Art. 1643 applies to lease of things, whether
The contract of lease may be of things, or of work
movable or immovable. The NCC makes no
and service. A lease of a thing is a contract where
special-provisions for the lease of movables.
one of the parties binds himself to give to another
Nevertheless, the provisions of the Code on
the enjoyment or use of a thing for a certain price
leases of lands are also applicable to leases of
and for a period which may be definite or indefinite,
personal property except those provisions
but not longer than 99 years. (Art. 1643, NCC)
which by their nature and intent, can only be
applied where the object of the lease is
It is a consensual, bilateral, onerous and
immovable. (De Leon, 2013)
commutative contract by which the owner
temporarily grants the use of his property or the
3. Rent. (Rabuya, 2017)
rendering of some service to another who
undertakes to pay some rent, compensation or
price. (Rabuya, 2017)
A. KINDS OF LEASE
NOTE: The lessor’s right of use is impaired, therein.
He may even be ejected by the lessee if the lessor
uses the leased realty. Therefore, lease is a burden 1. Lease of things – whether real or personal,
on the land; it is an encumbrance on the land. (Roxas involving an obligation on the part of the lessor
v. CA, G.R. No. 92245, 26 June 1991) to deliver the thing, which is the object thereof,
and the correlative right of the lessee to the
Essential Elements of Lease peaceful and adequate enjoyment thereof for a
price certain; (Art. 1654, NCC) or
1. Consent of the contracting parties;
2. Lease of work – which refers to a contract for a
a. On part of owner – nobody can force an piece of work, involving an obligation on the
owner to lease out his property if he is not part of the contractor (lessor) to execute a piece
willing. of work for the employer (lessee) in
b. On part of lessee consideration of a certain price or
compensation. (Art. 1713, NCC)
GR: No person can be compelled to become a
lessee against his will. NOTE: Duties of a contractor who furnishes
work and materials:
XPN: In the case of industrial accession where a. To deliver;
both the landowner, and the builder, planter, b. To transfer ownership and warrant
and sower acted in good faith, the builder or title; and
planter can be compelled to pay reasonable rent c. To warrant against eviction and hidden
if they cannot be obliged by the landowner to defects.
buy the land because its value is considerably
more than that of the building or trees. In case 3. Lease of service – involving an obligation on
of the sower, he can also be compelled by the the part of the housekeeper, laborer or
landowner to pay the proper rent. Here, the employee, or common carrier to do or perform
parties shall agree upon the terms of the lease a service for the head of a family, or master,
2023 GOLDEN NOTES
II. LEASE
employer, or passenger or shipper of goods, b. If the term is fixed but indefinite, the
respectively, in consideration of compensation. court will fix the term under the law of
obligations and contracts; and
NOTE: Since lease is consensual and is not
imposed by law, only the lessor has the right to 10. Lessor need not be the owner.
fix the rents, to which the lessee may or may not
agree. However, the increasing of the rent is not NOTE: A usufructuary may thus lease out
an absolute right on the part of the lessor. the premises in favor of a stranger, such
lease to end at the time that the usufruct
Essence of Lease itself ends.
The transmission of the temporary enjoyment or Consideration of Lease

use by the lessee of a thing for a certain period in
consideration of the undertaking to pay rent The cause of a contract of lease of things must be a
therefor. (De Leon, 2013) price certain, generally called “rent” in money or its
equivalent, or some other prestation which the
Characteristics or Requisites for Lease of Things lessee binds himself to undertake. The important
thing is that what is given by the lessee has value.
1. Consensual; (De Leon, 2005)
2. Principal;
3. Nominate; Rent
4. Purpose is to allow enjoyment or use of a
thing; "Rent" may be defined as the compensation either
in money, provisions, chattels, or labor, received by
NOTE: The person to enjoy is the lessee the owner of the soil from the occupant thereof. It is
while the person allowing the enjoyment defined as the return or compensation for the
by another is the lessor. possession of some corporeal inheritance, and is a
profit issuing out of lands or tenements, in return
5. Subject matter must be within the for their use. It is that, which is to be paid for the use
commerce of man; of land, whether in money, labor or other thing
agreed upon. (Tolentino v. Sy Chiam, G.R. No. 26086,
6. Purpose to which the thing will be devoted 12 Aug. 1927)
should not be immoral;
Rent under Rent Control Act of 2009
7. Onerous;
It is the amount paid for the use or occupancy of a
NOTE: There must be rent or price certain. residential unit, whether payment is made on a
monthly or other basis. (Sec. (3), R.A. No. 9653)
8. Period is Temporary;
Owner has the right to fix the rent because the
NOTE: Not perpetual; hence, the longest contract is consensual and not imposed by law, but
period is 99 years. increasing the rent is not an absolute right of the
lessor. The new rate must be reasonable and in no
9. Period is either definite or indefinite; and case shall the lessor be allowed to increase the
a. If no term is fixed, we should apply Art. rental when the term has not yet expired, unless the
1682 of NCC (for rural leases), and Art. tenant consents. (Paras, 2008)
1687 of NCC (for urban leases).
CIVIL LAW
Form of Lease Contract

LEASE USUFRUCT
GR: Lease may be made orally. As to Nature of Right
Real right only in the
XPN: If the lease of real property is made for more case of the lease of real
than one year, it must be in writing, in compliance property where the
with the Statute of Frauds. (Art. 1403 (2) (e), NCC) lease is registered.
Lease vs. Sale A lease of real property

becomes a real right and
LEASE SALE thereby binds third Always a real right.
As to Ownership persons when the lease
Only the enjoyment or is registered in the
use is transferred. Registry of property.
However, even if not
NOTE: In lease of things, registered, a lease is a
the transfer which one real right if the term is
Ownership is
of the parties obligates for more than one year.
transferred.
himself to make is not As to Creator of Right
one of ownership over
the thing, but merely the The creator of the right
enjoyment or use The lessor may or may must be the owner or
thereof. (Rabuya, 2017) not be the owner. one duly authorized by
As to Transfer him.
Transfer is permanent, As to Cause
Transfer is temporary. unless subject to a The lessor has the active
resolutory condition. The owner has the
obligation to maintain
passive duty to allow the
As to Necessity of Owning the Object at the the lessee in the
usufructuary to enjoy or
Time of Transfer enjoyment or use of the
use the same.
property.
The seller must be the As to Taxes
owner or at least
The lessor need not be The usufructuary pays
authorized by the owner The lessee generally
the owner. the annual charges and
to transfer ownership, pays no taxes.
of the thing sold at the taxes on the fruits.
time it is delivered. As to Repairs
As to Significance of Price of Object
The usufructuary is
The price of the subject
The price of the thing is The lessee generally has obliged to make the
matter is usually not
usually fixed in the no obligation to pay for ordinary repairs needed
mentioned, being
contract. repairs. by the thing given in
immaterial.
usufruct.
NOTE: A lease of personal property with option to As to Other Things

buy (at a nominal amount) (Art. 1485, NCC) at the The lessee cannot The usufructuary may
end of the lease can be considered a sale. (Elisco Tool constitute a usufruct on lease the thing in
Manufacturing Corporation v. CA, G.R No. 109966, 31 the property. usufruct to another.
May 1999)
Lease vs. Usufruct As to Origin
2023 GOLDEN NOTES
II. LEASE
Lease vs. Simple Loan (Mutuum)

May be created by law,
As a rule, may be created contract, last will and
SIMPLE LOAN
only by contract. testament or LEASE
(MUTUUM)
prescription.
As to Transfer of Ownership
As to Coverage Lessor does not lose
Lender loses ownership
ownership
Generally, covers As a rule, covers all
particular uses limited possible uses of the As to Relationship Between Parties
by the contract. property. Relationship is one of Relationship is one of
lessor and lessee obligor and oblige
Lease vs. Commodatum As to Usury Law
Not governed by the Governed by the Usury
LEASE COMMODATUM Usury Law Law
As to Cause
As to Applicability of Statute of Frauds
Onerous contract, If what is leased is real
although the rent may property for more than
Essentially gratuitous. Not governed by the
subsequently be one year, the Statute of
Statute of Frauds
condoned or remitted. Frauds must be
complied with
As to Nature
As to Object
Purely personal in
Not essentially personal Refers to real and Refers only to personal
character, and
in character and, personal property property.
consequently, the death
therefore, the right may
of either the bailor or the (Paras, 2008)
be transmitted to the
bailee extinguishes the
heirs.
contract. Lease of Work vs. Lease of Service
As to Perfection LEASE OF WORK LEASE OF SERVICE

Real contract, as it is As to Object of the Contract
perfected only upon
Consensual contract. It is the performance of
delivery of the object
The object is the some service or an
thereof.
execution of a piece of employer by a house
As to Transfer of Ownership work for an employer by helper or laborer or for a
No transfer of ownership. an independent passenger or owner of
contractor. goods by common
As to Use carrier.
Both contracts consist in the transmission of the
As to Liability for Compensation
enjoyment or use of a thing to another.
In both kinds of lease, the employer or passenger
As to Contract
or owner of goods binds himself to pay some
Consensual Real remuneration or compensation in favor of the
independent contractor, employee, or common
carrier, and the relation of principal and agent
does not exist between the parties.
CIVIL LAW
Lease of Services vs. Contract for a Piece of Work contracts which he is

authorized to enter.
CONTRACT FOR A As to Compensation
LEASE OF SERVICES
PIECE OF WORK The work or service
(LOCATIO OPERATUM It is presumed for a
(LOCATIO OPERAS must be for a price or
OPERARUM) compensation.
OPERIS) compensation.
As to Object of Contract As to Extinguishment
The will of both parties
The object of the
is necessary for the The will of one is
The object of the contract is the work
extinguishment of the sufficient.
contract is the labor or done (the result of the
relationship.
service itself performed labor) without
by the lessor. considering the labor As to Persons Involved
that produced it. Three persons: the
Only two persons are principal, the agent and
As to Payment of Labor Performed involved: the lessor and the third person with
The result is generally lessee. whom the agent has
The result is generally contracted.
important; the price is
not important; hence As to Risk of Loss Before Delivery
not payable until the
the laborer is entitled to The risk of loss before
work is completed, and The risk is borne by the
be paid even if there is delivery is borne by the
said price cannot be principal since the agent
destruction of the work independent contractor,
lawfully demanded if acts merely as his
through fortuitous esp. in the lease of work
the work is destroyed representative.
event or the result for a fixed price.
before it is finished and
intended not attained. As to Liability to Third Persons
accepted.
In the lease of work, the The agent is not liable,
As to Similarities independent contractor unless he expressly
1. There is a price certain (compensation). is personally liable for binds himself or exceeds
2. The relation of principal and agent does not his contracts with third the limits of his
exist between the lessor and lessee. persons. authority.
As to Powers Possessed
Lease of Services or Work vs. Agency In the lease of service,
the lessor ordinarily The agent exercises
LEASE OF SERVICES performs only discretionary powers.
AGENCY
OR WORK ministerial duties.
As to Basis of Contract
The basis is It is based on Lease of Things vs. Lease of Services
employment. representation.
As to Work to be Done LEASE OF THINGS LEASE OF SERVICES
As to Object of the Contract
The lessor performs a Object of contract is a Object is some work or
material act for the The agent executes a thing. service.
benefit of his employer juridical act for and in
As to Obligation of the Lessor
without representation behalf of his principal.
Lessor has to deliver the Lessor has to perform
of the latter.
thing leased. some work or service.
As to Type of Contract As to Remedy in Case of Breach
Preparatory Contract. In case of breach, there In case of breach, no
Principal Contract. The purpose is for the can be an action for action for specific
agent to enter into other specific performance. performance may lie.
2023 GOLDEN NOTES
II. LEASE
Compensation in Lease of Work or Service b. If they are accessory to the lease of an

industrial establishment. (e.g., oil in an
1. When there is an agreement industrial firm) (Art. 1645, NCC)
The lessee must be compelled to pay the agreed Persons Disqualified to Be Lessees
price unless it is found to be iniquitous or
unreasonable, in which case the courts may fix a 1. Husband and wife cannot lease to each other
reasonable and just remuneration. Where the their separate properties:
compensation is renounced or waived after the
service has been rendered, there is still a lease of XPNs:
service although it has become gratuitous. a. If a separation of property was agreed
upon in the marriage settlement; or
2. Where the agreement may be implied
b. If there has been a judicial separation
One who performs work or service in favor of under Art. 135 of the Family Code; (Art.
another who impliedly consents thereto and who 1490, NCC);
benefits thereby, is entitled to compensation by
virtue of an innominate contract of facio ut des (I do Reasons for the disqualification:
that you may give) or of the case of services tacitly i. To prevent prejudice to creditors;
contracted, in which case the courts will fix the ii. To prevent the stronger spouse from
reasonable worth of the services rendered. influencing unduly the weaker spouse.
3. Where no rate or amount is fixed in the NOTE: The prohibition applies even to common
contract law spouses; otherwise, said spouses would be
placed in a better position than legitimate
The contract is nevertheless valid if the amount can spouses.
be ascertained in the light of the customs and usages
of the place, or by findings of fact on the basis of 2. Persons referred to under Art. 1491 of NCC are
evidence submitted in case of disagreement. disqualified because of fiduciary relationships.
NOTE: A price certain exists when the same can be NOTE: While foreigners in general cannot buy
ascertained according to the customs and usages of rural or urban lands, they are not completely
the place. excluded by the Constitution from use of lands
for residential purposes. Since their residence
Lease of Consumable Goods in the Philippines is temporary, they may be
granted temporary rights such as a lease
GR: Consumable goods cannot be the subject matter contract which is not forbidden by the
of a contract of lease of things. (Art. 1645, NCC) Constitution. However, if an alien is given not
only a lease of, but also an option to buy a piece
Reason: To use or enjoy them, they will have to be of land, by virtue of which the Filipino owner
consumed. This cannot be done by the lessee since cannot sell or otherwise dispose of his property
ownership over them is NOT transferred to him by (e.g., for 50 years), then it becomes clear that
the contract of lease. (Art. 1643, NCC) the arrangement is a virtual transfer of
ownership. If this can be done, then the
XPNs: They may be leased: Constitutional ban against alien landholding in
the Philippines, is indeed in grave peril. (Fullido
a. If they are merely to be exhibited as for v. Grilli, G.R. No. 215014, 29 Feb. 2016) Hence,
display purposes; (lease ad pompan et foreigners may lease land from others. (Art.
ostentationem); and 1643, NCC)
CIVIL LAW
Lease of Private Lands by Foreigners Q: Fred sold to Juan a parcel of land, belonging to
his minor son, Lino, then under his
a. Foreigner investing in the Philippines guardianship, without judicial approval. After
the sale, Juan immediately took possession of
Any foreigner investing in the Philippines is the land, built a house and religiously paid the
allowed to lease private lands, provided taxes thereon. Nine years thereafter, Lino, no
that the lease contract shall be for a period longer a minor, rented the ground floor of the
not exceeding 50 years renewable once for house built by Juan. Lino paid the rent for the
a period of not more than 25 years, and the first month, then stopped paying. Two years
lease area shall be used solely for the thereafter, when pressed for payment of the
purpose of investment upon the mutual accrued rent, Lino refused, claiming ownership
agreement of the parties. (Sec. 4, R.A. No. over the property, alleging that the sale of the
7652) property to Juan while he was a minor without
the approval of the guardianship court rendered
NOTE: “Investing in the Philippines” means the sale null and void. Is the claim of Lino valid
making an equity investment in the and meritorious? Explain. (1987 BAR)
Philippines through actual remittance of
foreign exchange or transfer of assets, A: NO. Lino’s claim is not valid and not meritorious
whether in the form of capital goods, because Lino is in estoppel. A lessee cannot assail the
patents, formulae, or other technological right and title of the lessor and cannot claim
rights or processes, upon registration with ownership as against the lessor. The fact that the
the SEC. sale was made while Lino was a minor is of no
moment because he recognized and ratified the
b. Foreigner not investing in the Philippines contract Juan’s ownership after he was already of
majority age.
Allowed to lease private lands in the
Philippines but for a maximum period of 25 Purpose in Recording a Lease
years, renewable for another 25 years upon
mutual agreement of both parties. (Sec. 1, A lease does not have to be recorded in the Registry
P.D. No. 471) of Property to be binding between the parties.
Estoppel against Lessee Registration is useful only for the purposes of

notifying strangers to the transaction. (Art. 1648,
A lessee is estopped from asserting title to the thing NCC) Registration is not essential for the validity of
leased as against the lessor (Art. 1436, NCC), or to the contract but is needed to make it effective
deny the lessor’s title, or to assert a better title not regarding third persons. (Rabuya, 2017)
only in himself, but also in some third person,
including the State while he remains in possession However, if the purchaser has actual knowledge of
of the leased property and until he surrenders the existence of the lease, which knowledge is
possession to the lessor. (VSC Commercial equivalent to registration, he is bound by the lease.
Enterprises, Inc. v. CA, G.R. No. 121159, 16 Dec. 2002) (Lao v. Lao. G.R. No. 149599, 16 May 2005)
This estoppel applies even though the lessor had no

title at the time the relation of lessor and lessee was
created. It may be asserted not only by the original
lessor, but also by those who succeed to his title.
(Century Savings Bank v. Sps. Samonte, G.R. No.
176212, 20 Oct. 2010)
2023 GOLDEN NOTES
II. LEASE
Proper Authority Required 3. Whether it be a) or b), if the lease is to be

recorded, there must be a special power of
If a lease is to be recorded, the following persons attorney. (Art. 1647, NCC)
must have special power of attorney to constitute
the lease: NOTE: If it is the wife who is administering her
paraphernal real property, the husband has no
1. Husband – with respect to the paraphernal authority whatsoever, to lease, in any way, or
real estate of the wife; administer the property.
2. Father or guardian – with respect to the Q: If a father, who is administering the real
property of the minor or the ward; estate of his minor son, wants to record the
lease, should he ask for judicial permission?
3. Manager or administrator – with respect
to the property under his administration. A: YES. A father who is administering the real estate
(Art. 1647, NCC) of his minor son should ask for judicial permission
if he wants to record the lease. (Art. 1647, NCC) But
NOTE: The “manager” here may be: even if no judicial authorization is asked, such defect
cannot be invoked by a lessee who has dealt with
a. The administrator of conjugal property him. (Summers v. Mahinay, CA 40 O.G. 11th S No. 18)
(Rodriguez v. Borromeo, G.R. No. L- Only the son or his own heirs may question the
17772, 09 June 1922); validity of the transaction.
b. The administrator of a co-ownership Q: Is lease a real or a personal right?

(Melencio v. Dy Tiao Lay, G.R. No. L-
32047, 01 Nov. 1930); or A: Generally, it is a personal right. But it partakes of
the nature of a real right if:
c. The administrator of state patrimonial
property. (Tipton v. Andueza Chua- a. the lease of real property is for more than
Chingco, G.R. No. L-2220, 04 Apr.1906) one year; or
Q: A husband was properly given by his wife the b. the lease of real property is registered
authority to administer her paraphernal real regardless of duration.
property. Does this necessarily mean that just
because the husband is now the administrator, NOTE: In both cases a special power of
he can lease said property without any further attorney is required to constitute thereon a
authority? lease by representation and record the same
with the Property Registry, because these
A: are acts of strict dominion, and not merely of
1. If the lease will be for one year or less, no administration.
other authority is required;
Effects if the lease of real property is not
2. If the lease on the real property will be for registered (2009 BAR)
more than a year, then a special power of
attorney (aside from the public instrument 1. The lease is not binding on innocent third
transferring administration) is required persons such as a purchaser; (Salonga v. Acuña,
(Art. 1878(8), NCC); or 54 O.G. 2943)
CIVIL LAW
2. Naturally, such an innocent third person is NOTE: The Investor’s Lease Act of 1995 (ILA) did
allowed to terminate the lease in case he buys not do away with P.D. No. 713, but under ILA the
the property from the owner-lessor, unless consent of DTI is required, while in P.D. No. 713 no
there is a stipulation to the contrary in the consent is required.
contract of sale; (Art. 1676, NCC)
Right of a purchaser of a leased property
3. When a third person already knows of the
existence and duration of the lease, he is bound GR: Purchaser of thing leased can terminate the
by such lease even if it has not been recorded. lease.
The reason is simple: actual knowledge is, for
this purpose, equivalent to registration; and XPNs:
(Soriano v. CA, G.R. No. 78975, 07 Sept. 1989) 1. Lease is recorded in Registry of Property;
2. There is a stipulation in the contract of sale that
NOTE: But if the sale is fictitious and was only the purchaser shall respect the lease;
resorted to for the purpose of extinguishing the 3. Purchaser knows the existence of the lease;
lease, the supposed vendee cannot terminate 4. Sale is fictitious; or
the lease. The sale is presumed fictitious if at 5. Sale is made with a right of repurchase.
that time the supposed vendee demands the
termination of the lease, the sale is not recorded Term of lease contract
in the Registry of Property. (Art. 1676(3), NCC)
GR: The law does not allow perpetual lease. There
4. If the stranger knows of the existence of the must be a period which may either be definite or
lease, but has been led to believe that the lease indefinite. (Art. 1643, NCC)
would expire very soon, or before the new lease
in favor of him begins (when in fact this was not When no period is fixed:
true), the stranger can still be considered
innocent. (Quimson v. Suarez, G.R. No. L-21381, 1. In case of lease of rural lands – it is
05 Apr. 1924) understood to have been made for all the time
necessary for the gathering of the fruits which
Rules on lease of things when lessee is an alien the whole estate leased may yield in one year,
or which it may yield once, although two or
1. Personal property – 99-year limit applies (Art. more years may have to elapse for the purpose;
1643); (Art. 1682, NCC)
2. Aliens cannot lease public lands, and cannot 2. In case of lease of urban lands - from year to
acquire private lands except through year if rent agreed upon is annual; week to
succession; week if weekly; or day to day if daily. However,
the court may fix a longer term, if the lessee has
3. If lease of real property (private lands), occupied the premises for a long period of time;
maximum of 25 years renewable for another 25 (Art. 1687, NCC) or
years (P.D. 713); and
3. A lease of things during the lifetime of one of
4. The 25-year period was extended to 50 years the parties is valid, which is considered one for
provided the following conditions are met: life, ending upon the death of the party who
could have terminated the contract. (Rabuya,
a. Lessee must make investments; 2017)
b. Lease is approved by DTI; and
c. If terms are violated, DTI can terminate it.
(Investor’s Lease Act of 1995)
2023 GOLDEN NOTES
II. LEASE
4. If based on the agreement of the parties, the Nature of Sublease

term of the lease is made to depend upon the
will of one of the contracting parties (e.g., as the It is a separate and distinct contract of lease wherein
lessee shall deem fit), the term shall be fixed by the original lessee becomes a sublessor to a
the courts. (Eleizegui v. Lawn Tennis Club, G.R. sublessee. The reason why assignment is generally
No. 967, 19 May 1903) prohibited while subleasing is generally allowed is
because the assignment of the lease contract is a
Assignment of lease by lessee novation where the personality of the lessee
disappears. In sublease, on the other hand, the
Lessee cannot assign the lease contract without the lessee remains to be a party to the lease contract,
consent of the lessor, unless there is a stipulation to and he remains liable to the lessor. (Rabuya, 2017)
the contrary. (Art. 1649, NCC)
Right of Lessee to Sublease (1990, 1999, 2005
In an assignment of lease, the personality of the BAR)
lessee (assignor/debtor) disappears. The lessee
makes an absolute transfer of his lease, involving Unlike in assignment, a lessee may generally
not only his rights but also obligations as such lessee sublease the property in the absence of express
and thus, dissociates himself from the original prohibition because the lessee remains a party to
contract of lease. There arises the new juridical the lease even if he has already created a sublease
relation between the lessor and the assignee who is thereon. Hence, for example, he still must pay rents
converted into a new lessee. There is in effect, a to the lessor. (Paras, 2008)
novation by substituting the person of the debtor
(Art. 1291(2), NCC), and novation cannot take place Note: Art. 1650 of NCC says “express prohibition.”
without the consent of the creditor. (Art. 1293, NCC) Hence, if the prohibition is merely implied, a
Hence, the lessee cannot assign the lease without sublease will still be allowed. (Susana Realty v.
the consent of the lessor (creditor), unless there is a Hernandez, et al., CA, 54 O.G. 2206)
stipulation granting him that right.
In sublease, the lessee remains a party to the
Objective: To protect the lessor or owner of the contract.
leased property. An assignment of lease without the
consent of the lessor is a ground for rescission of the There are two leases and two distinct juridical
lease. relations:
Sublease 1. Between the lessor and the lessee, and

2. Between the sublessor (lessee) and the
It is a separate and distinct contract of lease wherein sublessee.
the original lessee becomes a sublessor to a
sublessee of the thing, in whole or in part, without The lessee is still responsible for the performance of
prejudice to his responsibility for the performance his obligations toward the lessor.
of the contract toward the lessor. (Art. 1650, NCC)
A judgment of eviction against the lessee affects the
The lessee may sublet the thing leased, in whole or sublessee even if the latter is not sued in the
in part, unless expressly prohibited in the contract ejectment case.
of lease. (Art. 1650, NCC)
Reason: The sublessee (lessee) can invoke no right
superior to that of the sublessor from which his own
right is derived, and from the moment the sublessor
is duly ousted from the premises, the sublessee has
no leg to stand on.
CIVIL LAW
Parties to a Sublease As to Consent

Can be done even
1. Lessor;
without the permission
2. Sublessor (original lessee in the contract of Cannot be done unless
of the lessor unless
lease); and the lessor consents.
there be an express
3. Sublessee.
prohibition.
Juridical relationships in a sublease As to Number of Juridical Relations Created

arrangement There are two leases
There is only one
and two distinct
1. Principal lease; and juridical relationship,
juridical relationships
2. Sublease. that of the lessor and the
although immediately
assignee, who is
connected and related
These relationships co-exist and are intimately converted into a lessee.
to each other.
related to each other but are distinct from one
another. (Albano, 2013)
Liability of Sublessee towards Lessor (1999,
Q: Alfonso was the owner of a building being 2000 BAR)
leased to Beatriz. The contract allowed
subleasing of the building, thus, Beatriz Although the sublessee is not a party to the contract
subleased it to Charlie. Charlie directly paid his of lease, the sublessee is still directly liable to the
rent to Alfonso after the lease expired. Was lessor for acts appertaining to the use and
Charlie correct? preservation of the property. This is of course in
addition to the sublessee’s obligation to the
A: NO. There are two (2) distinct leases involved, sublessor. (Paras, 2008)
the principal lease and the sublease. In such
agreement, the personality of the lessee does not NOTE: The subsidiary liability of the sublessee for
pass on to or is acquired by the sublessee. Thus, the rent due to the original lessor is decreed under Art.
payment to the lessor was not payment to the 1652 of NCC, but only to the extent of the rent still
sublessor. Alfonso was a stranger to the sublease due from him in accordance with the terms of the
agreement. (Blas v. CA, G.R. No. 82813, 14 Dec. 1989) sublease. Payments of rent in advance by the
sublessee shall be deemed not to have been made,
Sublease vs. Assignment (1990, 1994, 2005 so far as the lessor’s claim is concerned, unless said
BAR) payments were effected in virtue of the customs of
the place.
SUBLEASE ASSIGNMENT
Direct Action by the Lessor (Accion Directa)
As to Transfer of Rights
The lessee makes an The lessor may bring an action directly against the
The lessee retains an absolute transfer of his sublessee if he does not use and preserve the thing
interest in the lease; he interest as lessee; thus, leased in accordance with the agreement between
remains a party to the he dissociates himself the lessor and the lessee or with the nature of the
contract. from the original property. It is not necessary that the sublessor be
contract of lease. joined as a defendant. (Art. 1651, NCC)
As to Right of Action Against Lessor
The sublessee does not The assignee has a NOTE: This is true, notwithstanding the fact that the
have any direct action direct action against the sublessee is not a party to the lease contract. (Paras,
against the lessor. lessor. 2008)
2023 GOLDEN NOTES
II. LEASE
Subsidiary Liability of Sublessee to Lessor (1999 4. That the thing is free from any hidden fault
BAR) or defect. (De Leon, 2005)
1. Remedy to collect rents from the In case of eviction of the lessee, and the return of the
sublessee rents paid is required, a reduction shall be made
taking into account the period during which the
The law grants the lessor the right to lessee enjoyed the thing.
demand payment from the sublessee the
rents which the sublessor failed to pay the The lessee has also the right of proportionate
lessor. The demand to pay rents made by reduction of the rents agreed upon where the area
the lessor on the sublessee does not exempt or number of the object of the lease is less than that
the latter from his obligation to pay the stated in the contract. (Art. 1542, NCC)
sublessor the rents which said sublessee
failed to pay the lessor. Lessor’s warranty is Distinct from his Liability
for Damages
Purpose: To prevent a situation where the
lessee collects rents from the sublessee but Liability for the warranty is not equivalent to
does not pay his rents to the lessor. liability in damages, as the latter is an obligation
distinct from the former.
2. Amount of rent recoverable
The lessor’s obligation to warrant the thing leased,
The liability of the sublessee is limited to whether or not he knew of the existence therein of
the amount of rent due from him to the defects that rendered it unsuitable for the use for
sublessor under the terms of the sublease which the lessee intended it, is distinct from his
at the time of the extrajudicial demand by liability for damages, which only attaches when he
the lessor. Future rents cannot be knew about such defects and failed to reveal them
recovered. He is liable to the lessor only for to the lessee or concealed them, in which case fraud
rents the lessee failed to pay the lessor. and bad faith may be presumed on his part. (Yap
Kim Chuan v. Tiaoqui, G.R. No. 10006, 18 Sept. 1915)
NOTE: The liability of the sublessee is
subsidiary.
B. RIGHTS AND OBLIGATIONS OF LESSOR
3. Liability for rents paid in advance
The sublessee continues to be subsidiarily

Rights and Obligations Arising from Lease
liable to the lessor for any rent unpaid by
Contract are Transmissible to the Heirs
the lessee, although the sublessee may have
made advance rent payments to the lessee.
1. A lease contract is not essentially personal
The rule is to avoid collusion between the
in character;
lessee and the sublessee. (Art. 1652, NCC)
2. The rights and obligations are

Warranty of the lessor
transmissible to the heirs; and
1. That he has a right to lease the thing;

3. The death of the party does not excuse
2. That the lessee shall enjoy the legal and
nonperformance of contract which
peaceful possession of the thing;
involves a property right, and the rights
3. That the thing is fit for the use for which it
and obligations pass to the successors or
is intended; and
representatives of the deceased.
CIVIL LAW
RIGHTS OF THE LESSOR b. The thing must be delivered, for without

delivery, there could be no lease because
Rights of the Lessor delivery goes to the essence of the contract.
Delivery cannot be waived. (De Leon, 2014)
1. GR: The lessor of a business or industrial
establishment may continue engaging in the 2. Making of necessary repairs (Art. 1654(2),
same business or industry to which the lessee NCC)
devotes the thing leased.
a. Includes all the repairs needed, whether
XPN: Unless there is a stipulation to the the damage be caused by nature, fortuitous
contrary. (Art. 1656, NCC) event or lapse of time, but not those
brought about by the fault of the lessee
NOTE: A contract of lease is no warranty by the himself or by his privies or his servants,
lessor to the lessee that the latter will realize whether the defect was caused prior to or
profits in his business venture. Even if the after the delivery of the object. (Rabuya,
lessee should suffer losses he would still be 2017)
bound to fulfill the terms of the contract. (City
of Naga v. CA, G.R. No. L-5944, 26 Nov. 1954) b. Article 1654 of NCC speaks of necessary
repairs to keep the thing leased suitable for
2. The sublessee is subsidiarily liable to the lessor the use to which it has been devoted unless
for any rent due from the lessee. However, the there is a stipulation to the contrary. In
sublessee shall not be responsible beyond the default of a special stipulation, the custom
amount of rent due from him, in accordance of the place shall be observed as to the kind
with the terms of the sublease, at the time of of repairs on urban property. (Art. 1686,
the extrajudicial demand by the lessor. (Art. NCC) In case, the lessor fails in the
1652, NCC) performance of this duty, the lessee may
suspend the payment of rent (Art. 1658
NCC) or avail himself of the other remedies
3. If the lessor or lessee should not comply with provided in the law. The lessor is not liable
the obligations set forth in Arts. 1654 and for repairs for damages or deterioration
1657, the aggrieved party may ask for the caused by the lessee himself.
recission of the contract and indemnification
for damages, or only the latter, allowing the NOTE: The word “repairs” implies the
contract to remain in force. (Art. 1659, NCC) putting back of something in the condition
in which it was originally, while an
OBLIGATIONS OF THE LESSOR “improvement’’ is the adding of something
new thereto; hence, the filling of a vacant
Obligations of the Lessor: (1996, 2010 BAR) lot is not a repair (Coca-Cola Bottlers
Philippines, Inc. v. CA, G.R. No. 100957, 27
1. Delivery of the property (Art. 1654(1), NCC) Jan. 1994) nor is the construction of a
house. (Parilla v. Pilar, G.R. No. 167680, 30
a. The thing leased must be delivered, in such Nov. 2006)
conditions as to render it fit for in the use
intended, in order that the lessee may enjoy 3. Duty of the lessee to notify lessor (Art. 1663
or use the same. (Art. 1654(1), NCC) NCC)
Delivery may, of course, be actual or
constructive. (Art. 1496(1), NCC) a. Peaceful and adequate enjoyment refers to
legal, not physical possession. Hence, a
lessor is not, for instance, liable for physical
2023 GOLDEN NOTES
II. LEASE
disturbances in the neighborhood, but is days and the part of the property of which he is
liable if the lessee is evicted due to non- deprived). (Art. 1662, NCC)
payment of taxes by the lessor. (Paras,
2008) NOTE: In either case, rescission may be availed
of if the main purpose of the lease is to provide
b. The lessor’s obligation to maintain the a dwelling place and the property becomes
lessee arises when acts termed “legal uninhabitable.
trespass” disturb, dispute, or place
difficulties in the lessee’s peaceful and Effects if the Lessor Fails to Make Urgent Repairs
adequate enjoyment of the leased premises
that in some manner or other cast doubt The lessee may:
upon the right of the lessor to execute the
lease. The lessor must answer for such legal 1. Order repairs at the lessor’s cost; (Art.
trespass. (Nakpil v. Manila Towers 1663, NCC)
Development Corporation, G.R. No. 160867, 2. Sue for damages; (Art. 1659, NCC)
20 Sept. 2006) 3. Suspend the payment of the rent; (Art.
1658, NCC) or
c. There is mere act of trespass when a third 4. Ask for rescission, in case of substantial
person claims no right whatsoever. In damage to him. (Art. 1659, NCC)
trespass in law, the third person claims a
legal right to enjoy the premises. (Rabuya, If the Contract of Lease is Silent as to Who Will
2017) Pay for Repair Expenses
NOTE: When it is merely trespass in fact, the a. Major repairs – Shouldered by the lessor;
lessor cannot be faulted for any breach. The and
lessee can file a direct action against the b. Minor repairs – Shouldered by the lessee.
trespasser such as forcible entry or illegal
detainer. Remedy of the lessee if the lessor fails to make
major or necessary repairs
4. Duty not to Alter Form (Art. 1661, NCC)
Lessee may ask for:
The lessor has also the duty not to alter the form 1. Rescission of contract and indemnification
of the thing leased as to impair the use of the said for damages; or
thing to which it is devoted under the terms of 2. Indemnification only, while the contract
the lease. remains in force. (Art. 1659, NCC)
Rules if Urgent Repairs are Necessary Effect of Destruction of thing leased by

Fortuitous Event (1993 BAR)
1. If repairs last for not more than 40 days
A. Total destruction
Lessee is obligated to tolerate the work,
although it may be annoying to him and 1. The lease is extinguished if the thing is
although during the same time, he may be totally destroyed;
deprived of a part of the premise. 2. The lessee cannot compel the lessor to
reconstruct the destroyed property;
2. If repairs last for more than 40 days 3. The lessee of the lot and building which has
been totally destroyed by fortuitous event
Lessee can ask for reduction of the rent in cannot be considered as lessee of the land
proportion to the time (including the first 40 after the building had been totally
CIVIL LAW
destroyed by the fortuitous event; (Roces v.

Rickards, 45 O.G. Supp. 97) and C. RIGHTS AND OBLIGATIONS OF LESSEE
4. While the land has not been affected,

consideration should be taken of the fact
RIGHTS OF LESSEE
that generally the land was leased only as
an incident to the lease of the building.
1. When Lessee May Immediately Terminate the
(Rohde Shotwell v. Manila Motors Co., Inc.,
Lease (Art. 1660, NCC)
G.R. No. L-7637, 29 Dec. 1956)
By notice to the lessor in case the dwelling place

B. Partial Destruction
or building is unfit for human habitation and is
dangerous to life or health.
Lease is not extinguished. The lessee is given the
option to choose between a proportionate
Even if at the time the contract was perfected,
reduction of the rent and rescission of the lease.
the lessee KNEW of the dangerous condition or
Once the choice of the lessee has been
WAIVED the right to rescind.
communicated to the lessor, the former cannot
change it. (Art. 1201, NCC)
Reason: Public safety cannot be stipulated
against.
If reduction of rent is chosen, the same shall be
retroactive to the date when the partial destruction
2. Right of lessee if new owner terminates the
occurred. In case of rescission, the general rule is
unrecorded lease
that it will not be granted for slight or trivial causes.
The partial destruction, under the circumstances,
The lessee may demand that he be allowed to
should be important or substantial as to defeat the
gather the fruits of the harvest which
purpose of the lessee in entering into the contract of
corresponds to the current agricultural year and
lease.
that the vendor indemnify him for damages
suffered. (Art. 1676(2), NCC)
NOTE: The choice is on the LESSEE, and not on the
lessor.
3. Rights of the lessee who introduced
improvements (1990, 1996 BAR)
When lessee may suspend payment of rent
Introduction of valuable improvement on the
1. When lessor fails to undertake necessary
leased premises does not give the lessee the
repairs; and
right of retention and reimbursement which
2. When lessor fails to maintain the lessee in
rightfully belongs to the builder in good faith.
peaceful and adequate enjoyment of the
Otherwise, such a situation would allow the
property leased.
lessee to easily “improve” the lessor out of its
property. (Rabuya, 2017)
Effectivity of the suspension
The lessor shall pay the lessee one-half of the

1. In the case of repairs, from the time he
value of the improvements computed at the time
made the demand for said repairs, and the
of the termination of the lease if the following
demand went unheeded; or
conditions are fulfilled:
2. In the case of eviction, from the time the

1. That the lessee should have made the useful
final judgment for eviction becomes
improvements in good faith;
effective.
2023 GOLDEN NOTES
II. LEASE
2. The improvements are suitable to the the materials and labor. According to Bermon,
purpose or use for which the lease is the construction of the building was made with
intended; and the understanding that the lease contract will be
extended for another four years. However, the
3. That the form and substance of the thing lease expired without the same being renewed.
leased are not altered or modified. (Art.
1678, NCC) Thereafter, the lease was converted into a
month-to-month basis. Sps. Yaco sent petitioner
NOTE: These requisites will prevent the lessee from a Demand Letter to vacate the premises and to
making such valuable improvements that the lessor pay the rent arrears. Bermon Marketing
may never recover the property leased. It is the claimed that the parties agreed that the lease
lessor who has the option to appropriate the useful will be extended to 10 years and that Bermon
improvements and reimburse the lessee therefor. It may construct a building on the open space.
is discretionary with the lessor to retain the useful Bermon claimed that it should be reimbursed of
improvements by paying one-half of their value. The the following amounts, since the same was
lessee cannot compel the lessor to appropriate and incurred in improving the property, thereby
reimburse him for the improvements. increasing the value of the land. Sps. Yaco
alleged that they were not liable to reimburse
A lessee who builds on the property leased is not a petitioner for the construction cost because the
possessor in good faith, thus, he has no right of lease provided that the construction of the
retention until reimbursed for the value of the second floor will be at Bermon’s own expense
improvement. without right of reimbursement, the ownership
of the building belonging to Sps. Yaco upon
The lessor and lessee may stipulate that all expiration of the lease. Should Sps. Yaco be held
improvements introduced by the lessee shall liable to pay one-half of the amount of the
pertain to the lessor. However, if the value of the improvements to petitioner.
improvement is considerably more than the value of
the leased premises, merely creating prejudice to A: YES. The payment of one-half of the value of the
the lessee instead of enforcing the contract literally, improvements was intended to prevent unjust
Art. 1678 of the NCC may be applied. enrichment on the part of the lessor which now has
to pay one-half of the value of the improvements at
Q: Sps. Yaco are the registered owners of a the time the lease terminates because the lessee has
parcel of land with a one-storey building, an old already enjoyed the same, whereas the lessor could
residential house and an open space between enjoy them indefinitely thereafter. Nevertheless,
the two buildings. Sps. Yaco and petitioner under Art. 1306 of the NCC, parties are free to enter
entered into a Contract of Lease, whereby Sps. into agreements and stipulate on the terms and
Yaco leased the subject property to petitioner conditions of the contract and waive their rights, so
for a period of 6 years. Under the lease contract long as the same are not contrary to law, morals,
it is provided that petitioner shall construct, at good customs, public order or public policy.
its own expense, a second floor on the existing
office, which upon termination of the lease will Sps. Yaco and petitioner stipulated that any
automatically become the property of the Sps. improvements shall be constructed at the expense
Yaco. As claimed by petitioner it incurred of the lessee which shall automatically become the
expenses for the construction of the same. Then, exclusive property of the lessor at the end of the
Bermon constructed a new building on the open lease without any reimbursement. (Bermon
space in the property to be used for its Marketing Communication Corp. v. Sps. Yaco, G.R. No.
advertisement business. Bermon claimed that 224552, 03 Mar. 2021)
the construction was with the knowledge and
consent of the Sps. Yaco. It incurred expenses on
CIVIL LAW
OBLIGATIONS OF LESSEE suffer, and which could have been avoided by

lessee’s diligence.
1. Payment of agreed price of lease (Art. 1657
NCC) 6. To return the property leased upon
termination of the lease in the same
The obligation of the lessee to pay the rent condition as he received it, save what has
agreed upon arises only when the thing been lost or impaired by:
leased has been delivered to the lessee for the
purposes stipulated in the contract. a. Lapse of time
b. Ordinary wear and tear; or
2. Proper use of the thing leased; (Art. 1657 c. Inevitable cause/fortuitous event. (Art.
NCC) 1665, NCC)
The lessee must exercise the diligence of a Responsibility for deterioration or loss of the
good father of a family in the use of the thing thing leased
leased. He must devote the thing to the use
stipulated, and if none was stipulated, to that GR: The presumption is that the lessee is
which may be inferred from the nature of the responsible for the deterioration or loss of the thing
thing leased, according to the custom of the leased unless he proves that it took place without
place. his fault. Such liability also extends to deterioration
caused by the members of his household and by
NOTE: The use of the thing for an illegal guests and visitors.
purpose entitles the lessor to terminate the
contract. XPN: When destruction is due to earthquake, flood,
The lessee is liable for any deterioration storm or other natural calamity. (Rabuya, 2017)
caused by members of his household, guests Q: Jude owned a building which he had leased
and visitors. (Art. 1668, NCC) out to several tenants. Without informing his
tenants, Jude sold the building to Ildefonso.
3. Payment of expenses for deed of lease; (Art. Thereafter, the latter notified all the tenants
1657 NCC) that he is the new owner of the building.
Ildefonso ordered the tenants to vacate the
In lease, the law imposes upon the lessee the premises within thirty (30) days from notice
obligation to pay the expenses for the deed of because he had other plans for the building. The
lease. By agreement, the obligation may be tenants refused to vacate, insisting that they will
assumed by the lessor. only do so when the term of their lease shall
have expired. Is Ildefonso bound to respect the
4. To tolerate the urgent repairs upon the thing lease contracts between Jude and his tenant?
leased even if annoying to him, and although Explain your answer. (2009 BAR)
during the same, he may be deprived of a part
of the premises; (Art. 1662(1), NCC) A: YES. Ildefonso must respect the lease contracts
between Jude and his tenants. While it is true that
5. To notify the lessor of every usurpation by a the said lease contracts were not registered and
third person or persons on the property and annotated on the title to the property, Ildefonso is
of the urgent repairs needed; (Art. 1663, NCC) still not an innocent purchaser for value. He ought
and to know the existence of the lease because the
building was already occupied by the tenants at the
NOTE: If the lessee fails to comply, he would time he bought it. Applying the principle of caveat
be liable for damages which the lessor would emptor, he should have checked and known the
2023 GOLDEN NOTES
II. LEASE
status of the occupants or their right to occupy the discretion to grant the fixing of a period in an
building before buying it. ordinary obligation under Art. 1191 of NCC.
Accion Directa Q: What are the damages recoverable in

ejectment cases?
A direct action which the lessor may bring against a
sublessee who misuses the subleased property or A: Only the rents or the fair rental value of the
for unpaid rents otherwise due from the original premises.
lessee (sublessor).
The following cannot be successfully claimed:
Alternative Remedies of Aggrieved Party (1999,
2001 BAR) 1. Profits plaintiff could have earned were it
not for the forcible entry or unlawful
1. Rescission of the contract with damages detainer;
2. Material injury to the premises; and
Failure of lessor to place the lessee in 3. Actual, moral, or exemplary damages.
possession of the premises leased is a case of (Baens v. CA, G.R. No. L-57091, 23 Nov. 1983)
lessor’s non-compliance with his obligation.
Two Kinds of Trespass with Respect to the
Restrictions to Rescission Property Leased
a. Requires judicial action; 1. Mere act of Trespass (Disturbance in Fact)

b. Can be brought only by the aggrieved party;
and The physical enjoyment is reduced and may take
c. Must be substantial, not slight or minor place in a case of forcible entry. The third person
breach. claims no right whatever. (Paras, 2008)
2. Action for damages only, allowing the lease to NOTE: If the leased premises are expropriated and
remain subsisting. the tenant is evicted from the premises, the lessor is
not liable for damages. The lessee must look to the
Q: Jane leased a truck to Ed for two (2) years. expropriator for his compensation. (Sayo v. Manila
After one (1) year from delivery, the truck was Railroad Co., G.R. No. 17357, 21 June 1922)
destroyed by a strong typhoon. What is the effect
of the destruction of the truck with respect to 2. Trespass in Law (Disturbance in Law)
the lease?
A third person claims a LEGAL right to enjoy the
A: It depends. If the thing leased is totally premises. The lessor is responsible for trespass in
destroyed by a fortuitous event, the lease is law. (Paras, 2008)
extinguished. If the destruction is partial, the lessee
may choose between: (1) proportional reduction of Lessee is Presumed at Fault in case of Loss or
rent, or (2) rescission of lease. (Art. 1655, NCC) Deterioration of the property
NOTE: On the part of the lessor, instead of This presumption is rebuttable. The burden of proof
rescinding the contract, he may directly file an is on the LESSEE to show that the loss or
action for ejectment against the lessee. deterioration is not due to his own fault, such as
when the deterioration resulted from lapse of time,
If the aggrieved party has chosen the option of ordinary wear and tear, or from inevitable cause.
rescission under Art. 1659 of NCC, the court has no (Art. 1665, NCC)
CIVIL LAW
Non-applicability of presumption when the loss Q: May the courts fix a different period for the
or destruction is due to: lease?
1. Earthquake; A: YES. Even though a monthly rent is paid, and no

2. Flood; period for the lease has been set, the courts may fix
3. Storm; and a longer term for the lease after the lessee has
4. Other natural calamities. (Art. 1667, NCC) occupied the premises for over one year. If the rent
is weekly, the courts may likewise determine a
Reason: It is unjust to impose upon the lessee the longer period after the lessee has been in possession
burden of proving due diligence. It is more probable for over six months. In case of daily rent, the courts
that in such cases, he was not negligent. may also fix a longer period after the lessee has
stayed in the place for over one month. (Art. 1687,
NOTE: Ordinarily, fire is NOT a natural calamity. But NCC)
if the tenant can prove that he had no fault in the
case of fire, and that it was impossible for him to When Demand is Necessary as a Procedural
stop its spread, he will not be liable. (Lizares v. Requirement
Hernaez, G.R. No. 14977, 30 Mar. 1920)
For purposes of an action for unlawful detainer on
Deterioration Caused by Others the ground of the lessee’s failure to pay rents or
violation of the terms of the lease, Rule 70, ROC
Although the deterioration was not caused by the requires that demand be made upon the lessee
lessee himself, he is still liable under the law if the giving him 5 days (in case of buildings) and 15 days
deterioration was made by his household, guests (in case of land), within which to pay the unpaid
and visitors. (Art. 1668, NCC) His liability is akin to rentals and to vacate the premises.
civil liability in quasi-delict. (Art. 2180, NCC)
The demand to vacate must be definite and must not
Duration and Termination of Lease provide an alternative.
The demand required under Rule 70 is only a
1. When the lease was made for a determinate procedural requirement and does not, if not
time, the lease ends on the day fixed, complied with, change the fact that the lease
without need of a demand (Art. 1669, NCC); contract has ended upon the termination of the
or period fixed for its existence.
2. If the understanding between the parties as When Demand to Vacate is Unnecessary

to the term of the lease was vague and
uncertain, it cannot be said that a definite When the action is to terminate the lease, demand is
period was agreed upon; hence the proper not necessary. The expiration of the term of the
Article to apply would be Art. 1687 of NCC. lease immediately gives rise to a cause of action for
(Guitarte v. Sabaco, et al., G.R. No. L-13688- unlawful detainer in which case, demand to vacate
91, 28 Mar. 1960) is no longer necessary. (Paras, 2008)
NOTE: Under Art. 1687 of NCC, if the period for the Extinguishment of Lease
lease has not been fixed, it is understood to be from
year to year, if the rent agreed upon is annual; from 1. By the expiration of the period; (Art. 1673,
month to month, if it is monthly; from week to week, NCC)
if the rent is weekly; and from day to day, if the rent
is to be paid daily. 2. Total loss or destruction of the thing leased;
(Art. 1655, NCC)
2023 GOLDEN NOTES
II. LEASE
3. Rescission due to non-performance of the period or to quit upon the expiration of the first
obligations of a party; term.
4. Mutual agreement to terminate the lease 4. Lease renewable at the option of both parties;
contract;
A stipulation that the lease of a parcel of land
5. By action of the purchaser or transferee of will be “renewable for another 10 years at the
the property leased in good faith against option of both paerties under such terms,
the lessee whose lease contract is not duly conditions and rentals reasonable at the time,”
recorded; means that there should be mutual agreement
as to the renewal of the lease.
6. In case the dwelling place or any other
building is unfit for human habitation and 5. Option to renew given to lessor;
is dangerous to life or health; (Art. 1660,
NCC) If the option is given to the lessor, the lessee
cannot renew the lease against the former’s
7. By resolution of the right of the lessor; or refusal. The lease is deemed terminated.
8. By will of the purchaser or transferee of the 6. Extension exclusively for the benefit of the
thing. (Rabuya, 2017) lessor; and
Extension or Renewal of lease The stipulation in a lease contract extending the

lease term beyond that originally agreed upon,
1. Authority of Court; in order to save the lessor the trouble of
reimbursing the lessee in cash for the expenses
When the parties have stipulated on the period incurred on the leased premises was
of the lease, upon its expiration, the Court exclusively for the benefit of the lessor; hence,
cannot extend the period since it has no the latter has the right to terminate the lease
authority to do so. upon the expiration of the original period, or at
any other time thereafter, by tendering to the
2. Lease not to be deemed extended or renewed lessee, or consigning to the court, the
by implication; outstanding balance of his expenditures.
Where a lease contract expressly stipulates that The lessor should be given the option to either
the lease shall not be deemed extended or reimburse the balance of the expenditures or
renewed by implication beyond the contractual demand that the lessee should account for and
period for any cause or reason whatsoever but credit the lessor for the fruits of the properties
only by negotiations, the mere fact that the since the expiration of the lease against the
lessee was willing to pay what he claimed to be balance due to the lessee, turning over any
a reasonable rent – which was less than that excess to the lessor.
demanded by the lessor – did not operate in any
sense to extend the lease. 7. Option to renew given to lessee.
3. Lease extendible for a similar period; Where a lessee is given the option to continue
or renew the contract of lease and is silent upon
A stipulation that a lease is “extendible” for a the rentals, the old terms are to be followed in
further similar period is to be understood as the renewed lease.
giving the lessee the right to the additional
CIVIL LAW
Implied New Lease or Tacita Reconduccion 2. The lessee continues enjoying the thing
(1990, 1999, 2001 BAR) leased for at least 15 days;
Tacita Reconduccion refers to the right of the lessee 3. The continuation of the occupation by the
to continue enjoying the material or de facto lessee is with the acquiescence of the
possession of the thing leased within a period of lessor; and
time fixed by law. (Rabuya, 2017)
4. The lessor or lessee has not previously
GR: Arises if at the end of the contract, the lessee given a notice to vacate.
should continue enjoying the thing leased for at
least 15 DAYS with the acquiescence of the lessor NOTE: The notice required under Article 1670 is the
one given after the expiration of the lease period for
XPN: Unless of course a notice to the contrary had the purpose of aborting an implied renewal of lease.
previously been given by EITHER PARTY. The notice to vacate constitutes an express act on
the part of the lessor that he no longer consents to
Effects of the Implied New Lease the continued occupation by the lessee of the leased
property. (Tagbilaran Integrated Settlers Assoc. v.
1. The period of the new lease is not that CA, G.R. No. 148562, 25 Nov. 2004)
stated in the original contract, but the time
in Arts. 1682 and 1687 of NCC is month to Instances when implied renewal NOT applicable
month, year to year, etc.; and
1. Stipulation against implied renewal;
2. Other terms of the original contract are 2. Invalidity of original lease;
revived. (Paras, 2008) 3. Acceptance of rentals beyond original term;
4. Acceptance of rentals less than amounts
Terms which are Revived stipulated; and
5. Non-payment of rentals.
The original terms of the original contract which are
revived are only those which are germane to the Rule if Lessor Objects to Lessee’s Continued
lessee’s right of continued enjoyment of the Possession
property leased or related to such possession, such
as the amount of rental, the date when it must be If the following requisites under Art. 1671 of NCC
paid, the care of the property, and the responsibility are present, the lessee shall be considered a
for repairs. (Dizon v. Magsaysay, G.R. No. L-23399, 31 possessor in bad faith:
May 1974)
1. The contract has expired;
NOTE: No such presumption may be indulged in 2. The lessee continues enjoying the thing;
with respect to special agreements which by their and
nature are foreign to the right of occupation or 3. The lessor has objected to this enjoyment.
enjoyment inherent in a contract of lease e.g.,
preferential right given to the lessee to purchase the If the lessee still makes a construction after he has
leased property. become a possessor in bad faith, he may be
compelled:
Requisites for an Implied Renewal of Lease:
1. To forfeit the construction without
1. The term of the original contract of lease indemnity;
must have already expired; 2. To buy the land regardless of whether or
not its value is considerably more than the
value of the construction; or
2023 GOLDEN NOTES
II. LEASE
3. To demolish the construction at his justify the filing of an ejectment case

expense. against the lessee.
NOTE: In any of the three cases hereinabove The theory that a lease could continue for
referred to, he will still be subject to the payment of an indefinite term as long as the lessee pays
damages. (Arts. 449-451, NCC) the rentals had already been rejected by the
SC because the validity or compliance of
Judicial Grounds for Ejectment of Lessees (1994, contracts cannot be left to the will of one of
2004 BAR) (E-N-V-I) the parties. (Art. 1308, NCC)
1. Expiration of period of the lease; Where the contract of lease prohibits the
lessee from introducing improvements and
The period of the lease contract may be: making repairs and the lessee did so, he
violated this condition. This violation is a
a. Conventional – when the period is by basis for ejectment.
agreement of the parties; or
b. Legal – when the period is fixed by law 4. Improper use or enjoyment of the property
under Arts. 1682 and 1687 of NCC; leased.
GR: Upon the expiration of the period, the The lessee is obliged to use the thing leased
lease contract is terminated. If a as a diligent good father of a family. If due
determinate time was stipulated, the lease to improper use of the property, the same
ceases without need of a demand. (Art. is lost, destroyed or deteriorated, the lessor
1669, NCC) may immediately file a suit for restitution
or ejectment. He need not wait for the
XPN: In case of implied new lease. After expiration of the period of the lease. (Art.
termination of the lease, the lessor is free to 1673, NCC)
dispose of the property in favor of another
lessee. The payment of all rents then due Preliminary Mandatory Injunction to Restore
will be immaterial. As long as the period Possession Pending Appeal (Art. 1674, NCC)
has expired, the lessee can be ejected.
The LESSOR is entitled to a writ of preliminary
2. Non-payment of the rentals agreed upon; injunction to restore him in his possession in case
the higher court is satisfied that the lessee’s appeal
One of the principal obligations of the is frivolous or dilatory (i.e., without merit) or the
lessee is to pay the rentals agreed upon. lessor’s appeal is prima facie meritorious.
(Art. 1657(1), NCC) It is the cause or
consideration for the use and enjoyment of Reason: The remedy is intended “to put an end to
the property leased. Non-payment of the the present state of the law which unjustly allows
rentals after a demand therefor is a the lessee to continue in possession during an
justifiable ground for the lessor to rescind appeal.” (Report of the Code Commission)
the contract and eject the lessee.
Use by Lessee of Legal Period
3. Violation of any condition; and
The lessee is entitled to periods agreed upon in the
Any violation of the terms and conditions of lease contract (conventional) or those established
a contract of lease, whether it is essential or in Arts. 1682 and 1687 of NCC (implied new lease).
accidental in nature, will constitute a
violation of the lease contract and will
CIVIL LAW
However, these rights are restricted if there are

grounds or causes for the ejectment of the lessee
under Art. 1673 of NCC. To enjoy peace, the lessee
must be faithful to his obligations as such.
When the lessee is guilty of a cause of ejectment

under Art. 1673 of NCC, he is also deprived of the
right to enjoy the period of grace under Art. 1687 of
NCC.
Fictitious Sale of Leased Property
1. If at the time the supposed buyer demands

the termination of the lease, the deed of
sale is not yet registered in the appropriate
Registry of Property. (Art. 1676(3), NCC)
2. If it is a simulated sale intended merely to

extinguish the existing lease. In the eyes of
the law, it does not exist. (Art. 1409, NCC)
Effect: The false “vendee” cannot terminate the

lease even if the same is unrecorded.
Reason: To discourage the of fictitiously selling the

premises in order to oust the lessee before the
termination of the lease.
Ornamental Expenses (Art. 1678, NCC)
Expenses incurred which cater only to the personal

comfort, convenience or enjoyment of a person.
The lessee has no right of reimbursement for

ornamental expenses. He may remove them
provided he does not cause any damage to the thing
leased. The lessor, if he so desires, may retain them
after paying their value to the lessee at the time the
lease is extinguished.
2023 GOLDEN NOTES
III. AGENCY
9. Fiduciary and Revocable – For the creation of

III. AGENCY legal relationship of representation by the agent
on behalf of the principal, the powers of the
former are essentially derived from the latter.
Neither the principal nor the agent can be legally
Contract of agency (2000, 2003 BAR)
made to remain in the relationship when they
choose to have it terminated.
By the contract of agency, a person binds himself to
render some service or to do something in
Classifications of Agency
representation or on behalf of another, with the
consent or authority of the latter. (Art. 1868, NCC)
1. As to manner of creation
a. Express – Agent has been actually
NOTE: The essence of agency is representation. For
authorized by the principal, either
a Contract of Agency to exist, it is essential that the
orally or in writing.; and (Art. 1869,
principal consents that the agent shall act on the
NCC)
former’s behalf and the agent consents so as to act.
(Rabuya, 2017)
b. Implied – Agency is implied from the
acts of the principal, from his silence or
One factor which most clearly distinguishes agency
lack of action, or his failure to repudiate
from other legal concepts is control; one person – the
the agency, knowing that another
agent – agrees to act under the control or direction of
person is acting on his behalf without
another – the principal. Indeed, the very word
authority, (Art. 1869, NCC) or from the
“agency” has come to connote control by the
acts of the agent which carry out the
principal. (Amor Trading Corp. v. CA, G.R. No. 158585,
agency, or from his silence or inaction
13 Dec. 2005)
according to the circumstances. (Art.
1870, NCC)
Characteristics of a contract of agency
2. As to character
1. Bilateral – If it is for compensation, it gives rise
a. Gratuitous – Agent receives no
to reciprocal rights and obligations.;
compensation for his services; and (Art.
2. Unilateral – If gratuitous, it creates obligations
1875, NCC)
for only one of the parties.;
3. Nominate – It has its own name.;
b. Onerous or Compensated – Agent
4. Consensual – It is perfected by mere consent.;
receives compensation for his services.
5. Principal – It can stand by itself without need of
(Art. 1875, NCC)
another contract.;
6. Preparatory and Progressive – It is entered
3. As to extent of business of the principal
into as a means for other purposes that deal with
a. General – Agency comprises all the
the public in a particular manner: for the agent
business of the principal; and (Art. 1876,
to enter into juridical acts with the public in the
NCC)
name of the principal.; (Villanueva and
Villanueva-Tiansay, 2015)
b. Special – Agency comprises one or
7. Generally onerous;
more specific transactions. (Art. 1876,
8. Representative relation – The agent acts for
NCC)
and on behalf of the principal on matters within
the scope of his authority and said acts have the
4. As to authority conferred
same legal effect as if they were personally
a. Couched in general terms – Agency is
executed by the principal.; and (Rabuya, 2017)
created in general terms and is deemed
to comprise only acts of administration.;
CIVIL LAW
and (Art. 1877, NCC) (Sps. Viloria v. Continental Airlines, Inc., G.R. No.
188288, 16 Jan. 2012)
b. Couched in specific terms – Agency
authorizing only the performance of a Appointment of an agent (2010 BAR)
specific act or acts. (Art. 1876, NCC)
GR: There are no formal requirements governing the
5. As to nature and effects appointment of an agent.
a. Ostensible or Representative – Agent
acts in the name and representation of XPN: When the law requires a specific form, i.e. when
the principal.; and (Art. 1868, NCC) sale of land or any interest therein is through an
agent, the authority of the latter must be in writing;
b. Simple or Commission – Agent acts in otherwise, the sale shall be void. (Art. 1874, NCC)
his own name but for the account of the
principal. (De Leon, 2014) Rules on Implied Acceptance of agency
Parties to a contract of agency 1. Between persons who are present – The

acceptance of the agency may also be implied if
1. Principal (Mandante) – One whom the agent the principal delivers his power of attorney to
represents and from whom he derives his the agent and the latter receives it without any
authority; he is the person represented or the objection. (Art. 1871, NCC)
person who consents that another shall act on
his behalf.; and 2. Between persons who are absent – The
acceptance of the agency cannot be implied from
2. Agent (Mandatario) – One who acts for and the silence of the agent.
represents another; he is the person acting in a
representative capacity. The agent has XPNs:
derivative authority in carrying out the a. When the principal transmits his power
principal’s business. (De Leon, 2019) of attorney to the agent, who receives it
without any objection; or
Essential elements of an agency
b. When the principal entrusts to him by
1. Consent (express or implied) of the parties to letter or telegram a power of attorney
establish the relationship.; with respect to the business in which he
is habitually engaged as an agent and he
NOTE: A person may express his consent: did not reply to the letter or telegram.
a. by contract, (Art. 1868, NCC), orally or in (Art. 1872, NCC)
writing;
b. by conduct; (Art. 1869, NCC) NOTE: Acceptance by the agent may also be express
c. by ratification; or (Art. 1910, NCC) or or implied from his acts which carry out the agency,
d. the consent may arise by presumption or or from his silence or inaction according to the
operation of law. (De Leon, 2014) circumstances. (Art. 1870, NCC)
2. The object is the execution of a juridical act in Communication of existence of agency

relation to third persons;
Ways of giving notice of agency:
3. The agent acts as a representative and not for
himself; and 1. By special information – The person appointed
as agent is considered such with respect to the
4. The agent acts within the scope of his authority. person to whom it was given; and
2023 GOLDEN NOTES
III. AGENCY
2. By public advertisement – The agent is Requisites for solidary liability of joint principals
considered as such with regard to any person.
(Art. 1873, NCC; De Leon, 2019) 1. There are two or more principals;
2. They have all concurred in the appointment of
Nature of the relationship between principal and the same agent; and
agent 3. Agent is appointed for a common transaction or
undertaking. (De Leon, 2019)
It is fiduciary in nature that is based on trust and
confidence. The agent is estopped from asserting or Theory of imputed knowledge
acquiring an interest adverse to that of his principal.
(De Leon, 2019) The importance of the duty to give information of
material facts becomes readily apparent when it is
Qualifications of a Principal borne in mind that knowledge of the agent is
imputed to the principal even though the agent never
1. Natural or juridical person; and communicated such knowledge to the principal.
2. Must have capacity to enter into contract in his (Ibid.)
own right. (Ibid.)
Exceptions to the theory of imputed knowledge
NOTE: If a person is capacitated to act for himself or
his own right, he can act through an agent. 1. The agent’s interests are adverse to those of the
principal;
Insofar as third persons are concerned, it is enough
that the principal is capacitated. But insofar as his 2. The agent’s duty is not to disclose the
obligations to his principal are concerned, the agent information, as where he is informed by way of
must be able to bind himself. confidential information; and
Kinds of Principal 3. The person claiming the benefit of the rule

colludes with the agent to defraud the principal.
1. Disclosed principal – At the time of the (Ibid.)
transaction contracted by the agent, the other
party knows that the agent is acting for a NOTE: The theory of imputed knowledge ascribes
principal and of the principal’s identity.; the knowledge of the agent to the principal, not the
other way around. The knowledge of the principal
2. Partially disclosed principal – The other party cannot be imputed to his agent. (Sunace Intl. Mgmt.
knows or has reason to know that the agent is or Services, Inc. v. NLRC, G.R. No. 161757, 25 Jan. 2006)
may be acting for a principal but is unaware of the
principal’s identity.; and Kinds of agents
3. Undisclosed principal – The party has no notice 1. Universal agent – employed to do all acts which
of the fact that the agent is acting as such for a the principal may personally do, and which he
principal. (De Leon, 2019) can lawfully delegate to another the power of
doing.;
Joint principals
Two or more persons appoint an agent for a common 2. General agent – employed to transact all
transaction or undertaking. (Art. 1915, NCC) business of the principal, or all the business of a
particular kind or in a particular place, or in
other words, to do all acts connected with a
particular trade, business or employment.; and
CIVIL LAW
3. Special or particular agent – authorized to act 5. When a person acted as an agent of an

in one or more specific transactions, or to do one incapacitated principal unless the third person
or more specific acts, or to act upon a particular was aware of the incapacity at the time of the
occasion. (De Leon, 2019) making of the contract. (De Leon, 2019)
Rule with regard to the execution of the agency Q: Spouses (Sps.) Briones took out a loan of
₱3,789,216.00 from iBank to purchase a BMW
GR: The agent is bound by his acceptance to carry out Z4 Roadster. The monthly amortization for two
the agency, in accordance with the instruction of the (2) years was ₱78,942.00. They executed a
principal and is liable for damages which, through promissory note with chattel mortgage that
his non-performance, the principal may suffer. (Arts. required them to take out an insurance policy on
1884 & 1887, NCC) the vehicle. In the promissory note, the Spouses
Briones constituted iBank as their attorney-in-
XPN: If its execution could manifestly result in loss fact with full power and authority for the
or damage to the principal. (Art. 1888, NCC) purpose of filing claims with the insurance
company as may be necessary to prove the claim
Responsibility of two or more agents appointed and to collect from the latter the proceeds of
simultaneously insurance in case of loss or damage to the
vehicle. The mortgaged BMW Z4 Roadster was
GR: They are jointly liable. (Art. 1894, NCC) carnapped in Tandang Sora, Quezon City.
Spouses Briones declared the loss to iBank,
XPN: Solidarity has been expressly stipulated. Each which instructed them to continue paying the
of the agents becomes solidarily liable for: next three (3) monthly installments “as a sign of
1. The non-fulfillment of the agency; and good faith.” When the Spouses Briones finished
2. Fault or negligence of his fellow agent. (Art. 1895, paying the three (3)-month installment, iBank
NCC) sent them a letter demanding full payment of the
lost vehicle. The Spouses Briones submitted a
XPNs to the XPN: notice of claim with their insurance company,
but the latter denied the claim due to the
2. When one of the other agents acts beyond the delayed reporting of the lost vehicle.
scope of his authority – innocent agent is not
liable.; or Thereafter, iBank filed a complaint for the
default of the Spouses to pay monthly
3. When the fault or negligence of his fellow amortizations. RTC ruled that as the duly
agents was done beyond the scope of their constituted attorney-in-fact of the Spouses
authority – innocent agent is not liable. (Art. Briones, iBank had the obligation to facilitate
1895, NCC) the filing of the notice of claim and then to
pursue the release of the insurance proceeds.
Instances when the agent may incur personal The CA also dismissed the complaint. Did an
liability agency relationship exist between the parties
which obligated iBank to facilitate the filing of
1. Agent expressly bound himself; the claim against the insurance company?
2. Agent exceeded his authority;
3. Acts of the agent prevented the performance on A: YES. All the elements of agency exist in this case,
the part of the principal; namely (1) there is consent, express or implied, of
4. When a person acted as agent without authority the parties to establish the relationship of agency;
or without a principal; and (2) the object is the execution of a juridical act in
relation to a third person; (3) the agent acts as a
2023 GOLDEN NOTES
III. AGENCY
representative and not for himself; and (4) the agent Requisites for the additional authority of agent in
acts within the scope of his authority. cases of necessity
Under the promissory note with chattel mortgage, 1. Real existence of emergency;
Spouses Briones appointed iBank as their attorney- 2. Inability of the agent to communicate with the
in-fact, authorizing it to file a claim with the principal;
insurance company if the mortgaged vehicle was 3. Exercise of additional authority is for the
lost or damaged. iBank was also authorized to principal’s protection; and
collect the insurance proceeds as the beneficiary of 4. Adoption of fairly reasonable means, premises
the insurance policy. Article 1370 of the Civil Code duly considered. (Ibid.)
is categorical that when “the terms of a contract are
clear and leave no doubt upon the intention of the Rule regarding double agency
contracting parties, the literal meaning of its
stipulations shall control. (Union Bank of the GR: Disapproved by law for being against public
Philippines v. Spouses Briones, G.R. No. 205657, 29, policy and sound morality.
Mar. 2017)
XPN: Where the agent acted with full knowledge and
Presumption of contract of agency consent of the principals.
GR: Agency is not presumed. Acts that a principal may delegate to his agent
The relation between principal and agent must exist GR: What a man may do in person, he may do thru
as a fact. Thus, it is held that where the relation of another.
agency is dependent upon the acts of the parties, the
law makes no presumption of agency, and it is always XPNs:
a fact to be proved, with the burden of proof resting 1. Personal acts; and
upon the person alleging the agency to show, not 2. Criminal acts or acts not allowed by law.
only the fact of its existence, but also its nature and (Ibid.)
extent. (Victorias Milling Co., Inc. v. Consolidated
Sugar Corporation, G.R. No. 117356, 19, June 2000) Q: A granted B the exclusive right to sell his brand
of Maong pants in Isabela, the price for his
XPNs: merchandise payable within 60 days from
1. Operation of law; and delivery, and promising B a commission of 20%
2. To prevent unjust enrichment. (De Leon, on all sales. After the delivery of the merchandise
2010) to B but before he could sell any of them, B’s store
in Isabela was completely burned without his
Agency by necessity fault, together with all of A's pants. Must B pay A
for the lost pants? Why? (1999 BAR)
Agency cannot be created by necessity. What is
created instead is additional authority in an agent A: YES. B must pay A for the lost pants. The contract
appointed and authorized before the emergency between A and B is a sale not an agency to sell
arose. By virtue of the existence of an emergency, the because the price is payable by B upon 60 days from
authority of an agent is correspondingly enlarged in delivery even if B is unable to resell it. If B were an
order to cope with the exigencies or the necessities agent, he is not bound to pay the price if he is unable
of the moment. (De Leon, 2019) to resell it. As a buyer, however, ownership passed to
B upon delivery and, under Art. 1504, NCC, the thing
perishes for the owner. Hence, B must still pay the
price.
CIVIL LAW
Proving the existence of principal-agent Agency vs. Judicial Administration

relationship through mere representation
JUDICIAL
AGENCY
Mere representation of an alleged agent is not ADMINISTRATION
sufficient to prove the existence of a principal-agent As to the source of authority
relationship. The declarations of the agent alone are
Judicial administrator
generally insufficient to establish the fact or extent of Agent is appointed by
is appointed by the
agency. It is a settled rule that the persons dealing the principal.
court.
with the assumed agent are bound at their peril, if
they would hold the principals liable, to ascertain not As to whom they represent
only the fact of agency but also the nature and extent Represents not only
of authority, and in case either is controverted, the Represents the the court but also the
burden of proof is upon them to establish it. (Sps. Yu principal. heirs and creditors of
v. Pan American World Airways, Inc., G.R. No. 123560, the estate.
27 Mar. 2000)
As to the requirement of bond
Agency vs. Guardianship Judicial

Administrator, before
Agent does not file a
AGENCY GUARDIANSHIP entering into his
bond.
As to who they represent duties, is required to
file a bond.
Guardian represents
Agent represents a As to control of the Agent/Administrator
an incapacitated
capacitated person.
person. The acts of an
As to the source of authority Agent is controlled by administrator are
Agent derives the principal through subject to specific
authority from the the agreement. provisions of law and
principal and his Guardian derives orders from the court.
authority may at any authority from the
time be abrogated or court.
Agency vs. Lease of Services
modified by the
principal.
AGENCY LEASE OF SERVICES
As to the appointing authority As to representation by the agent or worker
Agent is appointed by
Guardian is appointed Worker or lessor of
the principal and can
by the court, and Agent represents the services does not
be removed by the
stands in loco parentis. principal. represent his
latter.
employer.
As to being subject to represented person
As to termination of relationship
Guardian is not subject
Agent is subject to Relationship can be Generally,
to the directions of the
directions of the terminated at the will relationship can be
ward, but must act for
principal. of either principal or terminated only at the
the ward’s benefit.
agent. will of both.
As to liability
As to the kind of function he exercises
Guardian has no
Agent can make the The lessor ordinarily
power to impose Agent exercises
principal personally performs only
personal liability on discretionary powers.
liable. ministerial functions.
the ward.
2023 GOLDEN NOTES
III. AGENCY
Agency vs. Partnership Agency vs. Trust
AGENCY PARTNERSHIP AGENCY TRUST

As to his actions As to the capacity to hold title over the
property
A partner acts not only
for his co-partners and Trustee may hold
Agent acts in the name Agent usually holds
the partnership but legal title to the
of the principal. no title at all.
also as principal of property.
himself. As to his actions
As to the control by the principal Agent usually acts in

Trustee may act in his
A partner’s power to the name of the
own name.
bind his co-partner is principal.
An agent must submit not subject to the co-
As to the termination of the relationship
to the principal’s right partner’s right to
to control. control, unless there is Trust usually ends by
Agency usually may
an agreement to that the accomplishment
be terminated or
effect. of the purposes for
revoked any time.
which it was formed.
As to liability
As to the scope of authority over property
The ordinary agent A partner acting as
Agency may not be
assumes no personal agent for the Trust involves control
connected at all with
liability where he acts partnership binds not over property.
property.
within the scope of his only the firm members
authority. but himself as well. As to the binding effect of the contracts
entered into by them
As to sharing of profits
Trustee does not
Agent has authority to
The alleged owner or necessarily or even
make contracts which
partner takes his possess such
The profits belong to will be binding on his
agreed share of profits, authority to bind the
all the parties as principal.
not as owner but as an trustor.
common proprietors
agreed measure of
in agreed proportions. As to its creation
compensation for his
services or the like. Trust may be the
Agency is really a result of a contract; it
contractual relation. may also be created
by law.
Kinds of agency as to the extent of powers

conferred
An agency may be couched in:
1. General terms – It is one which is created in

general terms and is deemed to comprise only
acts of administration.; and (Art. 1877, NCC)
CIVIL LAW
2. Specific terms – It is necessary to perform any The CA ruled that when mortgagors Sian
act of strict ownership. (De Leon, 2019) Agricultural Corporation, Sebastian and Marina
de la Pena and Spouses (Sps.) Jerome Gonzales
Scope of authority of an agent and Perla Sian-Gonzales as registered owners of
Lots 1, 8, 214, 215,213-B and 96, respectively,
The agent must act within the scope of his authority. authorized petitioner-appellee and her son Roy
He may do such acts as may be conducive to the Sian Liamsiaco to mortgage their properties,
accomplishment of the purpose of the agency. (Art. they allowed a burden to be placed therein
1881, NCC) bearing the risk of losing it if the loans were not
paid. It is because of this risk that mortgagors
However, the limits of the agent’s authority shall not should be absolute owners, or, that special
be considered exceeded should it have been authority from the owners of the properties
performed in a manner more advantageous to the must be given before their properties can be
principal than that specified by him. (Art. 1882, NCC) encumbered through mortgage.
Q: Remedios obtained a P142,500.00 sugar crop Since the lifting of this encumbrance is a benefit
loan from Maybank which was payable within that would free the owners of the risk of losing
one year. Through a Special Power of Attorney their properties, it is only a matter of course that
(SPA), Remedios executed a Real Estate the special power to mortgage includes the
Mortgage (REM) on the following parcels of authority to discharge it from the burden. Does
land: (a) Lot 8, covered by Transfer Certificate of the authority to encumber one's land title
Title No. (TCT) T-74488, which is owned by Sian naturally includes the authority to perform acts
Agricultural Corporation; (b) Lot 1, covered by to disencumber such title?
TCT No. 55619, which is owned by spouses Sps.
Sebastian and Marina de la Pena. Subsequently A: YES. Art. 1882 of the NCC expressly provides: The
in 1982, Remedios and her son Roy Sian- limits of the agent's authority shall not be
Limsiaco (Roy) obtained another sugar crop considered exceeded should it have been performed
loan for P307,700.00 which was likewise due in a manner more advantageous to the principal
after one year. than that specified by him. Given this and
considering that respondent was already given
Through another SPA, Roy executed a REM on special authority to encumber the mortgagors-
the following parcels of land owned by Spouses principals' titles with the subject mortgage
Jerome Gonzales and Perla Sian-Gonzales:(a) contracts, then it is indeed implicit that respondent
Lot 214, covered by TCT No. T-121539; (b) Lot is also authorized to do all the necessary acts to
215, covered by TCT No. T-121540; (c) Lot213- release the mortgagors-principals from such
B, covered by TCT No. T-121541;(d) Lot 96, encumbrance. Thus, the filing of the instant case to
covered by TCT No. T-80515. Likewise, in 1984, cancel the mortgage liens, which were annotated in
Remedios obtained another sugar crop loan for the mortgagor-principals' respective titles through
P110,000.00 also secured by a REM on Lot 8 the special authority granted by them to
owned by Sian Agricultural Corporation respondent, should be considered within the limits
Maybank never demanded payment of the of respondent's authority since disencumbering the
above sugar crop loans nor filed a case to collect mortgagors - principals' titles of the same mortgage
or foreclose the mortgage. liens are obviously advantageous to the latter.
Moreover, the registered owners of the mortgaged
Thus Remedios and Roy filed a Petition before lands (alleged to be the real parties-in-interest)
the RTC to cancel the liens annotated on the never questioned the authority of respondent all
titles of the mortgaged properties on grounds of throughout the proceedings nor did they file any
prescription and extinction of their loan pleading or motion to that effect. In short, the real
obligation. parties-in-interest effectively ratified the act of
2023 GOLDEN NOTES
III. AGENCY
respondent of filing an action to cancel the Rule as to when the Principal is NOT Bound by
mortgage. (Maybank Ph., Inc. v. Sian-Limsiaco, G.R. the act of the agent
No. 196323, 08 Feb. 2021)
1. GR: When the act is without or beyond the
Instances when the act of an agent is binding to scope of his authority in the principal’s name.
the principal
XPNs:
1. When the agent acts as such without expressly a. Where the acts of the principal have
binding himself or does not exceed the limits of contributed to deceive a third 3rd
his authority. (Art. 1897, NCC) person in good faith;
2. If principal ratifies the act of the agent which b. Where the limitations upon the power
exceeded his authority. (Art. 1898, NCC) created by the principal could not have
been known by the third 3rd person;
3. Circumstances where the principal himself was,
or ought to have been aware. (Art. 1899, NCC) c. Where the principal has placed in the
hands of the agent instruments signed
4. If such act is within the terms of the power of by him in blank; and
attorney, as written. (Arts. 1900 & 1902, NCC)
d. Where the principal has ratified the acts
5. Principal has ratified, or has signified his of the agent.
willingness to ratify the agent’s act. (Art. 1901,
NCC) 2. GR: When the act is within the scope of the
agent’s authority but in his own name.
Effects of the Acts of an Agent
XPN: When the transaction involves things
IN PRINCIPAL’S IN AGENT’S OWN belonging to the principal. (Art. 1883, NCC)
NAME NAME
With Authority NOTE: The limits of the agent’s authority shall not be
considered exceeded should it have been performed
Not binding on the
in a manner more advantageous to the principal than
principal; agent and
that specified by him. (Art. 1882, NCC)
stranger are the only
parties, except
Right of agent to retain in pledge object of agency
regarding things
Valid. (Legal Pledge) (2015 BAR)
belonging to the
principal or when the
The agent may retain in pledge the things which are
principal ratifies the
the object of the agency until the principal effects the
contract or derives
reimbursement and pays the indemnity:
benefit therefrom.
Without Authority 1. If principal fails to reimburse the agent the

necessary sums, including interest, which the
Unenforceable but may
latter advanced for the execution of the agency.
be ratified, in which Valid on the agent, but
(Art. 1912, NCC)
case, may be validated not on the principal.
retroactively from the (De Leon, 2019)
2. If principal fails to indemnify the agent for all
beginning.
damages which the execution of the agency may
have caused the latter, without fault or
CIVIL LAW
negligence on his part. (Art. 1913, NCC) The fact that an agent who makes a contract for his
principal will gain or suffer loss by the performance
Rule where two persons deal separately with the or non-performance of the contract by the principal
agent and the principal or by the other party thereto does not entitle him to
maintain an action on his own behalf against the
If the two contracts are incompatible with each other party for its breach.
other, the one of prior date shall be preferred. This is
subject however to the rule on double sale under Art. An agent entitled to receive a commission from his
1544 of the NCC. (Art. 1916, NCC) principal upon the performance of a contract which
he has made on his principal's account does not, from
NOTE: Rules of preference in double sale this fact alone, have any claim against the other party
for breach of the contract, either in an action on the
1. Personal property – possessor in good faith contract or otherwise.
2. Real property An agent who is not a promisee cannot maintain an

a. Registrant in good faith; action at law against a purchaser merely because he
b. In the absence of inscription, possessor in is entitled to have his compensation or advances paid
good faith; and out of the purchase price before payment to the
c. In the absence of possession, person with the principal. (Uy v. CA, G.R. No. 120465, 09 Sept. 1999)
oldest title in good faith. (Art. 1544, NCC)
Specific obligations of an agent to the principal
If the agent acted in good faith, the principal shall be
liable for damages to the third person whose 1. Carry out the agency;
contract must be rejected. If agent is in bad faith, he
alone shall be liable. (Art. 1917, NCC) 2. Answer for damages which, through his non-
performance, the principal may suffer;
A person acting as an agent cannot escape
criminal liability by virtue of the contract of 3. Finish the business already begun on the death of
agency the principal, should delay entail any danger;
(Art. 1884, NCC)
The law on agency has no application in criminal
cases. When a person participates in the commission NOTE: The agency shall also remain in full force
of a crime, he cannot escape punishment on the even after the death of the principal if it has been
ground that he simply acted as an agent of another constituted in the common interest of the latter
party. (Ong v. CA, G.R. No. 119858, 29 Apr. 2003) and of the agent, or in the interest of a third
person who has accepted the stipulation in his
An agent cannot maintain an action against favor. (Art. 1930, NCC)
persons with whom they contracted on behalf of
his principal. 4. Observe the diligence of a good father of a family
in the custody and preservation of the goods
Agents are not a party with respect to that contract forwarded to him by the owner in case he
between his principal and third persons. As agents, declines an agency, until an agent is appointed;
they only render some service or do something in (Art. 1885, NCC)
representation or on behalf of their principals. The
rendering of such service did not make them parties NOTE: The owner shall as soon as practicable
to the contracts of sale executed in behalf of the either appoint an agent or take charge of the
latter. goods.
2023 GOLDEN NOTES
III. AGENCY
5. Advance the necessary funds should there be a 15. Bear the risk of collection and pay the principal
stipulation to do so except when the principal is the proceeds of the sale on the same terms
insolvent; (Art. 1886, NCC) agreed upon with the purchaser, should he
receive also on sale, a guarantee commission;
6. Act in accordance with the instructions of the (Art. 1907, NCC) (2004 BAR)
principal and in default thereof, do all that a good
father of a family would do; (Art. 1887, NCC) 16. Indemnify the principal for damages for his
failure to collect the credits of his principal at the
7. Not to carry out the agency if its execution would time that they become due; and (Art. 1908, NCC)
manifestly result in loss or damage to the
principal; (Art. 1888, NCC) 17. Be responsible for fraud or negligence. (Art.
1909, NCC; De Leon, 2014)
8. Answer for damages if there being a conflict
between his interests and those of the principal, NOTE: The court shall judge with more or less rigor,
he should prefer his own; (Art. 1889, NCC) the fault or negligence of the agent, according to
whether the agency was or was not for
9. Not to loan to himself without the consent of the compensation. (Art. 1909, NCC)
principal if he has been authorized to lend
money at interest; (Art. 1890, NCC) Instructions
10. Render an account of his transactions and to Private directions which the principal may give the
deliver to the principal whatever he may have agent in regard to the manner of performing his
received by virtue of the agency, even though it duties as such agent but of which a third party is
may not be owing to the principal; (Art. 1891, ignorant are said to be secret if the principal
NCC) intended them not to be made known to such party.
(De Leon, 2019)
NOTE: Every stipulation exempting the agent
from the obligation to render an account shall be Obligation of a person who declines an agency
void. (Art. 1891(2), NCC)
A person who declines an agency is still bound to
11. Distinguish goods by countermarks and observe the diligence of a good father of the family in
designate the merchandise respectively the custody and preservation of goods forwarded to
belonging to each principal, in the case of a him by the owner. This is based on equity. (Ibid.)
commission agent who handles goods of the
same kind and mark, which belong to different Authority vs. Principal’s instructions
owners; (Art. 1904, NCC);
AUTHORITY INSTRUCTIONS
12. Be responsible in certain cases for the acts of the As to the scope
substitute appointed by him; (Art. 1892, NCC)
(1999 BAR)
13. Pay interest on funds he has applied to his own Contemplates only a
Sum total of the
use; (Art. 1896, NCC) private rule of guidance
powers committed to
to the agent;
the agent by the
14. Inform the principal, where an authorized sale of independent and
principal.
credit has been made, of such sale; (Art. 1906, distinct in character.
NCC)
CIVIL LAW
As to the relationship to the agent When the obligation to account not applicable
Relates to the 1. If the agent acted only as a middleman with the

Refers to the manner or
subject/ business or task of merely bringing together the vendor and
mode of agent’s action
transactions with vendees;
with respect to matters
which the agent is
within the scope of
empowered to deal or 2. If the agent informed the principal of the
permitted action.
act. gift/bonus/profit he received from the
As to third persons purchaser and his principal did not object
thereto; and
Limitations of
Without significance as
authority are 3. Where a right of lien exists in favor of the agent.
against those dealing
operative as against (Ibid.)
with the agent with
those who have or are
neither knowledge nor
charged with Sub-Agent
notice of them.
knowledge of them.
As to purpose A sub-agent is a person employed or appointed by an
agent as his agent, to assist him in the performance
Contemplated to be Not expected to be made of an act for the principal which the agent has been
made known to third known to those with empowered to perform.
persons dealing with whom the agent deals.
the agent. (De Leon, 2014) Unless prohibited by the principal, the agent may
appoint a sub-agent or substitute. However, an agent
NOTE: If an act done by an agent is within the may not delegate to a sub-agent where the work
apparent scope of the authority with which he has entrusted to him by the principal to carry out
been clothed, it matters not that it is directly requires special knowledge, skill or competence
contrary to the instructions of the principal. The unless he has been authorized to do so by the
principal will, nevertheless, be liable unless the third principal. (Ibid.)
person with whom the agent dealt knew that he was
exceeding his authority or violating his instructions. Effects of Substitution
Third persons dealing with an agent do so at their 1. When substitution is prohibited – All acts of the
peril and are bound to inquire as to the extent of his substitute shall be void. (Art. 1892(2), NCC)
authority but they are not required to investigate the
instructions of the principal. (De Leon, 2019) 2. When substitution is authorized
Breach of loyalty of the agent a. The principal did not designate any
particular person – The substitution
In case of breach of loyalty, the agent is NOT entitled has the effect of releasing the agent
to commission. The forfeiture of the commission will from his responsibility unless the
take place regardless of whether the principal suffers person appointed is notoriously
any injury by reason of such breach of loyalty. It does incompetent or insolvent; and (Art.
not even matter if the agency is for a gratuitous one, 1892(2), NCC)
or that the principal obtained better results, or that
usage and customs allow a receipt of such a bonus. b. The principal designated the
substitute – Results in the absolute
exemption of the agent.
2023 GOLDEN NOTES
III. AGENCY
3. When substitution not authorized, but not With misrepresentations by the agent
prohibited – Valid if the substitution is
1. Authorized – principal still liable; and
beneficial to the principal but if the substitution
2. Beyond the scope of the agent’s authority.
has occasioned damage to the principal, the
agent shall be primarily responsible for the act
of the substitute. (De Leon, 2019) GR: Principal is not liable.
In behalf of the principal, within the scope of XPN: Principal takes advantage of a contract or
authority receives benefits made under false representation
1. Binds principal; and of his agent.
2. Agent not personally liable. Mismanagement of the business by the agent
Without or beyond scope of authority 1. Principal still responsible for the acts
contracted by the agent with respect to third
Contract is unenforceable as against the principal persons; and
but binds the agent to the third person.
2. Principal, however, may seek recourse from
Binding on the principal when: the agent.
1. Ratified; or Tort committed by the agent
2. The principal allowed the agent to act as
though he had full powers. Principal civilly liable so long as the tort is
committed by the agent while performing his
Within the scope of authority but in the agent’s duties in furtherance of the principal’s business.
name
Agent in good faith but prejudices third parties
1. Not binding on the principal; and
Principal is liable for damages.
2. Principal has no cause of action against the 3rd
third parties and vice versa.
Third party’s Liabilities to Agent
NOTE: When the transaction involves things
belonging to the principal, his remedy is to sue the GR: A third party’s liability on agent’s contracts is to
agent for damages because of failure to comply the principal, not to the agent.
with the agency.
XPNs: A third party subjects himself to liability at the
Within the scope of the written power of
hands of the agent where the:
attorney but agent has actually exceeded his
authority according to an understanding
1. Agent contracts in his own name for an
between him and the principal
undisclosed principal;
1. Insofar as third persons are concerned (they
are not required to inquire further than the 2. Agent possesses a beneficial interest in the
terms of the written power), agent acted subject matter of the agency;
within scope of his authority; and
3. Agent pays money of his principal to a third
2. Principal is estopped. party by mistake under a contract which proves
subsequently to be illegal, the agent being
With improper motives
ignorant of the illegality; and
Motive is immaterial; as long as within the scope
of authority, valid. 4. Third party commits a tort against the agent. (De
Leon, 2019)
CIVIL LAW
Scope of the agent’s authority as to third persons Development Corporation, G.R. No. 202364, 30 Aug.
2017)
It includes not only the actual authorization
conferred upon the agent by his principal but also The existence of apparent authority may be
that which is apparent or impliedly delegated to him. ascertained through:
(De Leon, 2019)
1. The general manner in which the principal holds
Q: When is a third person required to inquire into out an agent as having the power to act, with
the authority of the agent? which it clothes him; or
A: 2. The acquiescence of the principal in the agent’s

1. Where authority is not in writing – Every acts of a particular nature, with actual or
person dealing with an assumed agent is put constructive knowledge thereof, within or
upon an inquiry and must discover upon his beyond the scope of his authorities. (Sargasso
peril, if he would hold the principal liable, not Const. & Dev. Corp. v. Philippine Ports Authority,
only the fact of the agency but the nature and G.R. No. 170530, 05 July 2010)
extent of the authority of the agent. (Safic Alcan
& CIE v. Imperial Vegetable Oil Co., Inc., G.R. No. The principal is liable only as to third persons who
126751, 28 Mar. 2001) If he does not make an have been led reasonably to believe by the conduct
inquiry, he is chargeable with knowledge of the of the principal that such actual authority exists,
agent’s authority, and his ignorance of that although none has been given. (Banate v. Philippine
authority will not be an excuse. Countryside Rural Bank, Inc., G.R. No. 163825, 13 July
2010)
2. Where authority is in writing – if authority of
an agent is in writing, such person is not Apparent Authority vs. Authority by Estoppel
required to inquire further than the terms of the
written power of attorney. (De Leon, 2019) Apparent Authority Authority by Estoppel
As to the knowledge of the principal of the
NOTE: A third person with whom the agent wishes
authority of the agent
to contract on behalf of the principal may require the
presentation of the power of attorney or the Arises when the
instructions as regards the agency. (Art. 1902, NCC) principal, by his
Though not actually culpable negligence,
Q: When may the actual or apparent authority of granted, the principal permits his agent to
the agent bind the principal? knowingly permits exercise powers not
the agent to exercise granted to him, even
A: The principal is bound by the acts of the agent on or holds him out as though the principal
his behalf, whether or not the third person dealing possessing. may have no notice or
with the agent believes that the agent has actual knowledge of the
authority, so long as the agent has actual authority, agent’s conduct.
express or implied. (De Leon, 2019)
As to the establishment of the authority
Doctrine of Apparent Authority Founded on the
Founded in conscious
principal’s negligence in
The doctrine provides that even if no actual authority permission of acts
failing properly to
has been conferred on an agent, his or her acts, as beyond the powers
supervise the affairs of
long as they are within his or her apparent scope of granted.
the agent.
authority, bind the principal. (Calubad v. Ricarcen
2023 GOLDEN NOTES
III. AGENCY
Q: Marilyn R. Soliman (“Marilyn”), allegedly to Calubad for the monthly interest and principal
acting on behalf of Ricarcen Development loans. Calubad, as an innocent third party dealing in
Corporation (“Ricarcen”) of which she was good faith with Marilyn, should not be made to
president, took out a total of P 7,000,000.00 loan suffer because of Ricarcen's negligence in
from Arturo C. Calubad (“Calubad”) at a conducting its own business affairs. If a private
compounded monthly interest rate, which was corporation intentionally or negligently clothes its
secured by a real estate mortgage over officers or agents with apparent power to perform
Ricarcen’s real property in Quezon City. acts for it, the corporation will be estopped to deny
that such apparent authority is real, as to innocent
To prove her authority to execute the three third persons dealing in good faith with such
mortgage contracts on Ricarcen’s behalf, officers or agents. (Calubad v. Ricarcen Dev. Corp.,
Marilyn presented Calubad with a Board G.R. No. 202364, 30 Aug. 2017)
Resolution and Secretary’s Certificates, later
alleged to be falsified. Due to Ricarcen’s failure Q: Performance Forex Corp. is a corporation
to pay its loan, the mortgage was foreclosed, operating as a financial broker/agent between
eventually resulting to the issuance of a market participants in foreign exchange
Certificate of Sale in favour of Calubad as the transactions. Cancio and Pampolina accepted
highest bidder, and thus, the issuance of a the invitation of Performance Forex Corp.’s
certificate of title in his name. agent, Hipol, to open a joint account with
Performance Forex Corp. Hipol was authorized
When Ricarcen discovered these transactions of by Performance Forex Corp. to follow and
Marilyn, it filed before the Regional Trial Court execute the trade orders of Cancio and
(“RTC”) a complaint for Annulment of Real Pampolina.
Estate Mortgage and Extrajudicial Foreclosure
of Mortgage and Sale, with Damages against However, it was later found out that Hipol did
Marilyn and Calubad. Should Ricarcen be bound not execute the orders of Cancio and Pampolina
by the allegedly representative acts of Marilyn? and instead made unauthorized transactions
resulting into the loss of all of their money.
A: YES. Ricarcen should be bound by the acts of Hence, Cancio and Pampolina filed a complaint
Marilyn, whom it had clothed with apparent for damages against both Performance Forex
authority. The doctrine of apparent authority that is Corp. and its agent, Hipol for what happened. Is
based on the principle of estoppel, in accordance Performance Forex Corp. solidarily liable to
with Arts. 1431 and 1869 of the NCC provides that Cancio and Pampolina for Hipol’s acts?
even if no actual authority has been conferred on an
agent, his or her acts, as long as they are within his A: NO. A principal who gives broad and unbridled
or her apparent scope of authority, bind the authorization to his or her agent cannot later hold
principal. third persons who relied on that authorization
liable for damages that may arise from the agent's
In the case at bar, it was within Marilyn’s scope of fraudulent acts. Hipol was not employed with
authority as president to act for and enter into Performance Forex Corp. He was categorized as an
contracts in Ricarcen’s behalf. This could be seen independent broker for commission. Cancio and
with how the corporate secretary entrusted her Pampolina conferred trading authority to Hipol and
with blank yet signed sheets of paper to be used at thus made him their agent. Performance Forex Corp.
her discretion, which apparently caused the was not privy to how Cancio and Pampolina
execution of the allegedly falsified secretary instructed Hipol to carry out their orders.
certificates. It reasonably appeared that Ricarcen’s
officers knew of the mortgage contracts entered Thus, since the acts of Hipol were the direct cause of
into by Marilyn in Ricarcen’s behalf as proved by the the injury, there is no reason to hold Performance
checks drawn and issued by Ricarcen as payments Forex Corp. liable for actual and moral damages. If
CIVIL LAW
there was any fault, the fault remains with Hipol and c. As to third persons – One who knows that
him alone. (Cancio v. Performance Foreign Exchange another is acting as his agent or permitted
Corp., G.R. No. 182307, 06 June 2018) another to appear as his agent, to the injury
of third persons who have dealt with the
Agency by Estoppel apparent agent as such in good faith and in
the exercise of reasonable prudence, is
It is when the principal is bound by the acts of his estopped to deny the agency.
agent with the apparent authority which he
knowingly permits the agent to assume, to which he 3. Estoppel of third persons – A third person,
holds the agent out to the public as possessing. (AFP having dealt with one as agent may be estopped
Retirement and Separation Benefits System to deny the agency as against the principal,
[AFPRSBS], G.R. No. 207586, 16 Aug. 1969) agent, or third persons in interest.
Requisites of Agency by Estoppel 4. Estoppel of the government – The government

is not estopped by the mistake or error on the
1. The principal manifested a representation of the part of its agents. (Republic v. Bacas, G.R. No.
agent’s authority or knowingly allowed the 182913, 20 Nov. 2013)
agent to assume such authority;
Q: In an expropriation case between RP and
2. The third person, in good faith, relied upon such several property owners in Mandaluyong for
representation; and construction of the EDSA-Shaw Boulevard
Overpass Project, decision was rendered against
3. Relying upon such representation, such third the RP. The RP through the OSG received the
person has changed his position to his decision on 07 Oct. 2002 but it was only 20 Oct.
detriment. (Country Bankers Ins. Corp. v. Keppel 2003 that RP filed a petition for certiorari. It
Cebu Shipyard, G.R. No. 166044, 18 June 2012) resorted to an independent civil action because it
failed to file within the 15-day reglementary
Rules regarding estoppel in agency period. Is the Republic bound and put in estoppel
by the gross negligence/mistake of its
1. Estoppel of agent – One professing to act as agent/former counsel?
agent for another may be estopped to deny his
agency both as against his asserted principal and A: While the Republic or the government is usually
the third persons interested in the transaction in not estopped by the mistake or error on the part of its
which he engaged. officials or agents, the Republic cannot now take
refuge in the rule as it does not afford a blanket or
2. Estoppel of principal absolute immunity. The pronouncement in Republic
v. CA (G.R. No. 104678, 20 July 1992) is instructive.
a. As to agent – One who knows that another The Solicitor-General may not be excused from its
is acting as his agent and fails to repudiate his shortcomings by invoking the doctrine as if it were
acts, or accepts the benefits, will be estopped some magic incantations that could benignly, if
to deny the agency as against the other. arbitrarily, condone and erase its errors.
b. As to sub-agent – To estop the principal The rule on non-estoppel of the government is not
from denying his liability to a third person, designed to perpetrate an injustice. In general, the
he must have known or be charged with rules on appeal are created and enforced to ensure
knowledge of the fact of the transaction and the orderly administration of justice. The judicial
the terms of the agreement between the machinery would run aground if late petitions, like
agent and sub-agent. the present one, are allowed on the flimsy excuse
that the attending lawyer was grossly lacking in
2023 GOLDEN NOTES
III. AGENCY
vigilance. (Leca Realty Corp. v. Republic, G.R. Nos. Rules

155605 & 160179, 27 Sept. 2006)
1. Efficient and procuring cause – a principle in
Implied Agency v. Agency by Estoppel the law on agency whereby the broker, to be
entitled to compensation, must be the efficient
IMPLIED AGENCY AGENCY BY ESTOPPEL agent or procuring cause of the sale;
As to liability between principal and agent
If caused by the “agent,” 2. Ready-willing-and-able Rule – a principle
Agent is a true agent,
he is not considered a which states that for a broker to be entitled to
with rights and
true agent, hence, he has commission, he must provide a person who is
duties of an agent.
no rights as such. ready, willing and able both to accept and live up
As to liability to third persons to the terms offered by his principal; and
1. If caused by the (Albano, 2013)
principal, he is
liable, but only if 3. Procuring Cause - Procuring cause is meant to
The principal is the third person be the proximate cause. The term procuring
always liable; or acted on the cause, in describing a broker’s activity, refers to
misrepresentation; a cause originating a series of events which,
The agent is never and without break in their continuity, result in
personally liable. accomplishment of prime objective of the
2. If caused by the employment of the broker producing a
agent alone, only purchaser ready, willing and able to buy real
the agent is liable. estate on the owner’s terms. A broker will be
regarded as the procuring cause of a sale, so as
Factor or Commission agent to be entitled to commission, if his efforts are the
foundation on which the negotiations resulting
One who is engaged in the business of buying and in a sale are begun. The broker must be the
selling for a principal of personal property, which for efficient agent or the procuring cause of the sale.
this purpose has to be placed in his possession and at The means employed by him and his efforts must
his disposal. (Jurado, 2019) result in the sale. He must find the purchaser,
and the sale must proceed from his efforts acting
Broker as broker. (Medrano v. CA, G.R. No. 150678, 18
Feb. 2005)
He is a middleman or intermediary who, in behalf of
others, and for a commission or fee, negotiates Factorage
contracts or transactions relative to real or personal
property. It is the compensation of a factor or commission
agent.
NOTE: Distinguished from an agent: An agent is
authorized to enter into judicial acts in behalf of the NOTE: A factor or commission agent is one whose
principal but a true broker is merely an intermediary business is to receive and sell goods for a
between the parties and he has no power to enter commission; also called factorage. (De Leon, 2019)
into a contract in behalf of any of the parties. (CIR v.
Cadwallader Pacific Co., G.R. No. L-20343, 29 Sept. Ordinary commission
1976)
It is the fee or compensation for the sale of goods
which are placed in the agent’s possession and at his
disposal.
CIVIL LAW
Guarantee commission or del credere NOTE: Payment is an act of administration when it is

commission (2004 BAR) made in the ordinary course of management. (Art.
1878, NCC; De Leon, 2019)
It is the additional fee or compensation which is
given in return for the risk that the agent has to bear The making of customary gifts for charity, or those
in the collection of credits. made to employees in the business managed by the
agent are considered acts of administration. (Art.
Should the commission agent receive on sale, in 1878, NCC; De Leon, 2019)
addition to the ordinary commission, a guarantee
commission shall: Special power of attorney (SPA)
(i) bear the risk of collection; and
It is an instrument in writing by which one person, as
(ii) pay the principal the proceeds of the principal, appoints another as his agent and confers
sale on the same terms agreed upon upon him the authority to perform certain specified
with the purchaser. (Art. 1907, NCC) acts or kinds of acts on behalf of the principal with a
primary purpose to evidence agent’s authority to
The purpose of the guarantee commission is to third parties with whom the agent deals. (De Leon,
compensate the agent for the risks he will have to 2019)
bear in the collection of the credit due the principal.
(De, Leon, 2019) NOTE: The requirement of an SPA refers to the
nature of the authorization and not to is form. If the
Del credere agent SPA is not written, then it must be duly established
by evidence. (Gozun v. Mercado, G.R. No. 167812, 19
He is the agent who guarantees payment of the Dec. 2006)
customer’s account in consideration of the higher
commission. A del credere agent may sue in his name Intervention of a notary public in the validity of
for the purchase price in the event of non- an SPA
performance by the buyer. (De Leon, 2019)
GR: A power of attorney is valid although no notary
It is created in general terms and is deemed to public intervened in its execution. (Angeles v. PNR,
comprise only acts of administration even if the G.R. No. 150128, 31 Aug. 2006)
principal should state:
XPN: When SPA is executed in a foreign country, it
1. That he withholds no power; must be certified and authenticated in accordance
2. That the agent may execute such acts as he may with Sec. 24, Rule 132, ROC. (Sps. Alcantara v. Nido,
consider appropriate; or G.R. No. 165133, 19 Apr. 2010)
3. That the agency should authorize a general and
unlimited management. (Art. 1877, NCC) NOTE: The failure to have the special power of
attorney (executed in a foreign country)
Acts of administration authenticated is not merely a technicality – it is a
question of jurisdiction. Jurisdiction over the person
Refers to those acts which do not imply the authority of the real party-in-interest was never acquired by
to alienate for the exercise of which an express the courts. (Heirs of Medina v. Natividad, G.R. No.
power is necessary. (De Leon, 2019) 177505, 27 Nov. 2008)
Unless the contrary appears, the authority of an

agent is presumed to include all the necessary and
usual means to carry out the agency into effect.
2023 GOLDEN NOTES
III. AGENCY
An SPA is required: (1992, 2004 BAR) 15. To waive an obligation gratuitously. (Art. 1878,
NCC)
1. To create or convey real rights over immovable
property; Limitations to an SPA
2. To enter into any contract by which the 1. A special power to sell excludes the power to
ownership of an immovable is transmitted or mortgage;
acquired either gratuitously or for a valuable 2. A special power to mortgage does not include
consideration; the power to sell; and (Art. 1879, NCC) and
3. A special power to compromise does not
3. To loan or borrow money, unless the latter act be authorize submission to arbitration. (Art. 1880,
urgent and indispensable for the preservation of NCC)
the things which are under administration;
NOTE: The scope of the agent’s authority is what
4. To lease any real property to another person for appears in the written terms of the power of
more than one year; attorney. While third persons are bound to inquire
into the extent or scope of the agent’s authority, they
5. To make such payments as are not usually are not required to go beyond the terms of the
considered as acts of administration; written power of attorney. Third persons cannot be
adversely affected by an understanding between the
6. To obligate principal as guarantor or surety; principal and his agent as to the limit of the latter’s
authority. In the same way, third persons need not
7. To bind the principal to render some service concern themselves with instruction given by the
without compensation; principal to his agent outside of the written power of
attorney. (Siredy Enterprises, Inc. v. CA, G.R. No.
8. To bind the principal in a contract of 129039, 27 Sept. 2002)
partnership;
Construction of Powers of Attorney
9. To ratify obligations contracted before the
agency; Powers of attorney are generally construed strictly,
and courts will not infer or presume broad powers
10. To accept or repudiate an inheritance; from deeds which do not sufficiently include
property or subject under which the agent is to deal.
11. To effect novation which put an end to However, the rule is not absolute and should not be
obligations already in existence at the time the applied to the extent of destroying the very purpose
agency was constituted; of the power. (De Leon, 2019)
12. To make gifts, except customary ones for charity Q: X was the owner of an unregistered parcel of
or those made to employees in the business land in Cabanatuan City. As she was abroad, she
managed by the agent; advised her sister Y via overseas call to sell the
land and sign a contract of sale on her behalf.
13. To compromise, to submit questions to
arbitration, to renounce the right to appeal from Y thus sold the land to B1 on March 31, 2001 and
a judgment, to waive objections to the venue of executed a deed of absolute sale on behalf of X. B1
an action or to abandon a prescription already fully paid the purchase price. B2, unaware of the
acquired; sale of the land to B1, signified to Y his interest to
buy it but asked Y for her authority from X.
14. Any other act of strict dominion; and
CIVIL LAW
Without informing X that she had sold the land to Specific obligations of the principal to the agent
B1, Y sought X for a written authority to sell. X e-
mailed Y an authority to sell the land. Y 1. Comply with all obligations which the agent may
thereafter sold the land on 01 May 2001 to B2 on have contracted within the scope of his authority
monthly installment basis for two years, the first (Art. 1910(1), NCC) and in the name of the
installment to be paid at the end of May 2001. principal;
Who between B1 and B2 has a better right over
the land? Explain. (2010 BAR) 2. Advance to the agent, should the latter so request,
the sums necessary for the execution of the
A: B2 has a better title. This not a case of double sale agency;
since the first sale was void. The law provides that
when a sale of a piece of land or any interest therein 3. Reimburse the agent for all advances made by
is through an agent, the authority of the latter shall him, even if the business or undertaking was not
be in writing; otherwise, the sale shall be void. (Art. successful, provided the agent is free from fault;
1874, NCC) (Art. 1912, NCC)
The property was sold by Y to B1 without any written 4. Indemnify the agent for all damages which the
authority from the owner X. Hence, the sale to B1 was execution of the agency may have caused the
void. latter without fault or negligence on his part; and
(Art. 1913, NCC) and
Instances where an agency is created by
operation of law 5. Pay the agent the compensation agreed upon, or
if no compensation was specified, the reasonable
When the agent withdraws from the agency for a value of the agent’s services. (Arts. 1875 & 1306,
valid reason, he must continue to act until the NCC)
principal has had a reasonable opportunity to take
the necessary steps like the appointment of a new Liability for the expenses incurred by the agent
agent to remedy the situation caused by the
withdrawal; and (Art. 1929, NCC) and GR: Principal is liable for the expenses incurred by
the agents.
In case a person declines an agency, he is bound to
observe the diligence of good father of the family in XPNs:
the custody and preservation of the goods forwarded 1. If the agent acted in contravention of the
to him by the owner until the latter should appoint principal’s instructions, unless principal should
an agent. (Art. 1885, NCC) wish to avail himself of the benefits derived from
the contract;
NOTE: The law reconciles the interests of the agent
with those of the principal, and if it permits the 2. When the expenses were due to the fault of the
withdrawal of the agent, it is on the condition that no agent;
damage results to the principal, and if the agent
desires to be relieved of the obligation of making 3. When the agent incurred them with knowledge
reparation when he withdraws for a just cause, he that an unfavorable result would ensue, if the
must continue to act so that no injury may be caused principal was not aware thereof; or and
to the principal. (De Leon, 2019)
4. When it was stipulated that the expenses would
be borne by the agent, or that the latter would be
allowed only a certain sum. (Art. 1918, NCC)
2023 GOLDEN NOTES
III. AGENCY
Liability for the contracts entered by the agent A: While as a general rule the principal is not liable for
the contract entered into by his agent in case the
GR: The principal must comply with all the agent acted in his own name without disclosing his
obligations which the agent may have contracted principal, such rule does not apply if the contract
within the scope of his authority. involves a thing belonging to the principal. In such
case, the principal is liable under Article 1883 of the
XPN: Where the agent exceeded his authority. Civil Code. The contract is deemed made on his
behalf. (Sy-Juco v. Sy-Juco, G.R. No. L-13471, 12 Jan.
XPN to the XPN: When the principal ratifies it 1920)
expressly or tacitly. (Art. 1910, NCC)
Ratification
NOTE: Based on the principle of estoppel, the
principal becomes solidarily liable with the agent if In agency, ratification is the adoption or
the former allowed the latter to act as though he had confirmation by one person of an act performed on
full powers even if the agent has exceeded his his behalf by another without authority. The
authority. (Art. 1911, NCC) substance of ratification is the confirmation after the
act, amounting to a substitute for a prior authority.
Liability for tort committed by the agent (Prieto v. CA, G.R. No. 158597, 18 June 2012)
GR: Where the fault or crime committed by the agent Conditions for Ratification
is not in the performance of an obligation of the
principal, the latter is not bound by the illicit acts of 1. The principal must have the capacity and power
the agent, even if it is done in connection with the to ratify;
agency. (De Leon, 2019)
2. He must have had knowledge or had reason to
XPNs: know of material or essential facts about the
1. Where the tort was committed by the agent transaction;
because of defective instructions from the
principal or due to lack of necessary vigilance or 3. He must ratify the acts in its entirety;
supervision on his part; or
4. The act must be capable of ratification; and
2. When the tort consists in the performance of an
act which is within the powers of an agent but 5. The act must be done in behalf of the principal.
becomes criminal only because of the manner in (De Leon, 2019)
which the agent has performed it; the principal
is civilly liable to third 3rd persons who acted in Acts that May be Ratified
good faith.
1. Valid/Void acts;
Q: CX executed a special power of attorney 2. Voidable acts;
authorizing DY to secure a loan from any bank 3. Unrevoked acts – a principal must ratify his
and to mortgage his property covered by the agent’s unauthorized contact before it is revoked
owner’s certificate of title. In securing a loan by the other contracting party;
from bank, DY did not specify that he was acting 4. Criminal acts; and
for CX in the transaction with said bank. Is CX 5. Tortious acts. (Ibid.)
liable for the bank loan? Why or why not? Justify
your answer. (2004 BAR)
CIVIL LAW
Effects of ratification by principal Modes of Extinguishing Agency (1997 BAR)
The relation of the principal and agent is created 1. By its revocation;

since ratification by a principal is equivalent to prior 2. By the withdrawal of the agent;
authority. 3. By the death, civil interdiction, insanity or
insolvency of the principal or of the agent;
1. With respect to agent - Ratification relieved 4. By the dissolution of the firm or corporation
the agent from liability to the third party to the which entrusted or accepted the agency;
unauthorized transaction, and to his principal 5. By the accomplishment of the object or purpose
for acting without authority. The principal of the agency; and
thereby assumes responsibility for the 6. By the expiration of the period for which the
unauthorized act; agency was constituted. (Art. 1919, NCC)
2. With respect to principal himself – the NOTE: The list is NOT exclusive. Agency may also be
principal who ratifies thereby assumes extinguished by the modes of extinguishment of
responsibility for the authorized act as fully as obligations in general whenever they are applicable,
if the agent acted under original authority; and like loss of the thing and novation. (De Leon, 2019)
3. With respect to third persons – where a third Agency may be terminated:

person is liable to a principal under an
unauthorized act of his agent, the third person 1. by agreement (Nos. 5 and 6);
shall not be relieved of his liability on the theory
that the principal ratified that agent’s acts. 2. by the subsequent acts of the parties which may
(Ibid.) be either:
a. by the act of both parties or by mutual
Retroactive effect of ratification consent; or
b. by unilateral act of one of them (Nos. 1
GR: Ratification operates upon an unauthorized act and 2);
to have retroactive effect.
3. by operation of law (Nos. 3 and 4). (Ibid.)
XPNs:
1. Where to do so would defeat the rights of third Revocation
parties which have accrued between the time of
the making of the unauthorized contract and the Revocation may either be express or implied. (Art.
time of the ratification; 1920, NCC) (2014 BAR)
2. Where to do so would render wrongful an Revocation of agency by the principal (2010,

otherwise rightful act or omission; 2015 BAR)
3. Where to do so would allow the circumvention GR: Agency is revocable at will by the principal. (Art.
of a rule of law formulated in the interest of 1920, NCC)
public policy; and
XPNs: An agency is irrevocable:
4. If the third party has withdrawn from the
contract. (Ibid.) 1. If a bilateral contract depends upon it;
2. If it is the means of fulfilling an obligation
already contracted;
3. If partner is appointed manager and his
removal from the management is
2023 GOLDEN NOTES
III. AGENCY
unjustifiable; (Art. 1927, NCC) 3. After granting general power of attorney to

an agent, grants a special one to another
4. If it has been constituted in the common agent which results in the revocation of the
interest of the principal and the agent; (Art. former as regards the special matter
1930, NCC) or involved in the latter. (Art. 1926, NCC)
5. If it has been constituted in the interest of a NOTE: A special power of attorney is not revoked by
third person who has accepted the stipulation a subsequent general power of attorney given to
in his favor i.e., stipulation pour autrui. (Arts. another agent, unless that the latter refers also to the
1930 & 1311, NCC) act authorized under the special power. (Tolentino,
1992)
XPN to the XPN: When the agent acts to defraud the
principal. Revocation of agency when the agent is
appointed by two or more principals
Q: A lawyer was given an authority by means of a
Special Power of Attorney by his client to sell a When two or more principals have granted a power
parcel of land for the amount of P3 Million. Since of attorney for a common transaction, any one of
the client owed the lawyer P1 Million in them may revoke the same without the consent of
attorney's fees in a prior case he handled, the the others. (Art. 1925, NCC)
client agreed that if the property is sold, the
lawyer was entitled to get 5% agent's fee plus P1 Necessity of notice of revocation
Million as payment for his unpaid attorney's fees.
1. As to the agent – Express notice is not always
The client, however, subsequently found a buyer necessary; sufficient notice if the party to be
of his own who was willing to buy the property notified actually knows, or has reason to know,
for a higher amount. Can the client unilaterally a fact indicating that his authority has been
rescind the authority he gave in favor of his terminated or suspended. Revocation without
lawyer? Why or why not? (2015 BAR) notice to the agent will not render invalid an act
done in pursuance of the authority. (De Leon,
A: NO, the agency in the case presented is one which 2019)
is coupled with an interest. As a rule, agency is
revocable at will except if it was established for the 2. As to third persons – Express notice is
common benefit of the agent and the principal. In this necessary.
case, the interest of the lawyer is not merely limited
to his commission for the sale of the property but a. As to former customers – Actual notice
extends to his right to collect his unpaid professional must be given to them because they
fees. Hence, it is not revocable at will. (Art. 1927, NCC) always assume the continuance of the
agency relationship; or (Art. 1873, NCC)
A contract of agency is impliedly revoked when
the principal: b. As to other persons – Notice by
publication is enough. (Art. 1922, NCC)
1. Appoints a new agent for the same business
or transaction provided there is NOTE: There is implied revocation of the previous
incompatibility; (Art. 1923, NCC) agency when the principal appoints a new agent for
the same business or transaction, provided there is
2. Directly manages the business entrusted to incompatibility. But the revocation does not become
the agent; or (Art. 1924, NCC) or effective as between the principal and the agent until
it is in some way communicated to the latter. (De
Leon, 2019)
CIVIL LAW
Effect of direct management by principal NCC, a specification of their respective duties has
been agreed upon, or else it is stipulated that any one
GR: The agency is revoked for there would no longer of them shall not act without the consent of all the
be any basis for the representation previously others. As such, even granting that Zenaida exceeded
conferred. But the principal must act in good faith the authority granted by the SPA, being a partner in
and not merely to avoid his obligation to the agent. the constituted partnership between her and
Eduardo, she can still execute acts of administration
XPN: The only desire of the principal is for him and absent any agreement that one cannot act without
the agent to manage the business together. (Ibid.) the consent of all others. (Mendoza v. Paule, G.R. No.
175885, 13 Feb. 2009)
Q: Richard sold a large parcel of land in Cebu to
Leo for P100 million payable in annual When the agent can withdraw from the agency
installments over a period of ten years, but title
will remain with Richard until the purchase price The agent may renounce or withdraw from the
is fully paid. To enable Leo to pay the price, agency at any time, by giving due notice to the
Richard gave him a power-of-attorney principal. (Art. 1928, NCC; De Leon, 2019)
authorizing him to subdivide the land, sell the
individual lots, and deliver the proceeds to Duties and responsibilities of the withdrawing
Richard, to be applied to the purchase price. Five agent:
years later, Richard revoked the power of
attorney and took over the sale of the subdivision 1. If the principal should suffer any damage by
lots himself. Is the revocation valid or not? Why? reason of the withdrawal by the agent, the latter
(2001 BAR) must indemnify the principal therefor, unless
the agent should base his withdrawal upon the
A: The revocation is not valid. The power of attorney impossibility of continuing the performance of
given to the buyer is irrevocable because it is coupled the agency without grave detriment to himself.
with an interest – the agency is the means of fulfilling (Art. 1928, NCC)
the obligation of the buyer to pay the price of the
land. (Art. 1927, NCC) In other words, a bilateral 2. The agent must continue to act until the principal
contract, which is a contract to buy and sell the land, has had reasonable opportunity to take the
is dependent on the agency. necessary steps to meet the situation, even if he
should withdraw from the agency. (Art. 1929,
Q: Eduardo executed a SPA authorizing Zenaida NCC)
to participate in the pre-qualification and
bidding of a NIA project and to represent him in Kinds of Withdrawal by the Agent
all transactions related thereto. It was granted to
them. Zenaida leased Manuel’s heavy equipment 1. Without just cause– The law imposes upon the
to be used for the NIA project. Manuel interposed agent the duty to give due notice to the principal
no objection to Zenaida’s actuations. Eduardo and to indemnify the principal should the latter
later revoked the SPA alleging that Zenaida acted suffer damage by reason of such withdrawal. ; or
beyond her authority in contracting with Manuel (Art. 1928, NCC)
under the SPA. Records show that Eduardo and
Zenaida entered into a partnership in regard to 2. With just cause – If the agent withdraws from
the NIA project. Decide. the agency for a valid reason (Art. 1929. NCC) as
when the withdrawal is based on the
A: Under Art. 1818 of the NCC, every partner is an impossibility of continuing with the agency
agent of the partnership for the purpose of its without grave detriment to himself (Art. 1928,
business and each one may separately execute all NCC) or is due to a fortuitous event (Art. 1174,
acts of administration, unless, under Art. 1801 of the NCC), the agent cannot be held liable. (De Leon,
2023 GOLDEN NOTES
III. AGENCY
2019) Heirs continuing the contract of agency
Effect of Death of Principal to the contract of GR: Heirs cannot continue the contract of agency.
agency The rights and obligations of the agent arising from
the contract are not transmissible to his heirs.
GR: The agency is terminated by the death of the
principal even if the agency is for a definite period. Reason: The agency calls for personal services on the
(Lopez v. CA, G.R. No. 163959, 01 Aug. 2018; Art. 1919, part of the agent since it is founded on a fiduciary
NCC) relationship.
XPNs: XPNs:
1. If it has been constituted in common interest of
the principal and the agent; 1. Agency by operation of law, or a presumed or
tacit agency; and
2. If it has been constituted in the interest of a third
person who accepted the stipulation in his favor; 2. Agency is coupled with an interest in the subject
(Arts. 1911 and 1930, NCC) matter of the agency (e.g., power of sale in a
mortgage). (De Leon, 2019)
3. Anything done by the agent, without the
knowledge of the death of the principal or on any Q: Is the sale of the land by the agent after the
other cause which extinguishes the agency is death of the principal valid?
valid and shall be fully effective with respect to
third persons who may have contracted with him A: YES. Art. 1931 of the NCC provides that an act done
in good faith; and (Art. 1931, NCC) by the agent after the death of the principal is valid
and effective if these two requisites concur:
NOTE: The death of the principal extinguishes the
agency; but in the same way that revocation of the 1. That the agent acted without the knowledge of
agency does not prejudice third persons who the death of the principal; and
have dealt with the agent in good faith without
notice of the revocation. (Arts. 1921 and 1922, 2. That the third person who contracted with the
NCC) The death of the principal does not render agent himself acted in good faith.
the act of an agent unenforceable, where the
latter had no knowledge of such extinguishment Good faith here means that the third person was not
of the agency. (Hererra v. Luy Kim Guan, G.R. No. aware of the death of the principal at the time that he
L-17043, 31 Jan. 1961) and contracted with said agent. These two requisites must
concur: the absence of one will render the act of the agent
4. The agent is bound by his acceptance to carry out invalid unenforceable. (Rallos v. Felix Go Chan, G.R. No.
the agency and is liable for the damages which, L-24332, 31 Jan. 1978)
through his non-performance, the principal may
suffer. He must also finish the business already War
began on the death of the principal, should delay
entail any danger. (Art. 1884, NCC) During the existence of a state of war, a contract of
agency is inoperative if the agent or the principal is
Duty of Agent’s Heirs Upon the Death of Agent an enemy alien. (De Leon, 2019)
If the agent dies, his heirs must notify the principal

thereof, and in the meantime adopt such measures as
the circumstances may demand in the interest of the
latter. (Art. 1932, NCC)
CIVIL LAW
Loss or Destruction of Subject Matter
GR: The loss or destruction of the subject matter of

agency or the termination of the principal’s interest
therein terminates the agent’s authority.
XPNs:
1. If substitution is possible without substantial

detriment to either party; and
2. If the destroyed subject matter was not in fact
essential to the contract. (Ibid.)
Change of Circumstance Surrounding the

Transaction
GR: The authority of the agent is terminated where

there is a basic change in the circumstances
surrounding the transaction which was not
contemplated by the parties and would reasonably
lead the agent to believe that the principal would not
desire him to act.
XPNs:
1. If the original circumstances are restored within

a reasonable period of time, the agent's
authority may be revived;
2. Where the agent has reasonable doubts as to

whether the principal would desire him to act,
his authority will not be terminated if he acts
reasonably; or
3. Where the principal and agent are in close daily

contact, the agent's authority to act will not
terminate upon a change of circumstances if the
agent knows the principal is aware of the change
and does not give him new instructions. (De
Leon, 2019)
2023 GOLDEN NOTES
IV. CREDIT TRANSACTIONS
Object of a contract of loan

1. Commodatum – The object is generally not
consumable; and
2. Mutuum – The object is consumable.
A. LOANS Consumable and Non-consumable things
A thing is consumable when it cannot be used in a

Loan (BAR 1993, 2004, 2005) manner appropriate to its nature without being
consumed.
By the contract of loan, one of the parties delivers
to another, either something not consumable so On the other hand, a non-consumable thing is a
that the latter may use the same for a certain time movable thing which can be used in a manner
and return it, in which case the contract is called a appropriate to its nature without it being
commodatum; or money or other consumable consumed. (Pineda, 2006; Art. 418, NCC)
thing, upon the condition that the same amount of
the same kind and quality shall be paid, in which Fungible and non-fungible things
case the contract is simply called a loan or mutuum.
1. Fungible thing those properties that can be
Commodatum is essentially gratuitous. replaced by another property of the same kind,
quantity, and quality.
Simple loan may be gratuitous or with a stipulation
to pay interest. 2. Non-fungible those properties that cannot be
replaced by another property of the same kind,
In commodatum the bailor retains the ownership of quantity, and quality. (Aquino, 2021)
the thing loaned, while in simple loan, ownership
passes to the borrower. (Art. 1933, NCC) NOTE: fungibility of property is a question of intent
of the parties. (Ibid.)
1. KINDS
Fungibles are usually determined by number,
weight, or measure.
1. Commodatum – one of the parties delivers to
another something not consumable so that the
Irreplaceability of non-fungible thing
latter may use the same thing for a certain time
and then return it; and
GR: Non-fungible things are irreplaceable. They
must be returned to the lender after the purpose of
2. Mutuum or Simple Loan – one of the parties
the loan had been accomplished.
delivers to another money or another
consumable thing, upon the condition that the
XPN: Non-fungible things may be replaced by
same amount of the same kind and quality shall
agreement of the parties. In such case, the contract
be paid. (Aquino, 2021)
is barter and not loan.
Commodatum is a loan for use because there is a

Delivery essential to perfection of loan
transfer of the use of the thing borrowed while
mutuum is a loan of consumption because there is a
Delivery is necessary in view of the purpose of the
transfer of the ownership of the thing, which is
contract which is to transfer either the use or
generally received for consumption.
ownership of the thing loaned.
CIVIL LAW
An accepted promise to deliver something by way of interest; and

commodatum or simple loan is binding upon the 6. It is a unilateral contract. (Rabuya, 2017)
parties, but the commodatum or simple loan itself
shall not be perfected until the delivery of the object Perfection of the contract of mutuum
of the contract. (Art. 1934, NCC)
Real contracts, such as deposit, pledge and
Unlawful purpose of the contract of loan commodatum, are not perfected until the delivery of
the object of the obligation. (Art. 1316, NCC) While
If the loan is executed for illegal or immoral or mutuum or simple loan is not mentioned, it has the
unlawful purpose or use, the contract is void. (De same character as commodatum. Hence, mutuum is
Leon, 2021) also a real contract which cannot be perfected until
the delivery of the object.
The bailor may immediately recover the thing
before any illegal act is committed, and provided he An accepted promise to make a 680uturee loan is a
is innocent or in good faith. (Arts. 1411 & 1412, NCC) consensual contract and therefore, binding upon
the parties but it is only after delivery, will the real
MUTUUM contract of loan arise.
Characteristics of a Contract of Mutuum Mere issuance of checks does not perfect the
contract of loan. It is only after the checks have been
1. Borrower acquires ownership of the thing; (Art encashed that the contact may be deemed perfected.
1953, NCC)
Consideration in a simple loan
2. If the thing loaned is money, payment must be

1. As to the borrower – The acquisition of money
made in the currency stipulated, and if it is not
or any other fungible thing; and
possible to deliver such currency, then in the
currency which is legal tender in the
2. As to the lender – the right to demand the
Philippines; and (Art. 1249, NCC)
return of the money or any other fungible thing
or its equivalent.
NOTE: In case of extraordinary deflation or
inflation, the basis of payment shall be the value
Object of mutuum
of the currency at the time of the creation of the
obligation; (Art. 1250, NCC) and
Its object is money or fungible and consumable
things.
3. If fungible thing other than money was loaned,
the borrower is obliged to pay the lender
Governing rules on payment of loan
another thing of the same kind, quality and
quantity even if it should change in value. (Art.
If the object of loan is:
1955(2), NCC)
1. Money – Governed by Arts. 1249 and 1250 of the

Nature of a Contract of Mutuum
NCC.
1. The purpose of the contract is consumption; GR: Payment shall be made in the currency
2. The subject-matter is either money or stipulated.
consumable;
3. Ownership passes to the borrower; XPN: If not, that currency which is legal tender
4. It is a real contract; in the Philippines.
5. It may be gratuitous or with stipulation to pay
2023 GOLDEN NOTES
In case of extraordinary inflation – payment Mutuum vs. Lease

shall be made at the value of the currency at the
time of the creation of the obligation, unless MUTUUM LEASE
there is an agreement to the contrary. (Art. As to its object
1250, NCC) In case it is impossible to deliver
Object may be any
the same kind, its value at the time of the
Object is money or any thing, whether
perfection shall be paid. (Art. 1955, NCC) Thus,
consumable (fungible) movable or
even if the price of the thing that was delivered
thing. immovable, fungible or
increased after the perfection of the loan, a
non-fungible.
thing of the same kind and quality must still be
delivered to the bailor-creditor. (Aquino, 2021) As to transfer of ownership
There is transfer of No transfer of

Loan of money can be payable in kind if there
ownership. ownership.
is an agreement between the parties.
As to relationship
2. Consumable or Fungible thing – Debtor or Creditor-debtor Lessor-lessee
borrower shall pay another thing of the same relationship. relationship.
kind, quality and quantity even if it should
As to characteristic of the contract
change in value. If cannot be done, the value of
the thing at the time of its perfection (delivery) Unilateral Bilateral
shall be the basis of the payment of the loan.
As to return of the thing loaned or leased
(Art. 1955, NCC)
The money or
Q: Can Estafa be committed by a person who
consumable thing
refuses to pay his debt or denies its existence?
loaned is not returned The debtor returns the
but the same amount of thing/s leased.
A: NO, because the debtor in mutuum becomes the
the same kind and
owner of the thing delivered to him. If he consumed
quantity shall be paid.
or disposed of the thing, the act which is an act of
ownership is not misappropriation. Hence, there is
no basis for a criminal prosecution. (Flores, Jr. v.
COMMODATUM
Enrile, G.R. No. L-38440, 20 July 1982)
one of the parties delivers to another something not

Destruction of the thing loaned
consumable so that the latter may use the same
thing for a certain time and then return it. (Aquino,
The destruction of the thing loaned does not
2021)
extinguish one’s obligation in a simple loan because
his obligation is not to return the thing loaned but
Fruits
to pay a generic thing.
GR: The borrower in commodatum is not entitled to

fruits of the thing borrowed or loaned. (Art. 1935,
NCC)
XPNs: When there is a stipulation. (Art. 1940, NCC)
CIVIL LAW
Commodatum vs. Mutuum (1996, 2004 BAR) As to who bears the loss
Generally, the bailor

COMMODATUM MUTUUM The bailee bears the
bears the loss of the
As to its purpose loss of the thing
thing due to fortuitous
delivered.
The purpose is the use event.
of the thing loaned.
As to the ownership of the lender or bailor
For the borrower to
NOTE: use of the fruits The lender must be the
consume what was The bailor or lender
is not included unless owner or at least
borrowed. need not be the owner
expressly provided for capable of transferring
of the thing loaned
in the contract. (Arts. ownership.
1935 and 1940, NCC)
As for the return of the thing loaned
As to its nature
Generally, the lender
Real contract – upon Real contract – upon must wait for the
delivery. delivery. expiration of the
As to the object or the thing borrowed period agreed upon or
the accomplishment if The lender or bailor
Movable and the use for which the must wait for the
immovable things may Involves movables. commodatum was expiration of the
be borrowed. established. period agreed upon for
the payment of the
As to consideration
XPNs: In case of urgent loan.
Essentially gratuitous
need, in precarium,
May be gratuitous or and in case of acts of
NOTE: if onerous, it
onerous ingratitude by the
may be Contract of
bailee.
Lease
As to fungibility (Aquino, 2021)
The object is generally
non-fungible and non- Commodatum vs. Usufruct
consumable. The object is money or
other fungible things. COMMODATUM USUFRUCT
XPN: if the purpose is As to the right to enjoy the fruits
for exhibition.
Without stipulation,
Jus fruendi is included
As to ownership the bailee cannot enjoy
in the right of the
the fruits (no jus
Bailor retains The bailee becomes the usufructuary.
fruendi).
ownership of the thing owner of the thing
delivered. delivered. As to Transferability
As to the effect of death of the lender The usufructuary may

convey his right to
The right of the bailee
Death of the lender Death of the lender usufruct by way of
is personal and cannot
extinguishes the does not extinguish the mortgage or may
be transferred.
commodatum because loan. It is not purely alienate or transfer his
it is purely personal personal. right as such.
2023 GOLDEN NOTES
As to Use by Third Person As to Use by third person
Generally, third person The usufructuary can The lessee can allow
cannot be allowed to allow third persons to Generally, third person third persons to use
use. use the thing. cannot be allowed to the thing through sub-
use. lease if not expressly
As to Right of Retention prohibited.
GR: there is no right of
As to Repairs and Expenses
retention
There is a right to The bailee has the

XPN: damages as obligation to pay for
retention. Generally, the lessee
provided for under Art. ordinary repairs for
1591 in relation to Art. has no obligation to
the use and
1944 of the NCC pay for repairs.
preservation of the
(Aquino, 2021) thing.
(Aquino, 2021)
Commodatum vs. Lease
Where no period is agreed upon
COMMODATUM LEASE
As to nature Even if no period is agreed upon, the temporary use
Onerous; rentals are of the thing may also be a consequence of the
Essentially gratuitous paid for the use of the specified purpose for lending the property to the
thing bailee. (Aquino, 2021)
As to perfection
Real contract Consensual contract Object of the Contract of Commodatum
As to nature
GR: the object of the contract of commodatum is a
Personal contract – non-consumable thing that is either movable or
death of the party immovable.
Not a personal contract
extinguished the
contract) XPN: If the purpose of the contract is not the
consumption of the object, as when it is merely for
As to the extent of the right
exhibition. (Aquino, 2021; Art. 1936, NCC)
The right of the lessee
generally extends to a Ownership of Bailor, Not Required
Without stipulation,
particular use only
the bailee cannot enjoy
(depending on the This is consistent with the purpose of commodatum
the fruits (No jus
nature of the property) to merely give temporary use of the thing. The real
fruendi)
but is not entitled to right that is transferred is merely possession and
the fruits. not ownership. (Aquino, 2021)
As to Transferability
All that is necessary for the bailor is to have:
The lessee cannot (1) the right to possess and use the thing; and
The right of the bailee likewise assign their (2) the right to transfer such right to use and
is personal and cannot right to the lease, possess. (Ibid.)
be transferred. except with the
consent of the lessor.
CIVIL LAW
Persons who can be bailors Requisites:

a. Payment of interest is agreed upon;
an owner can be a bailor in commodatum. Hence, a
usufructuary or a lessee in a contract of lease can be b. The stipulation to pay interest must be
a bailor in commodatum with respect to the object in writing; and
of usufruct or lease. However, this right is subject to
the restrictions imposed under the contract c. The rate must not be against the law
between the owner, on one hand, and the lessee or (usurious if applicable) or against
usufructuary, on the other hand. (Aquino, 2021) morals and public policy
(unconscionable). (Aquino, 2021)
A bailee in commodatum cannot himself be a bailor
of the same thing. This is against the nature of 2. Compound – The interest which is imposed
commodatum as being personal. (Aquino, 2021; Art. upon accrued interest, that is, the interest due
1939(2)) and unpaid; (Arts. 1959 & 2212, NCC)
“Third person” 3. Legal – That interest which the law directs to

be paid in the absence of any agreement as to
GR: The members of the bailee's household may the rate; and (Art. 2209, NCC) and
make use of the thing loaned; they are not covered
by the term "third person." It is the rate of interest fixed by law or
regulation that will be followed:
XPNs: the members of the bailee's household may
not make use of the thing loaned a. Where there is a written agreement
that interest will be paid; or
1. if there is a stipulation in the agreement that
the members of the bailee's household b. When the law or rule provides for
cannot use the thing; and payment of interest but the rate is not
stipulated. (Aquino, 2021)
2. If the nature of the thing forbids such use by
the members of bailee's household. (Aquino, NOTE: The legal rate of interest is now 6% per
2021; Art. 1939, NCC) annum even for loans or forbearance of money,
goods, or credit under BSP Circular No. 799,
2. INTEREST Series of 2013.
4. Compensatory – The interest paid by virtue of

It is the compensation to be paid by the borrower
damages for delay or failure to pay principal
for the use of the money lent to him by the lender. It
loan on which interest is demanded. (Odiamar
is paid either as compensation for the use of money
v. Valencia, supra.)
(monetary interest) or as damages (compensatory
interest). (Andreas vs. BPI, G.R. No. 23836, 09 Sept.
NOTE: Finance Charges – Are not merely a specie of
1925)
interest, but these include interest, fees, service
charges, discounts, and such other charges incident
Classes of Interest
to the extension of credit under R.A. No. 3765, or the
Truth in Lending Act. Not disclosing the true finance
1. Simple or Monetary – The interest which is
charges in connection with the extensions of credit
paid for the use or forbearance of the money, at
is a form of deception which the Court cannot
a certain rate stipulated in writing by the
countenance. It is against the policy of the State as
parties; (Art. 2209, NCC; Odiamar v. Valencia,
stated in the Truth in Lending Act – to protect its
G.R. No. 213582, 12 Sept. 2018)
citizens from a lack of awareness of the true cost of
2023 GOLDEN NOTES
credit to the user by assuring a full disclosure of property. Were the stipulated interest rate and
such cost with a view of preventing the uninformed the ensuing foreclosure sale valid?
use of credit to the detriment of the national
economy. (Sec. 2, R.A. No. 3765; UCPB v. Beluso, G.R. A: NO. The Court has ruled that 5% per month or
No. 159912, 17 Aug. 2007) 60% per annum interest rate is highly iniquitous
and unreasonable; and since the interest rate
Requisites for Recovery of Interest agreed upon is void, the rate of interest should be
12% per annum (the then prevailing interest rate
1. The payment of interest must be expressly prescribed by the Central Bank of the Philippines for
stipulated; (Jardenil v. Salas, G.R. No. L-47878, 24 loans or forbearances of money) from the date of
July 1942) judicial or extrajudicial demand.
2. The agreement to pay interest must be in The foreclosure proceedings are also void. Since the
writing; and (Art. 1956, NCC) and obligation of making interest payments is illegal and
thus non-demandable, the payment of the principal
3. The interest must be lawful. loan obligation was likewise not yet demandable.
With Zenaida not being in a state of default, the
Rules on interest (2004 BAR) foreclosure of the subject properties should not
have proceeded. (Bulatao v. Zenaida, G.R. No.
GR: No interest shall be due unless it is stipulated in 235020, 10 Dec. 2019)
writing. (Art. 1956, NCC)
Liability for interest even in the absence of
XPNs: stipulation (exceptions to Art. 1956)
1. In case of interest on damages or indemnity for
damages, it need not be in writing; or (Art. 2209, 1. Indemnity for damages — The debtor in delay is
NCC) or liable to pay legal interest as indemnity for
damages even in the absence of stipulation for
2. Interest accruing from unpaid interest. (Art. the payment of interest. (De Leon, 2013) The
2212, NCC) “obligation consisting of the payment of a sum
of money’’ referred to in Article 2209 is not
NOTE: Art. 1956, NCC applies only to interest for the confined to a loan or forbearance of money. It
use of money and not to interest imposed as items has also been applied by the Supreme Court in
of damages. cases involving default in the payment of price
or consideration under a contract of sale and an
Stipulation of a Particular Interest Rate action or damages for injury to persons and loss
of property and an action for damages arising
If a particular rate of interest has been expressly from unpaid insurance claims. (Castelo v. CA,
stipulated by the parties, that interest, not the legal G.R. No. 96372, 22 May 1995) Interest as
rate of interest shall be applied. (Casa Filipina Dev. indemnity for damages is payable only in case
Corp. v. Deputy Executive Secretary, G.R. No. 96494, of default or non- performance of the contract.
28 May 1992) As they are distinct claims, they may be
demanded separately. (Sentinel Insurance Co.
Q: In dire need of money, Zenaida mortgaged a Inc. v. CA, G.R. No. L-52482, 23 Feb. 1990)
parcel of land to Atty. Bulatao to secure a loan
worth P200,000. The real estate mortgage 2. Interest accruing from unpaid interest —
entered by the parties stipulated a 5% per Interest due shall earn interest from the time it
month interest. Zenaida failed to pay the loan is judicially demanded although the obligation
later on and as such Atty. Bulatao foreclosed the may be silent upon this point. (Art. 2212, NCC;
see Sec. 5, Usury Law) Both Art. 2212 of the NCC
CIVIL LAW
and Sec. 5 of the Usury Law are applicable only CICC, consisting of site development, additional
where interest has been stipulated by the structural, architectural, plumbing, and electrical
parties. Art. 1212 contemplates the presence of works thereon.
stipulated or conventional interest which has
accrued when demand was judicially made. In Verily, the Court has repeatedly recognized that
cases where no interest had been stipulated by liabilities arising from construction contracts do not
the parties, no accrued conventional interest partake of loans or forbearance of money but are in
could further earn interest upon judicial the nature of contracts of service.
demand. (Isla vs. Estorga, G.R. No. 233974, 02
July 2018) When an obligation, not constituting a loan or
forbearance of money, is breached, an interest on
NOTE: Where the court’s judgment which did not the amount of damages awarded may be imposed at
provide for the payment of interest has already the discretion of the court at the rate of six percent
become final, no interest may be awarded. (6%) per annum. The Court, therefore, sustains the
(Santuban v. Fule, G.R. No. L-59664, 26 Dec. 1984) CA's ruling that the rate of legal interest imposable
on the liability of the Province of Cebu to WTCI is
Q: Province of Cebu was chosen by former 6% per annum. (WT Construction, Inc. v. The
President Gloria Macapagal-Arroyo to host the Province of Cebu, G.R. No. 208984, 16 Sept. 2015)
12th ASEAN Summit. To cater to the event, it
decided to construct the Cebu International Q: Petitioners Isla obtained a loan in the amount
Convention Center (CICC or the project) which of P100,000.00 from respondent, payable
would serve as venue for the ASEAN Summit. anytime from six (6) months to one (1) year and
Province of Cebu conducted a public bidding for subject to interest at the rate of 10% per month,
the project and WTCI emerged as the winning payable on or before the end of each month.
bidder for the construction of Phase I. After When petitioners failed to pay the said loan,
completing Phase I, WTCI again won the bidding respondent sought assistance from the
for Phase II of the project involving the adjacent barangay, and consequently, a Kasulatan ng
works on CICC. As Phase II neared completion, Pautang dated 8 Dec. 2005 was executed.
the Province of Cebu caused WTCI to perform Petitioners, however, failed to comply with its
additional works on the project, WTCI agreed to terms, prompting respondent to send a demand
perform the additional works notwithstanding letter dated 16 Nov. 2006. Once more,
the lack of public bidding. Weeks before the petitioners failed to comply with the demand,
scheduled ASEAN Summit, WTCI completed the causing respondent to file a Petition for Judicial
project, including the additional works and, Foreclosure against them before the RTC.
accordingly, demanded payment therefor. WTCI Petitioners maintained that the stipulated
demanded for payment but the Province of interest of 10% per month was exorbitant and
Cebu still refused to pay. Thus, it filed a grossly unconscionable. The RTC directed
complaint for collection of sum of money before petitioners to pay respondent the amounts of
the RTC. RTC ruled in favor of WTCI. CA affirmed P100,000.00 with 12% interest per annum from
the RTC's Order but reduced the interest rate to December 2007 until fully paid and P20,000.00
6% per annum. What is the nature of Province of as attorney's fees. Is the 12% interest imposed
Cebu’s liability? by the Court valid?
A: The liability of the Province of Cebu to WTCI is A: YES. Anent monetary interest, the parties are free
not in the nature of a forbearance of money as it to stipulate their preferred rate. However, courts
does not involve an acquiescence to the temporary are allowed to equitably temper interest rates that
use of WTCI's money, goods or credits. Rather, this are found to be excessive, iniquitous,
case involves WTCI's performance of a particular unconscionable, and/or exorbitant, such as
service, i.e., the performance of additional works on stipulated interest rates of 3% per month or higher.
2023 GOLDEN NOTES
In such instances, it is well to clarify that only the was not agreed upon in writing. If he
unconscionable interest rate is nullified and deemed nevertheless pays because he considers it his
not written in the contract; whereas the parties' moral obligation to pay said interest, he cannot
agreement on the payment of interest on the recover the interest that he has given
principal loan obligation subsists. It is as if the voluntarily. This will now be a natural
parties failed to specify the interest rate to be obligation, and the provisions on said subject
imposed on the principal amount, in which case the should apply. (Paras, 2008)
legal rate of interest prevailing at the time the
agreement was entered into is applied by the Court. 3. The legal interest will be followed when the law
This is because, according to jurisprudence, the legal or rule provides for payment of interest, but the
rate of interest is the presumptive reasonable rate is not stipulated. (Aquino, 2021)
compensation for borrowed money.
Q: The court ordered petitioner Nympha S.
In this case, petitioners and respondent entered into Odiamar to pay respondent the amount of
a loan obligation and clearly stipulated for the P1,010,049.00 representing the remaining
payment of monetary interest. However, the balance of petitioner's debt to the latter in the
stipulated interest of 10% per month was found to original amount of P1,400,000.00. In said
be unconscionable, and thus, the courts a quo struck motion, respondent prays for the imposition of
down the same and pegged a new monetary interest legal interest on the monetary award due her.
of 12% per annum, which was the prevailing legal She likewise insists that petitioner's loan
rate of interest for loans and forbearances of money obligation to her is not just P1,400,000.00 but
at the time the loan was contracted on 06 Dec. 2004. P2,100,000.00 and, as such, she should be made
(Isla vs. Estorga, G.R. No. 233974, 02 July 2018) to pay the latter amount. Whether a prayer for
the imposition of legal interest on the monetary
NOTE: In expropriation cases, interest is imposed if award due is proper?
there is delay in the payment of just compensation
to the landowner since the obligation is deemed to A: YES. In the absence of an express stipulation as
be an effective forbearance on the part of the State. to the rate of interest that would govern the parties,
Such interest shall be pegged at the rate of 12% per the rate of legal interest for loans or forbearance of
annum on the unpaid balance of the just any money, goods or credits and the rate allowed in
compensation, reckoned from the time of taking or judgments shall no longer be 12% per annum but
the time when the landowner was deprived of the will now be 6% per annum effective 01 July 2013. It
use and benefit of his property such as when title should be noted, nonetheless, that the new rate
is transferred to the Republic, or emancipation could only be applied prospectively and not
patents are issued by the government, until full retroactively. Consequently, the 12% per annum
payment. (LDB v. Santos, G.R. No. 213863, 27 Jan. legal interest shall apply only until 30 June 2013.
2016) Come 01 July 2013 the new rate of 6% per annum
shall be the prevailing rate of interest when
Payment of Interest when there is No Stipulation applicable.
1. A borrower borrowed money. No interest was Applying the foregoing parameters to this case,
stipulated. If by mistake he pays, then this will petitioner's loan obligation to respondent shall be
be a question of undue payment or solutio subjected to compensatory interest at the legal rate
indebiti. We should then apply the rules on the of 12% per annum from the date of judicial demand,
subject. i.e., 20 Aug. 2003, until 30 June 2013, and thereafter
at the legal rate of 6% per annum from 01 July 2013
2. If a borrower borrows money and orally agrees until finality of this ruling. Moreover, all monetary
to pay legal interest at 10% per annum, there is awards due to respondent shall earn legal interest
really no obligation to pay since the interest of 6% per annum from finality of this ruling until
CIVIL LAW
fully paid. (Odiamar v. Valencia, G.R. No. 213582, 12 a. Is the payment of interest valid?
Sept. 2018)
A: NO. Payment of monetary interest is allowed only
Basis of the Right to Interest if:
1. There was an express stipulation for the
The basis of the right to interest is it only arises by payment of interest; and
reason of the contract (stipulation in writing) for the 2. The agreement for the payment of interest
use of money or by reason of delay or failure to pay was reduced in writing.
principal on which interest is demanded due to a
breach of an obligation. (Baretto v. Santa Marina,
The concurrence of the two conditions is required
G.R. No. 11908, 04 Feb. 1918)
for the payment of monetary interest. Thus,
collection of interest without any stipulation
Equitable mortgage
therefor in writing is prohibited by law.
Equitable mortgage is one which, although it lacks
the proper formalities or other requisites of a b. Is solutio indebiti applicable? Explain.
mortgage required by law, nevertheless reveals the
intention of the parties to burden real property as a A: YES. The quasi-contract of solutio indebiti harks
security for a debt and contains nothing impossible back to the ancient principle that no one shall enrich
or contrary to law. himself unjustly at the expense of another. The
principle of solutio indebiti applies where (1) a
Interest in equitable mortgage payment is made when there exists no binding
relation between the payor, who has no duty to pay,
There can be no interest to be collected in equitable and the person who received the payment; and (2)
mortgage because the same is not stipulated in the payment is made through mistake, and not
writing. (Tan v. Valdehueza, G.R. No. L-38745, 06 Aug. through liberality or some other cause. The
1975) Supreme Court has held that the principle of solutio
indebiti applies in case of erroneous payment of
Recovery of unstipulated interest undue interest. (Siga-an v. Villanueva, G.R. No.
173227, 20 Jan. 2009)
A payment for unstipulated interest can be
recovered if paid by mistake, the debtor may Interest on unliquidated claims
recover as in the case of solutio indebiti or undue
payment. However, if payment is made voluntarily, GR: Interest may not be adjudged on unliquidated
no recovery can be made as in the case of natural claims or damages.
XPN: When or until the demand can be established
Q: Siga-an granted a loan to Villanueva in the with reasonable certainty. (BPI vs. Land Investors
amount of P540,000.00. Such agreement was and Developers Corporation, G.R. No. 198237, 08 Oct.
not reduced to writing. Siga-an demanded 2018)
interest which was paid by Villanueva in cash
and checks. The total amount Villanueva paid Running of interest on unliquidated claims
accumulated to P1,200,000.00. Upon advice of
her lawyer, Villanueva demanded for the return Accordingly, where the demand is established with
of the excess amount of P660,000.00 which was reasonable certainty, the interest shall begin to run
ignored by Siga-an. (2012 BAR) from the time the claim is made judicially or
extrajudicially (Art. 1169, NCC), but when such
certainty cannot be so reasonably established at the
2023 GOLDEN NOTES
time the demand is made, the interest shall begin to damages; and
run only from the date the judgment of the court is
made at which time the quantification of damages 2. For the award of interest in the concept of
may be deemed to have been reasonably actual and compensatory damages, the rate of
ascertained. interest and its accrual is imposed as follows:
The actual base for the computation of legal interest a. For breach of obligations consisting of loan
shall, in any case, be on the amount finally adjudged. or forbearance of money, interest due shall
(BPI vs. Land Investors and Developers Corporation, be that stipulated in writing. Interest due
G.R. No. 198237, 08 Oct. 2018) shall itself earn legal interest from the time
it is judicially demanded;
Monetary interest and compensatory interest
b. In the absence of stipulation, the rate of
Monetary interest must be expressly stipulated in interest shall be 6% per annum, computed
writing and it must be lawful. (Art. 1956, NCC) from default (i.e., judicial or extrajudicial
demand) subject to provisions of Art. 1169
The ruling in Eastern Shipping Lines, Inc. v. Court of of the NCC;
Appeals (G.R. No. 97412, 12 July 1994) has now been
modified by the ruling in Nacar v. Gallery Frames, c. When an obligation, not constituting a loan
Inc. (G.R. No. 189871, 13 Aug. 2013) based on BSP or forbearance of money, is breached, an
Monetary Board Circular No. 799 Series of 2013, interest on the amount of damages
providing that: awarded may be imposed at the discretion
of the court at the rate of 6% per annum. No
The rate of interest for the loan or forbearance of interest, however, shall be adjudged on
any money, goods or credits and the rate allowed in unliquidated claims or damages except
judgments, in the absence of an express contract as when or until the demand can be
to such rate of interest, shall be 6% per annum. (BSP established with reasonable certainty;
Circular No. 799, 01 July 2013)
d. Where the demand is established with
Prospective application of BSP Circular No. 799 reasonable certainty, the interest shall
begin to run from the time the claim is
It should be noted, nonetheless, that the new rate made judicially or extrajudicially (Art.
could only be applied prospectively and not 1169, NCC); and
retroactively. Consequently, the 12% per annum
legal interest shall apply only until 30 June 2013. e. When such certainty cannot be so
Come 01 July 2013 the new rate of 6% per annum reasonably established at the time the
shall be the prevailing rate of interest when demand is made, the interest shall begin to
applicable. (Nacar v. Gallery Frames, G.R. No. 189871, run only from the date the judgment of the
13 Aug. 2013) court is made at which time the
quantification of damages may be deemed
The new guidelines on the application of Legal to have been reasonably ascertained. The
Interest actual base for the computation of legal
interest shall, in any case, be on the amount
1. When an obligation, regardless of its source finally adjudged.
(i.e., law, contracts, quasi-contracts, delicts or
quasi-delicts) is breached, the contravenor can When the judgment of the court awarding a sum of
be held liable for damages and the provisions money becomes final and executory, whether the
under Title XVIII on Damages of the NCC govern case falls under under par. (a) or (c) above, the rate
in determining the measure of recoverable shall be 6% per annum from such finality until its
CIVIL LAW
satisfaction, this interim period being deemed to be When an obligation, not constituting a loan or
by then an equivalent to a forbearance of credit. forbearance of money, is breached.
(Nacar v. Gallery Frames, G.R. No. 189871, 13 Aug.
Court awards a sum of
2013)
money that becomes
An interest on the final and executory, the
NOTE: Judgments that have become final and
amount of damages rate of legal interest
executory prior to 01 July 2013, shall not be
awarded may be shall be 6% per annum
disturbed and shall continue to be implemented.
imposed at the from such finality until
(Ibid.)
discretion of the court its satisfaction, this
at the rate of 6% per interim period being
Summary of the Rules Above
annum. deemed to be by then
an equivalent to a
ADDITIONAL
INTEREST DUE forbearance of credit.
INTEREST
When the obligation is breached, and it Unliquidated claims or damages
consists in the payment of a sum of money
No interest until final
judgment.
The legal interest of --

6% shall be on the
amount finally
a. Interest due shall
adjudged by the Court.
itself earn legal
interest from the (Aquino, 2021)
time it is judicially
demanded. In the Authority of BSP Monetary Board to set interest
absence of rates
stipulation, the rate
of interest shall be The Supreme Court affirmed the authority of BSP
6% per annum to be Monetary Board (BSP-MB) to prescribe the
The interest due
computed from maximum rate or rates of interest for all loans or
should be that which
default renewals thereof or the forbearance of any money,
may have been
goods or credits, including those for loans of low
stipulated in writing.
b. If the court awards a priority such as consumer loans, as well as such
sum of money and loans made by pawnshops, finance companies and
the award becomes similar credit institutions. (Advocates for Truth in
final and executory, Lending Inc. v. Monetary Board, G.R. No. 192986, 15
the rate of legal Jan. 2013)
interest shall be 6%
per annum from Basis for the Interest Rate for Compensatory
such finality until its Interest
satisfaction.
1. Central Bank Circular No. 799 – 6% per annum
in cases of:
a. Loans;
b. Forbearance of money, goods and credits;
and
c. Judgment involving such loan or
forbearance.
2023 GOLDEN NOTES
2. Art. 2209 – 6% per annum in cases of: 2. Judicial demand has been made upon the
a. Other sources; (i.e., sale); borrower. (Art. 2212, NCC)
b. Damages arising from injury from person;
and NOTE: Such accrued interest will bear interest at
c. Loss of property which does not involve a the legal rate (Art. 2212, NCC) unless, a different rate
loan. is stipulated. (Hodges v. Regalado, 69 Phil. 588, 14
Feb. 1940)
3. Interest accruing from unpaid interest
(compound interest) – Interest due shall earn Increase in Interest Rates
interest from the time it is judicially demanded
although the obligation is silent upon this point. No increase in interest shall be due unless such
(Art. 2212, NCC) increase has also been expressly stipulated.
(Security Bank &Trust Co. v RTC of Makati, G.R. No.
Forbearance 113926, 23 Oct. 1996)
The unilateral determination and imposition of
It is a contractual obligation of lender or creditor to increased rates is violative of the principle of
refrain during a given period of time, from requiring mutuality of contracts ordained in Article 1308 of
the borrower or debtor to repay a loan or debt then the Civil Code. One-sided impositions do not have
due and payable. (Aquino, 2021, citing Crismina the force of law between the parties, because such
Garments, Inc. v. Court of Appeals, G.R. No. 128721, 09 impositions are not based on the parties’ essential
Mar. 1999) equality. (NSBCI v. PNB, G.R. No. 148753, 30 July
2004)
It refers to arrangements other than loan
agreements, where a person acquiesces to the Unconscionable Interest Rate
temporary use of fulfilment of certain conditions.
(Aquino, 2021, citing Estores v. Sps. Supangan, G.R. The stipulation as to interest may be considered
No. 175139, 17 Apr. 2012) void if it is unconscionable. Only the interest is void;
the principal obligation is not affected by the
Compounding of interest invalidity of the stipulation as to interest. (Aquino,
2021)
There must first be a stipulation of payment of
interest and this interest may earn interest only In Development Bank of the Philippines v. Family
when it is judicially demanded, although the Foods Manufacturing Co., Ltd. (G.R. No. 180458, 30
obligation is silent upon this point. (Art. 2212, NCC) July 2009), the Court has recognized a penalty clause
as an accessory obligation which the parties attach
Rule on Compounding of Interest to a principal obligation for the purpose of insuring
the performance thereof by imposing on the debtor
GR: Accrued interest (interest due and unpaid) shall a special prestation (generally consisting in the
not earn interest. payment of a sum of money) in case the obligation
is not fulfilled or is irregularly or inadequately
XPNS: When: fulfilled. The enforcement of the penalty can be
demanded by the creditor only when the non-
1. There is express stipulation made by the performance is due to the fault or fraud of the
parties - that the interest due and unpaid shall debtor. The non-performance gives rise to the
be added to the principal obligation and the presumption of fault; in order to avoid the payment
resulting total amount shall earn interest (Art. of the penalty, the debtor has the burden of proving
1959, NCC); or an excuse–the failure of the performance was due to
either force majeure or the acts of the creditor
himself.
CIVIL LAW
Governing rule on Usurious Transactions Such price is the selling price for a sale made on
the installment plan.
CB Circular No. 905 has expressly removed the
interest ceilings prescribed by Usury Law; thus, the Courts may simply reduce unreasonable
said law has become legally non-existent. interests
NOTE: It did not repeal or amend the usury law but Interest stipulated by the contracting parties is valid
merely suspended its effectivity. (Security Bank & however if the interest rate agreed upon is
Trust Company v. RTC of Makati, G.R. No. 113926, 23 iniquitous and unconscionable, the courts may
Oct. 1996) reduce the same as reason and equity demand.
(Imperial v. Jaucian, G.R No. 149004, 14 Apr. 2004)
There is certainly nothing in said circular which
grants lenders carte blanche authority to raise In the case of Medel v. CA (G.R. No. 131622, 27 Nov.
interest rates to levels which will either enslave 1998), the court ruled that while stipulated interest
their borrowers or lead to a hemorrhaging of their of 5.5% per month on a loan is usurious pursuant to
assets. Stipulations authorizing iniquitous or CBC No. 905, the same must be equitably reduced
unconscionable interests are contrary to morals, if for being iniquitous, unconscionable, and
not against the law. (Rey vs. Anson, G.R. No. 211206, exorbitant. It is contrary to morals. It was reduced
07 Nov. 2018) to 12% per annum in consonant with justice and fair
play.
In Sps. Andal v. PNB (G.R. No. 194201, 27 Nov. 2013),
the Court also held that where in the contract of loan Q: ERMA obtained credit facility from Security
the borrowers agreed to the payment of interest on Bank Co. by virtue of the Credit Agreement they
their loan obligation, the fact that the rate of interest executed. They also executed Suretyship
was subsequently declared illegal and Agreement whereby Ernesto Marcelo,
unconscionable does not entitle the borrowers to President, and Sergio Ortiz – Luiz, Jr, Vice-
stop payment of interest. It should be emphasized President are bound by the Credit Agreement
that only the rate of interest was declared void. The and solidarily liable with ERMA for payment.
stipulation requiring borrowers to pay interest on Erma obtained various peso and dollar
their loan remains valid and binding. The borrowers denominated loans from Security Bank
are, therefore, liable to pay interest–legal interest– evidenced by promissory notes. Under these
from the time they defaulted in payment until their promissory notes, the interest on the principal
loan is fully paid. at varying rates (7.5% per annum for dollar
obligation and 16.75% or 21% per annum on
When Usury Law does not apply peso obligation). In default of payment, ERMA
requested for restructuring of the agreement
1. A contract for the lease of property is not a loan; and offered a certain property as collateral.
hence, the rental paid is not governed by the However, Security Bank restructured only
Usury Law; (Tolentino v. Gonzales, G.R. No. partially which ERMA did not accept. Security
26085, 12 Aug. 1927) or Bank demanded payment against ERMA and the
sureties for the loans inclusive of interest and
2. The increase of the price of a thing sold on credit penalty charges with additional claim for
over its cash sale price is not interest within the Interest of twenty percent (20%) per annum on
purview of the Usury Law, if the sale is made in the peso obligation and 7.5% per annum on the
good faith and not as a mere pretext to cover a dollar obligation from 01 Nov. 1994 until fully
usurious loan. (Manila Trading v. Tamaraw, G.R. paid and penalty charge of 2% per month of the
No. L-22995, 28 Feb. 1925) total outstanding principal and interest due and
unpaid. The RTC ruled in favor of SBC but did not
impose the additional claims.
2023 GOLDEN NOTES
a. Whether ERMA and sureties are liable for A stipulation for floating interest is not valid. A
the additional claim? stipulation for a floating rate of interest in a letter of
credit in which there is no reference rate set either
A: NO. The RTC denied Security Bank's additional by it or by the Central Bank, leaving the
claims for interests and penalty charges for being determination thereof to the sole will and control of
iniquitous and imposed instead a 12% legal interest the lender bank is invalid. While it may be
on the total outstanding obligation. In making this acceptable for practical reasons given the
ruling, the RTC considered the partial payments fluctuating economic conditions for banks to
made by petitioners, their efforts to settle or stipulate that interest rates on a loan not be fixed and
restructure their loan obligations and the serious instead be made dependent on prevailing market
slump in their export business in 1993. The RTC conditions, there should be a reference rate upon
held that, under those circumstances, it would be which to peg such variable interest rates.
"iniquitous, and tantamount to merciless forfeiture Consolidated Bank and Trust Corp. (Solid Bank v. CA,
of property" if the interests and penalty charges G.R. No. 114672, 19 Apr. 2001)
would be continually imposed.
Q: Samuel borrowed P300,000.00 housing loan
b. Whether there is novation which would from the bank at 18% per annum interest.
release the sureties from liability? However, the promissory note contained a
proviso that the bank "reserves the right to
A: NONE. The RTC and the CA were in agreement increase interest within the limits allowed by
that while there were ongoing negotiations between law." By virtue of such proviso, over the
Erma and Security Bank for the restructuring of the objections of Samuel, the bank increased the
loan, the same did not materialize. Erma offered to interest rate periodically until it reached 48%
restructure its entire outstanding obligation and per annum. Finally, Samuel filed an action
delivered TCT No. M-7021 as collateral, to which questioning the right of the bank to increase the
Security Bank counter-offered a partial interest rate up to 48%.The bank raised the
restructuring or only up to P5,000,000. This defense that the Central Bank of the Philippines
counteroffer was not accepted by Erma. There was had already suspended the Usury Law. Will the
no new contract executed between the parties action prosper or not? Why? (2001 BAR)
evidencing the restructured loan. The nature and
extent of respondent Ortiz's liability are set out in A: YES. While it is true that the interest ceilings set
clear and unmistakable terms in the Continuing by the Usury Law are no longer in force, it has been
Suretyship agreement. Under its express terms, held that P.D. No. 1684 and CB Circular No. 905
respondent Ortiz, as surety, is "bound by all the merely allow contracting parties to stipulate freely
terms and conditions of the credit instruments." His on any adjustment in the interest rate on a loan or
liability is solidary with the debtor and co-sureties; forbearance of money but do not authorize a
and the surety contract remains in full force and unilateral increase of the interest rate by one party
effect until full payment of Erma's obligations to the without the other's consent. (PNB v. CA, G.R. No.
Bank. (ERMA Industries, Inc. v. Bank Corporation, 107569, 08 Nov. 1994) To say otherwise will violate
G.R. No. 191274, 06 Dec. 2017) the principle of mutuality of contracts under Art.
1308 of the NCC. To be valid, therefore, any change of
Floating Interest interest must be mutually agreed upon by the
parties. (Dizon v. Magsaysay, G.R. No. L-23399, 31
Floating interest is the interest stipulated by banks May 1974) In the present problem, the debtor not
which is not fixed and made to depend upon the having given his consent to the increase in interest,
prevailing market conditions, considering the the increase is void.
fluctuating economic conditions.
CIVIL LAW
Escalation Clauses
B. DEPOSIT
Escalation clauses refer to stipulations allowing an
increase in the interest rate agreed upon by the
contracting parties. (Juico v. China Banking
Deposit is a contract whereby a person (depositor)
Corporation, G.R. No. 187678, 10 Apr. 2013)
delivers a thing to another (depositary), for the
principal purpose of safekeeping it, with the
Escalation Clause Must Have De-escalation
obligation of returning it when demanded. (Pineda,
Clause
2006)
A contract of deposit is constituted from the
Escalation clauses refer to stipulations allowing an
moment a person receives a thing belonging to
increase in the interest rate agreed upon by the
another, with the obligation of safely keeping it and
contracting parties. (Ibid.)
returning the same upon demand. (Art. 1962, NCC)
An escalation clause can be valid only if it also

Its principal purpose is safekeeping and returning
includes a de-escalation clause or a stipulation that
the same.
the rate of interest agreed upon shall be reduced in
the event that the maximum rate of interest is
When Contract of Deposit is Perfected
reduced by law or by the Monetary Board. (PNB v.
IAC, G.R. No. 75223, 14 Mar. 1990)
A deposit, being a real contract, is perfected by
delivery (Art. 1316, NCC), but an agreement to
The presence of escalation clause without the
constitute a deposit is merely consensual and is
corresponding de-escalation clause in the event of a
therefore binding upon mere consent. (Art. 1963,
reduction of interest as ordered by law makes the
NCC)
clause one-sided as to make it unreasonable. Any
increase in the interest rate pursuant to an
Characteristics of contract of deposit
escalation clause must be the result of an agreement
between two parties. Increases unilaterally
1. Real contract – it can only be perfected by the
imposed by a bank are in violation of the principle
delivery of the object of the contract. (Art. 1316,
of mutuality of contracts. (PNB v. CA, G.R. No.
NCC) or an agreement to constitute deposit is
109563, 09 July 1996)
binding but the deposit itself is not perfected
until the delivery of the thing. ; (Art. 1963, NCC)
Effect of Invalidity of Escalation
NOTE: There is no consensual contract of

The interest paid by borrowers should be applied
deposit; there is only a consensual promise to
first to the payment of the stipulated or legal and
deliver which is binding if such is accepted.
unpaid interest, as the case may be, and later, to the
capital or principal. (Aquino, 2021)
2. Object of the contract must be a movable
property - This rule applies only to extra-
judicial deposit. Thus, in cases of judicial
deposit, the subject matter may be a real
property; or
3. Purpose is for the safekeeping of the thing

deposited (Art. 1962, NCC)- This this must be
the principal purpose and not only secondary;
2023 GOLDEN NOTES
NOTE: If safekeeping is merely secondary, the Deposit vs. Mutuum

contract is not a deposit but some other
contract. DEPOSIT MUTUUM
As to purpose
4. Principal – its existence is not dependent on Safekeeping/custody. Consumption.
another contract. ; As to when to return
5. Informal – no particular form is required for Upon expiration of the

Upon demand of the
the contract. ; and term granted to the
depositor.
borrower.
6. It is gratuitous, unless there is a: As to subject matter
a. Contrary agreement;
Movable
(extrajudicial) or may Money or other
b. The depositary is engaged in the business
be immovable fungible thing.
of storing goods, like a warehouseman; or
(judicial).
(Art. 1965, NCC); or
As to relationship
c. Where the property is saved from Depositor-depositary Lender-borrower
destruction without knowledge of the
As to compensation
owner, the latter is bound to pay the other
person just compensation (as in case of Generally gratuitous. May be gratuitous or
involuntary deposit). No compensation of with a stipulation to
things deposited with pay interest. There
NOTE: Deposit shall be considered as a loan if each other (except by can be compensation
there is a stipulation for the payment of mutual agreement). of credits.
interest. (Aquino v. Deala, G.R. No. 43304, 21
Oct. 1936) The reason is that interest can only
Deposit vs. Commodatum
arise from a contract of loan (mutuum).
DEPOSIT COMMODATUM
Q: Is there an instance where there is
As to Principal Purpose
compensation even though the depositary is not
engaged in business of storing goods or there is Transfer of use of the
Safekeeping.
no agreement as to compensation? thing.
As to Nature
A: YES. When during a fire, flood, storm, or other May be gratuitous or Always gratuitous by
calamity, property is saved from destruction by onerous. its essence.
another person without the knowledge of the
owner, the latter is bound to pay the former just As to Object
compensation. (Art. 2168, NCC) In extra-judicial Both movable and
deposit, only immovable property
7. The depositary cannot use the thing deposited, movables may be may be objects
unless: objects thereof. thereof.
As to Demandability
a. Expressly permitted by the depositor; or
b. Preservation of the thing requires its use, Return of the thing
Depositor can
but only for said purpose. (Art. 1977, NCC) cannot be demanded
demand the thing at
until the lapse of the
will.
period.
CIVIL LAW
Deposit vs. Lease to be its owner and

proprietor. (Rabuya,
DEPOSIT LEASE 2017)
Principal Purpose As to status
Safekeeping. Use of the thing. No contract. There is a contract.
When to return As to purpose
Upon demand of the Upon termination of Security or to ensure
depositor. the lease contract. the right of a party to
Custody and
property or to recover
safekeeping.
Kinds of Deposit in case of favorable
judgment.
1. Judicial (sequestration) (Arts. 1964 & 2005, As to subject matter
NCC) – It takes place when an attachment or Movables or
seizure of the property in litigation is ordered. immovables but Movables only.
generally immovable.
2. Extrajudicial (Arts. 1968 & 2004, NCC) As to cause
Generally gratuitous
a. Voluntary – The delivery is made by the Always onerous. but may be
will of the depositor or by two or more compensated.
persons each of whom believes himself As to when must the thing be returned
entitled to the thing entitled. ;or (Art. 1968, Upon order of the court
NCC); or Upon demand of
or when litigation is
depositor.
ended.
b. Necessary – Made in compliance with a As to in whose behalf it is held
legal obligation, or on the occasion of any Person who has a right
calamity, or by travelers in hotels and inns, Depositor or third
or in behalf of the
or by travelers with common carriers. person designated.
winner.
(Arts. 1996 & 1998, NCC)
Ownership of the thing deposited in a contract
Judicial vs. Extrajudicial Deposit of deposit
JUDICIAL EXTRAJUDICIAL The depositor need not be the owner of the thing
Creation deposited because the purpose of the contract is
Will of the court; takes safekeeping and not transfer of ownership. (Art.
place when an 1984, NCC)
attachment or seizure
of property in litigation Will of the contracting NOTE: A deposit may also be made by two or more
is ordered, thus it is the parties. persons each of whom believes himself entitled to
court order that gives the thing deposited with a third person, who shall
rise to this kind of deliver it in a proper case to the one to whom it
deposit. belongs. (Art. 1968, NCC)
As to Possession of Thing
The sequestrator Rent of Safety Deposit Boxes
possesses the thing in The depositary holds
virtual representation the thing by will of the The rent of safety deposit boxes is not an ordinary
of the person who by depositor. (Rabuya, contract of lease of things but a special kind of
the decision of the 2017) deposit; it is not strictly governed by the provisions
court should turn out on deposit. (Pineda, 2006)
2023 GOLDEN NOTES
The case of Sia v. CA (G.R. No. 102970, 13 May 1993) 2. If the depositary is incapacitated, he does not
enunciating that a rent of a safety deposit box is a incur the obligation of a depositary. However,
special kind of deposit, was decided under the he is liable to:
former General Banking Act. However, the Supreme
Court has not yet decided a case abandoning the (1) return the thing deposited while still in his
ruling in Sia v. CA, making it conform with the possession; or
General Banking Law of 2000.
(2) pay the depositor the amount by which he
Fixed, savings and current deposits in banks may have benefited himself with the thing
(1997, 1998, 2009 BAR) or its price subject to the right of any third
person who acquired the thing in good
Fixed, savings and current deposits in banks and faith, in which case the depositor may only
other similar institutions are not true deposits but bring an action against him for its recovery.
are considered simple loans because they earn (Art. 1971, NCC)
interest. (Art. 1980, NCC) Bank deposits are in the
nature of irregular deposit but they are really loans As to Depositor
governed by the law on loans. (De Leon, 2013)
He can exercise a reinvindicatory action at any time
NOTE: Where safekeeping is still the principal either against the depositary, if the thing deposited
purpose of the contract, and the use of the thing is is still in the latter’s possession, or against a third
merely secondary. This is called irregular deposit. person who acquired the thing provided that such
(De Leon, 2021) third person acted in bad faith.
Nature of Advance Payment in a contract of sale If the thing can no longer be restored, the depositor
will have the right to demand payment by which the
A so-called deposit of an advance payment in the depositary may have enriched himself with the
case of a sale is not the deposit contemplated under thing or its price.
Art. 1962 of the NCC. It is that advance payment
upon which ownership is transferred to the seller A guardian is not a depositary of the ward’s
once it is given subject to the completion of payment property
by the buyer under an agreement. (Cruz v. Auditor
General, G.R. No. L-12233, 30 May 1959) He is not holding the funds of the ward merely for
safekeeping exclusively, but also intended for the
Parties to a contract of deposit latter’s maintenance and support. Losses, if any,
without the fault of the guardian shall be deducted
1. Depositary – to whom the thing is deposited; from the funds of the ward. (Philippine Trust Co. v.
and Ballesteros, G.R. No. L-8261, 20 Apr. 1956)
2. Depositor – the one who deposits the thing.
Obligations of the Depositor
Effects of Incapacity of the Depositary or
depositor 1. Payment for necessary expenses for
preservation:
1. If the depositary is capacitated, he is subject to
all the obligations of a depositary whether the If the deposit is gratuitous – depositor must
depositor is capacitated or not. (Art. 1970, NCC); reimburse depositary; and (Art. 1992, NCC)
NOTE: Under the law, persons who are capable With compensation – no need for
cannot allege the incapacity of those with whom reimbursement; expenses are borne by
they contracted. (Art. 1397, NCC) depositary. (Pineda, 2006)
CIVIL LAW
GR: Depositor must pay losses incurred by Right of depositary to commingle

depositary due to the character of the thing
deposited. The depositary may commingle grain or other
articles of the same kind and quality, in which case
XPNs: the various depositors shall own or have a
1) When at the time of deposit, the proportionate interest in the mass. (Art. 1976, NCC)
depositor was not aware of the
dangerous character of the thing or was Right of the depositary to retain the thing in
not expected to know it; pledge
2) When the depositor notified the The depositary has the right to retain the thing in
depositary; or pledge until full payment of what may be due him by
reason of the deposit. (Art. 1994, NCC) This is an
3) When the depositary was aware of it example of pledge created by operation of law. (Art.
without advice from the depositor. 2121, NCC)
2. In case of an onerous deposit, to pay the Duty of the depositary’s heir who sold the thing
compensation agreed upon as consideration for deposited in good faith
the deposit. (Art. 1993, NCC)
The depositor’s heir who in good faith may have sold
Diligence required in a contract of deposit the thing he did not know was deposited, shall only
be bound to return the price he may have received
The diligence required of a depositary is that agreed or to assign his right of action against the buyer in
upon by the parties, who may limit or expand the case the price has not been paid him. (Art. 1991,
degree of diligence required. In the absence of any NCC)
stipulation, the degree of diligence required is lower
if the deposit is gratuitous and higher if the deposit NOTE: The word “depositor’s” in this part should be
is with compensation. (Art. 1972, NCC) Ordinarily, read as “depositary’s.” (De Leon, 2013) If the heir
the depositary must exercise over the thing acted in bad faith, he is liable for damages. The sale
deposited the same diligence he would exercise or appropriation of the thing deposited constitutes
over his property. estafa. (Art. 315(b), RPC)
Loss through force majeure or expropriation The provision applies only when the depositary has
died and left heir/s who took possession of the thing
If the depositary by force majeure or government in the concept of an owner and sold it in good faith
order loses the thing and receives money or another to a third person.
thing in its place, he shall deliver the sum or other
thing to the depositor. (Art. 1990, NCC) To whom it must be returned
Manner of deposit 1. The depositor, to his heirs and successors, or to

the person who may have been designated in
The depositary may change the manner of the the contract; (Art. 1972, NCC);
deposit if he may reasonably presume that the
depositor would consent to the change if the latter 2. If the depositor was incapacitated at the time of
knew of the facts of the situation. However, before making the deposit, to his guardian or
the depositary may make such change, he shall administrator or to the depositor himself should
notify the depositor thereof and wait for his he acquire capacity; (Art. 1970, NCC);
decision, unless delay would cause danger. (Art.
1974, NCC)
2023 GOLDEN NOTES
3. Even if the depositor had capacity at the time of Where it must be returned
making the deposit but he subsequently loses
his capacity during the deposit, the thing must GR: The thing deposited must be returned at the
be returned to his legal representative; or (Art. place agreed upon.
1986, NCC);
XPN: In the absence of stipulation, at the place
4. Two or more persons each claiming to be where the thing deposited might be, even if it should
entitled to a thing may deposit the same with a not be the same place where the original deposit
third person. In such case, the third person was made provided the transfer was accomplished
assumes the obligation to deliver to the one to without malice on the part of the depositary. (Art.
whom it belongs. 1987, NCC)
NOTE: The action to compel the depositors to settle When it must be returned
their conflicting claims among themselves would be
in the nature of an interpleader. (Sec. 1, Rule 62, ROC) GR: The thing deposited should be returned upon
demand or at will, whether or not a period has been
Proving the ownership of the thing deposited stipulated.
GR: The depositary cannot demand that the XPNs:

depositor should prove his ownership of the thing
deposited. (Art. 1984, NCC) 1. The thing is judicially attached while in the
depositary’s possession;
XPN: Should he discover that the thing has been
stolen and who its true owner is, he must advise the 2. The depositary was notified of the opposition of
latter of the deposit. a third person to the return or the removal of
the thing deposited; or (Art. 1988, NCC);
NOTE: If the depositary has reasonable grounds to
believe that the thing has not been lawfully acquired
by the depositor, the former may return the same. 3. In case of gratuitous deposit, if the depositary
has a justifiable reason for not keeping the
If the depositary knew the identity of the owner deposit. If the depositor refuses, the depositary
of the thing deposited may secure its consignation from the court.
(Art. 1989, NCC)
The depositary may not return the thing to the
owner should he knew of the identity of the latter. Voluntary Deposit
He is not authorized to return the thing
unceremoniously to the alleged owner without the It is a contract or judicial relation wherein a thing is
knowledge of the depositor. His duty is merely to delivered at the will of a person (depositor) to
advise the owner of the deposit. another (depositary) for the purpose of safekeeping
by the latter coupled with the obligation of
If the depositor insists on his ownership as against returning it upon demand. (Pineda, 2006)
the true owner, the depositary may file an
interpleader suit against both of them to avoid A voluntary deposit is that wherein the delivery is
responsibility. If the identity of the true owner made by the will of the depositor. (Art. 1968, NCC)
cannot be ascertained, the depositary may return
the thing to the depositor. (Pineda, 2006) A deposit may also be made by two or more persons
each of whom believes himself entitled to the thing
deposited with a third person, who shall deliver it in
a proper case to the one to whom it belongs. (Art.
CIVIL LAW
1968, NCC) there is authority.
Form of contract of deposit 3. If the thing should earn interest:

a. Collect interest as it falls due; and
A contract of deposit may be entered into orally or b. Take steps to preserve the value and rights
in writing. (Art. 1969, NCC) corresponding to it.
NOTE: The above article follows the general rule 4. Not to commingle things if so stipulated;
that contracts shall be obligatory in whatever form
they may have been entered into provided all the 5. GR: Not to make use of the thing deposited;
essential requisites for their validity are present.
(Art. 1356, NCC) Thus, except for the delivery of the XPNs:
thing, there are no formalities required for the a. When preservation of thing deposited
existence of the contract. (De Leon, 2013) requires its use; and
b. When authorized by depositor.
Difference between Voluntary and Necessary
deposit NOTE: GR: In such case, it is no longer a deposit
but a contract of loan or commodatum, as the
In voluntary deposit there is a freedom of action case may be.
which is implied in the phrase “delivery is made by
the will of the depositor,” unlike in the case of a XPN: If the principal reason for the contract is
necessary deposit. In other words, the depositor in still safekeeping, it is still deposit.
a voluntary deposit is free to choose the depositary.
(Pineda, 2006) 6. When the thing deposited is delivered sealed
and closed:
Obligations of a depositary in voluntary deposit a. Return the thing in the same condition;
b. Pay damages if seal be broken through his
1. To keep the thing safely and return it; (Art. fault; and
1972, NCC); c. Keep the secret of the deposit when seal is
broken with or without his fault. (Art.
2. Exercise same diligence as he would exercise 1981, NCC)
over his own property;
NOTE: However, the depositary is authorized to
GR: Not to deposit the thing with a third person. open the seal or lock when:
XPNs: a. There is presumed authority (i.e. the key

a. When expressly authorized by stipulation; is delivered);
and
b. When the preservation of the thing b. Out of necessity; or (Art. 1982, NCC) or
requires its use. (Art. 1977, NCC)
c. When the instruction of the depositor as
NOTE: Depositary is liable for the loss if: regards the deposit cannot be executed
without opening the box or receptacle.
a. He deposits the thing to a third person (Rabuya, 2015)
without authority, even though the loss is
due to fortuitous events; or 7. GR: Pay for any loss or damage that may arise
due to his fault;.
b. He deposits the thing to a third person who
is manifestly careless or unfit although XPN: Liability of loss through fortuitous event.
2023 GOLDEN NOTES
XPNs to XPN: Even in case of loss through and

fortuitous event, still liable if:
2. On occasion of a calamity – Governed by the
a. If it is so stipulated; provisions concerning voluntary deposit. (Arts.
b. He uses the thing without depositor’s 1968 –1971, NCC)
permission;
c. He delays its return; or Keepers of Hotels or Inns
d. He allows others to use it even if he himself
is authorized to use it. (Art. 1979, NCC) 1. The keepers of hotels or inns shall be held
responsible for loss of thing in case of deposit
8. Return the thing deposited with all its fruits, when both are present:
accessions, and accessories; and (Art. 1983,
NCC); a. They have been previously informed by
guest about the effects the latter brought in;
9. Pay interest on sums converted to personal and
use if the deposit consists of money. b. The guest has taken precautions prescribed
for their safekeeping.
Extinguishment of voluntary deposit
2. They are liable regardless of the degree of
a. Loss or destruction of thing deposited; care exercised when:
b. In gratuitous deposit, upon death of either
depositor or depositary; or (Art. 1995, NCC); a. Loss or injury is caused by his employees or
even by strangers; (Art. 2000, NCC) or
c. Other causes (e.g., return of thing, novation,
expiration of the term, fulfillment of resolutory b. Loss is caused by act of thief or robber
condition). when there is no use of arms or irresistible
force. (Art. 2001, NCC)
Necessary Deposit (2007 BAR)
3. The keepers of hotels or inns are not liable
A necessary (involuntary) deposit is one wherein for loss of thing in case of deposit when:
the deposit is not made by the will of the depositor
but created by force of the law or on occasion of a a. Loss or injury is caused by force majeure;
calamity. (Art. 2000, NCC)
When is deposit considered as necessary b. Loss due to the acts of guests, his family, his
employees, or visitors; and (Art. 2002, NCC)
1. When it is in compliance with a legal obligation; and
2. It takes place on the occasion of any calamity,
such as fire, storm, flood, pillage, shipwreck, or c. Loss arises from the character of the goods.
other similar events; (Art. 1996, NCC); (Art. 2002, NCC)
3. Made by passengers with common carriers; or
4. Made by travelers in hotels or inns. (Art. 1998, NOTE: Liability by the hotel or innkeeper
NCC) commences as soon as there is evident intention on
the part of the travelers to avail himself of the
Governing law in cases of necessary deposit accommodations of the hotel or inn. It does not
matter whether compensation has already been
1. In compliance with a legal obligation – paid or not, whether the guest has already partaken
Governed by the law establishing it, and in case of food and drink or not. (Paras, 2008)
of deficiency, the rules on voluntary deposit;
CIVIL LAW
Posting of Notice of exempt from liability Right to retain given to hotel-keeper or inn-
keeper
Hotel or inn-keepers cannot escape or limit liability
by stipulation or the posting of notices. Any The hotel-keeper has a right to retain the things
stipulation between the hotel keeper and the guest brought into the hotel by the guest, as a security for
whereby the responsibility of the former (Arts. credits on account of lodging, and supplies usually
1998-2001, NCC) is suppressed or diminished shall furnished to hotel guests. (Art. 2004, NCC)
be void. (Art. 2003, NCC) The hotel or inn keepers
are still liable regardless of the posting of notices Reason: The right is given to hotel-keepers to
exempting themselves from any liability. compensate them for the liabilities imposed upon
them by law. (De Leon, 2013)
Extent of liability of the hotel keepers in case of
loss NOTE: This is in the nature of the pledge created by
operation of law. The act of obtaining food or
1. It covers liability in hotel rooms which comes accommodation in a hotel or inn without paying
under the term “baggage” or articles such as therefor constitutes estafa. (Art. 135, RPC)
clothing as are ordinarily used by travelers; and
2. It includes lost or damages in hotel’s annexes A safety deposit box in a hotel is a contract of
such as vehicles in the hotel’s garage. (Art. 1999, necessary deposit. The existing relationship is one
NCC) of depositor and depositary. (YHT Realty Corp. v. CA,
G.R. No. 126780, 17 Feb. 2005)
Q: Venus was the owner of Suzuki Grand Vitara
which was insured with Pioneer Insurance for Judicial Deposit
loss and damage. When she arrived and checked
in at Heaven’s Hotel before midnight, its parking Judicial deposit (sequestration) takes place when an
attendant, John, got the key to said Vitara. At attachment or seizure of property in litigation is
about one in the morning, Venus was awakened ordered by a court. (Art. 2005, NCC)
in her room by a telephone call from the Hotel
Chief Security Officer who informed her that her It is auxiliary to a case pending in court. The
Vitara was carnapped while it was parked purpose is to maintain the status quo during the
unattended at the parking area of the bank near pendency of the litigation or to insure the right of
the hotel. May the insurance company, by right the parties to the property in case of a favorable
of subrogation, recover from the hotel the judgment. (De Leon, 2013)
damages it paid to Venus?
Object of judicial deposit
A: YES. The contract of necessary deposit existed
between the insured Venus and the hotel. Article The object of judicial sequestration may be
1962, in relation to Article 1998, of the Civil Code movables or immovable. (Art. 2006, NCC)
defines this contract. Plainly, Venus deposited for
safekeeping her vehicle through the hotel’s Q: When will the properties sequestered cease
employee. From Venus’ delivery, when she handed to be in custodia legis?
the keys to John, the contract was perfected. Thus,
there is the obligation of safely keeping it and A: They cease to be in custodia legis when the
returning it. Ultimately, the hotel is liable for the insolvency proceedings of a partnership terminated
loss of Venus’ vehicle. (Durban Apartments Corp. v. because the assignee in insolvency has returned the
Pioneer Insurance Surety Corp., G.R. No. 179419, 12 remaining assets to the firm, said properties cease
Jan. 2011) to be in custodia legis. (Ng Cho Cio v. Ng Diong &
Hodges, L-14832, 28 Jan. 1961)
2023 GOLDEN NOTES
Obligation of depositary of sequestered Gerardo Gelle, Nissan Cagayan de Oro

property Distributors, Inc., Jefferson U. Rolida, and Peter
Yap.
The depositary of sequestered property is the
person appointed by the court. (Art. 2007, NCC) He The TRO prayed for was eventually issued by the
has the obligation to take care of the property with RTC upon the posting by NSSC and Orimaco of a
the diligence of a good father of a family (Art. 2008, P1,000,000.00 injunction bond issued by their
NCC) and he may not be relieved of his surety, CGAC. The TRO enjoined respondents
responsibility until the litigation is ended or the from selling, dealing, and marketing all models
court so orders. (Art. 2007, NCC; De Leon, 2013) of motor vehicles and spare parts of Nissan, and
from terminating the dealer agreement between
Applicable Law UMC and NSSC and restrained UMC from
supplying and doing trading transactions with
The law on judicial deposit is remedial or NCOD, which, in turn, was enjoined from
procedural in nature. Hence, the Rules of Court are entering and doing business on Nissan Products
applicable. The relevant provisions of the Rules of within the dealership territory of NSSC as
Court are Rule 57 (Preliminary Attachment), Rule defined in the Dealer Agreement. The TRO was
59 (Receivership), and Rule 60 (Replevin)., Rule eventually converted into a writ of preliminary
127 provides for attachment in criminal cases. (De injunction. Respondents filed a petition for
Leon, 2013) certiorari and prohibition before the CA and
assailed the issuance of the aforesaid injunctive
writ.
C. GUARANTY AND SURETYSHIP
The CA rendered a Decision holding that the RTC
committed grave abuse of discretion in issuing
the writ absent a clear legal right thereto on the
Guaranty
part of NSSC and Orimaco. Consequently, the
Writ of Preliminary Injunction issued by the RTC
Guaranty is a contract where a person called the
was ordered dissolved. Respondents filed an
guarantor binds himself to the creditor to fulfill the
application for damages against the injunction
obligation of the principal debtor in case the latter
bond issued by CGAC in the amount of
should fail to do so. (Art 2047, NCC)
P1,000,000.00. Is CGAC liable?
Suretyship
A: YES. That CGAC’s financial standing differs from
that of NSSC does not negate the order of execution
Suretyship is a contract where a person binds
pending appeal. As the latter’s surety, CGAC is
himself solidarily with the principal debtor.
considered by law as being the same party as the
debtor in relation to whatever is adjudged touching
An undertaking that the debt shall be paid. (Pineda,
the obligation of the latter, and their liabilities are
2006)
interwoven as to be inseparable. Verily, in a contract
of suretyship, one lends his credit by joining in the
Q: The instant petition originated from a
principal debtor’s obligation to render himself
Complaint for Breach of Contract with Damages
directly and primarily responsible with him, and
and Prayer for Preliminary Injunction and
without reference to the solvency of the principal.
Temporary Restraining Order filed by Nissan
Thus, execution pending appeal against NSSC means
Specialist Sales Corporation and its President
that the same course of action is warranted against
and General Manager, Reynaldo A. Orimaco,
its surety, CGAC. The same reason stands for CGAC’s
against herein respondents Universal Motors
other principal, Orimaco, who was determined to
Corporation (UMC), Rodrigo T. Janeo, Jr.,
have permanently left the country with his family to
CIVIL LAW
evade execution of any judgment against him. A: NO. In this case, the surety bond was executed “to
(Centennial Guaranty Corp. v. Universal Motors Corp., guarantee the repayment of the down payment” and
G.R. No. 189358, 08 Oct. 2014) “to secure the full and faithful performance” of
Million State Development. According to the terms
Q: Doctors of New Millennium Holdings, Inc. is a of the bond, People’s General Insurance bound itself
domestic corporation comprised of about 80 to be liable in the amount of P10,000,000.00 if
doctors. On 02 Mar. 1999, it entered into a Million State Development defaults in its
construction and development agreement obligations. Petitioner, however, contends that the
(signed agreement) with Million State inclusion of the clause “or the Project Owner’s
Development Corporation, a contractor, for the waiver” in Article XIII of the signed agreement made
construction of a 200-bed capacity hospital in its obligations more onerous and, therefore, the
Cainta, Rizal. According to the terms of the surety must be released from its bond.
signed agreement, Doctors of New Millennium
obliged itself to pay P10,000,000.00 to Million A suretyship consists of two different contracts: (1)
State Development at the time of the signing of the surety contract and (2) the principal contract
the agreement to commence the construction of which it guarantees. Since the insurer’s liability is
the hospital. Million State Development was to strictly based only on the terms stated in the surety
shoulder 95% of the project cost and committed contract in relation to the principal contract, any
itself to secure P385,000,000.00 within 25 change in the principal contract, which materially
banking days from Doctors of New Millennium’s alters the principal’s obligations would, in effect,
initial payment, part of which was to be used for constitute an implied novation of the surety
the purchase of the lot where the hospital was to contract. A surety is released from its obligation
be constructed. As part of the conditions prior to when there is a material alteration of the contract in
the initial payment, Million State Development connection with which the bond is given, such as a
submitted a surety bond of P10,000,000.00 to change which imposes a new obligation on the
Doctors of New Millennium. The surety bond promising party, or which takes away some
was issued by People’s Trans-East Asia obligation already imposed, or one which changes
Insurance Corporation, now known as People’s the legal effect of the original contract and not
General Insurance Corporation. Doctors of New merely its form. A surety, however, is not released
Millennium, on the other hand, made the initial by a change in the contract which does not have the
payment of P10,000,000.00. effect of making its obligation more onerous.
Respondent was not privy to the terms of the surety
Million State Development, however, failed to bond entered into by petitioner and Million State
comply with its obligation to secure Development. If there were any changes in the
P385,000,000.00 within 25 banking days from contract that petitioner should have been aware of,
initial payment. Then Doctors of New it was Million State Development, as its principal,
Millennium sent a demand letter from the time which had the duty to inform them about the
remittance was due. When Million State changes.
Development reneged on its obligations,
Doctors of New Millennium sent a demand letter Based on petitioner’s own admissions, the principal
dated 14 June 1999 to People’s General contract of the suretyship is the signed agreement.
Insurance for the return of its initial payment of The surety, therefore, is presumed to have
P10,000,000.00, in accordance with its surety acquiesced to the terms and conditions embodied in
bond. Whether or not the surety bond the principal contract when it issued its surety
guaranteeing respondent Doctors of New bond.
Millennium’s initial payment was impliedly
novated by the insertion of a clause in the
principal contract, which waived the conditions
for the initial payment’s release?
2023 GOLDEN NOTES
Accordingly, petitioner cannot argue that the Similarity between guaranty and suretyship
insertion of the clause in the signed agreement
constituted an implied novation of the obligation Both guarantor and surety promise or undertake to
which extinguished its obligations as a surety since answer for the debt, default, or miscarriage of
there was nothing to novate: In order that an another person.
obligation may be extinguished by another which
substitutes the same, it is imperative that it be so Guaranty vs. Warranty
declared in unequivocal terms, or that the old and
new obligation be in every point incompatible with GUARANTY WARRANTY
each other. Novation of a contract is never An undertaking that the
presumed. In the absence of an express agreement, title, quality, or
A contract by which
novation takes place only when the old and the new quantity of the subject
a person is bound to
obligations are incompatible on every point matter of a contract is
another for the
(People’s General Insurance Corporation v. Doctor what it is represented
fulfillment of a
New Millenium Holdings, G.R. No. 172404, 13 Aug. to be and relates to
promise or
2014) some agreement made
undertaking of a
ordinarily by the party
third person.
Guaranty vs. Suretyship (1992, 1997, 2010 BAR) who makes the
warranty.
GUARANTY SURETYSHIP
As to their liability NOTE: In case of guaranty, the guarantor must be a
Liability depends person distinct from the debtor because a person
upon an independent cannot be the personal guarantor of himself. A
Surety assumes
agreement to pay the person cannot be both the primary debtor and the
liability as a regular guarantor of his own debt as this is inconsistent
obligation of the
party to the contract.
principal if he fails to with the very purpose of a guarantee which is for the
do so. creditor to proceed against a third person if the
As to nature of liability debtor defaults in his obligation.
Guarantor is Surety is primarily
secondarily liable. liable. Characteristics of Guaranty
As to their undertaking
Guarantor binds Surety undertakes to (1) Gratuitous. A guaranty is gratuitous,
himself to pay if the pay if principal does unless there is a stipulation to the contrary;
principal cannot pay. not pay.
As to what they insure (2) Accessory. Guaranty secures the payment
Insurer of solvency of of a principal obligation; hence, it cannot
Insurer of the debt. exist without a principal obligation;
debtor.
As to the benefit
(3) Subsidiary. The guarantor will pay only if
Guarantor can avail of
the principal debtor cannot pay and has no
the benefit of Surety cannot avail of
properties to answer for the obligation;
excussion and the benefit of
division in case excussion and
(4) Conditional. Certain conditions (e.g., the
creditor proceeds division. (Pineda,
requirement of exhaustion) must be
against him. (Pineda, 2006)
complied with before the guarantor can be
2006)
made liable;
CIVIL LAW
(5) Unilateral. The obligation is only on the Guaranty or surety agreement is regarded valid
part of the guarantor in favor of the despite the absence of any direct consideration
creditor. The debtor need not even give his received by the guarantor or surety, such
consent; consideration need not pass directly to the
guarantor; a consideration moving to the principal
(6) Express. A guaranty is not presumed; it will suffice. (Pineda, 2006)
must be express and cannot extend to more
than what is stipulated therein; and Kinds of Guaranty
(7) Covered by Statutes of Fraud. Guaranty, 1. General classification

which is a collateral contract, is a promise a. Personal – A guaranty where an individual
to answer for a debt; hence, it must be in personally assumes the fulfillment of the
writing. It is not required that the guaranty principal obligation of the debtor; or
be in a public instrument. (Aquino, 2021)
b. Real – The kind of guaranty where a
Unilateral Character of Guaranty property whether movable, or immovable
is formally committed to answer for the
The contract of guaranty may be undertaken principal obligation. (Pineda, 2006)
without the knowledge of the principal debtor. It
exists for the benefit of the creditor and not for the 2. As to its origin
benefit of the principal who is not a party to the a. Conventional– It is constituted by
contract of guaranty. The creditor has every right to agreement of the parties;
take all possible measures to secure the payment of
his credit. Hence, it can be constituted without the b. Legal – Imposed by virtue of a
knowledge and even against the will of the principal provision of law; or
debtor. (Arts. 1236, 1237, & 1250, NCC)
c. Judicial– Required by a court to
The contract is unilateral because what arises guarantee the eventual right of the
therefrom are solely obligations on the part of the parties in a case. (Art. 2051(1), NCC)
guarantor with relation to the creditor, although its
fulfillment or consummation gives rise to obligation 3. As to consideration
on the part of the person guaranteed with respect to a. Gratuitous– The guarantor does not
the guarantor. (Rabuya, 2017) receive any price or remuneration for
acting as such or
NOTE: A guarantor can recover from the debtor
what the former had to pay the creditor, even if the b. Onerous– One where the guarantor
guaranty was without the debtor’s consent or receives valuable consideration for his
against his will, but the recovery will only be to the guaranty. (Art. 2048, NCC)
extent that the debtor had been benefited. (Arts.
1236 & 1237, NCC; De Guzman v. Santos, G.R. No. 4. As to person
45571; 30 June 1939) a. Single – It is constituted solely to
guarantee or secure performance by
Gratuitous Character of Guaranty the debtor of the principal obligation;
or
A guaranty is gratuitous unless there is a stipulation
to the contrary. (Art. 2048, NCC) b. Double or sub-guaranty – It is
constituted to secure the fulfillment of
the obligation of a guarantor by a sub-
guarantor. (Art. 2051(2), NCC)
2023 GOLDEN NOTES
5. As to scope and extent Validity of the Principal Contract
a. Definite – One where the guaranty is A valid principal obligation is necessary in contract
limited to the principal obligation only, of guaranty since guaranty is an accessory contract,
or to a specific portion thereof; or it is an indispensable condition for its existence that
there must be a principal obligation. Hence, if the
b. Indefinite or Simple – One where the principal obligation is void, it is also void.
guaranty included all the accessory
obligations of the principal, e.g., costs, Absence of Consideration to Guarantor
including judicial costs. (Art. 2055 (2),
NCC) A guaranty or surety agreement is regarded as valid
despite the absence of any direct consideration
Obligations that May be Secured in a Contract of received by the guarantor or surety either from the
Guaranty principal debtor or from the creditor; a
consideration moving to the principal alone will
1. Valid obligations; suffice. (Garcia Jr., v. CA, G.R. No. 80201, 20 Nov.
1990)
2. Voidable obligations, unless it is annulled by
proper action in court; (Art. 1390, NCC Absence of Direct or Personal Interest of
Guarantor
3. Unenforceable obligations; (Art. 1403, NCC)
It is never necessary that he should receive any part
4. Natural obligations – When the debtor himself of benefit, if such there be, accruing to the principal.
offers a guaranty for his natural obligation, he (Willex Plastic Industries Corp v. CA, G.R. No. 103066,
impliedly recognizes his liability, thereby 25 Apr. 1996)
transforming the obligation from a natural into
a civil one; and (Art. 2052, NCC) Statute of Fraud in a Contract of Guaranty
5. Conditional obligations – Only in case of A contract of guaranty must be expressed and in

suspensive condition because upon its writing (Art. 1403(2), NCC); otherwise, it is
happening, it gives rise to the principal and unenforceable unless ratified. It need not be in a
hence, gives rise also to the accessory public instrument.
NOTE: The Statute of Frauds does not require that
Guaranty for present and future debts the contract of guaranty itself be in writing. What it
requires to be in writing for the contract of guaranty
There can be a guaranty for: to be enforceable is the under telling or special
1. Present debts; and promise of guarantor, which must be signed by him.
2. Future debts even if the amount is not yet (Rabuya, 2017)
known (Art. 2053, NCC).
Acceptance of the creditor in a contract of
Liquidated debt guaranty
a debt is liquidated when it is for a price fixed in a GR: The acceptance of the creditor is not essential
contract for the delivery of future goods and the in contract of guaranty.
seller is now ready to deliver said goods within the
period stipulated. (Smith, Bell & Co. v. National Bank, XPN: When there is a mere offer of a guaranty or a
G.R. No. 16482, 01 Feb. 1992) conditional guaranty wherein the obligation does
not become binding until it is accepted by the
CIVIL LAW
creditor and notice of such acceptance is given to Married Woman as a Guarantor

the guarantor.
GR: A married woman can be a guarantor without
Construction of a contract of guaranty or surety the consent of her husband but binds only her
separate property. (Art. 145, FC & Art. 2049, NCC)
GR: In case of doubt, a contract of guaranty or surety
should be strictly construed against the creditor and XPNs:
liberally in favor of the guarantor or surety; terms 1. If with her husband’s consent, it binds the
cannot be extended beyond the stipulation. community or conjugal partnership property. ;
and
XPN: In cases of compensated sureties. (Pineda,
2006) 2. Without husband’s consent, in cases provided
for by law, such as when the guaranty has
Ratio: A contract of guaranty is unilateral redounded to the benefit of the family. (Art. 121,
FC)
Parties to a contract of guaranty
1. Guarantor; and Rights of a Third Person (guarantor or surety)
2. Creditor. who pays for the debt guaranteed or secured
Guarantor 1. If payment is made without the knowledge

or against the will of the debtor; and
The guarantor is the person who is bound to
another for the fulfillment of a promise or a. Guarantor can recover only insofar as the
undertaking of a third person. payment has been beneficial to the
debtor; and (Art. 1236(2), NCC) and
Qualifications of a Guarantor
b. Guarantor cannot compel the creditor to
1. Possesses integrity; subrogate him in his rights.; (Art. 1237,
2. Capacity to bind himself; and NCC)
3. Has sufficient property to answer for the
obligation which he guarantees. 2. If payment is made with the knowledge or
consent of the debtor – The guarantor is
NOTE: The qualifications need only be present at the subrogated to all the rights which creditor had
time of the perfection of the contract. The creditor against the debtor.
can naturally waive the requirements, for rights in
general are waivable (Paras, 2008) Extent of Guarantor’s Liability
Loss of Qualification of the Guarantor 1. Where the guaranty is definite – It is limited in

whole or in part to the principal debt to the
GR: The qualification of the guarantor is lost exclusion of accessories; and (11 Manresa 196;
through conviction of a crime involving dishonesty Pineda, 2006); and
or insolvency. In this case, the creditor is given the
right to demand substitution of the guarantor. 2. Where the guaranty is indefinite or simple –
It shall comprise not only the principal
XPN: When the guarantor had been selected by the obligation but also all its accessories, including
creditor. The supervening loss of required the judicial costs provided that the guarantor
qualifications will not generally end the guaranty. shall only be liable for those costs incurred after
(Art. 2057, NCC) he has been judicially required to pay. (Art.
2055(2), NCC)
2023 GOLDEN NOTES
Effect in case of Death of a Party NOTE: Excussion may only be invoked after legal
remedies against principal debtor have been
1. Guarantor’s death – His heirs will still be liable expanded. The creditor must first obtain a judgment
to the extent of the value of the inheritance against the principal debtor before assuming to run
because the obligation is not purely personal after the alleged guarantor for obviously, the
and is therefore transmissible. (Estate of exhaustion of the principal’s property cannot even
Hemady v. Luzon Surety & Ins. Co., G.R. No. L- begin to take place before judgment has been
8437, 28 Nov. 1956) obtained. (Rabuya, 2017)
NOTE: An action against a guarantor who dies Effect of the creditor’s negligence in exhausting
during pendency of the same, being one for the the properties of the debtor
recovery of money or debt, should be dismissed,
but may be instituted in the proceeding for the He shall suffer the loss to the extent of the value of
settlement of his estate. (Villegas v. Zapanta, G.R. the pointed property which was not exhausted by
No. L-11056, 28 Dec. 1958) the creditor. (Art. 2061, NCC)
2. Debtor’s death – his obligation will survive. His Action of the creditor against the debtor
estate will be answerable. If the estate has no
sufficient assets, the guarantor shall be liable. GR: In an action of the creditor against the debtor,
(Pineda, 2006) only the principal debtor should be sued alone.
Jurisdiction in an action based on a contract of XPN: If the benefit of excussion is not available, the
guaranty guarantor can be sued jointly with the debtor.
The guarantor shall be subject to the jurisdiction of The guarantor entitled to be notified of the
the court of the place where the obligation is to be complaint against the debtor. If the guarantor
complied with. desires to set up defenses as are granted him by law,
he may have the opportunity to do so. (Art. 2062,
Benefit of Excussion NCC)
The benefit of excussion is a right by which the NOTE: A debtor and a guarantor can be sued
guarantor cannot be compelled to pay the creditor together in one complaint, as permitted by the Rules
unless the latter has exhausted all the properties of of Court on permissive joinder. However, if the
the principal debtor and has resorted to all legal creditor obtains favorable judgment, the latter is
remedies against such debtor. (Art. 2058, NCC) entitled to the deferment of judgment, before a writ
of execution can be implemented against a
Requisites of benefit of exhaustion or excussion guarantor, the creditor must first establish that the
debtor cannot pay.
1. The guarantor must set up the right of
excussion against the creditor upon the latter’s The consequences of the guarantor’s
demand for payment from him; and appearance or non-appearance in the case
against the debtor
2. He must point out to the creditor the available
property of the debtor which is not exempted 1. If he does not appear and judgment is rendered
from execution is found within the Philippine against the debtor, he cannot set up defenses
territory. (Art. 2060, NCC) which he could have set up had he appeared.
Moreover, he cannot question the decision
anymore;
CIVIL LAW
2. If he appears, such as by filing an answer in 4. Damages in accordance with law, if they are
intervention, he may lose or may win the case. due. (Art. 2066, NCC)
If he losses, he is still entitled to the benefit of
excussion; and XPNs:
3. There is no waiver of his benefit of excussion by 1. Guaranty is constituted without the knowledge
his appearance in the case. (Pineda, 2006) or against the will of the debtor.
Compromise agreement between the creditor Effect: Guarantor may only recover so much as
and the principal debtor was beneficial to the debtor. If payment has not
benefitted the debtor at all, the guarantor does
Compromise is a contract whereby the parties, by not acquire any claim for reimbursement.
making reciprocal concessions, avoid litigation or
put an end to one already commenced. (Pineda, The remedy of the guarantor would be to go
2006; Art. 2028, NCC) against the creditor for the amount paid, if there
is still a legal basis for the claim. If the
A compromise between the creditor and the guarantors suffer, it is due to his own fault.
principal debtor is valid if the compromise is
beneficial to the guarantor; otherwise, it is not 2. Payment by third persons who does not intend
binding upon him. to be reimbursed; and.
In a compromise between the creditor and the Effect: It is deemed a donation and as such
guarantor to the principal debtor, if compromise is requires the consent of debtor.
beneficial to the principal debtor, it is valid;
otherwise, it is not binding upon him. (Art. 2063, 3. If the guarantor has paid without notifying the
NCC) debtor and the latter not being aware of the
payment, repeats it, the guarantor has no
To be binding, it must benefit both the guarantor remedy whatever against the debtor, but only
and the debtor. against the creditor. (Art. 2076, NCC)
Right of Indemnity and Reimbursement of the XPNs to XPN:

Guarantor who paid the debt
a. In case of gratuitous guaranty;
GR: The guarantor who pays for a debtor must be
indemnified by the latter. b. If the guarantor was prevented by the
fortuitous event from advising the debtor of
The guarantor is entitled to be reimbursed by the payment; and
debtor for:
c. The creditor becomes insolvent, the debtor
1. Total amount of the debt paid; shall reimburse the guarantor for the
amount paid.
2. Legal interest from the time payment was made
known to the debtor (even though it did not Right of subrogation
earn interest for the creditor);
The guarantor has the right of subrogation after the
3. Expenses incurred after notifying debtor that payment of the debt is made to the creditor. The
demand to pay was made upon him; and guarantor is subrogated to all the rights which the
creditor had against the debtor. (Art. 2067(1), NCC)
2023 GOLDEN NOTES
If the guarantor pays without notice to the debtor, 6. If there are reasonable grounds to fear that the
the debtor may interpose against the guarantor principal debtor intends to abscond; or
defenses available to the debtor as against the
creditor at the time payment was made. (Pineda, 7. If the principal debtor is in imminent danger of
2006; Art. 2068, NCC) becoming insolvent. (Art. 2071, NCC)
Payment of the guarantor before maturity NOTE: In all these cases, the cause of action of the
guarantor is either to obtain release from the
GR: The guarantor cannot seek reimbursement guaranty, or to demand a security that shall protect
from the debtor until expiration of the period him from any proceedings by the creditor and from
stipulated. The guarantor must wait. For being the danger of insolvency of the debtor. (Art. 2071,
subsidiary in character, the guaranty is not NCC)
enforceable until the debt has become due. (Art.
2069, NCC) Purpose of the right of guarantor to proceed
against debtor before payment
NOTE: A guarantor cannot exercise the right of
subrogation until the principal obligation has been The purpose of this right is to enable the guarantor
fully extinguished. (Rabuya, 2017) to take measures for the protection of his interest in
view of the probability that he would be called upon
XPN: If the premature payment was ratified by the to pay the debt. (De Leon, 2013)
debtor, he can now be compelled to reimburse.
(Pineda, 2006) NOTE: The guarantor cannot demand
reimbursement or indemnity because he has not
Right of the guarantor to proceed against debtor paid the obligation. The proper remedy is to obtain
before payment release from the guaranty or to demand a security.
(Pineda, 2006)
GR: Guarantor cannot proceed against the principal
debtor even before having paid the creditor. Remedy of a guarantor of a third person at
Request of Another
XPNs:
The remedy of a person who becomes a guarantor
1. When he is sued for payment; at the request of another for the debt of a third
person who is not present may either:
2. In case of insolvency of the principal debtor;
1. Sue the requesting party; or
3. When the debtor has bound himself to relieve 2. Sue the principal debtor (Art. 2072, NCC)
him from the guaranty within a specified period,
and this period has expired; NOTE: The provision applies when the guarantor
has actually paid the debt.
4. When the debt has become demandable by
reason of the expiration of the period of The Article is based on the principle that no person
payment; shall be enriched at the expense of another. (Pineda,
2006)
5. After the lapse of ten years, when the principal
obligation has no fixed period for its maturity, Sub-guaranty
unless it be of such nature that it cannot be
extinguished except within a period longer than Double or sub-guaranty is one constituted to
ten years; guarantee the obligation of the guarantor.
CIVIL LAW
NOTE: In case of insolvency of the guarantor for can only cover obligations existing at the time the
whom he bound himself, he is responsible to the co- mortgage is constituted. (Marquez vs. Elisan Credit
guarantors in the same terms as the guarantors. Corporation, G.R. No. 194642, 06 Apr. 2015)
(Art. 2075, NCC)
NOTE: Although a promise expressed in a chattel
Entitlement to Right of Excussion mortgage to include debts that are yet to be
contracted can be binding commitment that can be
A sub-guarantor is entitled to the right of excussion compelled upon, the security itself, however, does
both with respect to the guarantor and to the not come into existence or arise until after a chattel
principal debtor. (Art. 2064, NCC) mortgage agreement covering the newly contracted
debt is executed either by concluding a fresh chattel
Continuing Guaranty mortgage or by amending the old contract
conformably with the form prescribed by the
A continuing guaranty or suretyship is one which Chattel Mortgage Law. (Ibid.)
covers all transactions, including those arising in the
future, which are within the description or XPN to the XPN: In case of stocks in department
contemplation of the contract of guaranty until the stores, drug stores, etc.
expiration or termination thereof. (Fortune Motors
Ph. Corp. v. CA, G.R. No. 112191 07 Feb. 1997) Note: R.A. No. 11057, otherwise known as the
“Personal Property Security Act” (PPSA), which was
A guaranty may be given to secure even future enacted on 17 Aug. 2018, repealed Secs. 1 to 16 of
debts, the amount of which may not be known at the Act No. 1508 or the “Chattel Mortgage Law.”
time the guaranty is executed. This is the basis for
contracts denominated as continuing guaranty or The PPSA is, however, not explicit as to whether a
suretyship. It is one which covers all transactions, “security interest” may secure the after-incurred
including those arising in the future, which are obligations of the debtor/grantor to the secured
within the description or contemplation of the creditor. Nevertheless, Sec. 10(c) of said law
contract of guaranty, until the expiration or provides that any stipulation limiting the grantor’s
termination thereof. (Dino v. CA, G.R. No. 89775, 26 right to create a security interest shall be void.
Nov. 1995)
Q: PAGRICO submitted a Surety Bond issued by
Guaranty of Future Debts R&B Surety to secure an increase in its credit
line with PNB. For consideration of the Surety
Future debts, even if the amount is not yet known, Bond, Cochingyan and Villanueva entered into
may be secured by a guarantee. However, there can an Indemnity Agreement with R&B Surety and
be no claim against the guarantor until the amount bound themselves jointly and severally to the
of the debt is ascertained or fixed and demandable. terms and conditions of the Surety Bond. When
The reason is that a contract of guaranty is PAGRICO defaulted, PNB demanded payment to
subsidiary. (De Leon, 2016) R&B Surety; R&B Surety, in turn, demanded
payment to Cochingyan and Villanueva. R&B
GR: It is not limited to a single transaction but sued them. Villanueva argued that the
contemplates a future course of dealings, covering a complaint was premature because PNB had not
series of transactions generally for an indefinite yet proceeded against R&B Surety to enforce the
time or until revoked. latter's liability under the Surety Bond. Is the
contention correct?
XPN: While a Pledge, Real Estate Mortgage, or
Antichresis may exceptionally secure after-incurred
obligations so long as these future debts are
accurately described, a chattel mortgage, however,
2023 GOLDEN NOTES
A: NO. Indemnity Agreements are contracts of If the creditor accepts payment in form of
indemnification not only against actual loss but immovable or immovable property, there is a
against liability as well. While in a contract of novation on the subject matter.
indemnity against loss an indemnitor will not be
liable until the person to be indemnified makes NOTE: Eviction revives the principal
payment or sustains loss, in a contract of indemnity obligation, but not the guaranty, for the
against liability, as in this case, the indemnitor's creditor here took the risk. (Paras, 2008)
liability arises as soon as the liability of the person
to be indemnified has arisen without regard to 4. Release in favor of one of the guarantors,
whether or not he has suffered actual loss. without consent of the others, benefits all to the
extent of the share of the guarantor to whom it
Accordingly, R & B Surety was entitled to proceed has been granted; (Art. 2078, NCC);
against petitioners not only for the partial payments
already made but for the full amount owed by 5. Extension granted to debtor by creditor
PAGRICO to the PNB. (Cochingyan, Jr. v. R&B Surety without consent of guarantor; or (Art. 2079,
and Ins. Co., G.R. No. L-47369, 30 June 1987) NCC); or
Two Causes for Extinguishment of the guaranty 6. When the guarantors through some act of the
creditor cannot be subrogated to the rights,
1. Direct – when the guaranty itself is mortgages and preferences of the latter. (Art.
extinguished, independently of the principal 2080, NCC)
obligation; or
Guaranty vs. Insurance
2. Indirect – when the principal obligation ends,
the accessory obligation of guaranty naturally GUARANTY INSURANCE
ends. (Shannon v. Phil. Lumber & Trans. Co., G.R. As to the undertaking
No. 41795, 30 Aug. 1935) Undertaking to fulfill Undertaking is to
the obligation of the indemnify in case of
Grounds for extinguishing a contract of debtor. loss.
guaranty As to the liability
The liability is
1. Principal obligation is extinguished; The liability is primary
subsidiary
As to the nature of the contract
2. Same causes as all other obligations; The contract is The contract is
(P-A-C-O-C-O-M-E-L-O-N-A) accessory principal
As to in whose favor the undertaking is made
a. Payment or performance; The undertaking may
b. Loss of the thing due; The guaranty is in be in favor of the
c. By Condonation or remission of the debt; favor of a principal, the insured although there
d. By confusion or Merger of the rights of the creditor may also be a third
creditor and debtor; party beneficiary
e. By Compensation; As to reimbursement
f. By Novation; or and
The insurer cannot ask
g. Other causes such as Annulment,
for reimbursement
rescission, fulfillment of a resolutory The guarantor can ask
from the insured
condition and prescription. for reimbursement
although there may be
subrogation
3. Release by acceptance of property by the
(Aquino, 2021)
creditor;
CIVIL LAW
Q: Doctors of New Millennium Holdings, Inc bond despite her failure to return the van,
entered into a construction and development considering that its effectivity has lapsed
agreement with Million State Development without any renewal?
Corporation for the construction of a 200-bed
capacity hospital in Cainta, Rizal. Million State A: YES. A surety bond remains effective until the
Development submitted a surety bond to action or proceeding is finally decided, resolved, or
Doctors of New Millennium issued by People’s terminated. This a rare instance where the writ of
Trans-East Asia Insurance Corporation, now seizure is dissolved due to the dismissal without
known as People’s General Insurance prejudice, but the bond stands because the case has
Corporation. Million State Development, yet to be finally terminated by the Regional Trial
however, failed to comply with its obligation Court.
and so Doctors of New Millennium filed a
complaint for breach of contract with damages Forfeiture of the replevin bond requires first, a
with prayer for the issuance of preliminary judgment on the merits in the defendant's favor, and
attachment against Million State Development second, an application by the defendant for
and People’s General Insurance with the damages. Neither circumstance appears in this case.
Regional Trial Court of Pasig City. Can a surety When petitioner failed to produce the van, equity
bond which guarantees initial payment be demanded that Asuten be awarded only an amount
impliedly novated by an insertion of a clause in equal to the value of the van. The RTC would have
the principal contract waiving the conditions for erred in ordering the forfeiture of the entire bond in
the initial payment’s release? Asuten's favor, considering that there was no trial
on the merits or an application by Asuten for
A: NO. The obligations of the surety to the principal damages. This judgment could have been reversed
under the surety bond are different from the had petitioner appealed the RTC's Order.
obligations of the contractor to the client under the Unfortunately, she did not. Respondent was, thus,
principal contract. The surety guarantees the constrained to follow the RTC's directive to pay
performance of the contractor’s obligations upon Asuten the full amount of the bond. (Enriquez v. The
the contractor’s default, its client may demand Mercantile Insurance Co., Inc., G.R. No. 210950, 15
against the surety bond even if there was no privity Aug. 2018)
of contract between them and this is the essence of
a surety agreement. (People's Trans-East Asia Bond
Insurance Corp., v. Doctors of New Millennium
Holdings, Inc., G.R. No. 172404, 13 Aug. 2014) A bond, when required by law, is commonly
understood to mean an undertaking that is
Q: Enriquez filed a replevin case against Asuten sufficiently secured, and not cash or currency.
for the recovery of the Toyota Hi-Ace van valued (Comm. of Customs v. Alikpula, G.R. No. L- 32542, 26
at P300,000.00. She applied for a bond in the Nov. 1970)
amount of P600,000.00 with The Mercantile
Insurance Company, Inc. (Mercantile Insurance) Bondsman
in Asuten's favor. The RTC approved the bond
and ordered the sheriff to recover the van from A bondsman is a surety offered in virtue of a
Asuten and to deliver it to petitioner. While the provision of law or a judicial order. He must have the
van was in petitioner's custody, the RTC qualifications required of a guarantor (Art. 2056,
dismissed the case without prejudice for failure NCC) and in special laws like the Rules of Court.
to prosecute. Thus, it ordered the sheriff to (Secs. 12 & 13, Rule 114, ROC; De Leon, 2013)
restore the van to Asuten. When petitioner
failed to produce the van, the RTC directed
Mercantile Insurance to pay Asuten the amount
of the bond. Is Enriquez liable for the replevin
2023 GOLDEN NOTES
The necessary qualifications of sureties to a Violation by the creditor of the terms of the
property bond surety agreement
1. Each of them must be a resident owner of real A violation by the creditor of the terms of the surety
estate within the Philippines; entitles the surety to be released therefrom.
(Associated Ins. & Surety Co. v. Bacolod Murcia
2. Where there is only one surety, his real estate Milling Co., G.R. No. L-12334, 22 May 1959)
must be worth at least the amount of the
undertaking; and When the performance of a bond is rendered
impossible
3. In case there are two or more sureties, they may
justify severally in amounts less than that If the performance of a bond is rendered impossible,
expressed in the undertaking, if the entire sum it is the surety’s duty to inform the court of the
justified is equivalent to the whole amount of happening of the event so that it may take action or
bail demanded. (Sec. 12, Rule 114, ROC) decree in the discharge of the surety when the
performance of the bond is rendered impossible by
Nature of bond an act of God, or the obligee, or the law. (People v.
Otiak Omal & Luzon Co., Inc., G.R. No. L-14457, 30
All bonds including “judicial bonds” are contractual June 1961)
in nature. Bonds exist only in consequence of a
meeting of minds under the conditions essential to Remedy if Unable to Give a Bond
a contract. (De Leon, 2021)
A pledgee or mortgage considered sufficient to
Judicial bond cover his obligation shall be admitted in case a
person bound to give a legal or judicial bond should
Judicial bonds constitute merely as a special class of not be able to do so.
contracts of guaranty, characterized by the fact that
they are given in virtue of a judicial order. (Gerardo NOTE: A judicial bondsman cannot demand the
v. Plaridel Surety and Ins., Co., G.R. No. L-7807, 31 Oct. exhaustion of the property of the principal debtor.
1956) This is to ensure that the fulfillment of the obligation
by the guarantor be not delayed or hindered.
E.g., A bond to stay execution of an appealed (Rabuya, 2017)
judgment of a lower court is a judicial bond.
Q: Sps. Floro and Eufema Roxas entered into a
Liability of the surety if the creditor was Contract of Building Construction dated 22 May
negligent in collecting the debt 1979 with Rosendo P. Dominguez, Jr.
(Dominguez), who undertook to be the building
A surety is still liable even if the creditor was contractor of a housing project known as “Vista
negligent in collecting from the debtor. The contract Del Mar Executive Houses.” Philtrust Bank
of suretyship is not about the obligee seeing to it (Philtrust) would finance the cost of materials
that the principal pays the debt or fulfills the and supplies to the extent of P 900,000.00, while
contract, but that the surety will see that the the Spouses would shoulder the labor cost of P
principal pays or performs. (PNB v. Manila Surety & 300,000.00. Paragraph 7 or the “whereas
Fidelity Co., Inc., G.R. No. L-20567, 30 July 1965) clause” of the said project contract provided,
however, that whether or not the Spouses could
provide the funds for the labor costs, Dominguez
would bind himself to finish the project within
150 working days. Furthermore, a clause for
liquidated damages amounting to P 1,000.00
CIVIL LAW
per day was stipulated against Dominguez in is a contract of adhesion ordinarily prepared by the
case of breach. surety or insurance company; thus, calling for a
liberal construction in favor of the insured and strict
On 24 May 1979, Dominguez secured a application against the insurer, which insurer as the
performance bond from FGU Insurance drafter, had the opportunity to state plainly the
Corporation (FGU) wherein they both agreed to terms of its obligation. (FGU Insurance vs Spouses
jointly and severally pay Floro Roxas (Floro) Roxas, G.R. 189526, 09 Aug. 2017)
and Philtrust the amount of P 450,000.00 in the
event of Dominguez’s non-performance of his b. Should the liabilities of the Spouses to
obligation under the contract. Dominguez be set off against any liability of
FGU under the performance bond?
However, the Spouses borrowed P 73,136.75 of
the project-allocated funds from Dominguez and A: YES. The liabilities of the Spouses to Dominguez
they also failed to make the promised payments could be set off against any liability of FGU under the
for the labor cost; hence, Dominguez refused performance bond. Under Art. 1280 of the NCC, a
further work on the project. Thus, a complaint guarantor may set up compensation as regards
was filed against Spouses and Philtrust before what the creditor may owe the principal debtor.
the CFI of Manila.
While this provision specifically speaks of a
a. Should FGU be liable for the full amount of guarantor, it nevertheless applies to a surety as well.
P 450,000 under the performance bond? Contracts of guaranty and surety are closely related
in the sense that in both, there is a promise to
A: YES. FGU should be liable for the full amount of P answer for the debt or default of another. The
450,000.00 solidarily with Dominguez. A difference lies in that a guarantor is the insurer of
performance bond is a kind of suretyship agreement the solvency of the debtor and thus binds himself to
that is designed to afford the project owner security pay if the principal is unable to pay, while a surety
that the contractor will faithfully comply with the is the insurer of the debt and he obligates himself to
requirements of the contract and make good on the pay if the principal does not pay. Hence, FGU could
damages sustained by the project owner in case of offset its liability under the Surety Bond against
the contractor’s failure to so perform. As a surety, Dominguez’ collectibles from the Spouses. (FGU
FGU’S liability is direct, primary, absolute, and Insurance v Sps. Roxas, G.R. 189526, 09 Aug. 2017)
solidary with the principal debtor, and is
determined strictly in accordance with the actual c. Should the Spouses be entitled to
terms of the performance bond it issued. The FGU liquidated damages under the contract for
Surety Bond was conditioned upon the full and building construction?
faithful performance by Dominguez of his
obligations, wherein FGU guaranteed to solidarily A: YES. The Spouses should be entitled to liquidated
pay the amount of P 450,000.00 in case of damages under the contract for building
Dominguez’ default. The terms of the bond were construction. The parties agreed and articulated on
clear; hence, the literal meaning of its stipulation the payment of liquidated damages in case of
should control. breach; hence, the deciding factor for the recovery
of liquidated damages in this case would be the fact
If it were true that FGU’s intention was to limit its of delay in the completion of the works. A clause on
liability to the cost overrun or additional cost to the liquidated damages is normally added to
Spouses to complete the project up to a maximum construction contracts not only to provide
cap of P 450,000.00, then it should have included in indemnity for damages but also to ensure
the Surety Bond specific words indicating this performance of the contractor by the threat of
intention. Its failure to do so must be construed greater responsibility in the event of breach. Here, it
against it, given the fact that a suretyship agreement was clearly provided that liquidated damages
2023 GOLDEN NOTES
would be recoverable for delay in the completion of

the project; hence, there should be more reason in D. REAL ESTATE MORTGAGE
case of non-completion. To hold otherwise would be
to diminish or disregard the coercive force of this
stipulation. (FGU Insurance vs Spouses Roxas, G.R.
Real estate mortgage (REM) is a contract whereby
189526, 09 Aug. 2017)
the debtor secures to the creditor the fulfillment of
the principal obligation, specially subjecting to such
Q: Doctors of New Millenium Holdings, Inc.
security immovable property or real rights over
(DNMH) is a domestic corporation and entered
immovable property in case the principal obligation
into a construction and development agreement
is not fulfilled at the time stipulated. (12 Manresa
with the Million State Development Corporation
467)
(MSD), a contractor for the construction of a
200-bed capacity hospital in Cainta, Rizal.
Characteristics
DNMH obliged to pay 10M to MSD and MSD was
to shoulder 95% of the project cost and
1. It is a real right;
committed itself to secure 385k within 25
banking days from DNMH’s initial payment.
2. It is an accessory contract;
Thus, MSD submitted a surety bond of 10M to

NOTE: If the principal obligation is void, the
DNMH, which was issued by People’s Trans-East
mortgage is also void. (Reyes v. Gonzales, 45 O.G.
Asia Insurance Corporation, now People’s
No. 2, p. 831) But if a mortgage is void because
General insurance corporation. Upon failure of
it was not made by the owner of the property,
MSD to comply, DNMH opted for payment of the
the principal contract of loan may still be valid.
surety bond from Philippine General Insurance,
(PNB v. Rocha, G.R. No. L-332260, 29 Dec. 1930)
which however denied liability on the ground
that its liability was limited by the contract and
3. Unilateral; it creates only an obligation on the
that the contract was novated upon execution of
part of the creditor who must free the property
an additional clause in the agreement. Is the
from encumbrance once the obligation is
surety liable in this case?
fulfilled.
A: YES. The liabilities of an insurer under the surety

4. It is indivisible;
bond are not extinguished when the modifications
in the principal contract do not substantially. The
5. It is inseparable;
surety is jointly and severally liable with its
principal when the latter defaults from its
NOTE: The mortgage adheres to the property,
obligations under the principal contract. (People’s
regardless of who its owner may subsequently
Trans-Eat Insurance Corp. v. Doctors of New
be. (McCullough v. Veloso, G.R. No. L-21455, 05
Millenium Holdings, G.R. No. 172404, 13 Aug. 2014)
Apr. 1924)
6. It is real property; and
7. It is subsidiary.
NOTE: Once the obligation has been paid or

satisfied, the property must be released from
the encumbrance imposed. The mortgage is
answerable only if the principal obligation is
not paid.
CIVIL LAW
Laws that govern Contract of Real Mortgage 3. When upon or after the expiration of the right
to repurchase another instrument extending
1. New Civil Code; the period of redemption or granting a new
2. Mortgage Law; period is executed;
3. Property Registration Decree; (P.D. 1529);
4. When the purchaser retains for himself a part
4. Sec. 194, as amended by Act No. 3344, Revised of the purchase price;
Administrative Code; and (Phil. Bank of
Commerce v. De Vera, G.R. No. L-18816, 29 Dec. 5. When the vendor binds himself to pay the
1962) and taxes on the thing sold; and
5. R.A. No. 4882 – law governing aliens who 6. In any other case where it may be fairly
become mortgagees. inferred that the real intention of the parties is
that the transaction shall secure the payment
Kinds of Real Mortgages of a debt or the performance of any other
1. Voluntary or Conventional mortgage – It is
constituted voluntarily by the contracting In any of the foregoing cases, any money, fruits,
parties or by the will of the owner of the or other benefit to be received by the vendee
property on which it was created; as rent or otherwise shall be considered as
interest which shall be subject to the usury
2. Legal mortgage – It is required by law to be laws. (Art. 1602(7), NCC)
executed in favor of certain persons; and (Arts.
2125(2), 2082 and 2083, NCC) and Real Estate of Mortgage vs. Equitable Mortgage
3. Equitable mortgage – a contract that appears An equitable mortgage is not different from a REM,
to be a sale with a right of repurchase or an and the lien created thereby ought not to be
absolute sale which in reality is a contract defeated by requiring compliance with the
whereby no transfer of ownership is intended formalities necessary to the validity of a voluntary
but the real intention is only to constitute a REM. (Sps. Rosales v. Sps. Suba, G.R. No. 137792, 12
security. (Aquino, 2021) Aug. 2003) The remedy is judicial foreclosure of the
mortgage under Rule 68 of the 1997 Rules of Civil
Requisites of an equitable mortgage Procedure, as amended. Registration of equitable
mortgage is not required. (Aquino, 2021)
1. The parties enter into what appears to be a
contract of sale; and Consideration in Mortgage
2. Their intention is to secure an existing debt by
way of mortgage. (Dionisia Dorada Vda. de Its consideration is the same as of the principal
Delfin v. Dellota, G.R. No. 143697, 28 Jan. 2008) contract from which it receives its life, and without
which it cannot exist as an independent contract.
Instances when the sale is presumed to be an (China Banking Corp. v. Lichauco, G.R. No. L-22001,
equitable mortgage 04 Nov. 1924)
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;
2023 GOLDEN NOTES
Requisites for a Valid Constitution of a Real EPCIB to defer legal action and allow it to make
Estate Mortgage (1991, 1994, 1996, 1999, 2001 payments on the obligations under such terms
BAR) and conditions acceptable to EPCIB. Thus, PDIC
and EPCIB agreed to enter into a Repayment
The following requisites are essential to the Agreement, where PDIC acknowledged that it is
contract of a real estate mortgage: indebted to EPCIB, and that the said obligations
have become past due.
1. That it be constituted to secure the fulfillment
of a principal obligation; In accordance with the terms and conditions of
the Repayment Agreement, PDIC executed REMs
2. That the mortgagor be the absolute owner of over 29 condominium units of the condominium
the thing mortgaged; project and a parcel of land. When PDIC
defaulted in its loan obligations under the
3. That the person constituting the mortgage have Repayment Agreement, EPCIB sent a letter to
the free disposal of their property, and in the PDIC demanding payment. In response to the
absence thereof, that they be legally authorized demand letter, PDIC offered to settle its loan
for the purpose; obligations by way of dacion en pago. However,
the parties failed to agree on the terms therefor.
4. It must appear in a public instrument; and (Art. Hence, EPCIB proceeded to initiate foreclosure
2125, NCC) and proceedings pursuant to the Repayment
Agreement and the subject REMs.
5. Recording in the Registry of Property is
necessary to bind third persons. Do the REMs entered into by PDIC and EPCIB
contain all the elements of a valid mortgage
NOTE: A recorded REM is a right in rem, a lien on contract?
the property whoever its owner maybe. (Rabuya,
2017) A: YES. In this case, the terms of the subject REMs
are clear and leave no doubt on the true intentions
Registration operates as a notice of the mortgage to of the parties. They were executed to secure all
others, but neither adds to its validity nor converts amounts payable by PDIC to EPCIB under the
an invalid mortgage into a valid one between the Repayment Agreement upon maturity. Under the
parties. The person in whose favor the law Repayment Agreement, PDIC expressly undertook
establishes a mortgage has the right to demand the to execute and deliver a REM as security for its
execution and the recording of the document in existing loan obligations to EPCIB. This can be
which the mortgage is formalized. (Art. 2152(2), gleaned in the provisions of the Agreement.
NCC)
Verily, the execution of the Repayment Agreement
Q: PDIC applied for and was granted a credit line was entered into for the purpose of accommodating
by EPCIB, composed of a secured credit line and the request for a restructuring of payment by PDIC.
a clean credit line. After the clean credit line was Restructuring, as applied to a debt, implies a
fully utilized, PDIC requested EPCIB to release postponement of the maturity, modification of the
funds from the secured credit line. However, essential terms of the debt (e.g., conversion of debt
after evaluating PDIC's account and given the into bonds or into equity, or a change in or
then market and economic condition, EPCIB amendment of collateral security) in order to make
decided to defer the granting of additional the account of the debtor current. With the
credit accommodation. The amounts previously execution of the Repayment Agreement wherein
drawn by PDIC had become past due and EPCIB PDIC undertook to execute a REM to secure all
had intended to take legal action against PDIC to amounts payable to EPCIB, any distinctions in the
enforce its rights. PDIC, however, requested loan facilities pursuant to the Letter of Approval
CIVIL LAW
dated 08 Aug. 1996 previously granted by EPCIB A: NO. As an accessory contract, a mortgage
have necessarily been superseded. Accordingly, contract's validity depends on the loan contract's
considering that PDIC requested for the release of validity. Thus, the contract of loan between
the mother title, it is but reasonable that EPCIB petitioners and private respondent must be valid.
would ask for a substitute property in its stead. The real estate mortgage contract remains valid
Certainly, EPCIB had a legitimate reason for refusing because the main contract of loan is found to be
to return TCT No. 230861 and cancel the mortgage valid when it was proven during trial that Vicente
annotated thereon before the execution by PDIC of and Nanette received the proceeds of the loan and
the new subject REMs. Thus, while it may be said further supported by the letter of Jesus Luntao of
that EPCIB's refusal to release the mother title had the existence of the loan. Despite having the
compelled PDIC to execute the subject REMs and opportunity to prove that the admission of Jesus is
mortgage the 29 units of the condominium project false, petitioners failed to present rebuttal evidence.
and the Bulacan property, the same cannot be They also failed to present evidence to support their
equated with undue influence that could have allegation that Eleanor received the loan proceeds
vitiated PDIC's consent. (Philippine Dev. and Ind. or that Eleanor's non-payment of her alleged
Corp. v. CA, G.R. No. 231545, 28 Apr. 2021) personal loan with BAP caused the foreclosure of
the mortgage. What petitioners presented were
Q: Vicente was the owner of a real property in mere denials. (Luntao vs. BAP, G.R. No. 204412, 20
Davao City. He executed an SPA in favor of his Sept. 2017)
sister, Nanette. She entered into a contract of
loan with BAP and used Vincente’s property as Real Estate Mortgage vs. Contract of Sale with
collateral. However, she failed to pay the Right of Repurchase
obligation to BAP when it fell due. Demand
letters were sent but to no avail. BAP instituted REAL ESTATE SALE WITH RIGHT
an Extra-Judicial Foreclosure of Vincente’s MORTGAGE OF REPURCHASE
property. Vicente and Nanette filed a complaint As to Nature of Contract
for declaration of nullity of real estate mortgage Principal and
Accessory contract.
against BAP. In the complaint, Nanette alleges independent contract.
that she signed blank loan forms, she did not As to Divisibility of Contract
receive the proceeds of the loan, and another
Redemption can be
sister, named Eleanor, was included in the loan
Indivisible. partial. (Arts. 1612-
documents when only Nanette is empowered by
1613, NCC)
Vincente to enter contract of loan. Thus, they
contend that since there is absence of As to Subject Matter
consideration, the loan contract is void which Real and personal
Only to real property.
means its accessory contract, real mortgage, is property.
void as well. RTC ruled in favor of BAP and As to Transfer of Ownership
dismissed the complaint finding that Vicente
There is transfer of
and Nanette indeed applied for loan and There is no transfer of
title and possession of
received the proceeds through the account title and possession of
the property, although
under the name of Holy Infant Medical the property.
conditional.
Clinic/Nanette Luntao/Eleanor Luntao. Also, it
relied heavily on the letter of Jesus Luntao in As to Entitlement to Fruits
court showing an admission of the existence of Creditor has no right to
the loan. CA denied the appeal. Whether the The vendee a retro is
the fruits of the
contract of loan entered by Nanette is void thus entitled to the fruits
property during the
nullifies the contract of real mortgage being an even during the period
pendency of the
accessory contract. of redemption.
mortgage.
2023 GOLDEN NOTES
As to Appropriation of Property Prior demand must have been made on the debtor
and the latter failed to pay. (BPI. v. Concepcion E.
If the debtor fails to pay As soon as there is a
Hijos, Inc., G.R. No. 27701, 21 July 1928)
his debt, the creditor consolidation of title in
cannot appropriate the the vendee a retro, he
Right to Possession
property mortgaged may dispose of it as an
nor dispose of it. absolute owner.
The mortgagee has no right or claim to the
possession of the property. Such possession is only
Rights of a Mortgagor a security for the payment of the sum borrowed. The
debtor merely subjects the property to a lien but the
To alienate the mortgaged property but the ownership thereof is not parted. (De Leon, 2013)
mortgage shall remain attached to the property.
(Art. 2130, NCC) Registration of Mortgage
Q: Bucton alleged that Concepcion borrowed the Registration of mortgage is a matter of right. By
title to her house and lot on the pretext that she executing the mortgage, the mortgagor is
was going to show it to an interested buyer. understood to have given his consent to its
However, Concepcion, instead, obtained a loan registration, and he cannot be permitted to revoke
in the amount of P30,000.00 from Rural Bank of it unilaterally. Registration operates as a notice of
El Salvador (Rural Bank) that as security for the the mortgage to others, but neither adds to its
loan, Concepcion mortgaged Bucton’s house and validity nor converts an invalid mortgage into a
lot to Rural Bank in her personal capacity, using valid one between the parties. (Gonzales v. Basa, G.R.
a forged SPA. No. L-48695, 30 Sept. 1942)
Would Bucton be bound by such real estate Mortgage as a Real and Inseparable Right
mortgage if the Rural Bank later forecloses the
property, after Concepcion defaults in payment? Mortgage is a real and inseparable right. The
mortgage directly and immediately subjects the
A: NO. The mere fact that the agent was authorized property upon which it is imposed, whoever the
to mortgage the property is not sufficient to bind the possessor may be, to the fulfillment of the obligation
principal, unless the deed was executed and signed for whose security it was constituted. (Art. 2126,
by the agent for and on behalf of his principal. The NCC)
authorized agent failed to indicate in the mortgage
that she was acting for and on behalf of her Effect of registration as to better right of third
principal. The real estate mortgage explicitly shows, parties
on its face, that it was signed by Concepcion in her
own name and in her own personal capacity. Thus, A registered mortgage right over property
Bucton cannot be bound by the acts of Concepcion. previously sold is inferior to the buyer’s
(Bucton v. Rural Bank of El Salvador, G.R. No. 179625, unregistered right.
24 Feb. 2014)
Reason: If the original owner had sold the thing,
Rights of a Mortgagee then he no longer had ownership and free disposal
of it so as to be able to mortgage it. (State Investment
To claim from a third person in possession of the House, Inc. v. CA, G.R. No. 115548, 05 Mar. 1996)
mortgaged property the payment of the part of the
credit secured by the property which said third
person possesses. (Art. 2129, NCC)
CIVIL LAW
Prohibition against Encumbrance of Mortgaged have a valid title to the mortgaged property, the
Land, without mortgagor’s consent mortgagee in good faith is nonetheless entitled to
protection. (De Leon, 2013)
In this case, rights over the property, which came
into existence after the execution of the deed, The doctrine, however, does not apply to a situation
cannot be annotated as an adverse claim on the title where the title is still in the name of the rightful
of the land over the mortgagee’s opposition. (Rivera owner and the mortgagor is a different person
v. Peña, G.R. No. L-11781, 24 Mar. 1961) pretending to be the owner. In such a case, the
mortgagee is not an innocent mortgagee for value,
Extent of Mortgage and the registered owner will generally not lose his
title. (Ereña v. Querrer-Kauffman, G.R. No. 165853, 22
GR: Mortgage extends to the following: (G-R-A-I-N) June 2006)
1. Natural accessions; Alienation or Assignment of Mortgage Credit

2. Improvements;
3. Growing fruits; The mortgage credit may be alienated or assigned
4. Rents or income not yet received when the to a third person, in whole or in part, with the
obligation becomes due; and formalities required by law. (Art. 2128, NCC)
5. Amount of indemnity granted or owing to
the proprietor from: NOTE: Even if the alienation is not registered, it
a. Insurance proceeds; or would still be valid as between the parties. (Lopez v.
b. Expropriation price. (Art. 2127, NCC) Alvarez, G.R. No. L-3438, 12 Oct. 1907) There is no
need to obtain the consent of the debtor/mortgagor.
Reason: Ownership of such accessions and
accessories and improvements subsequently The mortgagee acquires real right when property
introduced also belongs to the mortgagor who is the mortgaged as mortgage right is a real property in
owner of the principal. (Castro, Jr. v. CA, G.R. No. itself under Art. 415(10) of the NCC because it is an
97401, 06 Dec. 1995) encumbrance over an immovable. Hence, the
mortgagee is an owner of an intangible property
XPNs: that is the mortgage credit. As an owner, he has the
right to dispose of the mortgage credit. (Aquino,
1. Express stipulation excluding them; or 2021)
2. Evidence sufficiently overthrowing the
presumption that the mortgagor owns the Transfer of Mortgage Credit
mortgaged property.
Transfer of mortgage credit is an assignment of a
Effects of Mortgage right contemplated under Art. 1625 of the NCC.
Hence, the assignment must be:
1. It creates a real right; and
2. It creates merely an encumbrance. 1. Registered to affect third persons; and
2. The debtor must be notified. (Aquino, 2021)
Mortgagee in Good Faith
NOTE: The transfer of the mortgage credit does not
A mortgagee has a right to rely in good faith on the affect the debtor unless he is notified of it. (Aquino,
certificate of title of the mortgagor of the property 2021, citing 5 Tolentino 562)
given as security and in the absence of any sign that
might arouse suspicion, has no obligation to
undertake further investigation. Hence, even if the
mortgagor is not the rightful owner of, or does not
2023 GOLDEN NOTES
Stipulations on Mortgage Contract XPN: it can be said that the “offer” by the
mortgagor to the bank to provide the security
1. Including after-acquired properties; of the mortgage for advances of and when they
were made.
Status: Valid
NOTE: It is a clause which operates as a
Purpose: To maintain, to the extent of the convenience and accommodation to the
allowed by the circumstances, the original borrowers as it makes available additional
value of the property given as a security. Such funds without their having to execute
stipulation is common where the properties additional security documents, thereby saving
given as collateral are perishable or subject of time, travel, loan closing costs, costs of extra-
inevitable wear and tear. legal services, recording fees. etc.
2. Blanket or Dragnet Clause; Statement of the amount in a mortgage

contract in a Dragnet Clause
Status: Valid
The amount stated in the contract is not
A dragnet clause is a mortgage provision which controlling in case of mortgage securing future
is specifically phrased to subsume all debts of advancements. The amount named in the
past or future origin. It is a valid and legal contract does not limit the amount for which
undertaking, and the amounts specified as the mortgage stand as a security, if, from the
consideration in the contracts do not limit the four corners of the instrument the intent to
amount for which the pledge or mortgage secure future and other indebtedness can be
stands as security, if from the four corners of gathered. (Pineda, 2006)
the instrument, the intent to secure future and
other indebtedness can be gathered. A pledge Q: Petitioner obtained a loan of P20K from
or mortgage given to secure future defendant Rural Bank of Kawit. The loan
advancements is a continuing security and is was secured by a REM over a parcel of land.
not discharged by the repayment of the amount The mortgage contract states that the
named in the mortgage until the full amount of mortgage will cover the payment of the loan
all advancements shall have been paid. of P20K and such other loans or other
(Premiere Development Bank v. Central Surety advances already obtained or to be
& Insurance, Inc., G.R. No. 176246, 13 Feb. 2009) obtained by the mortgagors from the bank.
The loan of P20k was fully paid. Thereafter
In addition, a blanket mortgage or dragnet they again obtained a loan of P18K, secured
clause is a continuing security. A mortgage by the same mortgage. The spouses
with a dragnet clause makes available future defaulted. The bank extra-judicially
loans without the need of executing another foreclosed the mortgage. Was the
set of security documents. (Aquino, 2021, citing foreclosure sale valid?
Tecklo v. Rural Bank of the Philippines, G.R. No.
171201) A: YES. It has long been settled that those
mortgages given to secure future
A mortgage with a dragnet clause is an “offer” advancements are valid and legal contracts;
by the mortgagor to the bank to provide the that the amounts named as consideration in
security of the mortgage for advances of and said contract do not limit the amount for which
when they were made. 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 given to secure
CIVIL LAW
advancement is a continuing security and is 5. Grant of first refusal;

not discharged by repayment of the amount
named in the mortgage, until the full amount of Status: Valid.
the advancements is paid. (Mojica v. CA, G.R. No.
94247, 11 Sept. 1991) The consideration for the loan-mortgage may
be said to include the consideration for the right
3. Forbidding of alienation or assignment of of first refusal. The mortgagor has the right to
mortgage credit; sell the mortgaged property without securing
the consent of the mortgagee, but has the
Status: Void. (Art. 2130, NCC) obligation under a right of refusal provision to
notify the mortgagee of his intention to sell the
Reason: Such prohibition would be contrary to property, and give him the priority over other
the public good inasmuch as the transmission of buyers.
property should not be unduly impeded.
NOTE: A sale made in violation of the
NOTE: In case of alienation, the transferee is mortgagee’s contractual right of first refusal is
bound to respect the encumbrance because rescissible.
being a real right, the property remains to the
fulfillment of the obligation for whose guaranty The buyer is presumed to have been notified
it was constituted. thereof by the registration of the mortgage deed
containing such stipulation, which equates to a
Assignment of credit, right or action shall be in a notice to the whole world.
public instrument in order to affect third
persons 6. Acceleration Clause; and
An assignment of a credit, right or action shall Status: Valid. (LDB v. Conquilla, G.R. No. 163338,
produce no effect as against third persons, unless 21 Sept. 2005)
it appears in a public instrument, or the
instrument is recorded in the Registry of A stipulation stating that on the occasion of the
Property in case the assignment involves real mortgagor’s default, the whole sum remaining
property. (Art. 1625, NCC) unpaid automatically becomes due and payable.
4. Stipulation requiring mortgagee’s consent 7. Stipulation of Upset Price or TIPO

before alienation;
Status: Void. (Property should be sold to the
Status: Void for violating Art. 2130 of the NCC. highest bidder)
While such provision does not absolutely Upset Price or TIPO is the minimum price at
prohibit the mortgagor from selling his which the property shall be sold at a public
mortgaged property, what it does not outrightly auction.
prohibit, it nevertheless achieves. The
mortgagee can simply withhold its consent and A stipulation in the mortgage of real property
thereby, preventing the mortgagor from selling providing an Upset Price or TIPO, to become
the property. (De Leon, 2013) operative in the event of a foreclosure sale at
public auction, is null and void for property
NOTE: Such stipulation nonetheless must be sold to the highest bidder.
contravenes public policy, being an undue
impediment or interference on the transmission
of property.
2023 GOLDEN NOTES
Possession by third person of the Property Judicial foreclosure vs. Extrajudicial foreclosure
Mortgaged (1999 BAR)
The creditor may claim from the third person in JUDICIAL EXTRAJUDICIAL
possession of the mortgaged property, the payment FORECLOSURE FORECLOSURE
of the part of the credit secured by the property Court Intervention
which the third party possesses, in terms and with With court Without court
the formalities which the law establishes. (Art. 2129, intervention. intervention.
NCC) Right of Appeal
Decisions are not
Foreclosure Decisions are appealable;
appealable. immediately
Foreclosure is a remedy available to the mortgagee executory.
by which he subjects the mortgaged property to the Cutting Off Rights
satisfaction of the obligation. It is a proceeding to Order of the court cuts Foreclosure does not
terminate the rights of the mortgagor of the off all rights of the cut off the rights of all
property. parties impleaded. parties involved.
Right of Redemption
Causes of Action of Mortgage-Creditor GR: No right of
redemption.
Mortgage-creditor has a single cause of action There is a right of
against the mortgage-debtor, which is to recover the XPN: If mortgagee is a redemption.
debt, but he has the option to either: bank, quasi-bank, or
trust entity.
1. File a personal action for collection of sum of Equity of Redemption
money; or
There is equity of No equity of
2. Institute a real action to foreclose on the
redemption. redemption.
mortgaged property.
Nature of Judicial Foreclosure
NOTE: If he elects to foreclose, he waives the action
for the collection of the unpaid debt, except only for
A judicial foreclosure is an action quasi in rem. It is
the recovery of whatever deficiency may remain in
based on a personal claim against a specific
the outstanding obligation of the debtor-mortgagor
property of the defendant. (Ocampo v. Domalanta,
after deducting the old price in the public auction
G.R. No. L-21011, 30 Aug. 1967)
sale. The remedies are alternative, not cumulative,
(Bank of America, NT and SA v. American Realty Corp.
Steps in Judicial Foreclosure
G.R. No. 133876, 29 Dec. 1999) each remedy is
complete by itself.
1. Judicial action brought to the proper court
having jurisdiction;
Kinds of Foreclosure
2. Order by the court for mortgagor to pay
1. Judicial – Governed by Rule 68, Rules of Court;
mortgage debt if the court finds the complaint
and
to be well-founded, within a period of not less
2. Extrajudicial – The mortgagee is given a SPA to
than 90 days nor more than 120 days from the
sell the mortgaged property. (Act 3135)
entry of judgment;
3. Sale to the highest bidder at a public auction if

the mortgagor fails to pay at the time directed
CIVIL LAW
in the court order; Action for Foreclosure of Mortgage Survive the

Death of Mortgagor
4. Confirmation of the sale, which operates to
divest the rights of all parties to the action and An action for foreclosure of mortgage survives the
vest their rights to the purchaser; death of mortgagor because the claim is not a pure
money claim but an action to enforce a mortgage
Requirements: lien. Being so, the judgment rendered therein may
be enforced by a writ of execution. The action may
a. Motion for confirmation is filed; and be prosecuted by the interested person against the
b. Notice of hearing of motion. executor or administrator independently of the
testate or intestate proceedings of the settlement of
5. Execution of judgment in the manner provided the mortgagor’s estate “for the reason that such
by law on mortgages, the parties not being claims cannot in any just sense be considered claims
authorized to change the procedure prescribed; against the estate, but the right to subject specific
(Piano v. Cayanong, G.R. No. L-18603, 28 Feb. property to the claim arises from the contract of the
1963) debtor whereby he has during life set aside certain
property for its payment, and such property does
NOTE: The proper remedy to seek reversal of a not, except in so far as its value may exceed the debt,
judgment in an action for foreclosure is an belong to the estate.” (Matute v. Canlas, G.R. No. L-
appeal from the judgment itself or from the 12709, 28 Feb. 1962)
order confirming the sale of the foreclosed real
estate. (Sps. Agbada v. Inter-Urban Developers, Remedies of the Mortgagee in case of Death of
Inc., G.R. No. 144029, 19 Sept. 2002) the Debtor (Wa-Fo-R)
6. Application of the proceeds of the sale; and 1. To Waive the mortgage and claim the entire
debt from the estate of the mortgagor as an
a. Costs of sale; ordinary claim;
b. Amount due the mortgagee; 2. To Foreclose the mortgage judicially and prove
any deficiency as an ordinary claim; or
c. Claims of junior encumbrancers or persons
holding subsequent mortgages in the order 3. To Rely on the mortgage exclusively,
of priority; and foreclosing the same at any time before it is
barred by prescription, without right to file
d. The balance, if any, shall be paid to the claim for any deficiency. (Maglaque v. Planters
mortgagor, or his duly authorized agent, or Development Bank, G.R. No. 109472, 18 May
the person entitled to it. 1999)
NOTE: If the mortgagee retains the balance, Necessity for confirmation of court in
the mortgagor has a cause of action to foreclosure sale (Judicial Foreclosure)
recover such surplus.
A foreclosure sale (in judicial foreclosure) is not
7. Execution of sheriff’s certificate. complete until it is confirmed and before such
confirmation, the court retains control of the
NOTE: In the absence of a certificate of sale, no proceedings by exercising sound discretion with
title is passed by the foreclosure proceedings to regard to it either granting or withholding
the vendee. confirmation as the rights and interests of the
parties and the ends of justice may require. (Rural
Bank of Oroquieta v. CA, G.R. No. L-53466, 10 Nov.
2023 GOLDEN NOTES
1980) Steps in Extrajudicial Foreclosure of Real Estate

Mortgage
There can be no redemption of the property after
confirmation. Such confirmation retroacts to the 1. Filing of an application before the Executive
date of the auction sale. After the confirmation, the Judge through the Clerk of Court;
previous owners lose any right they may have had
over the property, which rights in turn vested on the In extrajudicial foreclosure of real mortgages in
Purchaser of the property. (Lonzame v. Amores, G.R. different locations covering a single
No. L-53620, 31 Jan. 1985) indebtedness, only one filing fee corresponding
to such debt shall be collected.
Right to Recover Deficiency
2. Clerk of court will examine whether the
GR: Mortgagee has the right to recover deficiency by following requirements of the law have been
way of mere motion. complied with:
XPN: When the mortgage was executed by a third a. Posting of notice in not less than 20 days in
person to secure the obligation of a debtor, such at least three public places of the
third person not having assumed personal liability municipality or city where the property is
for the payment of the debt, the extent of recovery situated. Notices are given to secure
in the judgment foreclosure shall be limited to the bidders and to prevent a sacrifice of the
purchase price at the foreclosure sale. The remedy property. (Sps. Suico v. PNB, G.R. No.
of the mortgagee in such case is to proceed against 170215, 28 Aug. 2007)
the debtor in an ordinary action for sum of money
to recover the balance of debt due. (Rabuya, 2017) b. Publication (if property is worth more than
P400.00) once a week for at least three
Extrajudicial Foreclosure consecutive weeks in a newspaper of
general circulation in the city or
An extrajudicial foreclosure may only be effected if municipality. The notice shall be published
in the mortgage contract covering a real estate, a in a newspaper of general circulation
clause is incorporated therein giving the mortgagee pursuant to Sec. 1, P.D. 1079.
the power, upon default of the debtor, to foreclose
the mortgage by an extrajudicial sale of the 3. The application shall be raffled among different
mortgage property. (Sec. 1, Act 3135, as amended by sheriffs;
Act 4148)
4. An auction sale may be had even with just one
Authority to Sell participating bidder. The name/s of the
bidder/s shall be reported by the Sheriff or the
The authority to sell may be done in a separate Notary Public who conducted the sale to the
document but annexed to the contract of mortgage. Clerk of Court before the issuance of the
The authority is not extinguished by the death of the certificate of sale (as amended by the 30 Jan.
mortgagor or mortgagee as it is an essential and 2001 Resolution A.M. No. 99-10-05-0(5); Sps.
inseparable part of a bilateral agreement. (Perez v. Certeza v. Phil. Savings Bank, G.R. No. 190078, 05
PNB, G.R. No. L-21813, 30 July 1966) Mar. 2010)
The indivisibility of a REM is not violated by

conducting two separate proceedings on
mortgaged properties located in different cities
or municipalities as long as each parcel of land
CIVIL LAW
is answerable for the entire debt. (Sps. Yu v. National Bank and a tax lien for unpaid taxes
PCIB, G.R. No. 147902, 17 Mar. 2006) incurred by Marinduque Mining and Industrial
Corporation. DBP delivered to Clarges the
No sale can be legally made outside the province owner's duplicate copy of TCT No. 151178 with
in which the property sold is situated, such sale the mortgage and tax liens still annotated on it.
shall be made in said place or in the municipal Clarges demanded a clean title from the DBP, but
building of the municipality in which the the bank failed to deliver a clean title. Thus,
property or part thereof is situated. (Sec. 2, Act Clarges Realty Corporation filed before the RTC
3135) of Makati City a Complaint for Specific
Performance and Damages.
5. The clerk of court shall issue a certificate of
payment indicating the amount of Clarges had already rested its case when the
indebtedness, the filing fees collected, the DBP moved for leave of court to file a third-party
mortgages sought to be foreclosed, the complaint. The DBP sought to implead the Asset
description of the real estates and their Privatization Trust as a third-party defendant
respective locations; and maintained that the Asset Privatization
Trust had assumed the “direct and personal”
6. The certificate of sale must be approved by the obligation to pay for Marinduque Mining and
Executive Judge; and Industrial Corporation's tax liability and to have
the partially reduced tax lien cancelled. Clarges
7. After the redemption has expired, the clerk of opposed the Motion for Leave. Consequently, the
court shall archive the records. (A.M. No. 99-10- trial court denied the Motion for Leave. Should
05-0, 15 Jan. 2000, further amended on 07 Aug. the Motion for Leave to File Third-Party
2001) Complaint be denied?
NOTE: The law covers only REMs. It is intended A: YES. A lien, until discharged, follows the
merely to regulate the extrajudicial sale of the property. Hence, when petitioner acquired the
property mortgaged when the mortgagee is property, the bank also acquired the liabilities
given a special power or express authority to do attached to it, among them being the tax liability to
so in the deed itself or in a document annexed the BIR. That the unpaid taxes were incurred by the
thereto. (Luna v. Encarnacion, G.R. No. L-4637, 30 defunct Marinduque Industrial and Mining
June 1952) Corporation is immaterial. In acquiring the
property, petitioner assumed the obligation to pay
Q: The Development Bank of the Philippines for the unpaid taxes. With petitioner capable of
(DBP) and Clarges Realty Corporation (Clarges) having the tax lien cancelled, it cannot insist on the
executed a Deed of Absolute Sale for the admission of its third-party complaint against the
property. The parties agreed that all expenses to Asset Privatization Trust. The admission of a third-
be incurred in connection with the transfer of party complaint requires leave of court; the
title to Clarges would be borne by the DBP. discretion is with the trial court. If leave is denied,
Moreover, the DBP bound itself under Clause 6 the proper remedy is to file a complaint to be
of the Deed of Absolute Sale to deliver a title to docketed as a separate case. There was no grave
the property “free from any and all liens and abuse of discretion in denying leave to admit the
encumbrances on or before 15 Dec. 1987.” The third-party complaint against the Asset
DBP succeeded in having the property Privatization Trust. As the CA observed, the trial
registered under its name. TCT No. S-16279 was court would have wasted time and effort had it
cancelled and, in its place, TCT No. 151178 was admitted the third-party complaint. Respondent,
issued. However, TCT No. 151178 contained the original plaintiff, had already rested its case
annotations from the former TCT No. S-16279, when the Motion for Leave was filed. The original
specifically, the mortgage lien of the Philippine case would have dragged on with the addition of a
2023 GOLDEN NOTES
new party at a late stage of the trial. (Development 4. It must be Available to the public in general and
Bank of the Philippines v. Clarges Realty Corp., G.R. not just to a select few chosen by the publisher,
No. 170060, 17 Aug. 2016) otherwise, the precise objective of publication
of notice of sale will not be realized; and
Notes on Posting and Publication under Act 3135
5. It must Not be devoted to the interests or
1. Nature; and published for the entertainment of a particular
profession, trade, calling, race or religion.
They are imbued with public considerations (Metropolitan Bank and Trust Company, Inc. v.
and any waiver thereon would be inconsistent Eugenio Peñafiel, G.R. No. 173976, 27 Feb. 2009)
with the intent and letter of the law.
Q: MBTC granted a loan to Sps. Peñafiel who
Failure to comply with the statutory mortgaged their two parcels of land in
requirements as to publication of notice of Mandaluyong. The spouses defaulted in the
auction sale constitutes a jurisdictional defect payment. MBTC instituted an extrajudicial
which invalidates the sale. foreclosure proceeding under Act 3135. The
Notice of Sale was published in Maharlika
NOTE: The failure to post notice is not per se a Pilipinas, which has no business permit in
ground for invalidating a foreclosure sale Mandaluyong and its list of subscribers shows
provided that the notice thereof is duly that there were no subscribers from
published in a newspaper of general circulation. Mandaluyong. Did MBTC comply with the
(DBP v. Aguirre, G.R. No. 144877, 07 Sept. 2007) publication requirement under Sec. 3, Act 3135?
2. No requirement of personal notice. A: NO. Maharlika Pilipinas is not a newspaper of

general circulation in Mandaluyong where the
Sec 3 of Act 3135 does not require personal property is located. To be a newspaper of general
notice or any particular notice on the mortgagor circulation, it is enough that it is published for the
much less on his successors-in-interest where dissemination of local news and general
there is no contractual stipulation therefor. information, that it has a bona fide subscription list
of paying subscribers, and that it is published at
NOTE: Unless the parties stipulate, personal regular intervals. The newspaper must be available
notice to the mortgagor in extrajudicial to the public in general, and not just to a select few
proceedings is not necessary because Sec. 3 of chosen by the publisher. Otherwise, the precise
Act 3135 only requires the posting of notice of objective of publishing the notice of sale in the
the sale in three public places and the newspaper will not be realized. (Metropolitan Bank
publication of that notice in a newspaper of and Trust Company, Inc. v. Eugenio Peñafiel, G.R. No.
general circulation. (Ramirez v. The Manila 173976, 27 Feb. 2009)
Banking Corp., G.R. No. 198800, 11 Dec. 2013)
1. No certificate of posting is required
Requisites for a newspaper to be deemed of
General Circulation (L-A-N-D-I) GR: A certificate of posting is not required,
much less considered indispensable for the
1. It must be published for the Dissemination of validity of a foreclosure sale under Act 3135.
local news and general information;
XPN: Such certificate is significant only when it
2. It must have a bona fide subscription List of becomes necessary to prove compliance with
paying subscribers; the required notice of posting.
3. It must be published at regular Intervals;
CIVIL LAW
The fact alone that there is no certificate of Extrajudicial Foreclosure

posting attached to the sheriffs sheriff’s
records is not sufficient to prove lack of The plain result of adopting extrajudicial
posting. (Rabuya, 2017) foreclosure under Act No. 3135 is that the creditor
waives his right to recover any deficiency. (Heirs of
2. Burden of proving non-compliance with the Sps. Flaviano v. Manila Banking Corporation, G.R. No.
publication and posting requirements 171206, 23 Sept. 2013)
Foreclosure proceedings have in their favor the While Act 3135 governing extrajudicial foreclosures
presumption of regularity. (Union Bank of the of mortgage does not give a mortgagee the right to
Philippines v. CA, G.R. No. 164910, 30 Sept. 2005) recover deficiency after the public auction sale,
neither does it expressly nor impliedly prohibit
Enjoining the implementation of Writ of such recovery.
Possession
NOTE: In both judicial and extrajudicial foreclosure,
As a rule, any question regarding the validity of the when a third person is the mortgagor, he is not liable
mortgage or its foreclosure cannot be a legal ground for any deficiency in the absence of a contrary
for refusing the issuance of a writ of possession. stipulation.
Regardless of whether or not there is a pending suit
for annulment of the mortgage or the foreclosure Action for Recovery of Deficiency
itself, the purchaser is entitled to a writ of
possession, without prejudice to the outcome of the A mortgagee may recover any deficiency in the
case. Hence, an injunction to prohibit the issuance mortgage account, which is not realized in a
of writ of possession is entirely out of place. foreclosure sale. An independent civil action may
Prohibition does not lie to enjoin the for the recovery be filed even during the period of
implementation of a writ of possession. Once the redemption. (Tarnate v. CA, G.R. No. 100635, 13 Feb.
writ of possession has been issued, the trial court 1995)
has no alternative but to enforce the writ without
delay. (Sps. Ong v. CA, G.R. No. 121494, 08 June 2000) If the deficiency is embodied in a judgment, it is
referred to as deficiency judgment.
Effect of Inadequacy of Price in Foreclosure Sale
NOTE: The action prescribes 10 years from the time
GR: When there is a right to redeem, inadequacy of the right of action accrues. (Art. 1142(2), NCC)
price is immaterial because the judgment debtor
may reacquire the property easier at a low price or Redemption of mortgage
sell his right to redeem. (PNB v. CA, G.R. No. 121739,
14 June 1999) Redemption is a transaction by which the
mortgagor reacquires or buys back the property
XPN: When the price is so inadequate as to shock which may have passed under the mortgage or
the conscience of the court taking into divests the property of the lien which the mortgage
consideration the peculiarly circumstances may have created. (Pineda, 2006)
attendant thereto. (UCPB v. CA, G.R. No. 155912, 17
Aug. 2007) Persons entitled to exercise Right of
Redemption
Judicial foreclosure
1. Mortgagor or one in privity of title with the
The mortgagee is specifically given the right to claim mortgagor; and
for the deficiency. (Sec. 6, Rule 68, ROC) 2. Successors-in-interest under Sec. 29, Rule 39,
ROC.
2023 GOLDEN NOTES
Kinds of Redemption 2. Right of redemption – Right of the mortgagor

to redeem the mortgaged property within one
1. Equity of redemption – Right of mortgagor to year from the date of registration of the
redeem the mortgaged property after his certificate of sale. It applies in case of
default in the performance of the conditions of extrajudicial foreclosure.
the mortgage but before the sale of the
mortgaged property or confirmation of the sale Where applicable: Extrajudicial foreclosure
by the court. The mortgagor pays the secured
debt within the period specified. To extinguish Period to exercise: Within 1 year from the date
the mortgage and retain ownership of the of registration of the certificate of sale. (Sec. 6,
property, the mortgagor must pay the secured ROC, Act 3135; Sec. 28, Rule 39, ROC)
debt within the 90-day period after judgement
becomes final, or even after foreclosure sale, The right of redemption, as long as within the
but prior to its confirmation. period prescribed, may be exercised regardless
of whether or not the mortgagee has
Where applicable: Judicial foreclosure of real subsequently conveyed the property to some
estate mortgage other party. (Sta. Ignacia Rural Bank v. CA, G.R.
No. 97872, 01 Mar. 1994)
XPN: There is no right of redemption from a
judicial foreclosure sale after the confirmation NOTE: Notwithstanding Act 3135, juridical
of the sale, except those granted by banks and persons whose property is being sold pursuant
financial institution as provided by the General to an extrajudicial foreclosure, shall have the
Banking Act. (GSIS v. CFI of Iloilo, G.R. No. 45322, right to redeem the property in accordance with
05 July 1989) Sec. 47 of the General Banking Act until, but not
after, the registration of the certificate of sale
If the mortgagee is a bank, the mortgagor may with the applicable Register of Deeds which in
exercise a right of redemption and this rule no case shall be more than 3 months after
applies even if the foreclosure is judicial in foreclosure, from the date of the foreclosure
accordance with Rule 68 of the ROC. sale, but not after the registration of the
certificate of foreclosure sale, whichever is
Period to exercise: Within 90-120 days from earlier. Owners of property that has been sold
the date of the service of the order of in a foreclosure sale prior to the effectivity of
foreclosure or even thereafter but before the this General Banking Act shall retain their
order of confirmation of the sale. redemption rights until their expiration. (Sec.
47, R.A. No. 8791)
NOTE: The subsequent sale by the purchaser to
a third person of the mortgaged property does Q: X and Y, judgment creditors of A, obtained the
not prevent the court from granting the transfer of the title of the mortgaged property in
mortgagor a period within which to redeem the their names. Earlier, A executed a mortgage over
property by paying the judgment debt and the the same property in favor of FGU Insurance.
expenses of the sale and costs. The latter mortgage was registered. When A
defaulted, FGU foreclosed the property. A
Notice and hearing of a motion for confirmation certificate of sale was thereafter issued in FGU’s
of sale are essential to the validity of the order favor, which was confirmed by the RTC.
of confirmation. An order of confirmation However, before the new TCT could be issued, X
which is void due to lack of notice and hearing, and Y filed their respective motion for
may be set aside anytime, and the mortgagor intervention and to set aside the judgment
may still redeem the mortgaged property. alleging that they are the new owners of the
property and the failure of FGU to implead X and
CIVIL LAW
Y in the action for foreclosure deprived the Summary of Redemption Period

latter of due process. Is the contention of X and
Y correct? 1. Extrajudicial (Act 3135)
A: NO. Subordinate lien holders acquire only a lien a. Natural Person - one (1) year from
upon the equity of redemption vested in the registration of the certificate of sale with
mortgagor, and their rights are strictly subordinate the Registry of Deeds;
to the superior lien of the mortgagee. Such equity of
redemption does not constitute a bar to the NOTE: The statutory period of redemption
registration of the property in the name of the is only directory and can be extended by
mortgagee. Registration may be granted in the agreement of the parties provided:
name of the mortgagee but subject to the
subordinate lien holders’ equity of redemption, i. The agreement to extend is voluntary;
which should be exercised within ninety (90) days and
from the date the decision becomes final. This ii. The debtor commits to pay the
registration is merely a necessary consequence of redemption price on a fixed date.
the execution of the final deed of sale in the (Gojudo v. Traders Royal Bank, G.R. No.
foreclosure proceedings. (Looyuko v. CA, G.R. No. 151098, 21 Mar. 2006)
102696, 12 July 2001)
b. Juridical Person – same rule as natural
Requisites for Valid Right of Redemption person.
1. Must be made within 12 months from the time c. Juridical Person (mortgagor) and Bank
of the registration of the sale in the Office of the (mortgagee) – three (3) months after
Registry of Property; foreclosure or before registration of
certificate of foreclosure whichever is
2. Payment of the purchase price of the property earlier. (Sec. 47, R.A. No. 8791)
plus 1% interest per month together with the
taxes thereon, if any, paid by the purchaser with NOTE: By an amendment by the General
the same rate of interest computed from the Banking Law of 2000, juridical mortgagors like
date of registration of the sale; partnerships and corporations are barred
from the right of redemption of mortgaged
3. Written notice of the redemption must be property sold pursuant to an extrajudicial
served on the officer who made the sale and a foreclosure, after the registration of the
duplicate filed with the proper Register of certificate of foreclosure with the applicable
Deeds; and (Sps. Yap v. Sps. Dy, G.R. No. 171868, Register of Deeds.
27 June 2011) and
For purposes of reckoning the one-year
4. Tender of payment within the prescribed period redemption period in case of individual
to make the redemption for future enforcement. mortgagors, or the three-month reckoning
(Sec. 26, Act 3135; Sec. 8, Rule 39, ROC) period for juridical persons or mortgagors the
same shall be reckoned from the date of
NOTE: The filing of a court action to enforce confirmation of the auction sale which is the
redemption, being equivalent to a formal offer to date when the certificate of title is issued. (BIR
redeem, would have the effect of “freezing” the RMC No. 15-2008, 15 Aug. 2008)
expiration of the one-year period. (Heirs of
Quisumbing v. PNB, G.R. No. 178242, 20 Jan. 2009) 2. Judicial – within the period of 90-120 days
from the date of the service of the order of
foreclosure or even thereafter but before the
2023 GOLDEN NOTES
order of the confirmation of the sale. (Sec. 2&3, 2. When mortgagee is a bank
Rule 28, ROC)
a. Amount fixed by the court or amount due
NOTE: Allowing redemption after the lapse of the under the mortgage deed;
statutory period, when the buyer at the foreclosure b. Interest; and
sale does not object but even consents to the c. Cost and expenses. (General Banking
redemption, will uphold the policy of the law which Law).
is to aid rather than defeat the right of redemption.
(Ramirez v. CA, G.R. No. 98147, 05 Mar. 1993) Redemption price in this case is reduced by the
income received from the property.
Payment of Redemption
Rentals received by the Purchaser
It shall be made to the purchaser or redemptioner
or for him to the officer who made the sale. (Sec. 29, The purchaser or redemptioner shall not be entitled
Rule 39, ROC) to receive the rents, earnings, and income of the
property sold on execution or the value of the use
The medium of payment may be in cash or in check. and occupation thereof while the property is in the
possession of the tenant. It shall belong to the
NOTE: In accepting a check, he undoubtedly places judgment obligor until the expiration of the period
himself in a position where he can be held liable to of redemption. (Pineda, 2006; Sec. 32, Rule 39, ROC)
the purchaser at a public auction if any damage has
been suffered by the latter as a result of the medium Rights of persons with Subordinate Interest
by which payment was made. (Co v. PNB, G.R. No. L-
51767, 29 June 1982) 1. Mortgagor’s equity of redemption before
foreclosure – a second mortgagee acquires only
Amount of Redemption Price the equity of redemption vested in the
mortgagor and his rights are strictly
1. When mortgagee is not a bank (Act. 3135 in subordinate to the superior lien of the first
relation to Sec. 28, Rule 39, ROC) mortgagee; (Sun Life Assurance Co. of Canada v.
Diez, G.R. No. L-29027, 25 Oct. 1928)
a. Purchase price of the property;
2. Mortgagor’s right of redemption after
b. 1% interest per month on the purchase foreclosure – his remedy is limited to the right
price from the date of registration of the to redeem by paying off the debt secured by the
certificate up to the time of redemption; first mortgage; (Tizon v. Valdez, G.R. No. L-
24797, 16 Mar. 1926)
c. Necessary expenses incurred by the
purchase for the improvements made by 3. The second mortgagee is entitled, under the
him to preserve the property during the mortgage constituted in his favor to the
period of redemption; and payment of his credit the excess of the proceeds
of the auction sale, after covering the
d. Taxes paid and amount of purchaser’s mortgagor’s obligations to the first mortgagee;
prior lien, if any, with the same rate of
interest computed from the date of 4. To be made defendant in an action for
registration of sale, up to the time of foreclosure of the mortgage; and
redemption.
NOTE: The effect of the failure of the
mortgagee to implead a subordinate lien-
holder or subsequent purchase or both is to
CIVIL LAW
render the foreclosure ineffective against NOTE: After consolidation of title in the purchaser’s
them. name for failure of the mortgagor to redeem the
property, the purchaser’s right to possession ripens
5. To question the legality of the foreclosure into absolute right of a confirmed owner.
proceedings or the effect of the alleged lack of
notice on them of such foreclosure. (G. Puyat & When Writ of Possession NOT available
Sons v. PNC, G.R. No. L-16843, 30 Apr. 1962)
1. Where mortgaged property under lease
Right to Possession of Third Persons as previously registered in the Registry of
Purchasers Property or despite non-registration, the
mortgagee has prior knowledge of the existence
The purchaser in an extra-judicial foreclosure sale and duration of the lease; (Ibasco v. Caguioa, G.R.
is entitled to the possession of the property and can No. L62619, 19 Aug. 1986);
demand that he be placed in possession of the same
either during (with bond) or after the expiration 2. Where the mortgagor refuses to surrender the
(without bond) of the redemption period therefor. property sold. The remedy is to file an ordinary
(Sps. Marquez v Sps. Alindog, G.R. No. 184045, 22 Jan. action for the recovery of possession in order
2014) that the mortgagor may be given opportunity to
be heard; and
A writ of possession is an order whereby a sheriff is
commanded to place in possession of real or 3. When third party is in actual possession
personal property, the person entitled thereto such adverse to the judgment debtor. (Sec. 36, Rule
as when the property is extrajudicially foreclosed. 39, ROC; Sec. 6, Act 3135)
NOTE: The right of the applicant or subsequent Period of Redemption is NOT a Prescriptive
purchaser for the issuance of a writ of possession Period
never prescribes. (Ching v. Family Savings Bank, G.R.
No. 167835, 15 Nov. 2010) The period of redemption is not a prescriptive
period, but a condition precedent provided by law
1. Before expiration of redemption period – to restrict the right of the person exercising
possession can be availed of as long as an ex redemption.
parte motion under oath is filed and a bond in
accordance with Sec. 7 of Act 3135 is posted. If a person exercising the right of redemption has
(Philippine Bank of Communications v. Yeung, offered to redeem the property within the period
G.R. No. 179691, 04 Dec. 2013) fixed, he is considered to have complied with the
condition precedent prescribed by law and may
2. After lapse of redemption period – purchaser thereafter bring an action to enforce redemption.
is not obliged to bring a separate suit for
possession. He must invoke the aid of the courts On the other hand, if the period is allowed to lapse
and ask a writ of possession. (Javelosa v. CA, G.R. before the right of redemption is exercised, then the
No. 124292, 10 Dec. 1996) action to enforce redemption will not prosper, even
if the action is brought within the ordinary
No bond is required of the purchaser after the prescriptive period.
redemption period if the property is not redeemed.
Suspension of the implementation of the writ of Effect of Failure to Redeem
possession is not allowed after the redemption
period. Act 3135 provides that if the mortgagor or
successors-in-interest fail to redeem within the
redemption period, the title over the property
2023 GOLDEN NOTES
consolidates in the purchaser. Q: DBP guaranteed LCD’s loan. When LCD

defaulted, DBP paid it and sought
The consolidation confirms the purchaser as the reimbursement. LCD failed to reimburse DBP,
owner entitled to the possession of the property. hence DBP extrajudicially foreclosed the REM,
The mortgagor, by failing to redeem loses all interest where it was the highest bidder. The Sheriff’s
in the property. (UCPB v. Lumbo, GR. No. 162757, 11 certificate of sale was annotated in the
Dec. 2013) certificate of titles on 30 Apr. 1976. La Campana
failed to redeem the properties. The court,
Q: D obtained a loan from C secured by a REM among others, ordered LCD to pay such sums of
over a parcel of land. When D defaulted, C money unlawfully collected or received by way
extrajudicially foreclosed the property. C was of rentals and/or fruits from the subject
declared the highest bidder in the auction. On 29 properties to DBP. When should the period for
Oct. 1993, C caused the registration of the the remittance of collected or received rentals
certificate of sale. On 09 Nov. 1994 D filed a or fruits from the properties, of LCD to DBP
complaint for annulment of the extrajudicial start?
foreclosure and auction sale. Can D redeem the
property beyond the one-year redemption A: In foreclosure proceedings, the buyer becomes
period? the absolute owner of the property purchased if it is
not redeemed during the prescribed period of
A: NO. D lost any right or interest over the subject redemption, which is one year from the date of
property primarily because of his failure to redeem registration of the sale. The Sheriff’s certificate of
the same in the manner and within the period sale was annotated in the certificate of titles on 30
prescribed by law. His belated attempt to question Apr. 1976. DBP became the absolute owner of the
the legality and validity of the foreclosure properties on 01 May 1977.
proceedings and public auction must accordingly
fail. (Sps. Landrito v. CA, G.R. No. 133079, 09 Aug. Thus, the period to be considered in determining
2005) the amount of collection should start from 01 May
1997 up to the time when the possession of the
A mortgagor, whose property has been properties is actually and completely surrendered
extrajudicially foreclosed and sold, can validly to DBP. (La Campana Dev. Corp. v. DBP, G.R. No.
execute a mortgage contract over the same property 146157, 13 Feb. 2009)
in favor of a third party during the period of
redemption. The purchaser at the foreclosure sale Options in case of Death of Debtor
merely acquires an inchoate right to the property
which could ripen into ownership only upon the A secured creditor holding a real estate mortgage
lapse of the redemption period without his credit has three distinct, independent, and mutually
having been discharged, it is illogical to hold that exclusive remedies that can be alternatively
during that same period of twelve months the pursued in case the mortgagor dies:
mortgagor was "divested" of his ownership, since
the absurd result would be that the land will 1. To waive the mortgage and claim the entire
consequently be without an owner although it debt from the estate of the mortgagor as an
remains registered in the name of the mortgagor. ordinary claim;
Such mortgage does not involve a transfer, cession
or conveyance of the property but only constitutes 2. To foreclose the mortgage judicially and prove
a lien thereon. (Medida v. CA, G.R. No. 98334, 08 May any deficiency as an ordinary claim; and
1992)
3. To rely on the mortgage exclusively, foreclosing
the same at any time before it is barred by
prescription without a right to file a claim for
CIVIL LAW
any bank deficiency. (Perez v. PNB, G.R. No. L- 5. The creditor has the right to receive the fruits of
21813, 30 July 1996) the immovable;
6. It can guarantee all kinds of valid obligations;
Petition for Annulment of Foreclosure (Arts. 2091 & 2139, NCC) and
Proceedings 7. Indivisible in nature. (Art. 2090, NCC)
This petition contests the presumed right of NOTE: It is not essential that the loan should earn
ownership of the buyer in a foreclosure sale and interest in order that it can be guaranteed with a
puts in issue such presumed right of ownership, contract of antichresis. Antichresis is susceptible of
while an ex parte petition for issuance of a writ of guaranteeing all kinds of obligations, pure or
possession is a non-litigious proceeding. conditional. (Javier v. Valliser, (CA) N. 2648-R, 29 Apr.
1950; Sta. Rosa v. Noble, 35 O.G. 27241)
Filing of a petition for nullification of foreclosure
proceedings with motion for consolidation is not Stipulation authorizing for appropriation of
allowed as it will render nugatory the presumed property upon non-payment of the debt
right of ownership, as well as the right of possession
of a buyer in a foreclosure sale. A stipulation authorizing the antichretic creditor to
appropriate the property upon the non-payment of
the debt within the period agreed upon is void. (Art.
E. ANTICHRESIS 2088, NCC)
Form of a contract of antichresis and its contents

(1995, 2007 BAR)
Antichresis (1995, 1996, 2007 BAR)
1. Covers only the fruits of real property but not

It is a contract whereby the creditor acquires the
the immovable itself;
right to receive the fruits of an immovable of the
debtor, with the obligation to apply them to the
NOTE: Art. 1306 of the NCC gives the parties the
payment of interest, if owing, and thereafter to the
freedom to stipulate otherwise. The reduction
principal of his credit. (Art. 2132, NCC)
of the amount of the fruits available to the
creditor does not vary the nature of the
Characteristics of Antichresis
contract.
1. Accessory contract;
2. Delivery of the immovable is necessary for the
creditor to receive the fruits and not that the
2. Formal contract – the amount of the principal
contract shall be binding. Amount of principal
and of the interest must both be in writing,
and interest must be specified in writing; (Art.
otherwise the contract of antichresis is void;
2134, NCC) and
(Art. 2134, NCC)
3. Express agreement that debtor will give

NOTE: Delivery of possession of the immovable
possession to the creditor and that the creditor
is not essential to the perfection of the contract
will apply the fruits to the interest and then to
of antichresis so that this contract is classified
the principal. (Art. 2134, NCC)
as consensual contract. Nevertheless, the
creditor takes and retains possession of the
NOTE: The fruits of the immovable which is the
property until payment of debt. (Rabuya, 2017)
object of the antichresis must be appraised at
their actual market value at the time of the
3. It deals only with immovable property;
application. (Art. 2133, NCC) The property
4. It is a real right;
delivered stands as a security for the payment
2023 GOLDEN NOTES
of the obligation of the debtor in antichresis. the production of secondary evidence, which was in
Hence, the debtor cannot demand its return violation of the best evidence rule embodied under
until the debt is totally paid. Sec. 3, in relation to Sec. 5 of Rule 130 of the ROC.
Q: The Sps. Adolfo were the original registered In sum, the Heirs of Bangis failed to establish the
owners of a lot. This property was mortgaged to existence and due execution of the subject deed on
Rehabilitation Finance Corporation (now which their claim of ownership was founded.
Development Bank of the Philippines or DBP), Consequently, the RTC and CA were correct in
and upon default on the payment of the loan affording no probative value to the said document.
obligation, was foreclosed and ownership was (Aniceto Bangis Substituted by His Heirs v. Adolfo, GR
consolidated in its name. Serafin Adolfo, Sr., No. 190875, 13 June 2012)
however, repurchased the same on 01 Dec. 1971,
a year after his wife died in 1970. Sometime in Q: The respondent in this case borrowed money
1975, Adolfo allegedly mortgaged the subject from the petitioner. By way of security, the
property for the sum of P12,500.00 to Aniceto parties verbally agreed that petitioner would
Bangis who immediately took possession of the take physical possession of the property,
land. The said transaction was, however, not cultivate it, then use the earnings from the
reduced into writing. When Adolfo died, his cultivation to pay the loan and realty taxes. It
heirs executed a Deed of Extrajudicial Partition was further agreed that upon full payment of the
covering the subject property. The Heirs of loan, the petitioner would return the property
Adolfo expressed their intention to redeem the to the respondents. The petitioner, however,
mortgaged property from Bangis but the latter sold the property to other people. Thus, the
refused claiming that the transaction between respondents filed before the RTC for annulment
him and Adolfo was one of sale. The RTC and CA of sale and transfers and relied on the
ruled that the contract between the plaintiffs agreement (antichresis) they had with the
and defendants as a mere mortgage or petitioner. Petitioner argues that the antichresis
antichresis and since the defendants have been claim of the Revilla spouses was not reduced
in the possession of the property in 1975 up to into writing, thus, it is void under Art. 2134 of
the present time enjoying all its fruits or income. the NCC. Is the contract of antichresis void in this
Was the transaction one of sale, or a mortgage or case?
antichresis?
A: YES. Antichresis requires that the amount of the
A: NEITHER. For the contract of antichresis to be principal and the interest be in writing for the
valid, the amount of the principal and of the interest contract to be valid. Similar to the prohibition
shall be specified in writing, otherwise the contract against pactum commissorium since creditors
of antichresis shall be void. (Art. 2134, NCC) In this cannot appropriate the things given by way of
case, the heirs of Adolfo were indisputably unable to pledge or mortgage, or dispose of them, an
produce any document in support of their claim that antichretic creditor also cannot appropriate the real
the contract between Adolfo and Bangis was an property in his or her favor upon the non-payment
antichresis. Hence, the CA properly held that no of the debt. Therefore, there should be a written
such relationship existed between the parties. agreement between the parties. (Cotoner-Zacharias
v. Sps. Alfredo, G.R. No. 190901, 12 Nov. 2014)
On the other hand, the Heirs of Bangis presented an
Extra-Judicial Settlement with Absolute Deed of Sale NOTE: When it comes to pledge or agreements
to justify their claimed ownership and possession of whereby a personal property is given as a collateral
the subject land. However, notwithstanding that the to secure an obligation, R.A. No. 11057, also known
subject of inquiry is the very contents of the said as the Personal Property Security Act (PPSA),
document, only its photocopy was presented at the technically repeals the prohibition on pactum
trial without providing sufficient justification for commissorium, viz.:
CIVIL LAW
Sec. 45. Right of Redemption. As to the formality
(b) The right of redemption may be exercised, Must be in writing and

unless: registration is
necessary to bind third
(1) The person entitled to redeem has not, after persons. However, it
the default, waived in writing the right to Must be in writing, as may still be valid even
redeem; the interest and the if the mortgage is not in
principal must be writing, subject to the
(2) The collateral is sold or otherwise disposed specified in writing. remedies available to
of, acquired or collected by the secured the mortgagee to
creditor or until the conclusion of an compel execution of
agreement by the secured creditor for that the written instrument
purpose; and and registration.
(3) The secured creditor has retained the As to the possession

collateral.
The creditor-
The creditor is in
mortgagee is generally
NOTE: Nevertheless, the PPSA did not repeal, possession of the
not in possession of the
amend, or modify the NCC provisions on property.
property.
Antichresis.
As to the taxes
Antichresis vs. Mortgage (1989 BAR) The creditor is obliged
to pay taxes on the The mortgagee is not
ANTICHRESIS MORTGAGE property unless there obliged to pay the taxes
As to the right to fruits is a stipulation to the on the property.
contrary
(Aquino, 2021)
The creditor has the Antichresis vs. Pledge (1989 BAR)

right to receive the Generally, the creditor
fruits, which will be has no right to receive PLEDGE
applied to the interest the fruits. ANTICHRESIS (now superseded
and principal. by the PPSA
As to the property involved
Real property Personal property

As to the property involved
As to perfection
1. Movable - in By delivery (real

chattel mortgage contract)
or
Immovable property By mere consent NOTE: Sec. 12 of the
only (consensual contract) PPSA provides the
2. Immovable – in
real estate means by which a
mortgage security interest may
be perfected.
2023 GOLDEN NOTES
As to the formality Rights of antichretic creditor
The interest and the 1. Right to fruits and income of the thing; (Art.
principal need not be 2132, NCC)
Principal and interest
in writing. However,
must be specified in
the description of the 2. Retain the thing until debt is paid; (Art. 2136,
writing, otherwise
thing pledged must be NCC)
contract is void.
in a public instrument
to affect third persons. NOTE: The property delivered stands as
security for the payment of the obligation of the
As to the fruits debtor in antichresis. Hence, the debtor cannot
demand its return until indebtedness is
If the thing pledged satisfied and the property is redeemed.
earns or produces (Macapinlac v. Gutierrez Repide, G.R. No. 18574,
fruits, income, 20 Sept. 1992)
The creditor has the dividends, or interests,
right to receive the the creditor shall 3. Foreclose the property upon non-payment at
fruits, which will be compensate what he maturity; (Art. 2137, NCC)
applied to the interest receives with those
and the principal. which are owing to NOTE: In this case, the ROC on the rules on
him. (Ortiz v. Kayanan foreclosure of mortgages shall apply.
G.R. No. L-32974, 30
July 1979) 4. Preference to the proceeds of the sale of the
thing; and
(Aquino, 2021) 5. To be reimbursed for his expense for machinery
and other improvements on the land and for the
NOTE: In antichresis, debtor loses control of the sums paid as land taxes.
subject matter of the contract.
Obligations of an Antichretic Creditor
Determination of the Amount to be Paid in
Antichresis The antichretic creditor has the following
obligations: (P-E-R-A)
The actual market value of the fruits at the time of
the application thereof to the interest and the 1. Pay the taxes and charges assessable against
principal shall be the measure of the application of the property like real estate taxes and others;
fruits to the obligation. (Art. 2133, NCC) (Art. 2135, NCC)
Parties to a contract of antichresis NOTE: The creditor has to pay the taxes even if
the fruits be insufficient. If he does not pay
1. Antichretic creditor – one who receives the taxes, he is, by law, required to pay indemnity
fruits on the immovable property of the debtor. for damages to the debtor. (Pando v. Gimenez,
G.R. No. 31816, 15 Feb. 1930) Creditor may
2. Antichretic debtor – one who pays his debt avoid such obligation by compelling the debtor
through the application of the fruits of his to reacquire enjoyment of the property, unless
immovable property. there is a stipulation to the contrary. (Art.
2136(2), NCC)
2. Bear the necessary Expenses for the

preservation and repair of the property;
CIVIL LAW
3. Apply the fruits received for payment of the Remedy of the Creditor In Case of Non-Payment
outstanding interests, if any, and thereafter of
the principal (Art. 2132, NCC); and Creditor does not acquire ownership of the real
estate for non-payment of the debt within the period
4. To Render an account of the fruits to the debtor. agreed upon. Every stipulation to the contrary is void.
(Diaz v. De Mendezona, G.R. No. L-24824, 30 Jan. (Art. 2137, NCC)
1926)
The remedies of the creditor in case of non-payment
Rule on the application of the fruit upon the debt of the debt within the period agreed when the fruits
are not enough to pay for the obligations are as
The application of the fruit upon the debt must be follows:
expressly agreed between the creditor and the
debtor that the former, having been given 1. To abandon the security and file an action for
possession of the properties given as security, is to specific performance; or
apply their fruits to the payment of interest, if owing,
and thereafter to the principal of his credit. (Art. 2. Petition the court for the payment of the debt or
2132, NCC) the sale of the real property. (Aquino, 2021)
Stipulated Interest NOTE: rules on the foreclosure of mortgages

under the ROC shall apply. (Art. 2137, NCC)
The contracting parties may stipulate that the
interest upon the debt shall be compensated with NOTE: Parties may agree on an extrajudicial
the fruits of the property that is the object of the foreclosure in the same manner as they are
antichresis. In fact, the fruits shall be applied to the allowed in contracts of mortgage. (Tavera v. El
interest rather than the principal. (Aquino, 2021; Hogar Filipino, Inc., G.R. No. L-45963, 12 Oct.
Art. 2138, NCC) 1939)
NOTE: If the value of the fruits should exceed the A stipulation authorizing the antichretic creditor to
amount of interest allowed by the laws against appropriate the property upon non-payment of the
usury, the excess shall be applied to the principal. debt within the period agreed upon is void. (Art.
(Art. 2138, NCC) However, usury is presently legally 2088, NCC, which, insofar as pledge and mortgage are
non-existent. (Aquino, 2021) concerned, was technically repealed by the PPSA as
discussed above)
When the Antichretic Debtor Can Demand the
Return of Their Property Availability of acquisitive prescription to the
antichretic creditor
The antichretic debtor can only demand the return
of the property after having fully paid his The creditor in an antichresis and his successors-in-
obligations to the creditor. It is not fair for the interest cannot ordinarily acquire by prescription
debtor to regain the possession of the property the land given to him. Hence, any agreement to the
when his debt has not been fully paid. Until there is contrary is void. (Valencia v. Valencia, G.R. No. 16256,
full payment of the obligation, the property shall 28 Sept. 1921) Possession of the property is not in
stand as security therefor. (Macapinlac v. Gutierrez the concept of an owner but that of a mere holder
Repide, G.R. No. 18574, 20 Sept. 1922) during the existence of the contract. (Ramirez v. CA,
G.R. No. L-38185, 24 Sept. 1986)
2023 GOLDEN NOTES
When Redemption Under Sec. 47 of the General Right of purchaser at the auction sale over the
Banking Act of 2000 is Applicable foreclosed property
In the event of foreclosure, judicial or extrajudicial, The purchaser at the auction sale concerned
of any mortgage on real estate which is security for whether in a judicial or extrajudicial foreclosure
any loan or other credit accommodation granted. shall have the right to enter upon and take
possession of such property immediately after the
NOTE: Any petition in court to enjoin or restrain the date of the confirmation of the auction sale and
conduct of the foreclosure proceedings instituted administer the same in accordance with law.
pursuant to Sec. 47 of the General Banking Act shall
be given due course only upon the filing by Requirements Common to Pledge and Mortgage
petitioner of a bond in the amount fixed by the court
conditioned that he will pay all damages which the Pledge and mortgage can be binding only if the
bank may suffer by the enjoining or the restraint of following requirements are complied with:
the foreclosure proceeding.
1. They must be constituted to secure the
Who may exercise the right of redemption fulfillment of a principal obligation;
The mortgagor or debtor whose real property has 2. The mortgagor or pledgor must be the
been sold for the full or partial payment of his absolute owner of the thing pledged or
obligation. mortgaged; and
Redemption Period 3. The pledgor or mortgagor must have free

disposal of the property. (Aquino, 2021; Art.
It must be made within one (1) year after the sale of 2085, NCC)
the real estate.
NOTE: The above-enumerated requirements apply
NOTE: Notwithstanding Act 3135, juridical persons to the contract of antichresis. (Art. 2139, NCC)
whose property is being sold pursuant to an
extrajudicial foreclosure, shall have the right to Similarities of Pledge and Mortgage
redeem the property in accordance with Sec. 47 of
the General Banking Act until, but not after, the 1. Both are constituted to secure a principal
registration of the certificate of foreclosure sale obligation; they are only accessory contracts;
with the applicable Register of Deeds which in no (Arts. 2086 & 2052, NCC)
case shall be more than three months after
foreclosure, whichever is earlier. Owners of 2. Both pledgor and mortgagor must be the
property that has been sold in a foreclosure sale absolute owner of the property; (Art.
prior to the effectivity of the General Banking Act 2085(2), NCC)
shall retain their redemption rights until their
expiration. 3. Both pledgor and mortgagor must have the
free disposal of their property or be
How redemption is made authorized to do so; and
By paying the amount due under the mortgage deed, 4. The thing proffered as security may be sold at
with interest thereon at rate specified in the public auction, when the principal obligation
mortgage, and all the costs and expenses incurred becomes due, and no payment is made by the
by the bank or institution from the sale and custody debtor. (Pineda, 2006)
of said property less the income derived therefrom.
CIVIL LAW
Who May Pledge or Mortgage Limited Liability of a Third Person as a Pledgor

or Mortgagor
The pledgor and the mortgagor must have the
following characteristics: GR: A third person who pledged and mortgaged his
property is not liable for any deficiency.
1. The pledgor or the mortgagor must be the
owner of the property pledged or mortgaged; XPN: If the third party pledgor or mortgagor
expressly agreed to be bound solidarily with the
2. The pledgor or the mortgagor must have free principal debtor. (Pineda, 2006)
disposal of the property to be pledged or
mortgaged; Property Acquirable in the Future cannot be
mortgaged
3. If the pledgor or mortgagor does not have
free whit disposal of the property, he must be Where the mortgagor mortgaged a property and
legally authorized to pledge or mortgage; and under the contract, he agreed to mortgage
additional properties which he may acquire in the
4. He must not suffer from any incapacity or future, there was no valid mortgage as to the latter
disqualification provided by law. because he was not yet the owner of the properties
at the time of the mortgage. (Dilag v. Heirs of
Indivisibility of Pledge, Mortgage and Ressurrecion, G.R. No. 48941, 06 May 1946)
Antichresis
Mortgage Constituted to Secure Future
GR: Pledge, mortgage, and antichresis are Advances
indivisible. (Art. 2139, NCC)
Mortgage constituted to secure future advances is
NOTE: The mortgage is indivisible even if the valid. It is a continuing security and not discharged
obligation of the debtor is joint and not solidary. by repayment of the amount named in the
Generally, the divisibility of the principal obligation mortgage, until the full amount of the advances is
is not affected by the indivisibility of the pledge or paid. However, a chattel mortgage can only cover
mortgage. (Art. 2089, NCC) obligations existing at the time the mortgage is
constituted and not to obligations subsequent to the
XPNs: execution of the mortgage. (Lim v. Luter, G.R. No.
25235, 09 Dec. 1926)
1. Where each one of several things guarantees
determinate portion of the credit; (Art. 2089, Nature of an Assignment of Rights to Guarantee
NCC) an Obligation of a Debtor
2. Where only a portion of the loan was released;
or An assignment of rights to guarantee an obligation
3. Where there was failure of consideration. of a debtor is in effect a mortgage and not an
absolute conveyance of title which confers
NOTE: The contract of antichresis may secure all ownership on the assignee. (Manila Banking Corp. v.
kinds of obligations, be they pure or subject to a Teodoro, Jr., G.R. No. 53955, 13 Jan 1989)
suspensive or resolutory condition. (Art. 2091, NCC)
Accommodation Mortgage
Future advancements or renewals may also be
secured by Pledge (China Banking Corporation v. CA, An accommodation mortgagor is a third person who
G.R. No. 117604, 26 Mar, 1997) is not a party to a principal obligation and secures
the latter by mortgaging or pledging his own
property. (Art. 2085, NCC)
2023 GOLDEN NOTES
The liability of an accommodation mortgagor there any reason to prevent it; on the contrary, Art.
extends up to the loan value of their mortgaged 2112 of the NCC expressly authorizes this
property and not to the entire loan itself. Should procedure in connection with pledge, even if it may
there be any deficiency, the creditor has recourse on not have been expressly stipulated. (Aquino, 2021;
the principal debtor, not against accommodation El Hogar Filipino v. Paredes, G.R. No. L-19843, 03 Oct.
mortgage. (Rabuya, 2017) 1923)
NOTE: Accommodation is also applicable to pledge This is not against the law, since what the law
since the law provides that “third parties who are prohibits is only the acquisition by the creditor of
not parties to the principal obligation may secure the property mortgaged after non-payment of debt,
the latter by pledging or mortgaging their own and the above stated article simply authorizes him
property.” (Art. 2085, NCC) It is also applicable to to sell it with the aforesaid conditions, which
antichresis since Art. 2139 of the NCC authorization is inherent in the ownership, and is
states that the last paragraph of Art. 2085 shall be not against morals and public order. (Aquino, 2021)
applicable to a contract of antichresis.
Q: ABC loaned to MNO P40,000 for which the
Pactum Commissorium latter pledged 400 shares of stock in XYZ Inc. It
was agreed that if the pledgor failed to pay the
It is a stipulation whereby the thing pledged or loan with 10% yearly interest within four years,
mortgaged or subject of antichresis shall the pledgee is authorized to foreclose on the
automatically become the property of the creditor shares of stock. As required, MNO delivered
in the event of non-payment of the debt within the possession of the shares to ABC with the
term fixed. Such stipulation is null and void. (Art. understanding that the shares would be
2085, NCC) returned to MNO upon the payment of the loan.
However, the loan was not paid on time. A month
Elements of Pactum Commissorium after 4 years, may the shares of stock pledged be
deemed owned by ABC or not? Reason. (2004
1. There is a pledge, mortgage or antichresis of a BAR)
property by way of security; and
A: The shares of stock cannot be deemed owned by
2. There is an express stipulation for the ABC upon default of MNO. They have to be
automatic appropriation by the creditor of the foreclosed. Under Art. 2088 of the NCC, the creditor
property in case of non- payment of the cannot appropriate the things given by way of
principal obligation. (Pineda, 2006) pledge. And even if the parties have stipulated that
ABC becomes the owner of the shares in case MNO
NOTE: What are prohibited are those stipulations defaults on the loan, such stipulation is void for
executed or made simultaneously with the original being a Pactum Commissorium.
contract, and not those subsequently entered into.
Q: X borrowed money from Y and gave a piece of
Pactum Commissorium when allowed land as security by way of mortgage. It was
expressly agreed between the parties in the
While the law prohibits the creditor from mortgage contract that upon nonpayment of the
appropriating to himself the things pledged or debt on time by X, the mortgaged land would
mortgaged, and from disposing them, this does not already belong to Y. If X defaulted in paying,
mean that a stipulation if prohibited whereby the would Y now become the owner of the
creditor is authorized, in case of nonpayment within mortgaged land? Why?
the term fixed by the parties, to sell the thing
mortgaged at public auction, or to adjudicate the
same to himself in case of failure of said sale, nor is
CIVIL LAW
A: NO. Y would not become the owner of the land.

The stipulation is in the nature of Pactum
Commissorium which is prohibited by law. The
property should be sold at public auction and the
proceeds thereof applied to the indebtedness. Any
excess shall be given to the mortgagor.
Q: Suppose in the preceding question, the

agreement between X and Y was that if X failed to
pay the mortgage debt on time, the debt shall be
paid with the land mortgaged by X to Y. Would
your answer be the same as in the preceding
question? Explain. (1999 BAR)
A: NO, the answer would not be the same. This is a

valid stipulation and does not constitute pactum
commissorium. In pactum commissorium, the
acquisition is automatic without need of any further
action. In the instant problem another act is
required to be performed, namely, the conveyance
of the property as payment (Dacion en pago).
2023 GOLDEN NOTES
REAL ESTATE
PLEDGE CHATTEL MORTGAGE ANTICHRESIS
MORTGAGE
An accessory contract
whereby a debtor
delivers to the creditor or
a third person a movable
or personal property, or Chattel mortgage is a
document evidencing contract by virtue of
incorporeal rights, to which, a personal
secure the fulfillment of a property is recorded in
It is a contract whereby
principal obligation with the Chattel Mortgage
the debtor secures to the
the condition that when Register as a security for A contract whereby the
creditor the fulfillment of
the obligation is satisfied, the performance of an creditor acquires the
a principal obligation,
the thing delivered shall obligation. right to receive the fruits
specially subjecting to
be returned to the of an immovable of the
such security, immovable
pledgor with all its fruits NOTE The chattel debtor, with the
property or real rights
and accessions, if any. mortgage under Act No. obligation to apply them
over immovable
1508 is now superseded to the payment of
property, in case the
NOTE The NCC by the PPSA which interest, if owing, and
principal obligation is
provisions governing denominates a contract thereafter to the
not paid or complied
pledge are now whereby personal principal of his credit.
with at the time
superseded by R.A. No. property is used to
stipulated.
11057 or the PPSA which secure payment or other
denominates a contract performance of an
whereby personal obligation as a “security
property is used to agreement.”
secure payment or other
performance of an
obligation as a “security
agreement.”
As to the object of the contract

Movable or personal The object of a security
property, or document agreement under the
evidencing incorporeal PPSA is personal
rights. property.
Movable properties NOTE Under the former

Immovable property or
which are within the Chattel Mortgage Act, a
real rights over Fruits of an immovable.
commerce of men real property may be a
immovable property.
provided it is susceptible subject of chattel
of possession. And mortgage as long as the
incorporeal rights parties to the contract so
evidenced by proper agree and no innocent
documents may be third party will be
pledged. prejudiced thereby.
CIVIL LAW
NOTE The object of a (Makati Leasing and

security agreement Finance Corp. v. Weaver
under the PPSA is Textile Mills, Inc. G.R. No.
personal property. L-58469, 17 May 1983)
Necessity of delivery
Property must be
Delivery is not necessary.
delivered.
NOTE Under the PPSA,

NOTE Under the PPSA,
delivery of the personal
delivery of the personal
property to and
property to and Property is delivered to
possession thereof by the Delivery is not necessary.
possession thereof by the the creditor.
secured creditor is one of
secured creditor is one of
the means whereby a
the means whereby a
security interest may be
security interest may be
perfected. (Sec. 12(b),
perfected. (Sec. 12(b),
R.A. No. 11057)
R.A. No. 11057)
NOTE: The pledgor can sell the thing pledged with the consent of the pledgee (Art. 2097, NCC), while the
mortgagor can sell the property mortgaged even without the consent of the mortgagee. (Art. 2130, NCC)
2023 GOLDEN NOTES
V. COMPROMISE
included in the same. (Art. 2036(1), NCC)

V. COMPROMISE
NOTE: A general renunciation of rights is
understood to refer only to those that are connected
with the dispute which was the subject of the
Compromise
compromise. (Art. 2036(2), NCC)
A compromise is a contract whereby the parties, by

Effect of Compromise upon the Parties
making reciprocal concessions, avoid a litigation or
put an end to one already commenced. (Art. 2028,
A compromise has upon the parties the effect and
NCC)
authority of res judicata, but there shall be no
execution except in compliance with a judicial
A compromise agreement is a contract between the
compromise. (Art. 2037, NCC)
parties, which if not contrary to law, morals or
public policy, is valid and enforceable between
Compromise, When Voidable
them. (Municipal Board of Cabanatuan City v.
Samahang Magsasaka, Inc., G.R. No. L-25818, 25 Feb.
A compromise in which there is mistake, fraud,
1975).
violence, intimidation, undue influence, or falsity of
documents is voidable. (Art. 2038(1), NCC)
Kinds of Compromise Agreement
NOTE: A contract where consent is given through
1. Judicial - puts an end to a pending litigation; and
mistake, violence, intimidation, undue influence, or
fraud is voidable. (Art. 1330, NCC)
2. Extrajudicial- which is to avoid litigation. (Art.
2028, NCC)
However, one of parties cannot set up a mistake of
fact as against the other if the latter, by virtue of the
Questions Where Compromise shall NOT be
compromise, has withdrawn from a litigation
Valid
already commenced. (Art. 2038(2), NCC)
No compromise upon the following questions shall

Where there is Discovery of Documents
be valid:
Referring to One or More but Not to All of the
Questions Settled Shall Not Itself be a Cause for
1. The civil status of persons;
annulment or Recission of the Compromise
2. The validity of a marriage or a legal
separation;
When the parties compromise generally on all
3. Any ground for legal separation;
differences which they might have with each other,
4. Future support;
the discovery of documents referring to one or more
5. The jurisdiction of courts; and
but not to all of the questions settled shall not itself
6. Future legitime. (Art. 2035, NCC)
be a cause for annulment or rescission of the
compromise. (Art. 2039(1), NCC)
What Comprises Compromise
XPN: Unless said documents have been concealed
The following comprises a compromise:
by one of the parties. (Ibid.)
1. only those objects which are definitely

NOTE: But the compromise may be annulled or
stated therein; or
rescinded if it refers only to one thing to which one
of the parties has no right, as shown by the newly
2. which by necessary implication from its
discovered documents. (Art. 2039(2), NCC)
terms should be deemed to have been
CIVIL LAW
When Compromise should be Agreed Upon or

may be rescinded
1. Compromise should be agreed upon – If

after a litigation has been decided by a final
judgment; and
2. Compromise may be rescinded – when

either or both parties being unaware of the
existence of the final judgment. (Art. 2040,
NCC)
NOTE: Ignorance of a judgment which may be

revoked or set aside is not a valid ground for
attacking a compromise. (Art. 2040)
Effect of Failure or Refusal to Abide by the

Compromise
If one of the parties fails or refuses to abide by the

compromise, the other party may either enforce the
compromise or regard it as rescinded and insist
upon his original demand. (Art. 2041, NCC)
2023 GOLDEN NOTES
VI. QUASI-CONTRACTS
Contract vs. Quasi-Contract

VI. QUASI-CONTRACTS
CONTRACT QUASI-CONTRACT
There is a meeting of
There is no consent,
the minds or consent;
Quasi-Contract but the same is
the parties must have
supplied by fiction of
deliberately entered
A juridical relation arising from lawful, voluntary, law to prevent
into a formal
and unilateral acts based on the principle that no injustice.
agreement.
one shall be unjustly enriched or benefited at the
expense of another. (Art. 2142, NCC).
Q: DPRC and MIAA entered into a Contract of
Lease whereby the DPRC leased from the MIAA a
It is not an implied contract. There is no meeting of
parcel of land and the building thereon located
the minds between parties. A juridical relation is
at Domestic Road, Pasay City. MIAA passed a
created by a quasi-contract so that nobody shall
Resolution No. 98-30 increasing the rentals.
enrich themselves at the expense of another. (Sta.
Maria, 2017) DPRC initially refused to pay the increased
rentals which was decreed without prior notice
and hearing. DPRC paid in protest. The Court
Distinguished from “Implied Contracts”
promulgated its Decision in the case of MIAA v.
Airspan Corporation, et al, where it nullified
An implied contract requires consent while a quasi-
resolutions issued by MIAA for non-observance
contract, being a unilateral contract, does not. The
of the notice and hearing requirements for the
basis of an implied contract is the will of the parties
fixing rates required by the Administrative
while the basis of a quasi-contract is law, to the end
Code. DPRC sought the refund of its overpaid
that there be no unjust enrichment. (Rabuya, 2017).
monthly rentals under protest. The RTC ruled in
favor of DPRC. The CA ruled that some of the
Characteristics of a Quasi-Contract (L-U-V)
overpaid monthly rentals have prescribed
because overpaid monthly rentals was in the
1. It must be Lawful;
nature of a quasi-contract of solutio indebiti;
2. It must be Unilateral; and
hence, the claim of refund must be commenced
3. It must be Voluntary. (Pineda, 2000).
within 6 years from date of payment under the
Civil Code. Is the CA correct?
Solutio indebiti (SI) v. Accion in rem verso (AIRV)
A: NO. To establish the application of solutio indebiti

ACCION IN REM
SOLUTIO INDEBITI in a given situation,two conditions must concur: (1)
VERSO
a payment is made when there exists no binding
As to mistake
relation between the payor who has no duty to pay,
Mistake is an essential Mistake is not
and the person who received the payment, and (2)
element necessary
the payment is made through mistake, and not
As to nature
through liberality or some other cause. Here, there
Does not grant a right It is merely an
exists a binding relation between DPRC and MIAA, as
of action to enforce auxilliary action,
both of them are mutually bound to each other
performance but available only when
under a Contract of Lease. Thus, the cause of action
authorizes retention of there is no other
of petitioner DPRC is based on the violation of a
what has been remedy on contract,
contractual stipulation in the parties' Contract of
delivered or rendered. quasi-contract, crime
Lease, and not due to the existence of a quasi-
(Dechavez, 2021) or quasi-delict.
contract. DPRC made the overpayments in monthly
(Rabuya, 2017)
rentals not due to any mistake, error, or omission as
to any factual matter surrounding the payment of
CIVIL LAW
rentals. Nor did DPRC make the overpayments due Required Diligence Required of an Officious
to any mistaken construction or application of a Manager
doubtful question of law. Instead, DPRC deliberately
made the payments in accordance with respondent The officious manager shall perform his duties with
MIAA's resolutions, albeit under protest. Hence, the all the diligence of a good father of a family, and pay
action based on a written contract must be the damages which through his fault or negligence
brought within 10 years from the time the right of may be suffered by the owner of the property or
action accrues pursuant to Art. 1144 of the NCC, and business under management.
not within 6 years for actions based on quasi-
contract. (Domestic Petroleum Retailer Corp. v. MIAA, The courts may, however, increase or moderate the
G.R. No. 210641, 27 Mar. 2019) indemnity according to the circumstances of each
case. (Art. 2145, NCC)
A. NEGOTIORUM GESTIO Diligence of a good father of a family
It is the ordinary degree of care which a reasonable

and prudent person will do given the same
When a person voluntarily takes charge of another’s
circumstances the officious manager is in. (Sta.
abandoned business or property without the
Maria)
owner’s authority. (Art. 2144, NCC) It should not be
performed for profit. (Sta. Maria, 2017)
Liability of Officious Manager
Reimbursement must be made to the gestor for

He cannot escape liability by stating that there was
necessary and useful expenses, as a rule. (Art. 2150,
no obligation on his part to take over the property
NCC)
or business in the first place. Once he takes over, he
is charged with the responsibility to take care of it.
e.g., A abandons his property, a mango plantation,
(Ibid.)
and his business therein. B decides to manage the
business and the property so that the business will
If the owner suffers damage due to the negligence or
earn upon harvest time. B does this without any
fault of the officious manager, the court can increase
authority from A. B therefore becomes an officious
or moderate the indemnity according to
manager without any expectation of any profit or
circumstances. (Ibid.)
remuneration. B must continue managing the
property of the business until it is terminated. He
The Officious Manager Can Delegate
can also require A to have him (B) substituted if A is
Management of the Properties to Another
in a position to do so. If the property is not
abandoned, all acts of A unauthorized and any
If the officious manager delegates to another person
contract entered into by him shall be generally
all or some of his duties, he shall be liable for the acts
unenforceable. If B were authorized, the law on
of the delegate, without prejudice to the direct
agency shall apply. (Sta. Maria, 2017)
obligation of the latter toward the owner of the
business.
Officious Manager
The responsibility of two or more officious

He is, in a sense, an intruder in the business or
managers shall be solidary, unless the management
property of the owner. However, if his intrusion is
was assumed to save the thing or business from
with the objective of preserving, managing, and
imminent danger. (Art. 2146, NCC)
taking care of the property without any intent to
gain, a quasi-contract is created. (Ibid.)
2023 GOLDEN NOTES
VI. QUASI-CONTRACTS
The owner can seek the full amount of damages destroyed by fortuitous event, the officious
from anyone of the officious managers. (Sta. Maria, manager will be held liable for his act of
2017) unduly retaining what is not his. (Sta.
Maria, 2017)
The officious manager shall be liable for any
fortuitous event (4) If he assumed the management in bad
faith. (Art. 2147, NCC)
Generally, the happening of a fortuitous event
affecting an obligation excuses the person charged For example, the officious manager takes
from performing the obligation. In case of over the warehousing business of the
negotiorum gestio, Arts. 2147 and 2148 does not owner so that he can get the clients of the
excuse the officious manager from liability due to owner for his (officious manager's) own
fortuitous event. warehousing business. Such officious
manager shall be liable for the loss of the
(1) If he undertakes risky operations which warehousing business of the owner caused
the owner was not accustomed to embark by a fortuitous event. (Sta. Maria, 2017)
upon;
(5) If he is manifestly unfit to carry on the
If the business of the owner is simply management; and
providing a warehouse for dolls and other
toys, and the officious manager decides to XPN: when the management was assumed
allow the storing of highly inflammable to save the property or business from
materials in the warehouse, the officious imminent danger. (Sta. Maria, 2017)
manager shall be liable if the warehouse is
burned due to a fortuitous event, such as (6) If by his intervention he prevented a more
the striking of lightning. (Sta. Maria, 2017) competent person taking up the
management. (Art. 2148, NCC)
(2) If he has preferred his own interest to
that of the owner; XPN: when the management was assumed
to save the property or business from
For example, the officious manager takes imminent danger. (Sta. Maria, 2017)
over the business of the owner of
warehousing goods. In the meantime, the NOTE: For Nos. 5 and 6, The officious manager
officious manager also stores some of his has no business taking over the abandoned
goods in the warehouse. In the event that a property or business of somebody if he has no
flood occurs, and he first saves his goods, knowledge or is not competent to undertake
before the goods of the owner and the the management.
latter's clients, from being destroyed, the
officious manager will be liable for the loss e.g., If a teacher takes on the farming business
due to the fortuitous event. (Sta. Maria, of another, he shall be liable for any damage
2017) caused by a fortuitous event. He should have
been prudent enough to know that he cannot
(3) If he fails to return the property or possibly undertake something which he has no
business after demand by the owner; or competence in. If another person who is
competent to take over the farming business
Once the owner demands the return of the decides to manage the same and the said
business, the officious manager should teacher prevents him from doing so on the
readily return it. He has no right to keep it ground that he has been there first, such
for himself. Hence, if the property is teacher will be liable if the property is
CIVIL LAW
destroyed by a fortuitous event. However, if Requisites

the said teacher manages the said farming
business to save it from imminent danger, he Even though the owner did not derive any benefit
will not be liable for damages caused by a and there has been no imminent and manifest
fortuitous event. (Sta. Maria, 2017) danger to the property or business, the owner is
liable provided that:
Ratification of the management by the owner of
the business a. The officious manager has acted in good faith,
and
The ratification of the management by the owner of
the business produces the effects of an express b. The property or business is intact, ready to be
agency, even if the business may not have been returned to the owner.
successful. (Art. 2149, NCC)
Officious Manager is Personally Liable for
Ratification means that the owner agrees to Contracts Which He Has Entered Into with Third
whatever the officious manager has done. It cures Persons
even the defects which the officious manager has
committed. If ratification happens, the law on Even though he acted in the name of the owner, and
agency applies and even if the business is not there shall be no right of action between the owner
successful, such agency by virtue of ratification shall and third persons, he is personally liable.
be recognized. (Sta. Maria, 2017)
XPNs:
The Owner Must Always Reimburse the
Officious Manager for All Expenses which have 1. If the owner has expressly or tacitly ratified
Inured for the Benefit or Advantage of the the management, or
Owner
If the officious manager decides to manage the
Although the officious management may not have property or business, and for this reason, he
been expressly ratified, the owner of the property or buys some decorations to be placed in the
business who enjoys the advantages of the same property, such officious manager shall be the
shall be liable for obligations incurred in his only one responsible for the payment of such
interest, and shall reimburse the officious manager decorations even if he acts in the name of the
for the necessary and useful expenses and for the owner. The seller of the decorations has no
damages which the latter may have suffered in the right of action against the owner in the event
performance of his duties. the officious manager does not pay for them.
However, the owner shall pay for them if he
The same obligation shall be incumbent upon him has expressly or tacitly ratified the act of the
when the management had for its purpose the officious manager. (Sta. Maria, 2017)
prevention of an imminent and manifest loss,
although no benefit may have been derived. (Art. 2. When the contract refers to things
2150, NCC) pertaining to the owner of the business. (Art.
2152, NCC)
Even if no benefit has been derived but the officious
manager takes over to save the property or business If the buying and selling of decoration is the
from imminent loss, the officious manager should very object of the business of the owner, the
likewise be reimbursed for obligations incurred for owner shall be liable. (Sta. Maria, 2017)
the owner's interest, including useful and necessary
expenses.
2023 GOLDEN NOTES
VI. QUASI-CONTRACTS
When Management is Extinguished A Creditor-Debtor Relationship is Created

Under a Quasi-Contract
1. When the owner repudiates it or puts an
end thereto; A creditor-debtor relationship is created under a
quasi-contract whereby the payor becomes the
NOTE: the decision of the owner prevails creditor who then has the right to demand the
over that of the officious manager. (Sta. return of payment made by mistake, and the person
Maria, 2017) who has no right to receive such payment becomes
obligated to return the same. The quasi-contract of
2. When the officious manager withdraws solutio indebiti harks back to the ancient principle
from the management, subject to the that no one shall enrich himself unjustly at the
provisions of Art. 2144; expense of another. (Sta. Maria, 2017, citing
Sebastian Siga-An v. Alicia Villanueva, G.R. No.
The officious manager can withdraw from 173227, 20 Jan. 2009)
the property or the business. However, he
must require the person concerned or the Payment by reason of a mistake in the
owner to substitute him if such owner is in construction or application of a doubtful or
a position to do so. If the owner is not in a difficult question of law
position to do so, he must continue and
withdraw only upon the termination of the GR: Solutio indebiti involves only a mistake of fact.
affair and its incidents. (Sta. Maria, 2017)
XPN: If the mistake is brought about by the
3. By the death, civil interdiction, insanity or construction or application of a doubtful or difficult
insolvency of the owner or the officious question of law. (Sta. Maria, 2017; Art. 2155, NCC)
manager. (Art. 2153)
If the payer was in doubt whether the debt was
due, he may recover if he proves that it was not
B. SOLUTIO INDEBITI due (Art. 2156, NCC)
For example, a debtor pays a creditor prematurely

because he is not sure whether the debt is already
When something is received when there is no right
due. The creditor accepts it. The debtor can recover
to demand it, and it was unduly delivered through
what he has paid prior to the due date of the debt
mistake. The recipient has the duty to return it. (Art.
provided that the demand for reimbursement is not
2154, NCC)
made after the debt has become due. (Sta. Maria,
2017)
Indispensable Requisites of the Juridical
Relation of Solutio Indebiti
The responsibility of two or more payees, when
there has been payment of what is not due, is
1. He who paid was not under obligation to do
solidary (Art. 2157, NCC)
so; and
For example, A is indebted to B and C for P2,000.

2. The payment was made by reason of an
The obligation is of a solidary nature such that A can
essential mistake of fact. (City of Cebu v. Piccio
pay only to one of them the whole obligation, and
and Caballero L-13012 and 14876, 31 Dec.
the debt is considered paid as to both. Thus, if A pays
1960)
B the amount of P2,000, the debt is considered paid.
It is up to C to claim from B his share of the credit,
which is P1,000. If there is payment by mistake, A
can recover from either B or C the amount which he
CIVIL LAW
has paid. This is true, even if in the meantime, C has shall return the price or assign the action to collect
not yet obtained his P1,000. (Sta. Maria, 2017) the sum. (Art. 2162, NCC)
When the property delivered or money paid For example, A is obliged to give B a house on 01 Jan.
belongs to a third person, the payee shall comply 1997. Believing that it was due on 01 August 1996,
with the provisions of Art. 1984 (Art. 2158, NCC) A delivered the house on said date. B likewise did
not know that the house was still due on 01 Jan.
For example, A is obliged to pay B his obligation by 1997. B was in good faith. On November 1996, the
giving B a watch. Despite the fact that the payment house was rented in the amount of P2,000 per hour
is not yet due, A gives B the watch which turns out by a movie producer for a particular motion picture
to be stolen from X. At the time of his receipt of the and, while shooting, the kitchen was accidentally
watch, B has no obligation to ask A questions as to burned. After the shooting of the motion picture, B
who owns the watch. However, if B later finds out was paid the rent in the amount of P30,000 for 15
that X really owns the watch, B must advise X that hours on December 1996, A discovered that the
he (B) is in possession of his (X's) watch. X must house was not yet due and demanded its return. B
claim the watch within one month from the advice. can return the house and pay the amount of the
If X does not claim the watch, B is excused from all kitchen which has been impaired, because he (B)
liability if, A, because of solutio indebiti, claims back has been benefited by the house when he had it
the watch, and B gives back the watch to A. rented. (Sta. Maria, 2017)
However, if at the time A gives the watch of B, the
latter has reasonable grounds to believe that it has Reimbursement for Improvements and
been acquired unlawfully, B can return the same to Expenses Incurred by One who Unduly Received
A. (Sta. Maria, 2017) the Thing in Good Faith
Whoever in bad faith accepts an undue payment, He shall be exempt from the obligation to restore
shall pay legal interest if a sum of money is who, believing in good faith that the payment was
involved, or shall be liable for fruits received or being made of a legitimate and subsisting claim,
which should have been received if the thing destroyed the document, or allowed the action to
produces fruits (Art. 2159) prescribe, or gave up the pledges, or cancelled the
guaranties for his right. He who paid unduly may
If the creditor knows that the payment is not yet due proceed only against the true debtor or the
and payment is tendered to him, he must inform the guarantors with regard to whom the action is still
debtor that payment is not yet due. Should the effective. (Art. 2162, NCC)
creditor accept such premature payment, he is
therefore in bad faith and shall be liable for interest Presumption that there is a Mistake in the
from the time he accepts payment up to the time he Payment
returns it upon demand of the debtor. (Sta. Maria,
2017) It is presumed that there is a mistake in the payment
if something which had never been due or had
Responsibility of One Who Accepts an Undue already been delivered was delivered; but he from
Payment of a Thing Certain and Determinate in whom the return is claimed may prove that the
Good Faith delivery was made out of liberality. (Art. 2163, NCC)
He who in good faith accepts an undue payment of a A debtor who pays in solutio indebiti may recover
thing certain and determinate shall only be what he has paid by mistake. However, the person
responsible for the impairment or loss of the same to whom the payment has been made can show that
or its accessories and accessions insofar as he has such payment is a gift or a donation by showing the
thereby been benefited. If he has alienated it, he proper evidence like a valid deed of donation. (Sta.
Maria, 2017)
2023 GOLDEN NOTES
VI. QUASI-CONTRACTS
OTHER QUASI-CONTRACTS A Third Person May Furnish Support to the

Needy Individual, With Right of Reimbursement
When a Stranger, Without the Knowledge of the From the Person Obliged to Give Support
Person Obliged to Give Support, Gives Support
When the person obliged to support an orphan, or
When, without the knowledge of the person obliged an insane or other indigent person unjustly refuses
to give support, it is given by a stranger, the latter to give support to the latter, any third person may
shall have a right to claim the same from the former, furnish support to the needy individual, with right
unless it appears that he gave it out of piety and of reimbursement from the person obliged to give
without intention of being repaid. (Art. 2164, NCC) support. The provisions of this article apply when
the father or mother of a child under 18 years of age
When funeral expenses are borne by a third unjustly refuses to support him. (Art. 2166, NCC)
person, without the knowledge of those
relatives who were obliged to give support When a person is not in a condition to give
consent to a contract due to an accident or other
When funeral expenses are borne by a third person, cause and he is treated or helped
without the knowledge of those relatives who were
obliged to give support to the deceased, said When through an accident or other cause a person
relatives shall reimburse the third person, should is injured or becomes seriously ill, and he is treated
the latter claim reimbursement. (Art. 2165, NCC) or helped while he is not in a condition to give
consent to a contract, he shall be liable to pay for the
The following are obliged to support each other: services of the physician or other person aiding him,
unless the service has been rendered out of pure
1. The spouses; generosity. (Art. 2167)
2. Legitimate ascendants and descendants;
3. Parents and their legitimate children and the When a property is saved from destruction by
legitimate and illegitimate children of the another person without the knowledge of the
latter; owner
4. Parents and their illegitimate children and
the legitimate and illegitimate children of the When during a fire, flood, storm, or other calamity,
latter; and property is saved from destruction by another
5. Legitimate brothers and sisters, whether of person without the knowledge of the owner, the
full or half-blood (Art. 195, FC) latter is bound to pay the former just compensation.
(Art. 2168, NCC)
Whenever two or more persons are obliged to give
support, the liability shall devolve upon the When the government, upon the failure of any
following persons in the following order: person to comply with health or safety
1. the spouse; regulations concerning property, undertakes to
2. the descendants in the nearest degree; do the necessary work, even over his objection,
3. the ascendants in the nearest degree; and he shall be liable to pay the expenses (Art. 2169,
4. the brothers and sisters. NCC)
For example, A was the daughter of X and Y. A died. For example, a municipal ordinance prohibits the
G was the one who shouldered the expenses for A's throwing of spoiled food outside of the house in a
funeral. If G did this benevolent act as an act of waste can without any plastic bag. A does not abide
charity, X and Y need not reimburse him. If G by the said ordinance and continually throws
intended to be reimbursed, he can only be paid after spoiled food in a wooden garbage container. To
demanding payment from X and Y. (Sta. Maria, prevent the spread of disease, the municipal
2017) government can put the spoiled food inside a plastic
CIVIL LAW
bag first and then provide the owner of the house When a third person, without the knowledge of
with a garbage can at the owner's expense even if he the debtor, pays the debt, the rights of the
does not want to. (Sta. Maria, 2017) former
When by accident or other fortuitous event, The creditor is not bound to accept payment or
movables separately pertaining to two or more performance by a third person who has no interest
persons are commingled or confused, the rules in the fulfillment of the obligation, unless there is a
on co-ownership shall be applicable stipulation to the contrary. Whoever pays for
another may demand from the debtor what he has
The commingling here is unintentional as it is the paid, except that if he paid without the knowledge
result of an accident or fortuitous event. (Sta. Maria, or against the will of the debtor, he can recover only
2017) insofar as the payment has been beneficial to the
debtor. (Art. 1236, NCC)
Where a Lost Personal Property is Found
Whoever pays on behalf of the debtor without the
The rights and obligations of the finder of lost knowledge or against the will of the latter, cannot
personal property are the following: compel the creditor to subrogate him in his rights,
such as those arising from a mortgage, guaranty, or
1. Whoever finds a movable, which is not penalty. (Art. 1237, NCC)
treasure, must return it to its previous
possessor. If the latter is unknown, the finder When in a small community a majority of the
shall immediately deposit it with the mayor inhabitants of age decide upon a measure for
of the city or municipality where the finding protection against lawlessness, fire, flood, storm
has taken place; or other calamity, anyone who objects to the
plan and refuses to contribute to the expenses
2. The finding shall be publicly announced by but is benefited by the project as executed shall
the mayor for two consecutive weeks in the be liable to pay his share of said expenses (Art.
way he deems best; 2174, NCC)
3. If the movable cannot be kept without For example, the people of a certain barrio decide to
deterioration, or without expenses which engage a security force to protect their community
considerably diminish its value, it shall be because of rampant lawlessness. For this reason, the
sold at public auction eight days after the people agree to contribute to the expenses of this
publication; security force. G however refuse to make any
contribution. In the event that the security force
4. Six months from the publication having apprehends robbers intending to rob the house of G,
elapsed without the owner having appeared, G should pay his share in the expenses for the
the thing found, or its value, shall be awarded community's engagement of the security force to
to the finder. The finder and the owner shall protect the people from criminals. (Sta. Maria, 2017)
be obliged, as the case may be, to reimburse
the expenses; (Art. 719, NCC) and Any person who is constrained to pay the taxes
of another shall be entitled to reimbursement
5. If the owner should appear in time, he shall from the latter (Art. 2175, NCC)
be obliged to pay, as a reward to the finder,
1/10 of the sum or of the price of the thing For example, A is the neighbor of G whose property
found. (Art. 720, NCC) is about to be forfeited to the government because
of unpaid real estate taxes. A can pay the taxes, but
G must reimburse him. (Sta. Maria, 2017)
2023 GOLDEN NOTES
VII. TORTS AND DAMAGES
2. Prevention – To prevent future losses and

VII. TORTS AND DAMAGES harm.
1. ABUSE OF RIGHTS
A. PRINCIPLES 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, NCC)
Tort
Principle of Abuse of Rights
It is a civil wrong wherein a person’s conduct causes
a compensable injury to the person, property, or
Refers to acts performed which are not illegal but
recognized interest of another, in violation of a duty
nevertheless make the actor liable for damages, if in
imposed by law. (Black’s Law Dictionary, 1990)
so acting or in exercising his right, his purpose is to
prejudice or injure another.
A tort is a wrong, a tortious act, which has been
defined as the commission or omission of an act by
NOTE: The Principle is a departure from the
one, without right, whereby another receives some
classical theory that he who uses a right injures no
injury, directly or indirectly, in person, property, or
one. It prescribes that a person should not use his
reputation. (Vinzons-Chato v. Fortune Tobaccco
right unjustly or in bad faith, otherwise he opens
Corporation, G.R. No. 141309, 19 June 2007)
himself to liability. (De Leon, 2012)
A legal wrong committed upon the person or

In order for there to be an abuse of rights:
property independent of a contract. It may be:
1. The defendant should have acted in a manner
1. A direct invasion of some legal right of the
that is contrary to morals, good customs or
individual;
public policy;
2. The infraction of some public duty by which
2. Acts should be willful; and
special damage accrues to the individual; or
3. There was damage or injury to the plaintiff
3. The violation of some private obligation by
(De Leon, 2012).
which like damage accrues to the individual.
Elements of Abuse of Rights
Tort vs. Breach of Contract
1. There is a legal right or duty;
Contract duties are created by the promises of the
2. Which is exercised in bad faith; and
parties, while tort duties are imposed as rules of
3. For the sole intent of prejudicing or injuring
law. (De Leon, 2012)
another. (Far East Bank and Trust Co. v.
Pacilan, G.R. No. 157314, 29 July 2005;
Main functions of punishing tort
Albenson Enterprises Corp. v. CA, G.R. No.
88694, 11 Jan. 1993)
1. Compensation and Restitution – To
compensate persons sustaining loss or
NOTE: The law recognizes the primordial limitation
harm as a result of another’s act or
on all rights – that in the exercise of the rights, the
omission, placing the cost of that
standard under art. 19 must be observed. (Sesbreño
compensation on those who, in justice
v. CA, G.R. No. 160689, 26 Mar. 2014)
ought to bear it; and
CIVIL LAW
Art. 20 vs. Art. 21 One month after, Francisco, with the aid of a
group of armed men, caused the closure of the
Art. 20 Art. 21 gasoline station by constructing fences around
As to the act committed it. Was the act of Francisco and his men lawful?
The act is legal, Why? (2014 BAR)
however, the act
The act is illegal, and a
offended public A: NO, the act was not lawful. Even if the lessee’s
law was violated,
morals, good customs right to occupy the premises has expired, the lessor
and public policy. cannot physically oust the lessee from the leased
As to the manner commission of the act premises if the latter refuses to vacate. The lessor
The act was done must go through the proper channels by filing an
willfully or may have The act was done appropriate case for unlawful detainer or recovery
been committed willfully. of possession. Every possessor has a right to be
negligently. respected in his possession (Art. 539, NCC) and in no
As to the intent case my possession be acquired through force or
The intent of the intimidation as long as there is a possessor who
The intent of the objects thereto. (Art 536, NCC) The act of Francisco
offender is
offender is is an abuse of rights because even if he has the right
immaterial in
immaterial. to recover possession of his property, he must act
determining liability.
with justice and give the lessees their day in court
Application of the Principle of Damnum Absque and observe honesty and good faith. (UPLC
Injuria in relation to Abuse of Rights Doctrine Suggested Answers)
In order that a plaintiff may maintain an action for 2. UNJUST ENRICHMENT

the injuries of which he complains, he must
establish that such injuries resulted from a breach Provisions of the NCC relating to Unjust
of duty which the defendant owed to the plaintiff – Enrichment
a concurrence of injury to the plaintiff and legal
responsibility by the person causing it. 1. Art. 22;
2. Art. 23;
The underlying basis for the award of tort damages 3. Art. 2142; and
is the premise that the individual was injured in 4. Art. 2143;
contemplation of law. Thus, there must be first a
breach of some duty and the imposition of liability Enrichment
for that breach before damages may be awarded;
and the breach of such duty should be the proximate It consists of every patrimonial, physical or moral
cause of the injury. (Far East Bank and Trust Co. v. advantage so long as it is appreciable in money. It
Pacilan, G.R. No. 157314, 29 July 2005) may also take the form of avoidance of expenses and
other indispensable deductions in the patrimony of
Q: Sps. Magtanggol managed and operated a a person as well as the prevention of loss or injury.
gasoline station on a 1,000 sq.m. lot which they (De Leon, 2012)
leased from Francisco Bigla-awa. The contract
was for a period of three (3) years. When the No person can claim what is not validly and legally
contract expired, Francisco asked the spouses to his or hers. Hence, he or she should not unduly
peacefully vacate the premises. The spouses profit on something which does not meritoriously
ignored the demand and continued with the belong to him or her. (Sta. Maria, 2010)
operation of the gasoline station.
2023 GOLDEN NOTES
NOTE: The doctrine of unjust enrichment simply action under any other institution of positive law,
means that a person shall not be allowed to profit or that action must be resorted to, and an action based
enrich himself inequitably at another’s expense. on unjust enrichment will not lie.
There is unjust enrichment when a person unjustly
retains a benefit to the loss of another, or when a Unjust enrichment claims do not lie simply because
person retains money or property of another one party benefits from the efforts or obligations of
against the fundamental principles of justice, equity, others, but instead it must be shown that a party
and good conscience. (Republic v. Ballocanog, G.R. was unjustly enriched in the sense that the term
No. 163794, 28 Nov. 2008) unjustly could mean illegally or unlawfully. (Aquino,
2016)
Unjust Enrichment (accion in rem verso)
3. LIABILITY WITHOUT FAULT
Every person who through an act of performance by
another, or other means, acquires or comes into
Even when an act or event causing damage to
possession of something at the expense of the latter
another's property was not due to the fault or
without just or legal ground, shall return the same
negligence of the defendant, the latter shall be liable
to him. (Art. 22, NCC)
benefited. (Art. 23, NCC)
Even when an act or event causing damage to
another’s property was not due to the fault or
Liability without Fault also includes:
negligence of the defendant, the latter shall be liable
1. Strict Liability – there is strict liability if one is
benefited. (Art. 23, NCC)
made independent of fault, negligence or intent
after establishing certain facts specified by law.
Elements
It includes liability for conversion and for
injuries caused by animals, ultra-hazardous
1. The defendant has been enriched;
activities and nuisance. (Arts. 2183 and 2193,
2. The plaintiff has suffered a loss;
NCC)
3. The enrichment of the defendant is without
just or legal ground; and
2. Product Liability Law – is the law which
4. The plaintiff has NO other action based on
governs the liability of manufacturers and
a contract, quasi-contract, crime, quasi-
sellers for damages resulting from defective
delict, or any other provision of law.
products. (Aquino, 2019)
(Grandteq Industrial Steel Products, Inc. v.
Margallo, G.R. No. 181393, 28 July 2009)
4. ACTS CONTRARY TO LAW
NOTE: There is no unjust enrichment when the
person who will benefit has a valid claim to such Every person who, contrary to law, willfully or
benefit. (DPWH v. COA, G.R. No. 237987, 19 Mar. negligently causes damage to another, shall
2019) indemnify the latter for the same. (Art. 20, NCC)
NOTE: In an action under Art. 22, it is not necessary It speaks of the general sanction for all other
for there to be a mistake in payment unlike in provisions of law which do not especially provide
solution indebiti. (De Leon, 2012) their own sanction. Thus, anyone who, whether
wilfully or negligently, in the exercise of his legal
Accion in rem verso is considered merely as an right or duty, causes damage to another, shall
auxiliary action, which is available only when there indemnify his or her victim for injuries suffered
is no other remedy on contract, quasi-contract, thereby. (Albenson v. CA, supra)
delict, and quasi-delict. If there is an obtainable
CIVIL LAW
Requisites parties; or
3. Moral seduction.
1. The act must be willful or negligent;
2. It must be contrary to law; and Mere breach of promise to marry is not an
3. Damages must be suffered by the injured actionable wrong but to formally set a wedding and
party. go through all the preparation and publicity, only to
walk out of it when the matrimony is about to be
5. ACTS CONTRARY TO MORALS solemnized, is quite different. This is palpably and
unjustifiably contrary to good customs. (Wassmer v.
Velez, G.R. No. L-20089, 26 Dec. 1964)
Acts Against Good Morals (Contra Bonus Mores)
Seduction and Sexual Assault
Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good
Seduction, by itself, without breach of promise to
customs or public policy shall compensate the latter
marry is also an act which is contrary to morals,
for the damage. (Art. 21, NCC)
good customs and public policy. (Aquino, 2005)
Elements (L-C-D)
NOTE: Liability may be imposed under Art. 21 of the
NCC if a married man forced a woman not his wife
1. There is an act which is Legal;
to yield to his lust (Quimiging v. Icao, G.R. No. 26795,
2. The act is Contrary to morals, good
31 July 1970)
customs, public order, or public policy; and
3. It is Done with the intent to injure.
Desertion by a Spouse
(Mendoza v. Sps. Gomez, G.R. No. 160110, 18
June 2014)
A spouse has a legal obligation to live with his or her
spouse. If a spouse does not perform his or her duty
It presupposes loss or injury, material or otherwise,
to the other, he may be held liable for damages for
which on may suffer as a result of such violation.
such omission because the same is contrary to law,
(Cogeo-Cubao Operators and Drivers Association v.
morals, and good customs. (Aquino, 2005)
CA, G.R. No. 100727, 18 Mar. 1992)
Examples of Acts Contrary to Morals
1. Breach of Promise to Marry;

2. Seduction and Sexual Assault; and
3. Desertion by a Spouse.
Breach of Promise to Marry
GR: Breach of promise to marry by itself is not

actionable.
XPN: If there are additional circumstances which

make it fall within the purview of Arts. 19, 20, 21, or
2176 of the NCC, including but not limited to:
(F-H-M)
1. Financial damage;
2. Social Humiliation caused to one of the
2023 GOLDEN NOTES
Tort or wrong perpetrated by one who intends to do

B. CLASSIFICATION OF TORTS that which the law has declared wrong as
contrasted with negligence in which the tortfeasor
fails to exercise the degree of care in doing what is
otherwise permissible.
Torts are classified as follows:
Kinds of Intentional Tort

1. Intentional Torts;
2. Negligent Torts; and
1. Abuse of rights (Art. 19, NCC)
3. Strict Liability.
2. Acts contrary to law(Art. 20, NCC)
3. Acts contra bonus mores (Art. 21, NCC)
Tortious Act
4. Acts involving disrespect to persons, right

It is a wrongful act. It is the commission or omission
to personal dignity, right to personal
of an act by one, without right, whereby another
security, right to privacy, and right of peace
receives some direct or indirect injury, in person,
of mind (Art. 26, NCC) and
property, or reputation. (De Leon, 2012)
5. Dereliction of duty (Art. 27, NCC)

GR: An action for damages can only be maintained
by the person directly injured, not by one alleging
Tort Interference
the collateral injury.
Any third person who induces another to violate his

XPN: There are instances where injury to one may
contract shall be liable for damages to the other
operate as an injury to another, e.g., a lone parent
contracting party. (Art. 1314, NCC)
cannot sue for the injury suffered by his child but
may maintain an action in his own right for any
Requisites
damages suffered as a result of the injury.
1. Existence of a valid contract;

Major Purposes of Tort
2. Knowledge on the part of a third person of
the existence of the contract; and
1. To provide a peaceful means for adjusting
3. The interference of the third person is
the rights of parties who might otherwise
without legal justification or excuse
take the law into their own hands;
2. To deter wrongful conduct;
Intentional Physical Harms
3. To encourage socially responsible
behavior; and
1. Battery;
4. To restore injured parties to their original
condition, insofar as the law can do this, by
Damages for mental suffering are
compensating them for their injury.
recoverable without the necessity for
(Aquino, 2019)
showing actual physical injury in a case of
willful battery because the basis of that
1. INTENTIONAL action is the unpermitted and intentional
invasion of the plaintiff's person and not the
Intentional torts are independent civil liabilities not actual harm done to the plaintiff's body.
arising from an act or omission complained of as a
felony. Intentional torts are found under Arts. 32 Personal indignity is the essence of an action
and 34 of the NCC. (Safeguard Security Agency, Inc. for battery. Consequently, the defendant is
v. Tangco, G.R. No. 165732, 14 Dec. 2006) liable not only for contacts which do actual
physical harm, but also for those which are
CIVIL LAW
offensive and insulting. (Fisher v. Carrousel 6. Conversion;

Motor Hotel, Inc., 424 S. W2d 627, 1967)
Conversion is an intentional exercise of
2. Assault; dominion or control over a chattel which so
seriously interferes with the right of another
Neither fear, nor terror, nor apprehension of to control it that the actor may justly be
harm is an essential ingredient of the required to pay the other the full value of the
common law crime of assault. Hence, the chattel. (Restatement 2d on Torts, Section
common law conception is that fear on the 22A)
part of the victim need not be proved in the
crime of assault. (Commonwealth v. Slaney, In determining the seriousness of the
345 Mass. 135) interference and the justice of requiring the
actor to pay the full value, the following
factors are important:
3. False imprisonment;
a. The extent and duration of the actor’s
False imprisonment is also known as
exercise of dominion or control;
“dignitary tort.” It is found under Art. 32(4) of
the NCC, and Arts. 124 and 267 of the RPC.
b. The actor’s intent to assert a right in
fact inconsistent with the other’s right
Illegal serious detention under Art. 267 of the
of control;
RPC, as amended, includes not only the
imprisonment of a person but also the
c. The actor’s good faith;
deprivation of her liberty in whatever form
and for whatever length of time. It includes a
d. The extent and duration of the
situation where the victim cannot go out of
resulting interference with the other’s
the place of confinement or detention or is
right of control;
restricted or impeded in his liberty to move.
(People v. Bisda, G.R. No. 140895, 17 July 2003)
e. The harm done to the chattel; and
4. Trespass to land;
f. The inconvenience and expense
caused to the other. (Restatement 2d
The court may award nominal damages in
on Torts, Section 22A)
every case where any property right has been
invaded.
Intentional Non-Physical Harms
In the case of National Power Corp. v. Sps.

1. Violation of personal dignity;
Campos, Jr. (G.R. No. 143643, 27 June 2003),
the Court ruled that the petitioner, in blatant
Under Art. 26 of the NCC, the rights of
disregard of the respondents' proprietary
persons are amply protected, and damages
right, trespassed the subject property and
are provided for violations of a person's
conducted engineering surveys thereon.
dignity, personality, privacy and peace of
Under the circumstances, the award of
mind.
nominal damages is likewise warranted.
The violations mentioned in Arts. 26 and
5. Trespass to chattels;
2219 of the NCC are not exclusive but are
merely examples and do not preclude other
similar or analogous acts. Damages therefore
are allowable for actions against a person's
2023 GOLDEN NOTES
dignity, such as profane, insulting, law. (Dioquino v. Laureano, G.R. No. L-25906,
humiliating, scandalous or abusive language. 28 May 1970)
In the case of Concepcion v. CA (G.R. No.
120706, 31 Jan. 2000), there is no question A long catena of cases supports the
that private respondent suffered mental proposition that moral damages are not
anguish, besmirched reputation, wounded recoverable for unsuccessful suits filed in
feelings and social humiliation as a proximate good faith. (Equitable Banking Corp. v. IAC,
result of petitioner's abusive, scandalous and G.R. No. 66070, 31 Oct. 1984)
insulting language.
3. Infliction of emotional distress;
2. Violation of Privacy;
Primarily, an “emotional distress” tort action
Every person shall respect the dignity, is personal in nature, i.e., it is a civil action
personality, privacy and peace of mind of his filed by an individual to assuage the injuries
neighbors and other persons. The following to his emotional tranquility due to personal
and similar acts, though they may not attacks on his character.
constitute a criminal offense, shall produce a
cause of action for damages, prevention and Moreover, to recover for the intentional
other relief: infliction of emotional distress the plaintiff
must show that:
(1) Prying into the privacy of another's (a) The conduct of the defendant was
residence; intentional or in reckless disregard of
the plaintiff;
(2) Meddling with or disturbing the private
life or family relations of another; (b) The conduct was extreme and
outrageous;
(3) Intriguing to cause another to be
alienated from his friends; and (c) There was a causal connection
between the defendant's conduct and
(4) Vexing or humiliating another on the plaintiff's mental distress; and
account of his religious beliefs, lowly
station in life, place of birth, physical (d) The plaintiff's mental distress was
defect, or other personal condition. (Art. extreme and severe. (MVRS
26, NCC) Publications v. Islamic Da'wah Council
of the Philippines, G.R. No. 135306, 28
Generally, denuncia falsa or malicious Jan. 2003)
prosecution refers to unfounded criminal
actions (Madera vs. Lopez, L-37105, 10 Feb. 4. Malicious prosecution;
1981). The term has been expanded to
include unfounded civil suits instituted just Malicious prosecution is when a person
to vex and humiliate the defendant despite directly insinuates or imputes to an innocent
the absence of a cause of action or probable person the commission of a crime and the
cause. (Buchanan vs. Vda. de Esteban, G.R. No. accused is compelled to defend himself in
L-10402, 30 Nov. 1915) court. While generally associated with
unfounded criminal actions, the term has
As observed by Chief Justice Fernando, the been expanded to include unfounded civil
expenses and annoyance of litigation form suits instituted just to vex and humiliate the
part of the social burden of living in a society defendant despite the absence of a cause of
which seeks to attain social control through action or probable cause. (Martires v.
CIVIL LAW
Cokieng, G.R. No. 150192, 17 Feb. 2005) prosecution does not make one liable for
malicious prosecution.
A tort action for malicious prosecution has
been defined as “an action for damages 5. Defamation;
brought by one against another whom a
criminal prosecution, civil suit, or other legal Defamation, which includes libel and slander,
proceedings has been instituted maliciously means the offense of injuring a person's
and without probable cause, after the character, fame or reputation through false
termination of such prosecution, suit or and malicious statements. It is that which
proceeding in favor of the defendant therein. tends to injure reputation or to diminish the
(Aquino, 2016) esteem, respect, good will or confidence in
the plaintiff or to excite derogatory feelings
This Court has drawn the four elements that or opinions about the plaintiff. It is the
must be shown to concur to recover damages publication of anything which is injurious to
for malicious prosecution. Therefore, for a the good name or reputation of another or
malicious prosecution suit to prosper, the tends to bring him into disrepute.
plaintiff must prove the following: Defamation is an invasion of a relational
interest since it involves the opinion which
(1) The prosecution did occur, and the others in the community may have, or tend to
defendant was himself the prosecutor have, of the plaintiff.
or that he instigated its
commencement; It must be stressed that words which are
merely insulting are not actionable as libel or
(2) The criminal action finally ended with slander per se, and mere words of general
an acquittal; abuse however opprobrious, ill-natured, or
vexatious, whether written or spoken, do not
(3) In bringing the action, the prosecutor constitute a basis for an action for
acted without probable cause; and defamation in the absence of an allegation for
special damages. The fact that the language is
(4) The prosecution was impelled by legal offensive to the plaintiff does not make it
malice — an improper or a sinister actionable by itself. (MVRS Publications v.
motive. Islamic Da'wah Council of the Philippines, G.R.
No. 135306, 28 Jan. 2003; Figueroa v. People,
The award of damages arising from malicious G.R. No. 159813, 09 Aug. 2006)
prosecution is justified if and only if it is
proved that there was a misuse or abuse of 6. Fraud or Misrepresentation;
judicial processes. (Tan v. Valeriano, G.R. No.
185559, 02 Aug. 2017) As held in Jekshewitz v. Groswald (164 N.E.
609, 1929), where a person is induced by the
In the case of Manila Gas Corp. v. Court of fraudulent representation of another to do an
Appeals (G.R. No. L-44190, 30 Oct. 1980), the act which, in consequence of such
Court ruled that to constitute malicious misrepresentation, he believes to be neither
prosecution, there must be proof that the illegal nor immoral, but which is in fact a
prosecution was prompted by a sinister criminal offense, he has a right of action
design to vex and humiliate a person that it against the person so inducing him for
was initiated deliberately by the defendant damages sustained by him in consequence of
knowing that his charges were false and his having done such act. (Manuel v. People,
groundless. Concededly, the mere act of G.R. No. 165842, 29 Nov. 2005)
submitting a case to the authorities for
2023 GOLDEN NOTES
7. Seduction; The “right” of the respondents to dismiss

Quisaba should not be confused with the
In the case of Pe v. Pe (G.R. No. L-17396, 30 manner in which the right was exercised and
May 1962), the circumstances under which the effects flowing therefrom. If the dismissal
defendant tried to win Lolita's affection was done anti-socially or oppressively, as the
cannot lead to any other conclusion than that complaint alleges, then the respondents
it was he who, thru an ingenious scheme or violated Art. 1701 of the NCC which prohibits
trickery, seduced the latter to the extent of acts of oppression by either capital or labor
making her fall in love with him. This is against the other, and Art. 21, which makes a
shown by the fact that defendant frequented person liable for damages if he wilfully
the house of Lolita on the pretext that he causes loss or injury to another in a manner
wanted her to teach him how to pray the that is contrary to morals, good customs, or
rosary. Because of the frequency of his visits public policy, the sanction for which, by way
to the latter's family who was allowed free of moral damages, is provided in Art.
access because he was a collateral relative 2219(10).
and was considered as a member of her
family, the two eventually fell in love with 9. Violation of rights committed by public
each other and conducted clandestine love officers
affairs not only in Gasan but in Boac where
Lolita used to teach in a barrio school. Any person suffering material or moral loss
because a public servant or employee refuses
Indeed, no other conclusion can be drawn or neglects, without just cause, to perform his
from this chain of events than that defendant official duty may file an action for damages
not only deliberately, but through a clever and other relief against the latter, without
strategy, succeeded in winning the affection prejudice to any disciplinary administrative
and love of Lolita to the extent of having illicit action that may be taken. (Art. 27, NCC)
relations with her. The wrong he has caused
her, and her family is indeed immeasurable Any public officer or employee, or any private
considering the fact that he is a married man. individual, who directly or indirectly
Verily, he has committed an injury to Lolita's obstructs, defeats, violates, or in any manner
family in a manner contrary to morals, good impedes or impairs any of the rights and
customs and public policy as contemplated in liberties of another person under Art. 32
Art. 21 of the NCC. shall be liable to the latter for damages.
8. Unjust dismissal; and Interference with Relations
In the case of Quisaba v. Sta. Ines-Melale 1. Family relations such as:

Veneer & Plywood Inc (G.R. No. L-38088, 30
Aug. 1974), the Court ruled that although the a. Alienation of Affection;
acts complained of seemingly appear to b. Loss of Consortium; or
constitute "matters involving employee- c. Criminal Conversation (Adultery).
employer relations" as Quisaba's dismissal
was the severance of a pre-existing 2. Social relations such as:
employee-employer relation, his complaint is
grounded not on his dismissal per se, as in a. Meddling with or disturbing family
fact he does not ask for reinstatement or relations found under Art. 26(2) of the
backwages, but on the manner of his NCC; or
dismissal and the consequent effects of such
dismissal.
CIVIL LAW
b. Intriguing to cause another to be 3. STRICT LIABILITY

alienated from his friends found under
Art. 26(3) of the NCC.
It means the proof of negligence is not necessary. It
applies even if the defendant manufacturer or
3. Economic relations such as:
processor has exercised all the possible care in the
preparation and the sale of his product.
a. Interference with contractual
relations or tort interference found
POSSESSOR AND USER OF AN ANIMAL
under Art. 1314 of the NCC;
b. Business Interruption Damages; or
Possessor and User of an Animal
c. Unfair Competition; and
The possessor of an animal or whoever may make

4. Political relations such as:
use of the same is responsible for the damage which
it may cause, although it may escape or be lost. This
a. Violation of right to suffrage; or
responsibility shall cease only in case the damage
b. Violation of other political rights such
should come from force majeure or from the fault of
as freedom of speech, press, assembly,
the person who has suffered damage. (Art. 2183,
and religion.
NCC)
2. NEGLIGENT According to Manresa, the obligation imposed by

Art. 2183 of the NCC is not based on the negligence
Negligence or on the presumed lack of vigilance of the
possessor or user of the animal causing the damage.
Negligence is the omission of that degree of It is based on natural equity and on the principle of
diligence which is required by the nature of the social interest that he who possesses animals for his
obligation and corresponding to the circumstances utility, pleasure or service must answer for the
of the persons, time and place. (Art. 1173, NCC) damage which such animal may cause. (Vestil v. IAC,
G.R. No. 74431, 06 Nov. 1989)
An actionable negligence may be culpa contractual,
culpa aquiliana, or criminal negligence. Thus, an The language of Art. 2183 reveals an evident intent
action for damages for negligent act of the to make the possessor or whoever makes use of the
defendant may be based on contract, quasi-delict, or animal, liable independent of fault. The only
delict. The bases for liability are separate and exception is when the damage was caused by force
distinct from each other even if only one act is majeure or by the person who suffered the damage.
involved. (Aquino, 2017) Additionally, there is an opinion to the effect that
the owner or possessor of the animal is still liable
Intentional Tort vs. Negligent Tort even if damage was caused by the animal through
the fault of third persons. If the acts of a third person
INTENTIONAL NEGLIGENT cannot be foreseen or prevented, then the situation
Defendant does not is similar to that of force majeure and the possessor
Defendant is intend an invasion of is not liable. (Aquino, 2016)
consciously ware that plaintiff’s right but is
his conduct is wrongful aware that he is taking In the case of Afialda v. Hisole (G.R. No. L-2075, 29
unreasonable risks Nov. 1949), the animal was in the custody and under
the control of the caretaker, who was paid for his
work as such. Obviously, the Court ruled that it was
the caretaker's business to try to prevent the animal
from causing injury or damage to anyone, including
2023 GOLDEN NOTES
himself. And being injured by the animal under importance. (Velasco v. Manila Electric Co., G.R. No.
those circumstances, was one of the risks of the L-18390, 06 Aug. 1971)
occupation which he had voluntarily assumed and
for which he must take the consequences. Noise as Nuisance
Q: Primo owns a pet iguana which he keeps in a The fact that the cause of the complaint must be
man-made pond enclosed by a fence situated in substantial has often led to expressions in the
his residential lot. A typhoon knocked down the opinions that to be a nuisance the noise must be
fence of the pond and the iguana crawled out of deafening or loud or excessive and unreasonable.
the gate of Primo’s residence. N, a neighbor who Usually it was shown to be of that character.
was passing by, started throwing stones at the
iguana, drawing the iguana to move toward him. The determining factor when noise alone is the
N panicked and ran but tripped on something cause of complaint is not its intensity or volume. It
and suffered a broken leg. Is anyone liable for is that the noise is of such character as to produce
N’s injuries? Explain. (2010 BAR) actual physical discomfort and annoyance to a
person of ordinary sensibilities, rendering adjacent
A: No one is liable. The possessor of an animal or property less comfortable and valuable. If the noise
whoever may make use of the same is responsible does that it can well be said to be substantial and
for the damage which it may cause, although it may unreasonable in degree; and reasonableness is a
escape or be lost. This responsibility shall cease only question of fact dependent upon all the
in case the damage should come from force majeure circumstances and conditions.
or from the fault of the person who has suffered
damage. (Art. 2183, NCC) There can be no fixed standard as to what kind of
noise constitutes a nuisance. In the absence of
NUISANCE evidence that the complainant and his family are
supersensitive to distracting noises, it is to be
The general rule is that everyone is bound to bear assumed that they are persons of ordinary and
the habitual or customary inconveniences that normal sensibilities. (Velasco v. Manila Electric Co.,
result from the proximity of others, and so long as G.R. No. L-18390, 06 Aug. 1971)
this level is not surpassed, he may not complain
against them. But if the prejudice exceeds the Classes of Nuisance
inconveniences that such proximity habitually
brings, the neighbor who causes such disturbance is Nuisances may be divided into two classes:
held responsible for the resulting damage, being
guilty of causing nuisance. 1. Nuisances per se; and
2. Nuisances per accidens.
There can be no doubt but that commercial and
industrial activities which are lawful in themselves Nuisances per se are recognized as nuisances under
may become nuisances if they are so offensive to the any and all circumstances. Nuisances per accidens
senses that they render the enjoyment of life and are nuisances only because of the special
property uncomfortable. It is no defense that skill circumstances and conditions surrounding
and care have been exercised and the most them. (Iloilo Ice and Cold Storage Co. v. Municipal
improved methods and appliances employed to Council of Iloilo, G.R. No. 7012, March 26, 1913, 24
prevent such result. PHIL 471-485)
Of course, the creation of trifling annoyance and

inconvenience does not constitute an actionable
nuisance, and the locality and surroundings are of
CIVIL LAW
Attractive Nuisance Doctrine prevent children from being harmed. Respondent's

failure to install the needed safeguards constitutes
One who maintains on his premises dangerous negligence for which it should be held liable for
instrumentalities or appliances of a character likely damages.
to attract children in play, and who fails to exercise
ordinary care to prevent children from playing NOTE: This case is beyond the cutoff date provided
therewith or resorting thereto, is liable to a child of in the 2023 syllabus.
tender years who is injured thereby, even if the child
is technically a trespasser in the premises. Abatement of Nuisances per se
The principal reason for the doctrine is that the The general welfare clause authorizes the
condition or appliance in question although its abatement of nuisances without judicial
danger is apparent to those of age, is so enticing or proceedings. This tenet applies to a nuisance per se,
alluring to children of tender years as to induce or one which affects the immediate safety of
them to approach, get on or use it, and this persons and property and may be summarily abated
attractiveness is an implied invitation to such under the undefined law of necessity. (Monteverde
children. (Hidalgo Enterprises, Inc. v. Balandan, G.R. v. Generoso, G.R. No. 28491, 29 Sept. 1928; Estate of
No. L-3422, 13 June 1952; Jarco Marketing Corp. v. Francisco v. CA, G.R. No. 95279, 25 July 1991)
CA, G.R. No. 129792, 21 Dec. 1999)
Abatement of Nuisance per accidens
Example: Swimming pool with “attractive floats or If it be a nuisance per accidens, or by its nature, it
paraphernalia.” cannot be said to be injurious to rights of property,
health, or comfort of the community, it may then be
However, it should be noted that the attractive so proven in a hearing conducted for that purpose.
nuisance doctrine, generally, is not applicable to A nuisance per accidens is not per se a nuisance
bodies of water, artificial as well as natural, in the warranting its summary abatement without judicial
absence of some unusual condition or artificial intervention. (Estate of Francisco v. Court of Appeals,
feature other than the mere water and its location. G.R. No. 95279, July 25, 1991, 276 PHIL 649-656)
(Hidalgo Enterprises, Inc. v. Balandan, supra.)
NOTE: While the Sangguniang Bayan may provide
NOTE: In Aleta v. Sofitel Philippine Plaza Manila for the abatement of a nuisance (Sec. 149(ee), LGC),
(G.R. No. 228150, 11 Jan. 2023), the Court held that it cannot declare a particular thing as a nuisance per
although the swimming pool alone may not be se and order its condemnation. The nuisance can
considered as an attractive nuisance, the kiddie only be so adjudged by judicial determination.
pool's close proximity to the slides formed an
unusual condition or artificial feature intended to Municipal councils do not have the power to find as
attract children. In other words, the installation of a fact that a particular thing is a nuisance when such
the slides with slopes ending over the swimming thing is not a nuisance per se; nor can they authorize
pool's waters makes it an attractive nuisance. the extra judicial condemnation and destruction of
Hence, the respondent was duty bound to that as a nuisance which, in its nature, situation or
undertake protective measures to ensure the use is not such. These things must be determined in
children's safety. It was respondent's the ordinary courts of law. (Iloilo Cold Storage v.
responsibility to guarantee that appropriate Municipal Council, G.R. No. L-7012, 26 Mar. 1913;
safeguards were in place within the attractive Estate of Francisco v. CA, G.R. No. 95279, 25 July
nuisance in order to protect children against the 1991)
injury from unknown or unseen dangers. Further,
by maintaining an attractive nuisance in its
premises, it is respondent's responsibility to
ensure that necessary precautions are in place to
2023 GOLDEN NOTES
2. DIRECT
C. THE TORTFEASOR
Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged
Tortfeasor to pay for the damage done. (Art. 2176, NCC)
Every person legally responsible is liable for a tort The tortfeasor may be:
committed by him provided if it is the proximate 1. Natural person
cause of an injury to another. 2. Juridical person
NOTE: One who contributes to a damage cannot NOTE: For natural persons, apply requisites of Art.
escape liability because his proportional 2176 and for juridical persons, apply vicarious
contribution to the result may not be accurately liability provisions.
measured. (De Leon, 2012)
1. JOINT D. QUASI-DELICT vs. CULPA CONTRACTUAL vs.

CULPA CRIMINAL
Two or more persons who act together in
committing a wrong, or contribute to its
commission, or assist or participate therein actively Quasi-delict or Culpa Aquiliana
and with common intent, so that injury results to a
third person from joint wrongful act of the Obligations arise from damages caused to another
wrongdoers. (De Leon, 2012) through an act or omission, there being fault or
negligence but no contractual relations exist
Liability of Joint Tortfeasors between the parties. (Art. 2176, NCC)
Joint tortfeasors are solidarily liable. (De Leon, 2012; Elements of Quasi-delict
Art. 2194, NCC) Each are liable as principals, to the
same extent and in the same manner as if they had 1. A legal Right in favor of a person
performed the wrongful act themselves. (Ruks 2. A correlative legal Obligation on the part of
Konsult and Construction v. Adworld Sign and the defendant to respect such right.
Advertising Corp., G.R. No. 204866, 21 Jan. 2015) 3. A Wrong, an act or omission in violation of
such right with consequent injury.
Primary Test for Joint Tortfeasors
NOTE: The term tort was not used because it is
1. Whether the plaintiff has a single cause of broader in coverage as it covers, in common law
action against such tortfeasors; or countries, acts which are intentional or malicious,
2. Whether he has only several causes of action which latter acts in the general plan of the
against each of them. Philippine legal system are governed by the Penal
Code (Pineda, 2009)
NOTE: Where their concurring negligence resulted
in injury or damage to a third party, they become
joint tortfeasors and are solidarily liable for the
resulting damage. (Far Eastern Shipping v. Court of
Appeals, G.R. No. 130068, 1 Oct. 1998)
CIVIL LAW
Kinds of Negligence or Culpa NCC)
1. Culpa Contractual or contractual 5. That the cause of action has prescribed

negligence - negligence which results from after the lapse of 4 years; and (Art. 1146
breach of contract; NCC)
2. Culpa Aquiliana or civil negligence/tort/ 6. The fact that the plaintiff had committed
quasi-delict) - act or omission that causes contributory negligence is a partial
damage to another, there being no defense. (Art. 2179 NCC)
contractual relation between the parties;
(Art. 2176, NCC) and
3. Culpa Criminal or criminal negligence –

that which results in the commission of
crime or delict.
Q: Define quasi tort. Who are the persons liable

under quasi torts and what are the defenses
available to them? (2010 BAR)
A: Quasi-tort is considered as the equivalent of

quasi-delict. Hence the rules of the latter pertaining
to persons who can be held liable and their defenses
would also apply. Those liable for quasi-delict
include:
1. The tortfeasor or the person causing
damage to another through fault or
negligence (Art. 2176, NCC); and
2. Persons vicariously liable under Art. 2180

of the NCC.
The defenses available include:
1. That the defendant was not negligent or

that he exercised due diligence; (Art. 2176,
NCC)
2. That although the defendant is negligent,

his negligence is not the proximate cause of
the injury; (Art. 2179 NCC)
3. That the plaintiffs own negligence was the

immediate and proximate cause of his
injury; (Art. 2179 NCC)
4. That the person vicariously liable has

observed all the diligence of a good father
of a family to prevent damage; (Art. 2180
2023 GOLDEN NOTES
Culpa Aquiliana vs. Culpa Contractual
CULPA AQUILIANA CULPA CONTRACTUAL

As to the source of liability
The foundation of liability is independent of a
The liability is founded on a contract.
contract.
As to existence of negligence
Negligence is merely incidental to the performance of
Negligence is direct, substantive, and independent.
the contractual obligation.
As to the defense of good father of a family
The defense of “good father of a family” is a complete
The defense of “good father of a family” is not a
and proper defense insofar as parents, guardians,
complete defense in the selection of employees.
employers are concerned.
As to the presumption of negligence
There is no presumption of negligence. The party There is presumption of negligence, provided that
injured must prove the negligence of the defendant. breach of contract is proved.
(Pineda, 2009)
Culpa Aquiliana vs. Crimes
CULPA AQUILIANA CRIMES

As to the source of liability
There can be quasi-delict provided there is fault or
There must be a law punishing the act.
negligence resulting in damage or injury to another.
As to criminal intent
Criminal intent is necessary for criminal liability to
Criminal intent is not necessary.
exist.
Quasi-delict is a wrongful act against a private Crime is a wrong against the State or the public
individual. interest.
As to the quantum of proof required
The guilt if the accused must be proved beyond
The quantum of proof is preponderance of evidence.
reasonable doubt.
As to the punishment
The sanction is either reparation or indemnification The punishment is either imprisonment, fine, or both.
of the injury or damage. (Pineda, 2019)
CIVIL LAW
Culpa Contractual vs. Culpa Aquiliana vs. Culpa Criminal
CULPA CONTRACTUAL CULPA AQUILIANA CULPA CRIMINAL

(CONTRACT) (QUASI-DELICT) (DELICT)
As to existence of negligence
Negligence is an incident in the Negligence is substantive and Negligence is substantive and

performance of an obligation. independent. independent.
As to contractual relations
There is always a pre-existing There is no pre-existing There is no pre-existing

contractual relation. contractual relation. contractual relation.
As to source of obligation
The contract breached or not An act or omission punishable by

The defendant’s negligence.
fulfilled. law.
As to proof of negligence
Proof of the existence of the

Accused shall be presumed
contract and of its breach or non- The negligence of the defendant
innocent until the contrary is
fulfillment is sufficient prima facie must be proved.
proved beyond reasonable doubt.
to warrant recovery.
As to defenses available
Defense of “good father of a family”

Defense of “good father of a family”
in the selection and supervision of
in the selection and supervision of
the employees is not a proper
Defense of “good father of a family” the employees is not a proper
complete defense though it may
in the selection and supervision of defense.
mitigate damages.
the employees is a proper and
complete defense. The employee’s guilt is
Respondent superior or command
automatically the employer’s civil
responsibility or the master and
guilt if the former is insolvent.
servant rule.
As to quantum of proof
Preponderance of evidence. Preponderance of evidence. Guilt beyond reasonable doubt.
2023 GOLDEN NOTES
1. NATURE OF LIABILITY
E. PROXIMATE CAUSE
Nature of the vicarious liability of the
employers, owners, and managers
1. CONCEPT
Direct or immediate. It is not conditioned upon a
prior recourse against the negligent employee or a
Proximate cause is that cause, which, in natural and
prior showing of insolvency of such employee. It is
continuous sequence, unbroken by any efficient
also joint and solidary with the employee. (Art.
intervening cause, produces the injury, and without
2180, NCC; Pineda, 2009, citing Mercury Drug
which the result would not have occurred. (Ramos v.
Corporation v. Huang, G.R. No. 172122, 22 June 2007)
C.O.L. Realty, G.R. No. 184905, 28 Aug. 2009)
Nature of Responsibility of Vicarious Obligor

NOTE: Proximate cause is not necessarily the
immediate cause; it’s not necessarily the nearest
Primary and direct. He is solidarily liable with the
time, distance, or space. (People v. Elizalde, 59 OG
tortfeasor. His responsibility is not conditioned
1241)
upon the insolvency of or prior recourse against the
negligent tortfeasor. (Pineda, 2009, citing De Leon
Application of Proximate Cause
Brokerage v. CA, G.R. No. L-15247, 28 Feb. 1962)
The doctrine of proximate cause is applicable only

Nature of Liability of Head of the Family
in actions for quasi-delict, not in actions involving
breach of contract.
Absolute and exclusive. It is absolute in the sense
that as long as he is the head of the family that lives
The doctrine is a device for imputing liability to a
in the building or part thereof like a rented room, he
person where there is no relation between him and
is liable even if he is not present at the time of the
another party. In such a case, the obligation is
incident. It is exclusive in the sense that it is only the
created by law itself. But, where there is a pre-
head of the family who is made liable. (Pineda, 2009)
existing contractual relation between the parties, it
is the parties themselves who create the obligation,
Nature of Liability of Joint Tortfeasors
and the function of the law is merely to regulate the
relation thus created. (Calalas v. CA, G.R. No. 122039,
The joint tortfeasors are solidarily liable for the
31 May 2000)
damage caused. (Art. 2194, NCC; Pineda, 2009, citing
Metro Manila Transit Corporation v. CA, G.R. No.
Principle of concurrent causes
104408, 21 June 1993)
Where the concurrent or successive negligent acts

or omissions of two or more persons, although
acting independently, are in combination with the
direct and proximate cause of a single injury to a
third person, and it is impossible to determine what
proportion each contributed to the injury, either of
them is responsible for the whole injury, even
though his act alone might not have caused the
entire injury. (Sabido v. Custodio, G.R. No. L-21512,
31 Aug. 1966)
CIVIL LAW
Efficient Intervening Cause (Novus Actus 2. DOCTRINE OF LAST CLEAR CHANCE

Interviens)
Where both parties are negligent but the negligent

An efficient intervening cause is one which destroys
act of one is appreciable later than that of the other,
the causal connection between the negligent act and
or where it is impossible to determine whose fault
the injury and thereby negatives liability. (Aquino,
or negligence caused the loss, the one who had the
2019)
last clear opportunity to avoid the loss but failed to
do so is chargeable with the loss (Ofracio v. People,
When Efficient Intervening Cause is not
G.R. No. 221981, 04 Nov. 2020)
applicable
NOTE: The doctrine of last clear chance does not

There is no efficient intervening cause if the force
apply when only one of the parties was negligent.
created by the negligent act or omission have either:
Doctrine of Discovered Peril or Doctrine of

1. Remained active itself;
Supervening Negligence
2. Created another force which remained active
until it directly caused the result; or
This is also called as the “Humanitarian Negligence
3. Created a new active risk of being acted upon
Doctrine.” Where both parties are negligent but the
by the active force that caused the result.
negligent act of one succeeds that of the other by an
(Ibid.)
appreciable interval of time, the one who has the
last reasonable opportunity to avoid the impending
Proximate, Intervening, Remote and Concurrent
harm and fails to do so, is chargeable with the
Causes
consequences, without reference to the prior
negligence of the other party. (Picart v. Smith, G.R.
1. Proximate Cause - It is the cause which, in
No. L-12219, 15 Mar. 1918)
natural and continuous sequence, unbroken
by any efficient intervening cause, produces
The doctrine of last clear chance is a theory adopted
the injury, and without which the result
to mitigate the harshness of the contributory
would not have occurred.
negligence of the plaintiff. (Phoenix Construction Inc.
v. IAC, G.R. No. L-65295, 10 Mar. 1987)
2. Intervening cause - One that destroys the
causal connection between the negligent act
Requisites
and injury and thereby negatives liability.
1. Plaintiff is placed in danger by his own

NOTE: Foreseeable Intervening causes
negligent acts, and he is unable to get out
cannot be considered sufficient intervening
from such situation by any means;
causes.
3. Remote cause - That cause which some 2. Defendant knows that the plaintiff is in
independent force merely took advantage of danger and knows or should have known
to accomplish something not the natural that the plaintiff was unable to extricate
effect thereof. himself therefrom; and
4. Concurrent cause - Causes brought about by 3. Defendant had the last clear chance or
the acts and omissions of third persons which opportunity to avoid the accident through
makes the defendant still liable. Here, the the exercise of ordinary care but failed to
proximate cause is not necessarily the sole do so, and the accident occurred as a
cause of the accident. proximate result of such failure. (Pineda,
2009)
2023 GOLDEN NOTES
Instances When doctrine is NOT applicable Q: Mr. and Mrs. R own a burned-out building, the
firewall of which collapsed and destroyed the
1. When the injury or accident cannot be shop occupied by the family of Mr. and Mrs. S,
avoided by the application of all means at which resulted in injuries to said couple and the
hand after the peril has been discovered; death of their daughter. Mr. and Mrs. S had been
(Pantranco North Expressway v. Baesa, G.R. warned by Mr. & Mrs. R to vacate the shop in
Nos. 79050-51, 14 Nov. 1989) view of its proximity to the weakened wall but
the former failed to do so. Mr. & Mrs. S filed
2. If the defendant’s negligence is a against Mr, and Mrs. R an action for recovery of
concurrent cause and which was still in damages the former suffered as a result of the
operation up to the time the injury was collapse of the firewall. In their defense, Mr. and
inflicted; Mrs. R relied on the doctrine of last clear chance,
alleging that Mr. and Mrs. S had the last clear
3. Where the plaintiff, a passenger, filed an chance of avoiding the accident, had they
action against a carrier based on contract; heeded the former’s warning to vacate the shop,
(Bustamante v. CA, G.R. No. 89880, 06 Feb. and therefore Mr. and Mrs. R’s prior negligence
1991) should be disregarded. If you were the judge,
how would you decide the case? (1990 BAR)
4. If the actor, though negligent, was not
aware of the danger or risk brought about A: I would decide IN FAVOR OF MR. & MRS. S. The
by the prior fraud or negligent act; proprietor of a building or structure is responsible
for the damages resulting from its total or partial
5. In case of a collapse of a building or collapse if it should be due to the lack of necessary
structure; (De Roy v. CA, G.R. No. 80718, 29 repairs. (Art. 2190, NCC) With respect to the defense
Jan. 1988) of last clear chance, the same is not tenable as
enunciated by the Supreme Court in De Roy v. CA
6. Where both parties are negligent; or (PNR (G.R. No. L-80718, 29 Jan. 1988), where it held that
v. Brunty, G.R. No. 169891, 02 Nov. 2006) the doctrine of last clear chance is not applicable in
and instances covered by Art 2190 of the NCC. Further,
in Phoenix Construction, Inc. v. IAC (G.R. L-65295, 10
7. In case of collision, it applies in a suit Mar. 1987) the Court held that the role of the
between the owners and drivers of common law “last clear chance” doctrine, in relation
colliding vehicles and not where a to Art. 2179 of the NCC, is merely to mitigate
passenger demands responsibility from the damages within the context of contributory
carrier to enforce its contractual negligence.
obligations. (Tiu v. Arriesgado, G.R. No.
138060, 01 Sept. 2004)
NOTE: There is a different rule in case of

collision of vessels. The doctrine of last
clear chance in tort is not applicable to
collisions of vessels as “if both vessels may
be blamed for the collision, each one shall
be liable for his own damages, and both
shall be jointly responsible for the losses
and damages suffered by their cargos.” (Art.
827, Code of Commerce)
CIVIL LAW
4. Even if payment has been made, an action

F. VICARIOUS LIABILITY is still possible.
NOTE: Acceptance of the building, after

completion, does not imply waiver of any of
Principle of Vicarious Liability or Law on
the cause of action by reason of any defect.
Imputed Negligence (2001, 2002, 2003, 2004,
2005, 2006, 2009, 2010 BAR)
5. If the engineer or architect supervises the
construction, he shall be solidarily liable
The obligation imposed by Art. 2176 of the NCC for
with the contractor. (NCC, Art. 1723)
quasi-delicts is demandable not only for one's own
acts or omissions, but also for those persons for
NOTE: The contractor is likewise
whom one is responsible. (Art. 2180, NCC)
responsible for the damages if the edifice
falls, within the same period, on account of
LIABILITY OF PROPRIETORS OF BUILDINGS
defects in the construction or the use of
materials of inferior quality furnished by
When Proprietors of Building are Liable (1990,
him, or due to any violation of the terms of
2002, 2007)
the contract.
1. The proprietor of a building or structure is

When a Building Collapses During an
responsible for the damages resulting from
Earthquake
its total or partial collapse, if it should be due
to the lack of necessary repairs. (Art. 2190,
GR: No one can be held liable in view of the
NCC)
fortuitous event if the proximate cause of the
collapse of the building is an earthquake.
2. They shall also be responsible for damages
caused by emanations from tubes, canals,
XPN: If the proximate cause is the defective
sewers or deposits of infectious matter,
designing or construction, or directly attributable to
constructed without precautions suitable to
the use of inferior or unsafe material, it is clear that
the place. (Art. 2191, NCC)
liability exists. (Art. 1723, NCC; Juan F. Nakpil & Sons
v. CA, G.R. No. L-47851, 03 Oct. 1986)
Rules on Liability for Collapse of a Building
Concurrent Negligence of Two or More Persons

1. The collapse of the building must be within
15 years from the completion of the
Where the concurrent or successive negligent acts
structure.
or omissions of two or more persons, although
acting independently, are in combination the direct
NOTE: The collapse is due to a defect in the
and proximate cause of a single injury to a third
engineer or architect’s plans and
person. (Sabido v. Custodio, G.R. No. L-21512, August
specifications, or due to the defects in the
31, 1966)
ground.
Materiality of Intent
2. The prescriptive period is 10 years
following the collapse.
Liability in tort for injury is determined by conduct
and can arise regardless of the mental state or intent
3. The liability applies to collapse or ruin, not
to commit an unlawful.
to minor defects.
2023 GOLDEN NOTES
If several persons jointly commit a tort, the plaintiff c. Tolerated Possession - owner is liable if
or person injured, has his election to sue all or some the plaintiff is inside his property by
of the parties jointly, or one of them separately, tolerance or by implied permission.
because the tort is in its nature a separate act of each
individual. (Dean Worcester v. Ocampo, G.R. No. d. State of Necessity - A situation of present
5932, 27 Feb. 1912) danger to legally protected interests, where
the only remedy is injuring another’s
In case of injury to a passenger due to the negligence legally protected. (Aquino, 2019)
of the driver of the bus on which he was riding and
of the driver of another vehicle, the drivers as well LIABILITIES OF OWNERS AND MANAGERS OF
as the owners of the two vehicles are jointly and ESTABLISHMENTS AND ENTERPRISES
severally liable for damages. (Tiu v. Arriesgado, G.R.
No. 138060, 01 Sept. 2004) When Owners and Managers of Establishments
and Enterprises are Liable (2005 BAR)
Duties of Owners, Proprietors, and Possessors
of Properties The owners and managers of an establishment or
enterprise are likewise responsible for damages
GR: The owner has no duty to take reasonable care caused by their employees in the service of the
towards a trespasser for his protection from branches in which the latter are employed or on the
concealed danger. The trespasser come on to the occasion of their functions. (Art. 2180(4), NCC)
premises under his own risk. (Taylor v. Manila
Railroad Company, G.R. No. L-4977, 22 Mar. 1910) Employers shall be liable for the damages caused by
their employees and household helpers acting
XPNs: within the scope of their assigned tasks, even
a. Visitors - owners owe a duty of care to though the former are not engaged in any business
visitors. (Cabigao v. University of the East, or industry. (Art. 2180(5), NCC)
G.R. No. 33554, 15 Mar. 2017)
“Owners and Managers”
b. Doctrine of Attractive Nuisance - one who
maintains on his premises dangerous The terms “owners” and “managers” are used in the
instrumentalities or appliances, likely to sense of “employer” and do not include the manager
attract children in play and fails to prevent of a corporation who himself is just an employee.
children from playing therewith, is liable to (Phil. Rabbit Bus Lines v. Phil. American Forwarders,
a child of tender years who is injured Inc., G.R. No. L-25142, 25 Mar. 1975)
thereby, even if the child is technically a
trespasser in the premises. (Hidalgo To make the employer liable under Art. 2180 of the
Enterprises, Inc. v. Balandan, G.R. No. L- NCC, it must be established that the injurious or
3422, 13 June 1952) tortious act was committed at the time the
employee was performing his functions. (Marquez v.
NOTE: The principal reason for the Castillo, G.R. No. 46237, 27 Sep. 1939)
doctrine is that, although its danger is
apparent to those of age, it is so enticing or NOTE: However, a manager who is not an owner but
alluring to children of tender years as to who assumes the responsibility of supervision over
include them to approach, get on or use it; the employees of the owner may be held liable for
and this attractiveness is an implied the acts of the employees. (Pineda, 2009)
invitation to such children. (Ibid.)
One who hires an independent contractor but
controls the latter’s work is responsible also for his
CIVIL LAW
negligence. (Cuison v. Norton and Harrison Co., G.R. When a criminal case is filed against the offender,
No. L-32774, 14 Oct. 1930) before the employer’s subsidiary liability is exacted,
there must be proof that:
GR: It is required that the employee must be
performing his assigned task at the time that the 1. They are indeed the employer of the convicted
injury is caused. employee;
2. The former is engaged in some kind of industry;
XPN: However, it is not necessary that the task 3. The crime was committed by the employees in
performed by the employee is his regular job or that the discharge of their duties; and
which was expressly given to him by the employer. 4. That the execution against the latter has not
It is enough that the task is indispensable to the been satisfied due to insolvency.
business or beneficial to the employer. (Filamer
Christian Institute v. IAC, G.R. No. 75112, 07 Aug. NOTE: The determination of these conditions may
1992) be done in the same criminal action in which the
employee’s liability, criminal and civil, has been
NOTE: It is not required that the employer is pronounced, in a hearing set for that precise
engaged in some kind of industry or work. (Castilex purpose, with due notice to the employer, as part of
Industrial Corporation v. Vasquez, G.R. No. 132266, the proceedings for the execution of the judgment.
21 Dec. 1999) (Calang v. People, G.R. No. 190696, 03 Aug. 2010;
Rabuya, 2017)
Manager
Employer
GR: A mere manager, who does not own the
business, is not to be considered as an employer An employer includes any person acting directly or
because as a manager, he is just a high-class indirectly in the interest of an employer in relation
employee. to an employee and shall include the government
and all its branches, subdivisions and
XPN: A manager who is not an owner but who instrumentalities, all government owned or
assumes the responsibility of supervision over the controlled corporations and institutions, as well as
employees of the owner may be held liable for the non-profit private institutions, or organizations.
acts of the employees. (Art. 97, Labor Code)
NOTE: To be liable, the manager must be acting as Requisites Before an Employer may be Held
an employer of with the same authority as the Liable for the Act of Their Employees under Art.
owner. 2180(4) of the NCC
Owner or Employer 1. The employee was chosen by the employer

personally or through another;
To make the employer liable under Art. 2180(5) and
(6), it must be established that the injurious or 2. The service is to be rendered in accordance
tortuous act was committed at the time the with orders which the employer has the
employee was performing his functions. authority to give all times; and
NOTE: If there is deviation from the scope of 3. That the illicit act of the employee was on the
employment, the employer is not liable no matter occasion or by reason of the functions entrusted
how short in time is the deviation. to him. (Jayme v. Apostol, G.R. No. 163609, 27
Nov. 2008)
2023 GOLDEN NOTES
Presumption of the Negligence of the Employer The RTC ruled in favor of Sps Bayaban. It found
Laraga negligent and the proximate cause of the
The negligence of the employee is presumed to be accident. On appeal, the CA maintained Laraga’s
the negligence of the employer because the liability, ruling that the registered owner of a
employer is supposed to exercise supervision over motor vehicle is primarily and directly
the work of the employees. This liability of the responsible for the consequences of its
employer is primary and direct. (Standard Vacuum operation, including the negligence of the
Oil Co. v. Tan, G.R. No. L-13048, 27 Feb. 1960) driver, with respect to the public and all third
persons.
Once the employee’s fault is established, the
employer can then be made liable based on the 1. Does the burden of proof falls upon Imperial
presumption that the employer failed to exercise to prove that his employee, Laraga, was not
diligentissimi patris familias (diligence of a good acting within the scope of his assigned
father of a family) in the selection and supervision tasks?
of its employees. (LRTA v. Navidad, G.R. No. 145804,
06 Feb. 2003) A: NO. The burden of proving the existence of an
employer-employee relationship and that the
Owners/Managers Employers employee was acting within the scope of his or her
Art. 2180(4), NCC Art. 2180(5), NCC assigned tasks rests with the plaintiff under the
Requires engagement Latin maxim “ei incumbit probatio qui dicit, non qui
in business on the part negat” or “he who asserts, not he who denies, must
The employers need
of the employers as the prove.” Therefore, it is not incumbent on the
not be engaged in
law speaks of employer to prove that the employee was not acting
business or industry.
“establishment or within the scope of his assigned tasks. Once the
enterprise.” plaintiff establishes the requisite facts, the
Covers negligent acts presumption that the employer was negligent in the
of employees selection and supervision of the employee arises,
Covers negligent acts
committed either in disputable with evidence that the employer has
of employees acting
the service of the observed all the diligence of a good father of a family
within the scope of
branches or in the to prevent damage.
their assigned tasks.
occasion of their
functions. 2. Should Imperial be vicariously liable for the
damages sustained by Sps. Bayaban?
Q: A van and a tricycle figured in an accident
along Sumulong Highway in Antipolo City. The A: YES. Specifically, for employers, they are deemed
van was owned and registered under Imperial's liable or morally responsible for the fault or
name and was driven by Laraga, while the negligence of their employees but only if the
tricycle was driven by Mercado. employees are acting within the scope of their
assigned tasks. An act is deemed an assigned task if
Sps. Bayaban, who were on board the tricycle, it is “done by an employee, in furtherance of the
sustained injuries requiring therapy and post- interests of the employer or for the account of the
medical treatment. The Sps. Bayaban demanded employer at the time of the infliction of the injury or
compensation from Imperial, Laraga, and damage.”
Mercado for the hospital bills and loss of income
that they sustained while undergoing treatment. Considering that petitioner failed to dispute the
When neither Imperial, Laraga, nor Mercado presumption of negligence on his part, he was
heeded their demand, Sps. Bayaban filed a correctly deemed liable for the damages incurred by
Complaint for damages. Sps. Bayaban when the tricycle they were riding
collided with the van driven by petitioner's
CIVIL LAW
employee, Laraga. (Imperia v. Heirs of Neil Bayaban, A: YES, there is a presumption of negligence on the
G.R. No. 197626, 03 Oct. 2018) part of the employer. However, such presumption is
rebuttable. The liability of the employer shall cease
Remedies of the injured party in pursuing the when they prove that they observed the diligence of
civil liability of the employer for the acts of his a good father of a family to prevent damage. (Art.
employees 2180) When the employee causes damage due to his
own negligence while performing his own duties,
1. Primary, direct and solidary - If he there arises the juris tantum presumption that the
chooses to file a civil action for damages employer is negligent, rebuttable only by proof of
based on quasi-delict under Art. 2180 of the observance of the diligence of a good father of a
NCC and succeeds in proving the negligence family. (Delsan Transport Lines v. C & A Construction,
of the employee. It is not conditioned on the G.R. No. 156034, 01 Oct. 2003) Likewise, if the driver
insolvency of the employee; (Metro Manila is charged and convicted in a criminal case for
Transit Corp. v. CA, G.R. No. 118069, 16 Nov. criminal negligence the owner is subsidiarily liable
1998) or for the damages arising from the criminal act.
2. Subsidiary - If he chooses to file a criminal When an Employee is Considered to be Acting

case against the offender and is found guilty Within the Scope of Employment
beyond reasonable doubt. The employer
cannot use as a defense the exercise of the An employee who uses his employer’s vehicle in
diligence of a good father of a family. going from his work to a place where he intends to
eat or in returning to work from a meal is not
NOTE: Once there is a conviction for a ordinarily acting within the scope of his
felony, final in character, the employer employment in the absence of evidence of some
under Art. 103 of the RPC, is subsidiary special business benefit to the employer. (Castilex
liable, if it be shown that the commission Industrial Corporation v. Vasquez, G.R. No. 132266,
thereof was in the discharge of the duties of 21 Dec. 1999)
the employee. A previous dismissal of an
action based on culpa aquiliana could not However, evidence that by using the employer’s
be a bar to the enforcement of the vehicle to go to and from meals, an employee is
subsidiary liability required by Art. 103 of enabled to reduce his time-off and so devote more
the RPC. (Jocson, et al. v. Glorioso, G.R. No. L- time to the performance of his duties, supports the
22686, 30 Jan. 1968) finding that an employee is acting within the scope
of his employment while so driving the vehicle.
Vicarious Liability of Owners and Managers of (Ibid.)
Establishment vs. of Employers
Q: After working overtime up to midnight,
Q: OJ was employed as a professional driver of Alberto, an executive of an insurance company
MM Transit bus owned by Mr. BT. In the course drove a company vehicle to a favorite videoke
of his work, OJ hit a pedestrian who was bar where he had some drinks and sang some
seriously injured and later died in the hospital songs with friends to “unwind.” At 2:00 A.M., he
because of the accident. The victim’s heirs sued drove home but in doing so, he bumped a
the driver and the owner of the bus for damages. tricycle resulting in the death of its driver. May
Is there a presumption in this case that Mr. BT, the insurance company be held liable for the
the owner, had been negligent? If so, is the negligent act of Alberto? Why? (2001 BAR)
presumption absolute or not? (2004 BAR)
A: NO, the insurance company is not liable because
when the accident occurred, Alberto was not acting
within the assigned tasks of his employment.
2023 GOLDEN NOTES
It is true that under Art. 2180(5), employers are A: NO. The defense of diligence in the selection and
liable for damages caused by their employees who supervision of the employee under Art. 2180 of the
were acting within the scope of their assigned tasks. NCC is available only to those primarily liable
However, the mere fact that Alberto was using a thereunder, but not to those subsidiary liable under
service vehicle of the employer at the time of the Art. 103 of the RPC. (Yumul v. Juliano, G.R. No. 47690,
injurious accident does not necessarily mean that he 28 Apr. 1941)
was operating the vehicle within the scope of his
employment. In Castilex Industrial Corporation v. Employer’s Liability Under Art. 2180, NCC vs.
Vasquez (G.R. No. 132266, 21 Dec. 1999), the Court Under Art. 100, RPC
held that notwithstanding the fact that the
employee did some overtime work for the company, ART. 2180, NCC ART. 100, RPC
the former was, nevertheless, engaged in his own As to the nature of liability
affairs or carrying out a personal purpose when he
went to a restaurant at 2:00 A.M. after coming out Liability is direct,
from work. The time of the accident (2:00 A.M.) was primary, and solidary;
outside normal working hours. the employer may be Liability is subsidiary.
sued even without
Defenses available to an employer suing the employee.
As to the defense of diligence of a good father

1. Exercise of due diligence in the selection and
of a family
supervision of its employees (except in criminal
action); and Diligence of a good Diligence of a good
father of a family is a father of a family is not
NOTE: In the selection of prospective defense. a defense.
employees, employers are required to examine
them as their qualifications, experience, and As to the liability of employer
service records. On the other hand, with respect
Employer is liable even Petitioner must prove
to the supervision of employees, employers
if he is not engaged in that the employer is
should formulate standard operating
business. engaged in business.
procedures (SOPs), monitor their
implementation and impose disciplinary As to the quantum of proof required
measures for breaches thereof. To establish
these factors in a trial involving the issue of Proof of negligence is
Proof beyond
vicarious liability, employees must submit by mere
reasonable doubt is
concrete proof, including documentary preponderance of
required.
evidence. (Metro Manila Transit v. CA, G.R. No. evidence.
141089, 01 Aug. 2002)
Q: Arturo sold his Pajero to Benjamin for P1M.
2. The act or omission was made outside working Benjamin took the vehicle but did not register
hours and in violation of company’s rules and the sale with the Land Transportation Office
regulations.
(LTO). He allowed his son Carlos, a minor who
did not have a driver's license, to drive the car to
Q: Would the defense of due diligence in the buy pandesal in a bakery. On the way, Carlos
selection and supervision of the employee be driving in a reckless manner sideswiped Dennis,
available to the employer in both instances? then riding a bicycle. As a result, he suffered
(1997 BAR) serious physical injuries. Dennis filed a criminal
complaint against Carlos for reckless
CIVIL LAW
imprudence resulting in serious physical 1. Will their action prosper?

injuries. (2006 BAR)
A: YES, their action will prosper. The liability of the
1. Can Dennis file an independent civil action employer in this case may be based on quasi-delict
against Carlos and his father Benjamin for and is included within the coverage of independent
damages based on quasi-delict? civil actions. It is not necessary to enforce the civil
liability based on culpa aquiliana that the driver or
A: YES. Dennis can file an independent civil action employee be proven to be insolvent since the
against Carlos and his father for damages based on liability of the employer for the quasi-delict
quasi-delict there being an act or omission causing committed by their employees is direct and primary
damage to another without contractual obligation. subject to the defense of due diligence on their part.
Under Sec. 1, Rule 111 of the 2000 Rules on Criminal (Arts. 2176 &. 2180, NCC)
Procedure, what is deemed instituted with the
criminal action is only the action to recover civil 2. If the parents of the boy do not wish to file a
liability arising from the act or omission punished separate civil action against the bus
by law. An action based on quasi-delict is no longer company, can they still make the bus
deemed instituted and may be filed separately. (Sec. company liable if the driver cannot pay the
3, Rule 111, ROC) award for damages? If so, what is the nature
of the employer's liability and how may civil
2. Assuming Dennis' action is tenable, can damages be satisfied?
Benjamin raise the defense that he is not
liable because the vehicle is not registered A: YES, the parents of the boy can enforce the
in his name? subsidiary liability of the employer in the criminal
case against the driver. The conviction of the driver
A: NO, Benjamin cannot raise the defense that the is a condition sine qua non for the subsidiary liability
vehicle is not registered in his name. His liability of the employer to attach. Proof must be shown that
which is vicarious in character is based on Art. 2180 the driver is insolvent. (Art. 103, RPC)
because he is the father of a minor who caused
damage due to negligence. While the suit will LIABILITIES OF BANKS
prosper against the registered owner, it is the actual
owner of the private vehicle who is ultimately liable. Sec. 2 of the General Banking Law (R.A. No. 8791)
(Duavit v. CA, G.R. No. L-29759, 19 May 1989) The declares that the State recognizes the fiduciary
purpose of car registration is to reduce difficulty in nature of banking that requires high standards of
identifying the party liable in case of accidents. integrity and performance.
(Villanueva v. Domingo, G.R. No. 144274, 14 Sep.
2004) Banking is a business that is impressed with public
interest. It affects economies and plays a significant
Q: A driver of a bus owned by company Z ran role in business and commerce. This is why the
over a boy who died instantly. A criminal case Court has recognized the fiduciary nature of banks’
for reckless imprudence resulting in homicide functions and attached a special standard of
was filed against the driver. He was convicted diligence for the exercise of their functions.
and was ordered to pay Php 2 Million in actual (Philippine National Bank v. Santos, G.R. Nos. 208293
and moral damages to the parents of the boy & 208295, 10 Dec. 2014)
who was an honor student and had a bright
future. Without even trying to find out if the
driver had assets or means to pay the award of
damages, the parents of the boy filed a civil
action against the bus company to make it
directly liable for the damages. (2015 BAR)
2023 GOLDEN NOTES
Wrongful Acts of Bank’s Employees criminal law, the owner of the automobile, although
present therein at the time the act was committed,
Petitioner bank was remiss in its duty and is not responsible, either civilly or criminally,
obligation to treat private respondent’s account therefor. The act complained of must be continued
with the highest degree of care, considering the in the presence of the owner for such a length of
fiduciary nature of their relationship. The bank is time that the owner, by his acquiescence, makes his
under obligation to treat the accounts with driver's act his own. (Chapman v Underwood, G.R.
meticulous care. It must bear the blame for failing to No. L-9010, 28 Mar. 1914)
discover the mistake of its employee. (Metropolitan
Bank v. CA, G.R. No. 112576, 26 Oct. 1994) The basis of the master's liability in civil law is not
respondent superior but rather the relationship of
LIABILITIES OF OWNERS OF MOTOR VEHICLES pater familias. The theory is that ultimately the
negligence of the servant, if known to the master
Liability of an Owner of a Vehicle in case of an and susceptible of timely correction by him, reflects
Accident (1996, 1998, 2002, 2009 BAR) his own negligence if he fails to correct it in order to
prevent injury or damage.
In motor vehicle mishaps, the owner is solidarily
liable with his driver if the former, who was in the The test of imputed negligence under Art. 2184 of
vehicle, could have, by the use of the due diligence, the NCC is, to a great degree, necessarily subjective.
prevented the misfortune. It is disputably presumed Car owners are not held to a uniform and inflexible
that a driver was negligent if he had been found standard of diligence as are professional drivers.
guilty or reckless driving or violating traffic
regulations at least twice within the next preceding In many cases they refrain from driving their own
two months. (Art. 2184, NCC) cars and instead hire other persons to drive for
them precisely because they are not trained or
Under the foregoing provision, if the causative endowed with sufficient discernment to know the
factor was the driver's negligence, the owner of the rules of traffic or to appreciate the relative dangers
vehicle who was present is likewise held liable if he posed by the different situations that are
could have prevented the mishap by the exercise of continually encountered on the road. What would
due diligence. The rule is not new, although be a negligent omission under Art. 2184 on the part
formulated as law for the first time in the NCC. of a car owner who is in the prime of age and knows
how to handle a motor vehicle is not necessarily so
The Court in Chapman v Underwood (G.R. No. L-9010, on the part, say, of an old and infirm person who is
28 Mar. 1914) held the same rule applies where the not similarly equipped.
owner is present, unless the negligent acts of the
driver are continued for such a length of time as to The law does not require that a person must possess
give the owner a reasonable opportunity to observe a certain measure of skill or proficiency either in the
them and to direct his driver to desist therefrom. An mechanics of driving or in the observance of traffic
owner who sits in his automobile, or other vehicle, rules before he may own a motor vehicle.
and permits his driver to continue in a violation of
the law by the performance of negligent acts, after The test of his negligence, within the meaning of Art.
he has had a reasonable opportunity to observe 2184 is his omission to do that which the evidence
them and to direct that the driver cease therefrom, of his own senses tells him he should do in order to
becomes himself responsible for such acts. avoid the accident. And as far as perception is
concerned, absent a minimum level imposed by law,
On the other hand, if the driver, by a sudden act of a maneuver that appears to be fraught with danger
negligence, and without the owner having a to one passenger may appear to be entirely safe and
reasonable opportunity to prevent the act or its commonplace to another. Were the law to require a
continuance, injures a person or violates the uniform standard of perceptiveness, employment of
CIVIL LAW
professional drivers by car owners who, by their Car Owner Not Present in the Vehicle
very inadequacies, have real need of drivers'
services, would be effectively prescribed. (Caedo v. If the car owner is not present in the vehicle and the
Yu Khe Thai, G.R. No. L-20392, 18 Dec. 1968) driver was negligent, the injured party may still sue
the said owner under Art. 2180(5) of the NCC for
Q: Jesmariane Reyes was hit by a van owned and imputed liability.
registered by Caravan Travel and Tours
International, Inc. Bautista, who was employed NOTE: Employers shall be liable for the damages
as the driver of Caravan, was found to be grossly caused by their employees and household helpers
negligent in driving the vehicle. Reyes’ aunt, acting within the scope of their assigned tasks, even
Abejar, presented a copy of the Certification of though the former is not engaged in any business or
Registration of the van which attests to industry. (Art. 2180(5), NCC)
Caravan’s ownership thereof. Caravan argues
that it cannot be held liable since Abejar offered When an Owner of the Vehicle is Not Liable
no documentary or testimonial evidence to
prove that Bautista acted within the scope of his An owner of a vehicle cannot be held liable for an
assigned tasks when the accident occurred. accident involving the said vehicle if the same was
driven without his consent or knowledge, and by a
Is Caravan liable as employer of Bautista? person not employed by him. (Duavit v. CA, G.R. No.
82318, May 18, 1989)
A: YES. Art. 2180 requires proof of two things: (1)
an employment relationship between the driver and LIABILITIES OF COMMON CARRIERS
the owner; and (2) that the driver acted within the
scope of his or her assigned tasks. The “registered- Common carriers are required to exercise
owner rule” only requires the plaintiff to prove that extraordinary diligence in the vigilance over their
the defendant-employer is the registered owner of passengers.
the vehicle. In cases where both the registered-
owner rule and Art. 2180 apply, the plaintiff must Provisions Under the NCC Regarding the
first establish that the employer is the registered Liability of a Common Carrier
owner of the vehicle in question. Once the plaintiff
successfully proves ownership, there arises a The law concerning the liability of a common carrier
disputable presumption that the requirements of has now suffered a substantial modification in view
Art. 2180 have been proven. Therefore, the burden of the innovations introduced by the NCC. These
of proof shifts to the defendant to show that no innovations are the ones embodied in Arts. 1733,
liability under Art. 2180 has arisen. Here, 1755, and 1756 insofar as the relation between a
respondent presented a copy of the Certificate of common carrier and its passengers is concerned,
Registration of the van that hit Reyes. The which, for ready reference, are quoted hereunder:
Certificate attests to petitioner's ownership of the
van. Petitioner itself did not dispute its ownership Art. 1733. Common carriers, from the nature of
of the van. Consistent with the rule, a presumption their business and for reasons of public policy, are
that the requirements of Art. 2180 have been bound to observe extraordinary diligence in the
satisfied arises. It is now up to petitioner to vigilance over the goods and for the safety of the
establish that it incurred no liability under Art. passengers transported by them according to all the
2180, which it failed to do. (Caravan Travel and circumstances of each case.
Tours International, Inc. v. Ermilinda R. Abejar, G.R.
No. 170631, 10 Feb. 2016) Such extraordinary diligence in the vigilance over
the goods is further expressed in Arts. 1734, 1735,
and 1745(5), (6), and (7), while the extraordinary
2023 GOLDEN NOTES
diligence for the safety of the passengers is further Doctrine of Corporate Responsibility
set forth in Arts. 1755 and 1756.
A hospital has the duty to see that it meets the
Art. 1755. A common carrier is bound to carry the standards of responsibilities for the care of patients.
passengers safely as far as human care and foresight Such duty includes the proper supervision of
can provide, using the utmost diligence of very members of its medical staff. (Professional Services,
cautious persons, with a due regard for all the Inc. v. Agana, G.R. No. 126297, 31 Jan. 2007)
circumstances.
Doctrine of Informed Consent
Art. 1756. In case of death of or injuries to
passengers, common carriers are presumed to have The doctrine of informed consent within the context
been at fault or to have acted negligently, unless of physician-patient relationships goes far back into
they prove that they observed extraordinary English common law. From a purely ethical norm,
diligence as prescribed in Arts. 1733 and 1755. informed consent evolved into a general principle of
(Isaac v. A.L. Ammen Transportation Co., Inc., G.R. No. law that a physician has a duty to disclose what a
L-9671, 23 Aug. 1957) reasonably prudent physician in the medical
community in the exercise of reasonable care would
LIABILITIES OF DOCTORS disclose to his patient as to whatever grave risks of
injury might be incurred from a proposed course of
Standard of Care Required treatment, so that a patient, exercising ordinary
care for his own welfare, and faced with a choice of
1. General Practitioner - The standard of the undergoing the proposed treatment, or alternative
care demanded is ordinary care and diligence treatment, or none at all, may intelligently exercise
in the application of his knowledge. his judgment by reasonably balancing the probable
risks against the probable benefits. (Li v. Sps.
2. Specialist - legal duty to the patient is Soliman, G.R. No. 165279, 07 June 2011)
generally considered to be that of an average
specialist and not of an average physician. DUTIES OF LAWYERS
(Aquino, 2019)
An attorney is bound to exercise only a reasonable
Captain of the Ship Doctrine degree of care and skill, having reference to the
business he undertakes. Prone to err like any other
The head surgeon is made responsible for human being, he is not answerable for every error
everything that goes wrong within the four corners or mistake, and will be protected as long as he acts
of the operating room. (Ibid.) honestly and in good faith to the best of his skill and
knowledge. (Adarne v. Aldaba, A.M. No. 801, 27 June
The fact that there is a trend in American 1978)
Jurisprudence to do away with the Captain of the
Ship Doctrine does not mean that this court will ipso LIABILITIES OF PARENTS OR
facto follow said trend. (Ramos v. CA, G.R. 124354, 29 HEADS OF THE FAMILY
Dec. 1999)
“Principal of Parental Liability” (2005 BAR)
Doctrine of Apparent Authority
This liability is made natural as a logical
When no employment relationship exists but it is consequence of the duties and responsibilities of
shown that the hospital holds out to the patient that parents exercising parental authority which
the doctor is its agent, it may be vicariously liable includes controlling, disciplining, and instructing
under Art. 2176. their children. In this jurisdiction the parent’s
liability is vested by law which assumes that when a
CIVIL LAW
minor or unemancipated child living with their Liability Under Art. 101 of the RPC
parent, commits a tortious act, the parents are
presumed negligent in the performance of their The parents are, and should be, held primarily liable
duty to supervise the children under their custody. for the civil liability arising from criminal offenses
(Tamargo v. CA, G.R. No. 85044, 03 June 1992) committed by their minor children under their legal
authority or control, or who live in their company,
Requisites of vicarious liability of the parents unless it is proven that the former acted with the
(21-C-L) diligence of a good father of a family to prevent such
damages. The primary liability is premised on the
1. The child is below 21 years of age; provisions of Art. 101 of the RPC with respect to
2. The child Committed a tortious act to the damages ex delicto caused by their children 9 years
damage and prejudice of another person; and of age or under, or over 9 but under 15 years of age,
3. The child Lives in the company of the parent who acted without discernment. With regard to
concerned whether single or married. (Pineda, their children over 9 but under 15 years of age, who
2009) acted with discernment, or 15 years of age or over
but under 21 years of age, such primary liability
Thus, under Art. 221 of the FC, there is no more shall be imposed pursuant to Art. 2180 of the NCC.
alternative qualification as to the civil liability of (Ibid.)
parents. The liability of both father and mother is
now primary and not subsidiary. (Libi v. IAC, G.R. No. NOTE: Parents and other persons exercising
70890, 18 Sept. 1992) Otherwise stated, their parental authority shall be civilly liable for the
responsibility is now simultaneous, and no longer injuries and damages caused by the acts or
alternative. (Rabuya, 2017) omissions of their unemancipated children living in
their company and under their parental authority
NOTE: A child 15 years of age or under at the time subject to the appropriate defenses provided by
of the commission of the offense shall be exempt law. (Art. 221, FC)
from criminal liability. (Sec. 6, R.A. No. 9344)
VICARIOUS LIABILITY OF OTHER PERSONS
LIABILITY OF PARENTS INVOLVING EITHER EXERCISING PARENTAL AUTHORITY
CRIMES OR QUASI-DELICTS OF THEIR MINOR
CHILDREN; PRIMARY NOT SUBSIDIARY In default of the parents or a judicially appointed
guardian, parental authority shall be exercised by
Liability of Parents Involving Crimes or Quasi- the following persons in the order indicated:
Delicts of Their Minor Parents
1. Surviving grandparents;
The civil liability of parents for quasi-delicts of their 2. Oldest sibling, over 21 years old, unless unfit or
minor children is primary and not subsidiary. (Art. unqualified; or
2180, NCC) In fact, if we apply Art. 2194 of the NCC, 3. Child’s actual custodian, over 21 years old,
which provides for solidary liability of joint unless unfit or disqualified. (Art. 216, FC)
tortfeasors, the persons responsible for the act or
omission, in this case, the minor and the father, and Adopted Children
in case of his death or incapacity, the mother, are
solidarily liable. Accordingly, such parental liability Judicially adopted children are considered
is primary and not subsidiary, hence, Art. 2180(8) legitimate children of their adopting parents. (Sec.
provides that “the responsibility treated in this 17, R.A. No. 8552)
article shall cease when the persons herein
mentioned proved that they observed all the Thus, adopters are civilly liable for the
diligence of a good father of a family to prevent tortious/criminal acts of their minor children who
damages. (Libi v. IAC, G.R. No. 70890, 18 Sept. 1992) live with them.
2023 GOLDEN NOTES
NOTE: Parental authority may not be given NOTE: They are liable for acts committed by
retroactive effect so as to make the adopting parents children while living with them and are below 21
the indispensable parties in a damage case filed years of age, the law being applied by analogy.
against their adopted child, for acts committed by (Pineda, 2009)
the latter, when actual custody was yet lodged with
the biological parents. (Tamargo v. CA, G.R. No. LIABILITIES OF STATE, PROVINCES, CITIES, AND
85044, 03 June 1992) MUNICIPALITIES
Reversion of Parental Authority to Biological Aspects of liability of the State

Parents
1. Public/Governmental – where the State is
If the adopter dies while the adopted child is still a liable only for the tortious acts of its special
minor, parental authority should be deemed to have agents. The State has voluntarily assumed
reverted in favor of the biological parents. liability for acts done through special agents.
(Bartolome v. SSS, G.R. No. 192531, 12 Nov. 2014) (Pineda, 2009)
Illegitimate Child 2. Private/Non-governmental – when the State is

engaged in private business or enterprise, it
As for an illegitimate child, if he is acknowledged by becomes liable as an ordinary employer. (NIA v.
the father and lives with the latter, the father shall Fontanilla, G.R. No. 61045, 01 Dec. 1989)
be responsible. However, if he is not recognized by
the putative father but is under the custody and NOTE: The State is only liable for the negligent acts
supervision of the mother, it is the latter who is the of its officers, agents and employees when they are
one vicariously liable. (Pineda, 2009) acting as special agents.
Liabilities of Guardians Special Agent
Guardians are liable for damages caused by the One who receives a definite and fixed order or
minors or incapacitated persons who are under commission, foreign to the exercise of the duties of
their authority and live in their company. (Art. 2180, his office.
NCC) If the minor or insane person causing damage
has no parents or guardian, the minor or insane An employee who on his own responsibility
person shall be answerable with his own property performs functions inherent in his office and
in an action against him where a guardian ad litem naturally pertaining thereto is not a special agent.
shall be appointed. (Art. 2182, NCC) (Meritt v. Government of the Philippine Islands, G.R.
No. 11154, 21 Mar. 1916)
NOTE: The rules on vicarious liability of parents are
applicable to vicarious liability of guardians. NOTE: Where the government commissions a
private individual for a special governmental task, it
De facto Guardians are Covered by Art. 2180 is acting through a special agent within the meaning
of the provision. (Largo, 2007)
De facto guardians are relatives and neighbors who
take upon themselves the duty to care and support Liability of Provinces, Cities and Municipalities
orphaned children without passing through judicial
proceedings. As for local government units, “provinces, cities and
municipalities shall be liable for damages for the
death of, or injuries suffered by, any person by
reason of the defective condition of roads, streets,
CIVIL LAW
bridges, public buildings, and other public works In the case of Ylarde v. Aquino (G.R. L-33722, 29 July
under their control or supervision.” (Art. 2189, NCC) 1988), the teacher Edgardo Aquino, after bringing
his pupils to an excavation site dug by them, left
In case where there is a “Management and them all by themselves, and one of the pupils fell
Operating Contract” Between an LGU and a into the pit. The teacher acted with fault and gross
Private Corporation negligence because a teacher who stands in loco
parentis to his pupils would have made sure that the
Sta. Ana Public Market, despite the Management and children are protected from all harm in his
Operating Contract between respondent City and company.
Asiatic Integrated Corporation remained under the
control of the former. There is no argument that it is Application of Vicarious Liability under Art.
the duty of the City of Manila to exercise reasonable 2180 is not Limited to Schools of Arts and Trade
care to keep the public market reasonably safe for
people frequenting the place for their marketing The application of Art. 2180 of the NCC is not limited
needs. To recapitulate, it appears evident that the to schools of arts and trades. There is no substantial
City of Manila is likewise liable for damages under distinction between the academic and the non-
Art. 2189 of the NCC, respondent City having academic schools insofar as torts committed by
retained control and supervision over the Sta. Ana their students are concerned. The same vigilance is
Public Market and as tort-feasor under Art. 2176 of expected from the teacher over the students under
the NCC on quasi-delicts. (Jimenez v. City of Manila, his control and supervision, whatever the nature of
G.R. No. 71049, 29 May 1987) the school where he is teaching. There is no reason
why different degrees of vigilance should be
NOTE: It is not even necessary for the defective road exercised by the school authorities on the basis only
or street to belong to the province, city or of the nature of their respective schools. (Amadora
municipality for liability to attach. The article only v. CA, G.R. No. L-47745, 15 Apr. 1988)
requires that either control or supervision is
exercised over the defective road or street. (Guilatco NOTE: Although Art. 2180 is applicable to all
v. City of Dagupan, G.R. No. 61516, 21 Mar. 1989) schools, the distinction between an academic school
and an establishment of arts and trades is still
Lack of knowledge is Not a Defense essential to distinguish the liability of the teacher
from that of the head of the establishment.
The LGU cannot be relieved of liability based on its
purported lack of knowledge of the excavation and Liability of the Teacher as Distinguished from
the condition of the road when the accident the Head of the Establishment
occurred. Its obligation to maintain the safe
condition of the road within its territory is a GR: Where the school is academic rather than
continuing one which is not suspended while a technical or vocational in nature, responsibility for
street is being repaired. (Mun. of San Juan v. CA, G.R. the tort committed by the student will attach to the
No. 121920, 09 Aug. 2005) teacher in charge of such student.
LIABILITIES OF TEACHERS AND HEADS OF XPN: In the case of establishments of arts and
ESTABLISHMENTS OF ARTS AND TRADES trades, it is the head thereof, and only he, who shall
be held liable as an exception to the general rule.
Teachers or directors of arts and trades are liable
for any damages caused by their pupils or In other words, teachers in general shall be liable for
apprentices while they are under their custody. the acts of their students except where the school is
technical in nature, in which case it is the head
thereof who shall be answerable. (Ibid.)
2023 GOLDEN NOTES
Basis of the teacher’s vicarious liability Age of student immaterial
They are acting in Loco Parentis (in place of Even if the student has already reached the age of
parents). However, teachers are not expected to majority, the liability can be imputed to the teacher-
have the same measure of responsibility as that in-charge. Under Art. 2180, age does not matter.
imposed on parent for their influence over the child Unlike the parent who will be liable only if the child
is not equal in degree. The parent can instill more is still a minor, the teacher is held answerable by the
lasting discipline on the child than the teacher and law for the act of the student regardless of the age of
so should be held to a greater accountability than the student liable. (Amadora v. CA, G.R. No. L-47745,
the teacher or the head for the tort committed by the 15 Apr. 1988)
child. (Ibid.)
Limitation to the Liability of Teachers and Heads
Special Parental Authority under the Family of Schools
Code
Teachers and heads of schools are only liable if the
The school, its administrators and teachers, or the students remain in schools. If they are no longer in
individual, entity or institution engaged in child such premises, their responsibility shall attach no
shall have special parental authority and more. Their parents become responsible for them.
responsibility over the minor child while under (Pineda, 2009)
their supervision, instruction or custody. (Art. 218,
FC) When a student is in Custody of the School
Authorities
Authority and responsibility shall apply to all
authorized activities whether inside or outside the The student is in the custody of the school
premises of the school, entity, or institution. authorities as long as he is under the control and
influence of the school and within its premises,
Those given the authority and responsibility under whether the semester has not ended, or has ended
the Art. 218 shall be principally and solidarily liable or has not yet begun. The term “custody” signifies
for damages caused by the acts or omissions of the that the student is within the control and influence
unemancipated minor. The parents, judicial of the school authorities. The teacher in charge is
guardians or the persons exercising substitute the one designated by the dean, principal, or other
parental authority over said minor shall be administrative superior to exercise supervision
subsidiarily liable. (Art. 219, FC) over the pupils or students in the specific classes or
sections to which they are assigned. It is not
Rationale of Vicarious Liability of School Heads necessary that at the time of the injury, the teacher
and Teachers (2005 BAR) is physically present, and in a position to prevent it.
The rationale of school heads and teachers’ liability Art. 218 of the FC vs. Art. 2180 of the NCC
for tortious acts of their pupils and students, so long
as they remain in custody, is that they stand, to a Art. 218, FC Art. 2180, NCC
certain extent, as to their pupils and students, in loco As to who is liable
parentis and are called upon to “exercise reasonable
supervision over the conduct of the child.” This is School, its
expressly provided for in Arts. 349, 350, and 352 of Teachers, head of
administrators,
the NCC. (Pineda, 2009) establishment in arts
teachers engaged in
and trades are made
childcare are made
expressly liable.
expressly liable.
CIVIL LAW
As to the nature of liability the student is also actionable under breach of

Liability of school, its contractual obligations.
administrators, and Neither such express
teachers is solidary solidary nor subsidiary 3. Subsidiary liability for felonies committed
and parents are made liability is stated. by their servants, pupils, workmen,
subsidiary liable. apprentices, or employees in the discharge of
their duties, under Art. 103 of the RPC.
As to the age of the students involved
Students involved Students involved are
must be a minor. not necessarily minors.
G. RES IPSA LOQUITUR
Q: A 15-year-old high school student stabs his
classmate who is his rival for a girl, while they
were going out of the classroom after their last It means “the thing speaks for itself.” It is the rule
class. Who may be held liable? (2005 BAR) that the fact of the occurrence of an injury, taken
with the surrounding circumstances, may permit an
A: The school, its administrators and teachers, or inference or raise a presumption of negligence, or
the individual, entity or institution engaged in make out a plaintiff’s prima facie case, and present a
childcare shall have special parental authority and question of fact for defendant to meet with an
responsibility over the minor child while under explanation.
their supervision, instruction, or custody. Authority
and responsibility shall apply to all authorized However, res ipsa loquitur is not a rule of
activities whether inside or outside the premises of substantive law and, as such, does not create nor
the school, entity, or institution. (Art. 218, FC) constitute an independent or separate ground of
liability. Instead, it is considered as merely
LIABILITY OF THE SCHOOL evidentiary or in the nature of a procedural rule.
(Professional Services Inc. v. Agana, G.R. No. 126297,
1. Vicarious liability as an employer under Art. 31 Jan. 2007)
2180 of the NCC;
NOTE: It is also known as the “Doctrine of Common
2. Direct liability: or Knowledge.”
a. For quasi-delicts under Art. 2176 of the Requisites for the application of the doctrine
NCC;
b. As an institution exercising special The application of the doctrine may be allowed only
parental authority over minor children when:
under Art. 219 of the FC; and
c. For breach of contract. 1. The accident is of such character as to
warrant an inference that it would not have
NOTE: When a student enrolls, a contract is happened except for the defendant’s
entered into between him and the school. negligence;
Under this contract, the school is supposed to
ensure that adequate steps are taken to 2. The accident must have been caused by an
provide an atmosphere conducive to study agency or instrumentality within the
and ensure the safety of the student while exclusive management or control of the
inside its premises. (Saludaga v. FEU, G.R. No. person charged with the negligence
179337, 30 Apr. 2008) Thus, any quasi-delict complained of; and
committed by the school’s employee against
2023 GOLDEN NOTES
3. The accident must not have been due to any

voluntary action or contribution on the part H. DAMNUM ABSQUE INJURIA
of the person injured. (Josefa v. Meralco, G.R.
No. 182705, 18 July 2014)
Concepts
Thus, it is not applicable when an unexplained
accident may be attributable to one of several
The illegal invasion of a legal
causes, for some of which the defendant could not Injury
right.
be responsible. (FGU Insurance Corp. v. G.P.
The loss, hurt, or harm which
Sarmiento Trucking Co., G.R. No. 141910, 06 Aug. Damage
results from the injury.
2002)
The recompense or
Damages compensation awarded for the
When doctrine is applicable
damage suffered.
All that the plaintiff must prove is the accident itself;
Damage Without Injury
no other proof of negligence is required beyond the
accident itself. It relates to the fact of an injury that
There can be damage without injury in those
sets out an inference to the cause thereof or
establishes the plaintiff’s prima facie case. The instances in which the loss or harm was not the
result of a violation of a legal duty. In such cases, the
doctrine rests on inference and not on presumption.
consequences must be borne by the injured person
(Perla Compania de Seguros, Inc. v. Sps. Sarangaya,
alone, the law affords no remedy for damages
G.R. No. 147746, 25 Oct. 2005)
resulting from an act which does not amount to a
legal injury or wrong. These situations are often
Uses and Applications of the Doctrine (JuMP)
called damnum absque injuria.
1. In Medical negligence cases;
In other words, in order that a plaintiff may
2. In cases where the exercise of Judicial
maintain an action for the injuries of which he
discretion is abused; and
complains, he must establish that such injuries
3. In Practical instances
resulted from a breach of duty which the defendant
owed to the plaintiff- a concurrence of injury to the
Some Cases Where Doctrine was Held
plaintiff and legal responsibility by the person
Inapplicable
causing it.
1. Where there is direct proof of absence or
The underlying basis for the award of tort damages
presence of negligence;
is the premise that an individual was injured in
contemplation of law. Thus, there must first be a
2. Where other causes, including the conduct
breach of some duty and the imposition of liability
of the plaintiff and third persons, are not
for that breach before damages may be awarded;
sufficiently eliminated by the evidence; and
and the breach of such duty should be the proximate
cause of the injury. (Equitable Banking Corp. v.
3. When an unexplained accident may be
Calderon, G.R. No. 156168, 14 Dec. 2004)
attributable to one of several causes, for
some of which the defendant could not be
The proper exercise of a lawful right cannot
held responsible. (Aquino, 2019; FGU
constitute a legal wrong for which an action will lie,
Insurance Corp. v. G.R. Sarmiento Trucking
although the act may result in damage to another,
Corp., G.R. No. 141910, 06 Aug. 2002)
for no legal right has been invaded. One may use any
lawful means to accomplish a lawful purpose and
though the means adopted may cause damage to
CIVIL LAW
another, no cause of action arises in the latter’s A: NO. There is no basis in awarding damages in
favor. Any injury or damage occasioned thereby is favor of Yu Han Yat. In the absence of malice or bad
damnum absque injuria. The courts can give no faith in the prosecution of the case, the award of
redress for hardship to an individual resulting from damages is unavailing. Settled is the rule that the
action reasonably calculated to achieve a lawful end adverse result of an action does not per se make the
by lawful means. (The Orchard Golf & Country Club, action wrongful and subject the actor to damages,
Inc., v. Yu, G.R. No. 191033, 11 Jan. 2016) for the law could not have meant to impose a
penalty on the right to litigate. If damages result
NOTE: When the conjunction of damage and wrong from a person's exercise of a right, it is damnum
is wanting there is no damnum absque injuria. absque injuria (Bernas v. Estate of Felipe Yu Han Yat,
(Lagon v. CA, G.R. No. 119107, 18 Mar. 2005) G.R. Nos. 195908 & 195910, 15 Aug. 2018)
The principle does not apply when the exercise of Liability Without Fault
this right is suspended or extinguished pursuant to
a court order. (Amonoy v. Gutierrez, G.R. No. 140420, Liability without fault includes the following:
15 Feb. 2001)
1. Strict Liability – there is strict liability if one is
Q: Yu Han Yat is the registered owner of a made independent of fault, negligence, or intent
property in Quezon City. Later, he subdivided after establishing certain facts specified by law.
the property into 60 lots duly approved by the It includes liability for conversion and for
Bureau of Lands. TCT Nos. 47294 and 47353 injuries caused by animals, ultra-hazardous
were then issued in his name. To finance his plan activities, and nuisance; and
of developing the subject property, Yu Han Yat
applied for loans using some of his TCTs as 2. Product Liability – it is the law which governs
security. When the mortgage instruments were the liability of manufacturers and sellers for
presented for registration, the Registry of Deeds damages resulting from defective products.
of Quezon City refused to record the same on the (Aquino, 2005)
ground that the Yu Han Yat’s TCTs overlapped
with the boundaries covered by another title, Manufacturers and processors of foodstuffs,
TCT No. 336663, registered in the name of drinks, toilet articles, and similar goods shall be
Esperanza Nava (Nava). Eventually, the Land liable for death or injuries caused by any
Registration Authority ordered the registration noxious or harmful substances used, although
of the mortgage instruments. no contractual relation exists between them
and the consumers. (Art. 2187)
In 1992, Yu Han Yat filed a Petition for Quieting
of Title against the Estate of Nava, Mejia, Bernas Any Filipino or foreign manufacturer, producer,
and the Register of Deeds of Quezon City. The and any importer shall be liable for redress,
Estate of Nava applied for an injunction to independently of fault, for damages caused to
restrain Yu Han Yat from undertaking consumers by defects resulting from design,
development works on the property which the manufacture, construction, assembly and
RTC granted. On appeal, the CA ruled in favor of erection, formulas and handling and making up,
Yu Han Yat and awarded him damages and presentation or packing of their products, as
attorney’s fees to compensate him for the duly well as for the insufficient or inadequate
substantiated losses he suffered to protect his information on the use and hazards thereof.
interest over the property. Is the CA correct? (Sec. 97, R.A. No. 7394, Consumer Act of the
Philippines)
2023 GOLDEN NOTES
Actual Tortfeasor is Not Exempted from Liability EMERGENCY RULE
The minor, ward, employee, special agent, pupil, Emergency Rule

students, and apprentices who actually committed
the delictual acts are not exempted by the law from An individual who suddenly finds himself in a
personal responsibility. They may be sued and situation of danger and is required to act without
made liable alone as when the person responsible much time to consider the best means that may be
for them or vicarious obligor proves that he adopted to avoid the impending danger, is not guilty
exercised the diligence of a good father of a family, of negligence if he fails to undertake what
or when the minor or insane person has no parents subsequently and upon reflection may appear to be
or guardians. In the latter instance, they are a better solution, unless the emergency was brought
answerable with their own property. (Pineda, 2009) by his own negligence. (Gan v. CA, G.R. No. L-44264,
19 Sept. 1988; Marikina Auto Line Transport Corp. v.
Acts of Public Officers People, G.R. No. 152040, 31 Mar. 2006)
Mistakes committed by public officers are not NOTE: Defendants in tort cases can either be
actionable absent any clear showing of malice or natural or artificial beings.
gross negligence amounting to bad Faith. (Farolan v.
Solmac Marketing Corp., G.R. No. 83589, 13 Mar. Pursuant to vicarious liability, a corporation may be
1991) held directly and primary liable for tortious acts of
its officers or employees. (NCC, Art. 2180)
Principle of Vicarious Liability or Law on
Imputed Negligence (2001, 2002, 2003, 2004, In Mckee v. IAC, et. al, G.R. No. L-68102, 16 July 1992,
2005, 2006, 2009, 2010 BAR) the Court found the petitioner not guilty of
negligence because any reasonable and ordinary
The obligation imposed by Art. 2176 of the NCC for prudent man would have tried to avoid running
quasi-delicts is demandable not only for one's own over the two boys by swerving the car away from
acts or omissions, but also for those persons for where they were even if this would mean entering
whom one is responsible. (Art. 2180, NCC) the opposite lane. Avoiding such immediate peril
would be the natural course to take particularly
where the vehicle in the opposite lane would be
I. DEFENSES several meters away and could very well slow down,
move to the side of the road and give way to the
oncoming car.
Principal Defenses in Actions Based on

ASSUMPTION OF RISK
Negligence
Doctrine of Assumption of Risk

1. Emergency Rule;
2. Assumption of Risk and Volenti Non Fit
A plaintiff who voluntarily assumes a risk of harm
Injuria Neques Dolus;
arising from the negligent or reckless conduct of the
3. Contributory Negligence;
defendant cannot recover for such harm.
4. Mutual Negligence;
5. Fortuitous Event or Force Majeure;
When the Defense May Arise
6. Last Clear Chance;
7. Due Diligence;
1. Where a plaintiff, by contract or otherwise,
8. Damnum Absque Injuria;
expressly agrees to accept a risk or harm
9. Res Ipsa Loquitur; and
arising from the defendant's conduct, or
10. Prescription.
CIVIL LAW
2. Where a plaintiff who fully understands a can recover of the other for the damages suffered.
risk or harm caused by the defendant's (Bernardo v. Legaspi, G.R. No. 9308, 23 Dec. 1914)
conduct, or by a condition created by the
defendant, voluntarily chooses to enter or FORTUITOUS EVENT
remain, or to permit his property to enter or
remain, within the area of such risk, under Fortuitous Event or Force Majeure
circumstances manifesting his willingness to
accept the risk. (Sps. Abrogar v. Cosmos The principle embodied in the act of God doctrine
Bottling Company, G.R. No. 164749, 15 Mar. strictly requires that the act must be occasioned
2017) solely by the violence of nature. Human
intervention is to be excluded from creating or
Requisites of Assumption of Risk entering into the cause of the mischief. (Schmitz
Transport & Brokerage Corporation v. Transport
1. The plaintiff had actual knowledge of the Venture, Inc., et al., G.R. No. 150255, 22 Apr. 2005)
danger;
2. He understood and appreciated the risk GR: No person shall be responsible for those events
from the danger; and which could not be foreseen, or which, though
3. He voluntarily exposed himself to such risk. foreseen, were inevitable (Art. 1174, NCC)
(Sps. Abrogar v. Cosmos Bottling Company,
supra) XPN: Except in cases:
1. Expressly specified by law
CONTRIBUTORY NEGLIGENCE 2. When it is otherwise declared by
stipulation; or
G.R: Even if the defendant was negligent, when the 3. When the nature of the obligation requires
plaintiff’s own negligence was the proximate cause the assumption of risk. (Art. 1174, NCC)
of his injury, he cannot recover damages. (Art. 2179,
NCC) Requisites of fortuitous event
XPN: If the plaintiff’s negligence was only 1. The event must be independent of the
contributory, the immediate and proximate cause of human will or at least of the obligor’s will;
the injury being the defendant's lack of due care, the
plaintiff may recover damages, but the courts shall 2. The event could not be foreseen or if could
mitigate the damages to be awarded. be foreseen, must have been impossible to
avoid;
NOTE: In quasi-delicts, the contributory negligence
of the plaintiff shall reduce the damages that he may 3. The event must be of such character as to
recover. (Art. 2214, NCC) render it impossible for the obligor to
comply with his obligation in a normal
MUTUAL NEGLIGENCE manner;
Mutual Negligence 4. The obligor must be free from any

participation in, or the aggravation of the
Where two automobiles, going in opposite injury of the obligee. (De Leon, 2012;
directions, collide on turning a street corner, and it Schmitz Transport & Brokerage Corporation
appears from the evidence and is found by the trial v. Transport Venture, Inc., et al., G.R. No.
court that the drivers thereof were equally 150255, 22 Apr. 2005; Yobido v. CA, G.R. No.
negligent and contributed equally to the principal 113003, 17 Oct. 1997)
occurrence as determining causes thereof, neither
2023 GOLDEN NOTES
LAST CLEAR CHANCE In Pilapil v. CA (G.R. No. 52159, 22 Dec. 1989), the
Court held that respondents (common carriers)
Last Clear Chance were not negligent in failing to take special
precautions against threats to the safety of
The doctrine of last clear chance does not apply passengers which could not be foreseen, such as
when only one of the parties was negligent. For the tortious or criminal acts of third persons. However,
doctrine to apply, it must be shown that both parties in Fortune Express, Inc. v. CA (G.R. No. 119756, 18
were negligent but the negligent act of one was Mar. 1999), where a passenger bus was ambushed
appreciably later in time than that of the other. It and one of the passengers was killed, the Court held
may also apply when it is impossible to determine the petitioner bus company liable as it did not take
who caused the resulting harm, thus, the one who necessary precautions to protect the safety of
had the last opportunity to avoid the impending passengers despite the report of a Philippine
harm and failed to do so will be held liable. (Ofracio Constabulary agent that the Maranaos were
v. People, G.R. No. 221981, 04 Nov. 2020) planning to burn some of petitioner's buses.
Possible Scenarios Contemplated Under the DAMNUM ABSQUE INJURIA

Doctrine of Last Clear Chance
See pages 791-793 for discussion on damnum
1. When both parties are negligent but the absque injuria
negligent act of one party happens later in
time than the negligent act of the other party; RES IPSA LOQUITUR
and
Res Ipsa Loquitur
2. When it is impossible to determine which
party caused the accident. (Ofracio v. People, Where the thing which causes injury is shown to be
G.R. No. 221981, 04 Nov. 2020) under the management of the defendant, and the
accident is such as in the ordinary course of things
DUE DILIGENCE does not happen if those who have the management
use proper care, it affords reasonable evidence, in
Due Diligence to Prevent the Damage the absence of an explanation by the defendant, that
the accident arose from want of care
The vicarious liability shall cease when the
defendants prove that they observed all the Ordinarily, driving inside a relatively narrow
diligence of a good father of a family to prevent driveway shared by two houses would not result to
damage. (Art. 2180, NCC; Cuadra v. Monfort, G.R. No. children being hit and their bones fractured. This is
L-24101, 30 Sept. 1970) because a reasonably prudent man, especially an
alleged experienced driver, would have foreseen
As for the employer, if he shows to the satisfaction that the residents of the houses may exit towards
of the court that in the selection and in the the common driveway anytime, including young
supervision of his employees, he has exercised the and playful children who may suddenly run across
care and diligence of a good father of a family, the or along said driveway. Thus, a reasonably prudent
presumption is overcome and he is relieved from man is expected to drive with utmost caution when
liability. (Layugan v. IAC, G.R. No. L-49542, 12 Sep. traversing the said driveway, even if given a "clear"
1980) signal by a guard. (Maitim v. Aguila, G.R. No. 218344,
21 Mar. 2022)
CIVIL LAW
PRESCRIPTION Test of Negligence
Prescription The test is would a prudent man, in the position of

the tortfeasor, foresee harm to the person injured as
The following actions must be instituted within four a reasonable consequence of the course about to be
years: pursued? If so, the law imposes a duty on the actor
to take precaution against its mischievous results,
(1) Upon an injury to the rights of the plaintiff; and failure to do so constitutes negligence. (Picart v.
(2) Upon a quasi-delict (Art. 1146, NCC) Smith, G.R. No. L-12219, 15 Mar. 1918; Romulo
Abrogar and Erlinda Abrogar v. Cosmos Bottling
NOTE: Failure to specifically plead prescription in Company and Intergames Inc., G.R. No. 164749, 15
the answer does not constitute a waiver of the Mar. 2017)
defense of prescription. (Sps. Ferrer v. Vicente Ericta,
G.R. No. L-41767, 23 Aug. 1978) NOTE: The determination of negligence is a
question of foresight on the part of the actor. (Phil.
GR: The defense of prescription, even if not raised Hawk Corp. v. Vivian Tan Lee, G.R. No. 166869, 16 Feb.
in a motion to dismiss or in the answer, is not 2010)
deemed waived
Rule When Negligence Shows Bad Faith
XPN: unless such defense raises issues of fact not
appearing upon the preceding pleading. (Ibid.) When negligence shows bad faith, responsibility
arising from fraud is demandable in all obligations.
(Art. 1171, NCC) Furthermore, in case of fraud, bad
J. NEGLIGENCE faith, malice, or wanton attitude, the obligor shall be
responsible for all damages which may be
reasonably attributed to the non-performance of
the obligation. (Art. 2201, NCC)
Negligence is the omission of that degree of
diligence which is required by the nature of the
When Negligence is Excused
obligation and corresponding to the circumstances
of the persons, time, and place. (Art. 1173, NCC)
GR: Negligence is excused when events that
transpired were unforeseen or, which though
An actionable negligence may be culpa contractual,
foreseen, were inevitable. (Art. 1174, NCC)
culpa aquiliana, or criminal negligence. Thus, an
action for damages for negligent act of the
XPNs:
defendant may be based on contract, quasi-delict, or
delict. The bases for liability are separate and
1. In cases specified by law;
distinct from each other even if only one act is
2. When declared by stipulation; or
involved. (Aquino, 2017)
3. When the nature of the obligation requires the
assumption of risk.
Motive is Immaterial
Degrees of negligence
Motive is not material on negligence cases. The
defendant may still be held liable even if the act was
1. Simple negligence – Failure to give proper
meant to be a practical joke. (Aquino, 2019)
attention to a task expected of him or her,
signifying a disregard of a duty resulting from
carelessness or indifference; and
2023 GOLDEN NOTES
2. Gross negligence – Refers to negligence 7. Place – A man who should occasion to

characterized by the want of even slight care, or discharge a gun on an open and extensive
by acting or omitting to act in a situation where marsh, or in a forest would be required to use
there is a duty to act, not inadvertently but less circumspection and care, than if he were to
willfully and intentionally, with a conscious do the same thing in an inhabited town, village
indifference to the consequences, insofar as or city; (Kenny, 1928)
other persons may be affected. It is the omission
of that care that even inattentive and 8. Violation of Rules and Statutes;
thoughtless men never fail to give to their own
property. (Ombudsman v. De Leon, G.R. No. a. Statutes;
154083, 27 Feb. 2013) b. Administrative Rules; and
c. Private Rules of Conduct;
Circumstances to be Considered in Determining
Whether an Act is Negligent 9. Practice and Custom – A practice which is
dangerous to human life cannot ripen into a
1. Person Exposed to the Risk – A higher degree custom which will protect anyone who follows
of diligence is required if the person involved is it; (Yamada v. Manila Railroad Co., G.R. No.
a child; 10073, 24 Dec. 1915) and
2. Emergency – The actor confronted with an 10. Physical Disability

emergency is not to be held up to the standard
of conduct normally applied to an individual GR: A weak or accident-prone person must
who is in no such situation; meet the standard of a reasonable man,
otherwise he will be considered as negligent.
3. Social Value or Utility of Action – Any act
subjecting an innocent person to unnecessary XPN: if the defect amounts to a real disability,
risk is a negligent act if the risk outweighs the the standard of conduct is that of a reasonable
advantage accruing to the actor and to the person under like disability, e.g., the standard
innocent person himself; conduct of a blind person becomes that of a
reasonable person who is blind. (Francisco v.
4. Time of the day – May affect the diligence Chemical Bulk Carriers Incorporated, G.R. No.
required of the actor (Art. 1173, NCC); e.g., a 193577, 07 Sept. 2011)
driver is required to exercise more prudence
when driving at night; Quantum of Proof Required on Negligence
5. Gravity of the Harm to be Avoided – Even if the The quantum of proof required is preponderance of
odds that an injury will result are not high, evidence. (Sec. 1, Rule 133)
harm may still be considered foreseeable if the
gravity of harm to be avoided is great; Burden of proof
6. Alternative Cause of Action – If the alternative GR: Plaintiff alleging damage due to negligent acts
presented to the actor is too costly, the harm in his complaint has the burden of proving such
that may result may still be considered negligence.
unforeseeable to a reasonable man. More so if
there is no alternative thereto; XPN: When the rules or the law provide for cases
when negligence is presumed.
CIVIL LAW
Intoxication is Not Negligence Per Se The law requires a man to possess ordinary capacity
to avoid harming his neighbors unless a clear and
Mere intoxication is not negligence per se nor manifest incapacity is shown but it does not
establishes want of ordinary care. But it may be one generally hold him liable for unintentional injury
of the circumstances to be considered to prove unless, possessing such capacity, he might ought to
negligence. (Wright v. Meralco, G.R. No. L-7760, 01 have foreseen the danger. (Corliss v. Manila Railroad
Oct. 1914) Co., G.R. No. L-21291, 28 Mar. 1969)
Doctrine of Comparative Negligence Rule In Case of Fault or Negligence of an Obligor
The negligence of both the plaintiff and the 1. Art. 1173, NCC - the fault or negligence of the
defendant are compared for the purpose of reaching obligor consists in the omission of that diligence
an equitable apportionment of their respective which is required by the nature of the obligation
liabilities for the damages caused and suffered by and corresponds with the circumstances of the
the plaintiff. (Pineda, 2009) persons, of the time, and of the place. When
negligence shows bad faith, the provisions of
The relative degree of negligence of the parties is Arts. 1171 and 2201(2) of the NCC shall apply.
considered in determining whether, and to what
degree, either should be responsible for his NOTE: Under Art. 1171 of the NCC,
negligence (apportionment of damages). responsibility arising from fraud is demandable
in all obligations. Any waiver of an action for
NOTE: Under the modified form, the plaintiff can future fraud is void.
recover only if his negligence is less than or equals
that of the defendant. Expressed in terms of 2. Art. 2201, NCC - In contracts and quasi-
percentages, a plaintiff who is charged with 80% of contracts, the damages for which the obligor
the total negligence can recover only 20% of his who acted in good faith is liable shall be those
damages. (De Leon, 2012) that are the natural and probable consequences
of the breach of the obligation, and which the
1. STANDARD OF CARE parties have foreseen or could have reasonably
foreseen at the time the obligation was
constituted.
Concept of a Good Father of a Family
NOTE: In case of fraud, bad faith, malice, or
The general standard of test is Bonus Pater Familias
wanton attitude, the obligor shall be
or that of a good father of a family. If the law or
responsible for all damages which may be
contract does not state the diligence which is to be
reasonably attributed to the non-performance
observed in the performance, that which is expected
of the obligation. (Ibid.)
of a good father of a family shall be required. (Art.
1173(2), NCC)
Good Faith
He is not and is not supposed to be omniscient of the

It refers to the state of the mind which is manifested
future. Rather, he is one who takes precautions
by the acts of the individual concerned. It consists of
against any harm when there is something before
the intention to abstain from taking an
him to suggest or warn him of the danger or to
unconscionable and unscrupulous advantage of
foresee it. (Picart v. Smith, G.R. No. L-12219, 15 Mar.
another. (DBP v. CA, G.R. No. 137916, 08 Dec. 2004)
1918)
2023 GOLDEN NOTES
Application of Standard of Diligence to Children 2. PRESUMPTIONS OF NEGLIGENCE
GR: The action of a child will not necessarily be

Presumption of Negligence (2000, 2009 BAR)
judged according to the standard of an adult.
A person is generally presumed to have taken

XPN: If the minor is mature enough to understand
ordinary care of his concerns. (Sec. 3, Rule 131, ROC)
and appreciate the nature and consequences of his
actions. In such a case, he shall be considered to
Disputable Presumption of Negligence
have been negligent.
1. Motor vehicle mishaps – a driver is

NOTE: A child 15 years of age or under at the time
presumed negligent if they were:
of the commission of the offense shall be exempt
from criminal liability. (Sec. 6, R.A. No. 9344)
a. found guilty of reckless driving or
violating traffic regulations at least
Nevertheless, absence of negligence does not
twice within the preceding two
absolutely excuse the child from liability, as his
months; (Art. 2184, NCC) or
properties, if any, can be held subsidiarily liable. Nor
will such absence of negligence excuse the child’s
b. violating any traffic regulation at
parent from vicarious liability.
the time of the mishap. (Art. 2185,
NCC)
“Diligence Before the Fact”
XPN: Unless there is proof to the

The conduct that should be examined in negligence
contrary. (Ibid.)
cases is prior conduct or conduct prior to the injury
that resulted the aggravation.
NOTE: Proof of traffic violation is required.
A causal connection must exist between the
UNREASONABLE RISK OF HARM
injury received and the violation of the
traffic regulation. It must be proven that the
Elements to be Considered to Determine If a
violation of the traffic regulation was the
Person has Exposed Themselves to an
proximate or legal cause of the injury or
Unreasonable Great Risk (Mag-PUNC)
that it substantially contributed thereto.
Negligence, consisting in whole or in part,
1. Magnitude of the risk;
of violation of law, like any other
2. Principal object;
negligence, is without legal consequence
3. Collateral object;
unless it is a contributing cause of the
4. Utility of the risk; and
injury. (Tison v. Pomasin, G.R. No. 173180,
5. Necessity of the risk. (Aquino, 2019)
24 Aug. 2011)
In the field of negligence, interests are to be

2. Possession of dangerous weapons or
balanced only in the sense that the purposes of the
substances, results in death or injury; (Art.
actor, the nature of his act and the harm that may
2188, NCC)
result from action or inaction are elements to be
considered. Some may not be considered depending
XPN: When the possession or use thereof is
on the circumstances.
indispensable in his occupation or
business. (Ibid.)
NOTE: Proof of possession of dangerous

weapons or substances is required.
CIVIL LAW
3. Common carriers are presumed to have passengers or of strangers, if the common carrier's
been at fault or acted negligently in cases of employees through the exercise of the diligence of a
death or injuries to passengers; and good father of a family could have prevented or
stopped the act or omission.” Notably, for this
XPN: Unless they prove that they observed obligation, the law provides a lesser degree of
extraordinary diligence. (Arts. 1733 & 1755, diligence (i.e., diligence of a good father of a family)
NCC) in assessing the existence of any culpability on the
4. Captain of the ship doctrine - A surgeon is common carrier's part.
likened to a captain of the ship, such that it
is his duty to control everything going on in In this case, records reveal that when the bus
the operating room. The surgeon in charge stopped at San Jose City to let four men ride
of an operation is liable for the negligence petitioner's bus (two of which turned out to be
of his assistants during the time when those Battung's murderers), the bus driver, Duplio, saw
assistants are under the surgeon’s control. them get on the bus and even took note of what they
(Cantre v. Go, G.R. No. 160889, 27 Apr. 2007) were wearing. Moreover, Duplio made the bus
conductor, Daraoay, approach these men and have
Q: Romeo L. Battung, Jr. (Battung) boarded them pay the corresponding fare, which Daraoay
petitioner's (G.V. Florida Transport, Inc.) bus. did. During the foregoing, both Duplio and Daraoay
Battung was seated at the first row behind the observed nothing which would rouse their
driver and slept during the ride. When the bus suspicion that the men were armed or were to carry
reached the Philippine Carabao Center in out an unlawful activity. With no such indication,
Muñoz, Nueva Ecija, the bus driver, Duplio, there was no need for them to conduct a more
stopped the bus and alighted to check the tires. stringent search (i.e., bodily search) on the aforesaid
At this point, a man who was seated at the fourth men. By all accounts, therefore, it cannot be
row of the bus stood up, shot Battung at his head, concluded that the petitioner or any of its
and then left with a companion. The bus employees failed to employ the diligence of a good
conductor, Daraoay, notified Duplio of the father of a family in relation to its responsibility
incident and thereafter, brought Romeo to the under Art. 1763 of the NCC. As such, petitioner
hospital, but the latter was pronounced dead on cannot altogether be held civilly liable.
arrival. Hence, respondents filed a complaint for
damages in the aggregate amount of NOTE: The negligence of the employee gives rise to
P1,826,000.00 based on a breach of contract of the presumption of negligence on the part of the
carriage against petitioners, Duplio, and employer. This is the presumed negligence in the
Daraoay, before the RTC. Respondents selection and supervision of the employee. (Poblete
contended that as a common carrier, petitioner v. Fabros, G.R. No. L-29803 14 Sep. 1979)
and its employees are bound to observe
extraordinary diligence in ensuring the safety of How Negligence is Proven
passengers. And in case of injuries and/or death
on the part of a passenger, they are presumed to Negligence is proven by:
be at fault and, thus, responsible thereof. The
RTC ruled in favor of respondents and the CA 1. Direct evidence;
affirmed the ruling of the RTC. May the 2. Circumstantial evidence; or
petitioners be held civilly liable? 3. Res Ipsa Loquitur.
A: NO. Since Battung's death was caused by a co- Q: On the night of 06 Jan. 1998, a fire broke out
passenger, the applicable provision is Art. 1763 of which burned down the house and store of
the NCC, which states that “a common carrier is respondent Emilio and his son, respondent
responsible for injuries suffered by a passenger on Gilbert (the Alfeches), and the adjacent watch
account of the willful acts or negligence of other repair shop owned by respondent Manugas. It
2023 GOLDEN NOTES
was admitted that the cause of the fire was the Keihin-Everett independently investigated the
constant abrasion of VECO' s electric wire with incident. During its investigation, it was found
M. Lhuillier's signboard. The close proximity out that during the incident, Cudas told Aquino
and constant abrasion of the wire and signboard to report engine trouble to Orient Freight and
was due to the transfer of the VECO’s post which Aquino also later on reported that the truck was
was made by reason of the road-widening and missing. When the truck was intercepted by the
the drainage construction of the road. The police, Cudas escaped. When confronted with
signage was installed long before the said Keihin-Everett's findings, Orient Freight wrote
projects were made. The CA found that VECO’s back to admit that its previous report was
negligence in the transfer and installation of the erroneous and that pilferage was apparently
posts and wires was the proximate cause of the proven. In a letter, Matsushita terminated its In-
fire. Was VECO negligent? House Brokerage Service Agreement with
Keihin-Everett. Matsushita cited loss of
A: YES. VECO is a public utility tasked with confidence for terminating the contract, stating
distributing electricity to consumers. It is its duty to that Keihin-Everett's way of handling the
ensure that its posts are properly and safely incident and its nondisclosure of this incident's
installed. As the holder of a public franchise, it is to relevant facts "amounted to fraud and signified
be presumed that it has the necessary resources and an utter disregard of the rule of law." Keihin-
expertise to enable a safe and effective installation Everett demanded P2,500,000.00 as indemnity
of its facilities. By installing its posts and wires for lost income. It argued that Orient Freight's
haphazardly, without regard to how its wires could mishandling of the situation caused the
come in contact with a previously installed signage, termination of Keihin-Everett's contract with
VECO failed to act in keeping with the diligence Matsushita. When Orient Freight refused to pay,
required of it. Had it not been for the transfer, Keihin-Everett filed a complaint for damages.
VECO's wires would not have touched M. Lhuillier's
signage. (Visayan Electric Company, Inc. v. Emilio G. Was Orient Freight negligent for failing to
Alfeche, G.R. No. 209910, 29 Nov. 2017) disclose the facts surrounding the hijacking
incident, which led to the termination of the
Q: On 16 Oct. 2001, Keihin-Everett entered into Trucking Service Agreement between Keihin-
a Trucking Service Agreement with Matsushita. Everett and Matsushita?
These services were subcontracted by Keihin-
Everett to Orient Freight. In April 2002, A: YES. Orient Freight's conduct showed its
Matsushita called Keihin-Everett's Sales negligent handling of the investigation and its
Manager, Salud Rizada, about a column in the 19 failure to timely disclose the facts of the incident to
Apr. 2002 issue of the tabloid newspaper Keihin-Everret and Matsushita. Orient Freight was
Tempo. This news narrated the 17 Apr. 2002 clearly negligent in failing to investigate properly
interception by Caloocan City police of a stolen the incident and make a factual report to Keihin and
truck filled with shipment of video monitors and Matsushita. Orient Freight failed to exercise due
CCTV systems owned by Matsushita. When diligence in disclosing the true facts of the incident
contacted by Keihin-Everett about this news, to plaintiff Keihin and Matsushita. As a result, Keihin
Orient Freight stated that the tabloid report had suffered income losses by reason of Matsushita's
blown the incident out of proportion. They cancellation of their contract which primarily was
claimed that the incident simply involved the caused by the negligence of Orient Freight. (Orient
breakdown and towing of the truck. However, Freight International, Inc. v. Keihin-Everett
when the shipment arrived in Yokohama, Japan Forwarding Company, Inc., G.R. No. 191937, 09 Aug.
on 08 May 2002, it was discovered that 10 2017)
pallets of the shipment's 218 cartons, worth
US$34,226.14, were missing.
CIVIL LAW
Q: Wenifredo Salvaña was driving the bus Required Degree of Diligence

owned by Bachelor Express, Inc./Ceres Liner,
Inc. along the national highway when he In General
overtook a PUJ jeepney while negotiating a blind
curve in a descending road causing him to
intrude into the opposite lane and bump the 10-
If the law or contract does not state the diligence
wheeler Hino dump truck of petitioner
which is to be observed in the performance, that
Cresencio Baño running uphill from the
which is expected of a good father of a family
opposite direction. The collision resulted in
shall be required. (Art. 1173(2), NCC)
damage to both vehicles, the subsequent death
of the truck driver, Amancio Asumbrado, and
Diligence of a good father of a family or bonus
serious physical injuries to bus driver Salvaña.
pater familias - A reasonable man is deemed to
have knowledge of the facts that a man should be
A complaint for quasi-delict was filed against
expected to know based on ordinary human
Salvaña for negligently driving the bus causing it
experience. (PNR v. IAC, G.R. No. 7054, 22 Jan.
to collide with the dump truck. Respondents
1993)
denied liability, claiming that prior to the
collision, the bus was running out of control
because of a problem in the steering wheel
system, which could not have been avoided Persons who have Physical Disability
despite their maintenance efforts. Instead, they
claimed that Asumbrado had the last clear
chance to avoid the collision had he not driven
GR: A weak or accident-prone person must come
the dump truck at a very fast speed. Was Salvaña
up to the standard of a reasonable man,
grossly negligent?
otherwise, he will be considered as negligent.
A: YES. When bus driver Salvaña overtook the
XPN: If the defect amounts to a real disability, the
jeepney in front of him, he was rounding a blind
standard of conduct is that of a reasonable
curve along a descending road. Considering the road
person under like disability.
condition and that there was only one lane on each
side of the center line for the movement of traffic in
opposite directions, it would have been more
prudent for him to confine his bus to its proper Experts and Professionals
place. Having thus encroached on the opposite lane
in the process of overtaking the jeepney, without
ascertaining that it was clear of oncoming traffic
GR: They should exhibit the case and skill of one
that resulted in the collision with the approaching
who is ordinarily skilled in the field he is in.
dump truck driven by deceased Asumbrado,
Salvaña was grossly negligent in driving his bus. He
NOTE: This rule does not apply solely or
was remiss in his duty to determine that the road
exclusively to professionals who have undergone
was clear and not to proceed if he could not do so in
formal education.
safety. (Baño v. Bachelor Express, GR No. 191703, 12
Mar. 2012)
XPN: When the activity, by its very nature,
requires the exercise of a higher degree of
diligence (e.g., banks and common carriers)
2023 GOLDEN NOTES
Insane Persons Employees
Employees are bound to exercise due care in the

The insanity of a person does not excuse him or performance of their functions for the employers.
his guardian from liability based on quasi-delict Liability may be based on negligence committed
(Arts. 2180 & 2182, NCC). This means that the act while in the performance of the duties of the
or omission of the person suffering from mental employee. (Araneta v. De Joya, G.R. No. L-25172,
defect will be judged using the standard test of a 24 May 1974)
reasonable man.
NOTE: The existence of the contract constitutes
The bases for holding a permanently insane no bar to the commission of torts by one against
person liable for his torts are as follows: the other and the consequent recovery of
damages.
Where one of two innocent persons must suffer a
loss it should be borne by the one who
Owners, Proprietors, and Possessors of
occasioned it; Property
GR: The owner has no duty to take reasonable
To induce those interested in the estate of the
care towards a trespasser for his protection or
insane person (if he has one) to restrain and
even to protect him from concealed danger.
control him; and
XPNs:
The fear that an insanity defense would lead to
false claims of insanity to avoid liability. (Breunig
1. Visitors – Owners of buildings or premises
v. American Family Insurance Co., 173 N.W. 2d
owe a duty of care to visitors.
619, 3 Feb. 1970)
2. Tolerated Possession - Owner is still liable
NOTE: Under the RPC, an insane person is
if the plaintiff is inside his property by
exempt from criminal liability. However, by
tolerance or by implied permission.
express provision of law, there may be civil
However, common carriers may be held
liability even when the actor is exempt from
liable for negligence to persons who stay in
criminal liability. An insane person is still liable
their premises even if they are not
with his property for the consequences of his
passengers.
acts, though they performed unwittingly. (US v.
Baggay, Jr. G.R. No. 6659, 01 Sep. 1911)
3. Doctrine of Attractive Nuisance - One who
maintains on his premises dangerous
instrumentalities or appliances of a
Employers character likely to attract children in play,
and who fails to exercise ordinary care to
Employers are required to exercise that degree of prevent them from playing therefrom, is
care as mandated by the Labor Code or other liable to a child of tender years who is
mandatory provisions for proper maintenance of injured thereby, even if the child is a
the workplace or adequate facilities to ensure the trespasser.
safety of the employees.
4. State of Necessity – A situation of present
NOTE: Failure of the employer to comply with danger to legally protected interests, in
mandatory provisions may be considered which there is no other remedy than the
negligence per se. injuring of another’s also legally protected
interest.
CIVIL LAW
Doctors Damages vs. Injury
Injury is the illegal invasion of a legal right. Damage

If a General Practitioner – Ordinary care and
is the loss, hurt, or harm which results from the
diligence in the application of his knowledge and
injury; damages are the compensation awarded for
skill in the practice of his profession.
the damage suffered. There can be damage without
injury in those instances in which the loss or harm
If a Specialist – The legal duty to the patient is
was not the result of a violation of a legal duty.
generally considered to be that of an average
physician.
Example: Damnum absque injuria. (Sps. Custodio v.
CA, G.R. No. 116100, 09 Feb. 1996)
Lawyers
Damages can only be paid with money
An attorney is bound to exercise only a
reasonable degree of care and skill, having Damages can only be paid with money and not
reference to the business he undertakes to do. “palay” because “palay” is not a legal tender
(Adarne v. Aldaba, A.C. No. 801, 27 June 1978) currency in the Philippines. (Vda. Simeon Borlado v.
CA, G.R. No. 114118, 28 Aug. 2001)
NOTE: In actions for damages, the courts should

award an amount to the winning party and not its
K. DAMAGES
equivalent in property. (Ibid.)
In legal contemplation, the term “damages” is the 1. KINDS OF DAMAGES

sum of money which the law awards or imposes as
a pecuniary compensation, a recompense, or Kinds of damages (M-E-N-T-A-L)
satisfaction for an injury done or wrong sustained
as a consequence either of a breach of a contractual 1. Moral;
obligation or a tortious act. (MEA Builders, Inc. v. CA, 2. Exemplary or corrective;
G.R. No. 121484, 31 Jan. 2005) 3. Nominal;
4. Temperate or moderate;
NOTE: A complaint for damages is personal in 5. Actual or compensatory;
nature (personal action). 6. Liquidated
Remedies for Torts (Com-P-Res) a) ACTUAL AND COMPENSATORY DAMAGES
1. Compensatory – actions for sum of money Actual and Compensatory Damages (1991,
for the damage suffered. 1996, 2004 BAR)
2. Preventive – prayer for injunction, a writ of Actual damages are such compensation or damages
preliminary injunction, and a temporary for an injury that will put the injured party in the
restraining order, enjoining the defendant position in which he had been before he was injured.
from continuing the doing of the tortious They pertain to such injuries or losses that are
conduct. actually sustained and susceptible of measurement.
(Filipinas Systems, Inc. v. MRT Development Corp.,
3. Restitution – to return gains that the G.R. Nos. 167829-30, 13 Nov. 2007)
defendant wrongfully obtained by tort.
2023 GOLDEN NOTES
NOTE: To recover damages, the amount of loss must Q: Petitioner Wyeth Philippines, Inc. (Wyeth) is
not only be capable of proof but must actually be the project owner of the "Dryer 3 and Wet
proven and pleaded in Court. Process Superstructure Works.” In 2007, Wyeth
invited bidders to submit proposals for its
Art. 2199 of the NCC expressly mandates that project. Respondent SKI Construction Group,
“except as provided by law or by stipulation, one is Inc. (SKI) submitted its qualified proposal to
entitled to an adequate compensation only for such undertake the project for P242,800,000.00, and
pecuniary loss suffered by him as he duly proved.” was later on awarded the bid. Subsequently, the
Project Manager directed the cessation of all
It must be proven with a reasonable degree of construction activities until further notice to
certainty, premised upon competent proof or the give SKI ample time to address internal issues
best evidence obtainable. (Metro Rail Transit Dev’t. regarding its workforce. Wyeth wrote a letter to
Corp. v. Gammon Phils., Inc., G.R. No. 200401, 17 Jan. Mapfre, claiming on the bonds. Mapfre later
2018) confirmed that Wyeth will not be barred from
pursuing its claims against the bonds. However,
Kinds of Actual or Compensatory Damages Mapfre refused to pay the amount under the
payments bond. The parties failed to reach a
1. Damnum Emergens/Dano Emergente (actual settlement but eventually agreed to resolve the
damages) – all the natural and probable dispute through arbitration before the
consequence of the act or omission complained Construction Industry Arbitration Commission
of, classified as one for the loss of what a person (Commission).
already possesses.
After the conduct of hearings, Arbitral Tribunal
2. Lucrum Cessans/Lucro Cesante held that while Wyeth suffered pecuniary loss,
(compensatory damages) – for failure to the evidence it submitted were not clear and
receive, as benefit, that which would have convincing as to establish actual damages.
pertained to him (expected profits). (Filipinas Hence, the Tribunal applied Art. 2224 of the NCC
Synthetic v. De Los Santos, G.R. No. 152033, 16 and the parties' agreement on liquidated
Mar. 2011) damages as measure for temperate damages. It
awarded Wyeth temperate damages amounting
NOTE: Absolute certainty is not necessary to to P24,280,000.00. Upon appeal, the Court of
establish the amount of lucrum cessans. (De Appeals held that while SKI is entitled to the
Leon, 2012) value of rebars, formworks, and costs of repair,
the amount cannot be established with
NOTE: Both actual and compensatory damages can certainty, thus, the Court of Appeals only
be granted at the same time to the plaintiff as awarded SKI temperate damages. It also held
provided under Art. 2200, NCC. In other words, that the Arbitral Tribunal erred in awarding
there are two components to actual damages. (RCPI temperate damages to Wyeth, and instead
v. CA, G.R. No. L-55194, 26 Feb. 1981) awarded actual damages amounting to
P90,717,632.06.
Purpose of the law in awarding actual damages
A) Is Wyeth entitled to actual damages?
Actual or compensatory damages proceed from a
sense of natural justice and are designed to repair A: NO. Actual damages under Art. 2199 of the NCC
the wrong that has been done, to compensate for the provides that, except as provided by law or by
injury inflicted. (Kabisig Real Wealth Dev., Inc. v. stipulation, one is entitled to an adequate
Young Builders Corp., G.R. No. 212375, 25 Jan. 2017) compensation only for such pecuniary loss suffered
by him as he has duly proved. Such compensation is
referred to as actual or compensatory damages.
CIVIL LAW
Thus, actual damages must be proven with a XPN: Loss need not be proved in the following
reasonable degree of certainty, premised upon cases:
competent proof or the best evidence obtainable
like official receipts and invoices, as explained in 1. Liquidated damages have been previously
Metro Rail Transit Development Corp. v. Gammon agreed upon (Art. 2226, NCC);
Philippines.
NOTE: Liquidated damages take the place of
Actual damages constitute compensation for actual damages except when additional
sustained measurable losses. It is never presumed damages are incurred.
or based on personal knowledge of the court.
2. Forfeiture of bonds in favor of the government
B) Is SKI entitled to temperate damages? for the purpose of promoting public interest or
policy; (Far Eastern Surety and Insurance Co. v.
A: YES. Art. 2224 of the NCC provides for temperate CA, G.R. No. L-12019, 16 Oct. 1958)
damages, as follows: “Art. 2224. Temperate or
moderate damages, which are more than nominal 3. Loss is presumed; (Manzanares v. Moreta, G.R.
but less than compensatory damages, may be No. L-12306, 22 Oct. 1918)
recovered when the court finds that some pecuniary
loss has been suffered but its amount cannot, from 4. When the penalty clause is agreed upon in the
the nature of the case, be proved with certainty.” contract between the parties; (Art. 1226, NCC)
and
In concluding that respondent SKI's claims for the
value of rebars, formworks, safety harness 5. When death is caused within the contemplation
equipment, and costs of the repair were validly of Art. 2206. (Pineda, 2009)
proven, the Arbitral Tribunal thoroughly examined
and considered the evidence presented by the Civil liability Ex Delicto vs. Actual or
parties. Thus, its evaluation of the evidence and Compensatory Damages distinguished
findings of fact must be upheld. (Wyeth Philippines
Inc. v. CIAC., G.R. No. 220045-48, 22 June 2020) ACTUAL OR
CIVIL INDEMNITY
COMPENSATORY
EX DELICTO
When victim is unknown DAMAGES
The fact that the victim remains unknown, and no To be recoverable

heirs have come forward does not warrant the must additionally be
elimination of civil indemnity. (People v. De Guzman, Can be awarded established with
G.R. No. 92537, 25 Apr. 1994) without need of reasonable degree of
further proof than the certainty. (Metro Rail
Proving the loss fact of commission of Transit Dev’t. Corp. v.
the felony. Gammon Phils., Inc.,
GR: Loss must be proven with a reasonable degree G.R. No. 200401, 17 Jan.
of certainty, premised upon competent proof or best 2018)
evidence obtainable of the actual amount thereof
before one can be entitled to damages (PNOC
Shipping and Transport Corp. v. CA, G.R. No. 107518, NOTE: Rule applies to civil and criminal cases.
08 Oct. 1998) (People v. Cañares, G.R. No. 188323, 21 Feb. 2011)
2023 GOLDEN NOTES
GR: Documentary evidence should be presented to Art. 21 of NCC cannot be used as a basis for
substantiate the claim for damages for loss of award of actual damages
earning capacity.
Art. 21 of the NCC cannot be used as a basis for
XPN: Damages for loss of earning capacity may be award of actual damages when there is a pre-
awarded despite the absence of documentary existing contractual relation between the parties.
evidence when: (ACI Philippines, Inc. v. Coquia, G.R. No. 174466, 14
July 2008)
1. The deceased is self-employed and earning less
than the minimum wage under current labor Abrazaldo Doctrine
laws, in which case, judicial notice may be taken
of the fact that in the deceased's line of work no Temperate damages may be awarded where the
documentary evidence is available; or amount of the actual damages that the heirs are
entitled to cannot be shown. Such temperate
2. The deceased is employed as a daily wage worker damages, considering current jurisprudence fixing
earning less than the minimum wage under the indemnity for death at P50,000, should be one
current labor laws. (Philippine Hawk half thereof, which is P25,000. (People v. Abrazaldo,
Corporation v. Vivian Tan Lee, G.R. No. 166869, G.R. No. 124392, 07 Feb. 2003)
16 Feb. 2010)
Coverage of actual damages
If amount admitted by a party
Aside from actual pecuniary loss, actual damages
Even if there are no receipts and yet the amount also cover the following:
claimed is admitted by a party, it should be granted.
(People v. Abolidor, G.R. No. 147231, 18 Feb. 2004) a. Loss or impairment of earning capacity in cases of
temporary or permanent personal injury; or
Docketing fees must be based on allegation of b. Injury to the plaintiff’s business standing or
actual damages commercial credit. (Art. 2205, NCC)
The amount of damages claimed must be alleged not Loss or impairment of earning capacity
only in the body of the complaint, petition or answer
but also in the prayer portion thereof. (Siapno v. To be compensated for loss of earning capacity, it is
Manalo, G.R. No. 132260, 30 Aug. 2005) not necessary that the victim be gainfully employed
at the time of the injury or death. Actual damages
“Such other relief as this Honorable Court may are awarded not for the loss of earnings but for the
deem reasonable” loss of capacity to earn money. (People v. Sanchez,
G.R. Nos. 121039-45, 18 Oct. 2001)
The prayer for “such other relief as this Honorable
Court may deem reasonable” may include actual Determination of amount of damages
damages although not alleged in the answer, if and recoverable
when they are proved. (Heirs of Basilisa Justiva v.
Gustilo, G.R. No. L-16396, 31 Jan. 1963) Much is left to the discretion of the court
considering the moral and material damages
NOTE: It is broad enough to comprehend an involved. There can be no exact or uniform rule for
application as well for nominal damages and even measuring the value of a human life. (Villa Rey
exemplary damages. Transit, Inc., v. CA, G.R. No. L-25499, 18 Feb. 1970)
CIVIL LAW
The life expectancy of the deceased or of the Heirs cannot claim as damages the full amount
beneficiary, whichever is shorter, is an important of earnings of the deceased
factor. Other factors that are usually considered are:
Said damages consist, not of the full amount of his
1. Pecuniary loss to plaintiff or beneficiary; earnings, but of the support they received or would
2. Loss of support; have received from him had he not died in
3. Loss of service; consequence of the negligence of the bus’s agent.
4. Loss of society; Stated otherwise, the amount recoverable is not loss
5. Mental suffering of beneficiaries; and of the entire earning, but rather the loss of that
6. Medical and funeral expenses. (Ibid.) portion of the earnings which the beneficiary would
have received. In other words, only net earnings, not
NOTE: The formula that has gained acceptance over gross earning, are to be considered.
time has limited recovery to net earning capacity.
The premise is obviously that net earning capacity In fixing the amount of that support, the "necessary
is the person’s capacity to acquire money, less the expenses of his own living" should be deducted from
necessary expense for his own living. (Philtranco his earnings. Earning capacity, as an element of
Service Enterprises v. Felix Paras and Inland damages to one's estate for his death by wrongful
Trailways Inc., G.R. No. 161909, 25 Apr. 2012) act, is necessarily his net earning capacity or his
capacity to acquire money, less the necessary
Computation of Unearned Income expense for his own living. (Villa Rey Transit, Inc. v.
CA, et al., G.R. No. L-25499, 18 Feb. 1970)
Formula:
Medical expenses are in the nature of actual
Net Earning Capacity (x) = Life Expectancy x (Gross damages
Annual Income less Living Expenses). (People v.
Asilan, G.R. No. 188322, 11 Apr. 2012) Medical expenses are in the nature of actual
damages which should be duly proved and the
Legend: award for actual damages cannot be made on the
basis of the doctor’s prescription alone. (People v.
Net Earning Capacity = Life Expectancy x (Gross Enguito, G.R. No. 128812, 28 Feb. 2000)
Annual Income – Living Expenses)
Adjustment fees do not constitute actual
Life Expectancy = 2/3 x (80 – Age of the Deceased) damages
Living Expenses = 50% of gross annual income Adjustment fees and expense of drivers in the
recovery of cargo lost at sea done voluntarily,
Basis of Life Expectancy though unsuccessfully, does not constitute actual
damages. (Schmitz Transport & Brokerage Corp. v.
Life expectancy should not be based on the Transport Venture, Inc., G.R. No. 150255, 22 Apr.
retirement age of government employees, which is 2005)
pegged at 65. In calculating the life expectancy of an
individual for the purpose of determining loss of Injury to business standing and commercial
earning capacity under Art. 2206(1), NCC, it is credit of plaintiff
assumed that the deceased would have earned
income even after retirement from a particular job. Compensatory damages may be awarded in the
(Smith Bell Dodwell Shipping Agency Corp. v. Borja, concept of temperate damages for injury to business
G.R. No. 143008, 10 June 2002) reputation or business standing, loss of goodwill,
and loss of customers who shifted their patronage
to competitors. (Art. 2205, NCC; Coca-Cola Bottlers
2023 GOLDEN NOTES
Philippines Inc. v. Sps. Bernardo, G.R. No. 190667, 07 Recovery of attorney’s fees as actual damages
Nov. 2016) (1991, 1994, 2002 BAR)
ATTORNEY’S FEES AND EXPENSES OF GR: Attorney’s fees cannot be recovered as actual
LITIGATION damages.
Two concepts of Attorney’s fees XPNs: (S-W-I-S-S–C-M-U-D-E-R)
1. Ordinary – reasonable compensation paid to a 1. Stipulation between parties;

lawyer by the client for the legal services 2. Recovery of Wages of household helpers,
rendered to the latter. laborers and skilled workers;
3. Actions for Indemnity under workmen's
2. Extraordinary – awarded by the court to the compensation and employer liability laws;
successful litigant to be paid by the losing party 4. Legal Support actions;
as indemnity for damages. (Aquino v. Casabar, 5. Separate civil action to recover civil liability
G.R. No. 191470, 26 Jan. 2015) arising from crime;
6. Malicious prosecution;
They are actual damages due to the plaintiff. 7. Clearly Unfounded civil action or proceeding
against plaintiff;
Payable not only to the lawyer but to the client, 8. When Double judicial costs are awarded;
unless they have agreed that the award shall 9. When Exemplary damages are awarded;
pertain to the lawyer as additional
compensation or as part thereof. (Benedicto v. 10. Defendant acted in gross & evident bad faith
Villaflores, G.R. No. 185020, 06 Oct. 2010) in Refusing to satisfy plaintiff's just &
demandable claim; and
NOTE: In all cases, the attorney’s fees and
expenses of litigation must be reasonable. (Art. 11. When defendant's act or omission Compelled
2208, NCC) plaintiff to litigate with third persons or incur
expenses to protect his interest.
ORDINARY EXTRAORDINARY
As to Nature NOTE: It was held that, in respect of attorney’s fees,
where a claim therefore arises out of the filing of the
The reasonable An indemnity for complaint, they too should be considered as in the
compensation paid to a damages ordered by nature of a compulsory counterclaim. They should
lawyer for the legal the court to be paid by be pleaded or prayed for in the answer to the
services rendered to a the losing to the complaint in order to be recoverable, otherwise,
client who has engaged prevailing party in they would be barred. (Tiu Po v. Bautista, G.R. No. L-
him. litigation. 55514, 17 Mar. 1981)
Furthermore, moral damages and attorney’s fees

As to Basis
cannot be consolidated for they are different in
The fact of nature and each must be separately determined.
In cases authorized by (Philippine Veterans Bank v. NLRC, G.R. No. 130439,
employment of the
law. 26 Oct. 1999) Attorney’s fees are recoverable only in
lawyer by the client.
the concept of actual not moral damages. (Mirasol v.
As to whom payable Hon. dela Cruz, G.R. No. L-32552, 31 July 1978)
Lawyer Client
Attorney’s fees are not available when the
defendant employer is not guilty of bad faith.
CIVIL LAW
(Dalusong v. Eagle Clark Shipping Philippines, Inc., 1. Property;

G.R. No. 204233, 03 Sept. 2014)
a. Damage to or loss of personal property
Q: Philippine Transmarine Carriers, Inc. for and - the plaintiff is entitled to their value at
on behalf of its foreign principal, respondent the time of the destruction, that is,
Marine Shipmanagement Ltd. hired petitioner normally, the sum of money which he
as a Chief Cook while carrying provisions, would have to pay in the market for
suddenly felt a severe pain on his waist, identical or essentially similar goods, plus
abdomen, and down to his left scrotum. As the in a proper case, damages for the loss of
pain persisted for a number of days, he was the use during the period before
airlifted to a hospital in Belgium where he was replacement. (Marikina Auto Line v.
diagnosed with “infection with the need to rule People G.R. No. 152040, 31 Mar. 2006)
out Epididymitis and Prostatitis” and advised to
undergo repatriation. Upon arrival in the b. Damage to or loss of profit-earning
Philippines, petitioner claimed that he chattels - what has to be assessed is the
immediately reported to PTCI and asked for value of the chattel to its owner as a going
referral for further treatment but was ignored. concern at the time and place of the loss;
Thus, he filed a complaint for, inter alia, (PNOC Shipping v. CA, G.R. No. 107518, 08
permanent and total disability (PTD) benefits Mar. 1998) and
against PTCI, Marine, and respondent Captain
Marlon L. Malanao as the crewing manager c. Damage to or loss of real property –
(respondents). Was it proper for the CA to delete value at the time of destruction, or market
the award of attorney’s fees? value, plus, in proper cases, damages for
the loss of use during the period before
A: NO. The instances when these may be awarded replacement, value of use of premises, in
are enumerated in Art. 2208 of the NCC and is case of mere deprivation of possession.
payable not to the lawyer but to the client, unless
the client and his lawyer have agreed that the award 2. Personal injury;
shall accrue to the lawyer as additional or part of
compensation. a. Medical Expenses - plaintiff is entitled to
the amount of medical expenses for the
In this case, suffice it to say that the CA erred in injury suffered as a result of the
deleting the award of attorney's fees, considering defendant’s tortuous act.
that petitioner was found to be entitled to
permanent and total disability benefits and was NOTE: A person is entitled to the physical
forced to litigate to protect his valid claim. Thus, the integrity of his or her body; if that
reinstatement of such award is in order. (Horlador integrity is violated or diminished, actual
v. Philippine Transmarine Carriers, Inc., Marine injury is suffered for which actual or
Shipmanagement, G.R. No. 236576, 05 Sept. 2018) compensatory damages are due and
assessable. (Gatchalian v. Delim G.R. No. L-
Amount of Actual Damages in Contracts and 56487, 21 Oct. 1991)
Quasi-Contracts
b. Rape - For simple rape or qualified rape,
The amount of actual damages should be that which where the penalty imposed is death but
would put the plaintiff in the same position as he reduced to reclusion perpetua because of
would have been if he had not sustained the wrong R.A. 9346, the civil indemnity is
for which he is claiming compensation or P100,000.00. (People v. Jugueta, G.R. No.
reparation. 202124, 05 April 2016)
2023 GOLDEN NOTES
NOTE: Civil indemnity is mandatory upon Mitigation of Actual Damages

the finding of the fact of rape; it is distinct
from and should not be denominated as Actual damages can be mitigated in the following
moral damages which are based on cases:
different jural foundations and assessed
by the court in the exercise of sound 1. For Contracts:
discretion. (People v. Tabayan, G.R. No.
190620, 18 June 2014) a. Violation of terms of the contract by the
plaintiff himself;
3. Death – P100,000.00 by way of civil indemnity
ex delicto. (People v. Jugueta, G.R. No. 202124, 05 b. Enjoyment of benefit under the contract by
Apr. 2016) the plaintiff himself;
4. Physical Injuries – Civil indemnity of c. Defendant acted upon advice of counsel in

P50,000.00 for the victims who suffered cases where the exemplary damages are to
mortal/fatal wounds and could have died if not be awarded such as under Arts. 2230, 2231
for a timely medical intervention, and a civil and 2232; or
indemnity of P25,000.00 for the victims who
suffered non-mortal/non-fatal injuries. (Ibid.) d. Defendant has done his best to lessen the
plaintiff’s injury or loss.
Q: MV Lorcon Luzon, a commercial vessel owned
by Lorenzo Shipping, hit and rammed National NOTE: Award of compensatory damages for breach
Power Corporation’s Power Barge 104. NPC of contract may be executed pending appeal, but not
submitted pieces of evidence to the court as the moral and exemplary damages which must
basis for actual damages it has suffered. await the final determination of the main cases.
However, Lorenzo Shipping pointed out that (Radio Communication of the Philippines, Inc. v.
these pieces of evidence fall short of the Lantin, G.R. No. L-59311, 31 Jan. 1985)
standard required for proving pecuniary loss,
which shall be the basis for awarding actual 2. For Quasi-contracts:
damages. The CA awarded temperate damages
to NPC in lieu of actual damages as the amount a. In cases where exemplary damages are to
of damages was not proven by NPC. Is Lorenzo be awarded such as in Art. 2232 of the NCC;
Shipping liable for actual damages? or
b. Defendant has done his best to lessen the
A: NO. Art. 2199 of the NCC spells out the basic plaintiff’s injury or loss.
requirement that compensation by way of actual
damages is awarded only to the extent that 3. For Quasi-delicts:
pecuniary loss is proven. NPC failed to establish the
precise amount of pecuniary loss it suffered. a. That the loss would have resulted in any
Nevertheless, it remains that Power Barge 104 event because of the negligence or
sustained damage — which may be reckoned omission of another, and where such
financially — as a result of the MV Lorcon Luzon's negligence or omission is the immediate
ramming into it. National Power Corporation and proximate cause of the damage or
suffered pecuniary loss, albeit its precise extent or injury; or
amount had not been established. Accordingly, the
CA's conclusion that National Power Corporation is b. Defendant has done his best to lessen the
entitled to temperate damages should be sustained. plaintiff’s injury or loss. (Pineda, 2009)
(Lorenzo Shipping Corp. v. NPC, G.R. No. 181683, 07
Oct. 2015)
CIVIL LAW
4. For Crimes: NOTE: In case of death caused by quasi-

delict, the brother of the deceased is not
The damages to be adjudicated may be respectively entitled to the award of moral damages based
increased or lessened according to the aggravating on Art. 2206 of the NCC. (Sulpicio Lines Inc. v.
or mitigating circumstances. (Art. 2204, NCC) Curso, G.R. No. 157009, 17 Mar. 2010)
In Crimes and Quasi-delicts (1992, 1993, 2007 Q: Rodolfo, Monalisa, Johanna and Abellana
BAR) arrived at the municipal wharf of Jetafe, Bohol.
They boarded a cargo truck which would
The amount of damages for death caused by a crime transfer them from the wharf to Poblacion,
or quasi-delict shall be at least P75,000.00 even Jetafe. While passengers were getting on the
though there may have been mitigating truck, Simolde called Caballes, the official truck
circumstances. (People v. Tabarnero, G.R. No. driver. Caballes approached Simolde but left the
168169, 24 Feb. 2010) engine running. While Simolde and Caballes
were talking, Aparra, chief diesel mechanic,
In addition to the amount to be awarded, Art. 2206 started driving the truck. Upon seeing the truck
of the NCC provides that the defendant shall also be move, Caballes rushed to the truck and sat
liable for the following: beside Aparra. However, instead of taking
control of the vehicle, Caballes allowed Aparra
1. Loss of the earning capacity of the deceased, to drive. Shortly thereafter, Aparra lost control
and the indemnity shall be paid to the heirs of the truck and they fell off the wharf.
of the latter; such indemnity shall in every Consequently, Rodolfo and Monalisa died while
case be assessed and awarded by the court, Johanna and Abellana were injured. Vivian, the
unless the deceased on account of permanent widow of Rodolfo and the mother of Johanna,
physical disability not caused by the filed a complaint.
defendant, had no earning capacity at the
time of his death; 1. Whether or not quasi-delict was
committed?
2. If the deceased was obliged to give support
according to the provisions of Art. 291 of the A: YES. The requisites for quasi-delict are: (1)
NCC, the recipient who is not an heir called to damages to the plaintiff; (2) negligence, by act or
the decedent's inheritance by the law of omission, of which defendant, or some person for
testate or intestate succession, may demand whose-acts he must respond, was guilty; and (3) the
support from the person causing the death, connection of cause and effect between such
for a period not exceeding five years, the negligence and the damages. Caballes was grossly
exact duration to be fixed by the court; or negligent in allowing Aparra to drive the truck
despite being an inexperienced driver. Aparra's
NOTE: The article only mentioned heirs. inexperience caused the accident that led to the
Consequently, it cannot speak of devisees deaths of Rodolfo and Monalisa. It is undisputed
and legatees who are receiving support from that the deaths of Vivian's husband and daughter
the deceased. caused damage to her. Clearly, the requisites for a
quasi-delict are present in this case.
3. The spouse, legitimate and illegitimate
descendants and ascendants of the deceased 2. Whether or not loss of earning capacity
may demand moral damages for mental should be awarded to Vivian, wife of
anguish by reason of the death of the Rodolfo?
deceased.
2023 GOLDEN NOTES
A: YES. Art. 2206 provides that the amount of Q: Rosalie Sy Ayson discovered that the Fil-
damages for death caused by a crime or quasi-delict Estate and Fairways illegally entered into her
shall be at least P3,000.00, even though there may property when it constructed its golf course.
have been mitigating circumstances. In addition, the Despite receipt of a notice to vacate said
defendant shall be liable, among others, for the loss property, the latter still continued to encroach
of the earning capacity of the deceased, and the the subject land. On the other hand, Fil-Estate
indemnity shall be paid to the heirs of the latter; and Fairways contend that it was in good faith in
such indemnity shall in every case be assessed and constructing the golf course. It contended that a
awarded by the court, unless the deceased on certain Villanueva, the former owner of the
account of permanent physical disability not caused subject land, gave assurances that Ayson will
by the defendant, had no earning capacity at the agree to a land swap which will be mutually
time of his death. The indemnity for the deceased's beneficial for the parties. Ayson thereafter filed
lost earning capacity is meant to compensate the a complaint for damages.
heirs for the income they would have received had
the deceased continued to live. (Abellana v. Aparra, Assuming that the case will prosper, what kind
Jr., G.R. No. 188493, 13 Dec. 2017) of damages is she entitled to?
b) MORAL DAMAGES A: Ayson is entitled to recover moral and exemplary

damages. Moral damages are designed to
It includes physical suffering, mental anguish, fright, compensate and alleviate the physical suffering,
serious anxiety, besmirched reputation, wounded mental anguish, fright, serious anxiety, besmirched
feelings, moral shock, social humiliation, and similar reputation, wounded feelings, moral shock, social
injury. (Art. 2217, NCC) humiliation, and similar harm unjustly caused to a
person. Exemplary damages may be imposed by
Although incapable of pecuniary computation, way of example or correction for public good if the
moral damages, nevertheless, must somehow be guilty party acted in a wanton, fraudulent, reckless,
proportional to and in approximation of the oppressive or malevolent manner.
suffering inflicted. Such damages, to be recoverable,
must be the proximate result of a wrongful act or Here, Ayson can recover moral damages as she was
omission, the factual basis for which is satisfactorily made to suffer sleepless nights and mental anguish
established by the aggrieved party. (Expertravel & because her right as the owner of the subject lot was
Tours, Inc. v. CA, G.R. No. 152392, 26 May 2005) violated by Fil-Estate in constructing its golf course
in the latter's property. She is also entitled to
It is awarded to enable the injured party to obtain exemplary damages since despite the notice to
means, diversions or amusement that will serve to vacate, the latter still proceeded to construct its golf
alleviate the moral suffering he has undergone by course. (Ayson v. Fil-Estate Properties, Inc., G.R. No.
reason of the defendant’s culpable action. 223254, 01 Dec. 2016)
(Prudenciado v. Alliance Transport System, Inc., G.R.
No. L-33836, March 16, 1987) NOTE: Moral damages apply both to natural and
juridical persons. Moral damages are generally not
NOTE: A case of simple negligence does not justify awarded in favor of a juridical person, unless it
an award of moral damages. Such is proper only in enjoys a good reputation that was debased by the
cases of gross negligence amounting to bad faith. offending party resulting in social humiliation.
(Villanueva v. Salvador, G.R. No. 139436, 25 Jan. (ABS-CBN v. CA, G.R. No. 128690, 21 Jan. 1999)
2006)
GR: A judicial person is generally not entitled to
moral damages because, unlike a natural person, it
cannot experience physical suffering or such
CIVIL LAW
sentiments as wounded feelings, serious anxiety, matter of right, entitled to moral damages. The
metal anguish or moral shock. existing rule is that moral damages are not awarded
to a corporation since it is incapable of feelings or
XPN: A corporation may have a good reputation mental anguish. Exceptions, if any, only apply pro
which, if besmirched, may also be a ground for the hac vice. There is no showing here that an exception
award of moral damages. (Mambulao Lumber Co. v. should apply pro hac vice in favor of petitioner BNL
PNB, G.R. No. L-22973, January 30, 1968) Management. (BNL Management Corporation v. Uy,
G.R. No. 210297, 03 Apr. 2019)
NOTE: Art. 2219 (7) of the NCC expressly authorizes
the recovery of moral damages in cases of libel, Q: Mabunay who is a seafarer was hired by
slander or any other form of defamation. It does not Sharpe Sea. One day after boarding the ship,
qualify whether the plaintiff is a natural or juridical Mabunay slipped and hit his back on the
person. Therefore, a juridical person such as a purifier, while he was cleaning the second floor
corporation can validly complain for libel or any of the engine room. Mabunay then informed 2 nd
other form of defamation and claim for moral Engineer Castro who advised him to continue
damages. (Filipinas Broadcasting Network Inc. v. with his assigned duties. Despite the persistent
AMEC-BCCM, G.R. No. 141994, 17 Jan. 2005) pain in his back and numbness in his legs,
Mabunay continued working for 3 days, until
Q: BNL Management owned six (6) Chief Engineer Manuel De Leon allowed him to
condominium units at the Imperial Bayfront have a medical checkup when the ship docked in
Tower Condominium. BNL Management, Nanjing, China. He was diagnosed with chest and
through its president Romeo David (David), spinal bone damage and was declared unfit to
wrote a letter and brought raised their work. He was then repatriated to Manila.
concerns. It stated therein that if problems Mabunay reported to Sharpe Sea office and was
remain unresolved, it will withhold all future told to report to its company designated
payments of association dues until the issue are physician. Mabunay underwent surgery and was
resolved satisfactorily. Sevilla sent a letter to discharged from the hospital.
BNL Management containing a breakdown of its
arrears in the payment of association dues. Mabunay filed a complaint against Sharpe Sea
for the payment of medical expenses, total
BNL Management received the Second Notice of disability benefits, damages, and attorney’s fees.
Billing informing it of its pending arrears LA ruled in favor of Mabunay. NLRC affirmed
representing unpaid association dues. The LA’s ruling. In its MR, Sharp Sea attached the
Second Notice also contained a warning that medical report showing the findings of the
after a third notice had been sent, the company designated physician. The medical
Association would terminate utility services. report showed that Mabunay is diagnosed of
BNL Management received the Third Notice of Grade 8 disability. The NLRC pointed out that
Billing, still, did not pay the arrears. Because of while Dr. Cruz's medical report might not have
this, the Association's Board of Directors, who been presented before the Labor Arbiter, it was
are the respondents herein, resolved to not disputed that Mabunay was under the care
disconnect the electricity and water services in of Dr. Cruz from the time he was medically
the six (6) units owned by BNL Management. repatriated.
This prompted BNL Management to file a
Complaint against Uy, et al. for damages. Is Mabuhay entitled to moral and exemplary
damages when Sharp Sea withheld the company
Is BML Management entitled to moral damages? physician’s medical report showing that he was
A: NO. Petitioner BNL Management, being a diagnosed of Grade 8 disability?
corporation, is not entitled to moral damages. There
is no standing doctrine that corporations are, as a
2023 GOLDEN NOTES
A: YES. Mabunay is entitled to moral and exemplary Elements required for recovery (1991, 2002,
damages because Sharp Sea was found to be in bad 2003 BAR) (I-P-A-D)
faith. Bad faith is not simply bad judgment or
negligence. "It imports a dishonest purpose or some 1. An Injury clearly sustained by the claimant;
moral obliquity and conscious doing of wrong. It
means a breach of a known duty through some 2. A culpable Act or omission factually
motive or interest or ill-will that partakes of the established;
nature of fraud."
3. The act or omission must be the Proximate
SC ruled that by not timely releasing Dr. Cruz's result of the physical suffering, mental anguish,
interim disability grading, petitioners revealed their fright, serious anxiety, besmirched reputation,
intention to leave respondent in the dark regarding wounded feelings, moral shock, social
his future as a seafarer and forced him to seek humiliation and similar injury; and wrongful act
diagnosis from private physicians. Petitioners' bad or omission of the defendant as the proximate
faith was further exacerbated when they tried to cause of the injury sustained by the claimant;
invalidate the findings of respondent's private and
physicians, for his supposed failure to move for the
appointment of a third-party physician as required NOTE: The person claiming moral damages
by the POEA-SEC, despite their own deliberate must prove the existence of bad faith by clear
concealment of their physician's interim diagnosis and convincing evidence for the law always
from respondent and the labor tribunals. (Sharpe presumes good faith; it is not enough that one
Sea v. Mabunay Jr., G.R. 206113, 06 Nov. 2017) merely suffered sleepless nights, mental
anguish, serious anxiety as the result of the
Act or omission must be with bad faith actuations of the other party. (Ong Bun v. Bank
of the Phil. Islands, G.R. No. 212362, 14 Mar.
Moral damages are recoverable only if the party 2018)
from whom it is claimed has acted fraudulently or in
bad faith or in wanton disregard of his contractual 4. The award of Damages predicated on any of the
obligations. (Yamauchi v. Suñiga, G.R. No. 199513, 18 cases stated in Art. 2219. (Amado v. Salvador,
Apr. 2018) G.R. No. 171401, 13 Dec. 2007)
Bad faith imports a dishonest purpose or some Court Given Discretion to Determine Moral
moral obliquity and conscious doing of a wrong, a Damages
breach of known duty through some motive or
interest or ill will that partakes of the nature of Trial courts are given discretion to determine moral
fraud; it is a question of intention, which can be damages and the CA can only modify or change the
inferred from one’s conduct and/or amount awarded when they are palpably and
contemporaneous statements. (Peralta v. Raval, G.R. scandalously excessive “so as to indicate that it was
No. 188467, 29 Mar. 2017) the result of passion, prejudice or corruption on the
part of the trial court.” (Yuchengco v. Manila
NOTE: Unless there is a clear showing of malice or Chronicle Publishing Corp., G.R. No. 184315, 25 Nov.
bad faith or gross negligence, a public officer is not 2009)
liable for moral and exemplary damages for acts
done in the performance of duties. (Rebadulla v. Moral damages are not punitive in nature. There is
Republic, G.R. No. 222159, 31 Jan. 2018) no hard and fast rule in the determination of what
would be a fair amount of moral damages, since
each case must be governed by its own peculiar
circumstances. (PNB v. CA, G.R. No. 116181, 06 Jan.
1997)
CIVIL LAW
When victim bearing a child XPNs: Moral damages may be awarded in culpa
contractual, involving common carriers in the
An award for the death of a person does not cover following instances:
the case of an unborn foetus that is not endowed
with personality. The damages recoverable by the a. Where the passenger died by reason of
parents of an unborn child are limited to moral negligence of the carrier (Art. 1764, NCC); or
damages for the illegal arrest of the normal
development of the foetus on account of distress b. Where it is proved that the carrier is guilty of
and anguish attendant to its loss. (Geluz v. CA, G.R. fraud or bad faith, even if the death does not
No. L-16439, 20 July 1961) result. (Fores v. Mirand, G.R. No. L-12163, 04
Mar. 1959; Pineda, 2010)
Recovery of Moral Damages
NOTE: Even if the negligence of the bank is not
GR: To recover moral damages, the plaintiff must attended with malice and bad faith, moral damages
allege and prove: may be granted. (Cavite Development Bank v. Lim,
G.R. No. 131679, 01 Feb. 2000)
1. The factual basis for moral damages; and
2. The causal relation to the defendant’s act Moral damages may be recovered in the
following and analogous cases (1996, 2002,
XPN: Moral damages may be awarded to the victim 2004, 2006, 2009 BAR)
in criminal proceedings without the need for
pleading of proof or the basis thereof. 1. A criminal offense resulting in physical injuries;
2. Quasi-delicts causing physical injuries;
NOTE: Moral damages are mandatory without need 3. Seduction, abduction, rape, or other lascivious
of allegation and proof other than the death of the acts;
victim, owing to the fact of the commission of 4. Adultery or concubinage;
murder or homicide. (Espineli v. People, G.R. No. 5. Illegal or arbitrary detention or arrest;
179535, 09 June. 2014) 6. Illegal search;
7. Libel, slander or any other form of defamation;
Award of moral damages to a corporation 8. Malicious prosecution;
9. Acts mentioned in Art. 309; and
GR: Juridical person is generally not entitled to 10. Actions referred to in Arts. 21, 26, 27, 28, 29, 30,
moral damages because, unlike a natural person, it 32, 34, and 35 (Art. 2219, NCC).
cannot experience physical suffering or such
sentiments as wounded feelings, serious anxiety, NOTE: Art. 2219 of the NCC provides for criminal
mental anguish or moral shock. (Filipinas offenses resulting from physical injuries and quasi-
Broadcasting Network v. Ago Medical and delicts causing physical injuries.
Educational Center-Bicol, G.R. No. 141994, 17 Jan.
2005) Parents of the victim seduced, abducted, raped, or
abused, may also recover moral damages. (Art.
XPN: A corporation may have a good reputation 2219, NCC) The prevailing jurisprudence is that the
which, if besmirched, may also be a ground for the award of moral damages should be granted jointly
award of moral damages. (Ibid.) to both the victim and her parents. Stated
differently, the parents are not entitled to a separate
Moral damages recoverable under culpa award of moral damages. (People v. Delen, G.R. No.
contractual 194446, 21 Apr. 2014)
GR: Moral damages are not recoverable in actions

for damages predicated on a breach of contract.
2023 GOLDEN NOTES
NOTE: The term “physical injury” as used in Art. Cases where moral damages is mandatory
2219(1) of the NCC, includes death, and no proof of without need of any proof
pecuniary loss is necessary in order that such
damages may be adjudicated. (People v. Tambis, G. R 1. Rape cases;
No. 124452, 28 July 1999)
NOTE: Moral damages are automatically
Tortious acts referred to in chapter of human granted in a rape case without need of further
relations of the NCC proof other than the fact of its commission. For
it is assumed that a rape victim has actually
The plaintiff may recover moral damages in the suffered moral injuries entitling her to such an
following instances: award. (People v. Iroy, G.R. No. 187743, 03 Mar.
2010)
1. Willful acts contrary to morals, good customs or
public policy; 2. Murder cases; and
2. Disrespect to the dignity, personality, privacy NOTE: Same rule applies in cases of frustrated
and peace of mind of neighbors and other murder.
persons;
3. Homicide.
3. Refusal or neglect of a public servant to perform
his official duty without just cause; In robbery and other common crimes, the grant
of moral damages is not automatic, unlike in
4. Unfair competition in enterprise or in labor; rape cases. (People v. Taño, G.R. No. 133872, 05
May 2000)
5. Civil action for damages against accused
acquitted on reasonable doubt; Civil indemnity different from moral damages in
rape
6. Violation of civil rights;
In rape cases, civil indemnity is different from moral
7. Civil action for damages against city or damages. It is distinct from and should not be
municipal police force; and denominated as moral damages which are based on
different jural foundations and assessed by the
8. When the trial court finds no reasonable ground court in the exercise of sound discretion. (People v.
to believe that a crime has been committed after Caldona, G.R. No. 126019, 01 Mar. 2001)
a preliminary investigation or when the
prosecutor refuses or fails to institute criminal NOTE: In criminal proceedings for rape, plaintiff
proceedings. need not prove the factual basis for moral damages
as well as the causal relation to the defendant’s act.
Moral damages may be awarded in appropriate
cases referred to in the chapter on human relations Amount of award in qualified rape
of the NCC, specifically Arts. 19 to 36, without need
of proof that the wrongful act complained of had For qualified rape, where the penalty imposed is
caused any physical injury upon the complainant. death but reduced to reclusion perpetua because of
(Patricio v. Leviste, G.R. No. L-51832, 26 Apr. 1989) R.A. 9346, the amount of damages to be awarded are
as follows:
1. Civil indemnity – P100,000.00;

2. Moral damages – P100,000.00; and
3. Exemplary damages – P100,000.00. (People
CIVIL LAW
v. Jugueta, G.R. No. 202124, 05 Apr. 2016) personal knowledge of the court; and certainly not
on flimsy, remote, speculative and unsubstantial
Psychological incapacity and moral damages proof."
By declaring petitioner as psychologically B) Is Guy entitled to exemplary damages

incapacitated, the possibility of awarding moral
damages was negated, which should have been A: YES. Contrary to the CA’s pronouncement,
proved by specific evidence that it was done exemplary damages may be awarded even in the
deliberately. Thus, as the grant of moral damages absence of aggravating circumstances. It may be
was not proper, it follows that the grant of awarded "where the circumstances of the case show
exemplary damages cannot stand since the Civil the highly reprehensible or outrageous conduct of
Code provides that exemplary damages are the offender."
imposed in addition to moral, temperate, liquidated
or compensatory damages. (Buenaventura v. CA, G.R. C) Is the reduction of moral damages
No. 127358, 31 Mar. 2005) proper?
Q: An article written by Raffy Tulfo, and was A: YES. Art. 2219 of the NCC specifically states that
published in Abante Tonite, reported that a moral damages may be recovered in cases of libel,
certain Michael C. Guy (Guy), who was being slander, or defamation. The amount of moral
investigated for tax fraud, went to former damages that courts may award depends upon the
Department of Finance Secretary Juanita set of circumstances for each case. There is no fixed
Amatong (Secretary Amatong)'s house to ask for standard to determine the amount of moral
help. Claiming that the article had tainted his damages to be given. Courts are given the discretion
reputation, Guy filed a Complaint-Affidavit to fix the amount to be awarded in favor of the
against Tulfo and the following representatives injured party, so long as there is sufficient basis for
of Abante Tonite's publisher. awarding such amount. (Guy v. Tulfo, G.R. No.
213023, 10 Apr. 2019)
The RTC convicted Tulfo and Macasaet, et al. of
the crime of libel and ordered them to pay Guy: c) NOMINAL DAMAGES
(1) ₱5,000,000.00 as actual damages, and (2)
₱5,000,000.00 as moral damages. The CA Nominal Damages (1991, 1994, 2005 BAR)
affirmed the RTC’s decision, however, modified
it – awarding exemplary damages in the amount Nominal damages are adjudged in order that a right
of ₱500,000.00 and reduced moral damages to of the plaintiff, which has been violated or invaded
₱500,000.00. Later on, in its Amended Decision, by the defendant, may be vindicated or recognized,
the CA deleted the exemplary damages, as well and not for the purpose of indemnifying the plaintiff
as the actual damages awarded by the RTC. for any loss suffered by him. (Art. 2221, NCC)
A) Is Guy entitled to actual damages? Nature of Nominal Damages
A) NO. This Court has, time and again, emphasized Nominal damages are small sums fixed by the court
that actual damages cannot be presumed and without regard to the extent of the harm done to the
courts, in making an award, must point out specific injured party. They are damages in name only and
facts which could afford a basis for measuring are allowed simply in recognition of a technical
whatever compensatory or actual damages are injury based on a violation of a legal right. (Robes-
borne. An award of actual damages is "dependent Francisco Realty v. CFI, G.R. No. L-41093, 30 Oct.
upon competent proof of the damages suffered and 1978)
the actual amount thereof. The award must be
based on the evidence presented, not on the
2023 GOLDEN NOTES
Sources of Nominal Damages nominal damages is unnecessary and improper.

(Medina v. Cresencia, G.R. No. L-8194), 11 July 1956)
Includes all the 5 sources of obligation:
Nominal and temperate damages cannot be
1. Law; awarded concurrently. The two awards are
2. Contract; incompatible. Nominal damages are given in order
3. Quasi-contract; that a right of plaintiff which has been violated or
4. Delict; and invaded by the defendant, may be vindicated or
5. Quasi-delict. (Art. 2222, NCC) recognized. On the other hand, temperate damages
may be awarded when the court finds that some
NOTE: Nominal damages are recoverable from pecuniary loss has been suffered but its amount
invasion of property or in any case where a property cannot be proved with reasonable certainty.
right has been invaded. (Art. 2222, NCC) (Rabuya, 2017)
Elements of Nominal Damages Q: On 15 Mar. 2002, the annual meeting of the

stockholders of Philadelphia School, Inc. (“PSI”)
1. Plaintiff has a right; was held, wherein a new board of directors was
2. Such right is violated; and elected, a transfer of certain shares was
3. The purpose of awarding damages is to approved, and a 300% stock dividend was
vindicate or recognize the right violated. distributed. During the meeting, King was asked
to leave the board room because allegedly, he
Cases where nominal damages are awarded was not a PSI stockholder, while Lim was
allowed to vote only for one share during the
The court ‘'may award nominal damages in every elections despite the proxies he held for other
obligation arising from any source enumerated in stockholders who were his brothers.
Art. 1157, or in every case where any property right
has been invaded. (Art. 2222, NCC) Prior to the meeting, the SEC and the RTC had
previously ordered that the 1997 General
The adjudication of nominal damages shall preclude Information Sheet (“GIS”) of which Lim and King
further contest upon the right involved and all were listed as stockholders be used as basis for
accessory questions, as between the parties to the the 2000 and 2001 elections of PSI Board of
suit, or their respective heirs and assigns. (Art. 2223, Directors. Thus, on 26 Mar. 2002, Lim and King
NCC) filed a petition before the RTC of Quezon City,
seeking to annul the proceedings and acts
Nominal damages cannot co-exist with other resolved on the 15 Mar. 2002 meeting. Should
damages King and Lim be awarded indemnity for
damages?
NOTE: Nominal damages cannot co-exist with
compensatory damages. Nominal damages are A: YES. King and Lim should be entitled to an award
adjudged in order that a right of the plaintiff, which of damages because they were unjustifiably and
has been violated or invaded by the defendant, may obstinately refused recognition of their
be vindicated or recognized, and not for the purpose shareholdings in PSI as well as participation in the
of indemnifying the plaintiff for any loss suffered by annual stockholders’ meeting. The right to vote is
him. (LRTA v. Navidad, G.R. No. 145804, 06 Feb. 2003) inherent in and incidental to the ownership of a
capital stock, and the deprivation of which is a
There is already a judicial recognition that the violation of property right that entitles the injured
plaintiff’s right was violated when the lower court party to an award of damages. Arts. 2217 and 2220
awarded exemplary damages. Hence, the award of of the NCC allow recovery of moral damages in case
of willful injury to property. The acts of the other
CIVIL LAW
stockholders who refused to recognize the rights of prove how definite the injury. (Equitable PCI Bank v.
the plaintiffs caused mental anguish, serious anxiety Tan, G.R. No. 165339, 23 Aug. 2010)
and social humiliation to the latter. Furthermore,
under Art. 2224 of the NCC, temperate or moderate Temperate damages may be awarded in the
damages, which are more than nominal but less following cases:
than compensatory damages, may be recovered 1. In lieu of actual damages; or
even though not specifically prayed for in the 2. In lieu of loss of earning capacity.
complaint, when the court finds that some
pecuniary loss has been suffered but its amount Rationale behind the temperate or moderate
cannot, from the nature of the case, be provided damages (1994 BAR)
with certainty. Similarly, the award of attorney’s
fees and litigation expenses was proper because The rationale behind temperate damages is
plaintiffs were compelled to litigate to protect or precisely that from the nature of the case, definite
vindicate their stockholders’ rights against the proof of pecuniary loss cannot be offered. When the
unlawful acts of the other stockholders. (Lydia Lao court is convinced that there has been such loss, the
v. Yao Bio Lim, et al, G.R. 201306, 09 Aug. 2017). judge is empowered to calculate moderate damages,
rather than let the complainant suffer without
Award of nominal damages in labor termination redress from the defendant’s wrongful act. (GSIS v.
cases Sps. Labung-Deang, G.R. No. 135644, 17 Sept. 2001)
Where an employee was terminated for a caused, NOTE: It can only be recovered when the court is
but the employer failed to comply with the notice convinced that some pecuniary loss has been
requirement, the employee is entitled to the suffered by the aggrieved party but its amount,
payment of nominal damages. (Agabon v. National cannot, from the nature of the case be proved with
Labor Relations Commission, G.R. No. 158693, 17 Nov. certainty in terms of money (De Leon, 2012).
2004) The nominal damages awarded to the
employees for a dismissal based on just cause under Elements of Temperate Damages
Art. 282 of the Labor Code without notice
requirement was P30,000.00; while, where the 1. Some pecuniary loss;
dismissal of the employees was based on authorized 2. Loss is incapable of pecuniary estimation; and
cause under Art. 283 of the Labor Code, but without 3. The damages awarded are reasonable.
the required notice, the amount was fixed at
P50,000.00. (Celebes Japan Foods Corporation v. Q: Del Moral, Inc. (Del Moral) is a domestic
Yermo, G.R. No. G.R. No. 175855, 02 Oct. 2009) family corporation and the registered owner of
several parcels of land situated in different
d) TEMPERATE OR MODERATE DAMAGES municipalities in Pangasinan. These parcels of
land were originally tobacco farmlands.
Temperate damages are those damages, which are 102.9766 hectares of Del Moral's property were
more than nominal but less than compensatory, and later placed under the coverage of the agrarian
may be recovered when the court finds that some reform program under P.D. No. 27. On 17 July
pecuniary loss has been suffered but its amount 1987, E.O. No. 2284 was issued which (1)
cannot be proved with certainty. (Art. 2224, NCC) provided for the full land ownership to qualified
farmer-beneficiaries covered by P.D. No. 27; (2)
Nature of Temperate Damages determined the value of remaining unvalued
rice and com lands subject to P.D. No. 27; and (3)
The allowance of temperate damages when actual provided for the manner of payment by the
damages were not adequately proven is ultimately farmer beneficiary and mode of compensation
a rule drawn from equity, the principle affording to the landowner. Pursuant to Sec. 2 of E.O. No.
relief to those definitely injured who are unable to 228, the Department of Agrarian Reform (DAR)
2023 GOLDEN NOTES
computed the just compensation to be paid to Q: Nanito Evangelista filed a complaint for
Del Moral in the total amount of P342,917.81. In damages against Andolong over the latter's
1992, petitioner Land Bank of the Philippines failure to give the former's share in the net
(LBP) informed Del Moral of the approval of its profits derived from their business. However,
monetary claim pertaining to the 102.9766 this was evidenced solely by the documentary
hectares of farmlands which were placed under exhibits which disclosed the gross monthly
the coverage of P.D. No. 27. The LBP assigned the revenue and not the actual profit earned. During
original total valuation in the amount of the course of the proceedings, Andolong was
P342,917.81 or roughly P3,329.30 per hectare declared in default. Consequently, it was no
as just compensation to Del Moral. However, Del longer possible for Evangelista to prove the
Moral found the assigned valuation made by the actual profit earned since such documents were
DAR and the LBP to be grossly inadequate and in possession of Andolong. Can Evangelista
unreasonably low. Thus, Del Moral filed a recover damages if the net profits can no longer
petition before the RTC for the proper be ascertained?
determination of just compensation.
A: YES. Evangelista can recover damages although
The RTC rendered its Decision computing the the exact amount of the net profits remained
just compensation based on the recent fair unproven. This comes in the form of temperate or
market value of the property, instead of using moderate damages. Temperate damages may be
the prevailing factors at the time of the taking. recovered when the court finds that some pecuniary
Upon appeal, the CA affirmed the RTC's loss has been suffered but its amount cannot, from
computation for just compensation but reduced the nature of the case, be provided with certainty.
the award for temperate and nominal damages Consequently, in computing the amount of
to P10 million and P1 million, respectively. Is temperate or moderate damages, it is usually left to
the award of damages proper? the discretion of the courts, but the amount must be
reasonable, bearing in mind that temperate
A: NO. Regarding the award of temperate and damages should be more than nominal but less than
nominal damages, the Court held that temperate or compensatory. (Evangelista v. Sps. Andolong, G.R. No.
moderate damages may be recovered if pecuniary 221770, 16 Nov. 2016)
loss has been suffered but the amount cannot be
proved with certainty from the nature of the case. Q: Alfredo and his family were sound asleep in
their home when he was roused from sleep by
The trial and appellate courts found that Del Moral the sound of stones hitting his house. Alfredo
was unable to use productively the 102 hectares of went to the living room and peered through the
its landholdings after it was deprived of its jalousie window. The terrace light allowed him
possession in 1972. With the passage of time, it is, to recognize his neighbor and co-worker,
however, impossible to determine Del Moral's Bacerra. Bacerra threw stones at Alfredo's
losses with any certainty. Thus, considering the house while saying, "Vulva of your mother." Just
circumstances of this case, the award of P10 million as he was about to leave, Bacerra exclaimed,
as temperate damages is reasonable. "Vulva of your mother, Old Fred, I'll burn you
now." Bacerra then left. Troubled by Bacerra's
Nominal damages of P1 million should be deleted as threat, Alfredo waited for him to return. Alfredo
temperate and nominal damages are incompatible sat down beside the window. At around 4:00
and thus, cannot be granted concurrently. (Land a.m., he heard dogs barking outside. Alfredo
Bank of the Philippines v. Del Moral, Inc., G.R. No. looked out the window and saw Bacerra walking
187307, 14 Oct. 2020, J. Hernando) towards their nipa hut, which was located
around 10 meters from their house.
CIVIL LAW
Bacerra paced in front of the nipa hut and shook Nature of Liquidated Damages
it. Moments later, Alfredo saw the nipa hut
burning. Alfredo sought help from his neighbors A stipulation on liquidated damages is a penalty
to smother the fire. Edgar contacted the clause where the obligor assumes a greater liability
authorities for assistance, but it was too late. in case of breach of an obligation. The obligor is
The nipa hut and its contents were completely bound to pay the stipulated amount without need
destroyed. The local authorities conducted an for proof on the existence and on the measure of
investigation on the incident. Ultimately, the damages caused by the breach. (Titan v. Uni-Field,
trial court and the Court of Appeals found him G.R. No. 153874, 01 Mar. 2007)
guilty beyond reasonable doubt of simple arson,
and was ordered to pay temperate damages of NOTE: Attorney’s fee is in the concept of actual
P50,000.00 to Alfred. Is the award of temperate damages except that when it is stipulated and
damages proper? therefore in the form of liquidated damages no
proof of pecuniary loss is required. (Art. 2216, NCC)
A: YES. Under Art. 2224 of the NCC, temperate (Santiago v. Dimayuga, G.R. No. L-17883, 30 Dec.
damages may be awarded when there is a finding 1961)
that "some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be Liquidated damages may be equitably reduced
proved with certainty." The amount of temperate when
damages to be awarded in each case is discretionary
upon the courts as long as it is "reasonable under 1. Iniquitous or unconscionable; or (Art. 2227,
the circumstances." NCC); or
2. Partial or irregular performance.
Private complainant clearly suffered some
pecuniary loss as a result of the burning of his nipa When principal obligation is void
hut. However, private complainant failed to
substantiate the actual damages that he suffered. The nullity of the principal obligation carries with it
Nevertheless, he is entitled to be indemnified for his that of the penal clause. (Art. 1230, NCC)
loss. The award of temperate damages amounting to
₱50,000.00 is proper and reasonable under the Rule governing in case of breach of contract
circumstances. (Tabones v. People, G.R. No. 204544,
03 July 2017) When the breach of contract committed by the
defendant is not the one contemplated by the
e) LIQUIDATED DAMAGES parties in agreeing upon the liquidated damages,
the law shall determine the measure of damages,
Liquidated damages are fixed damages previously and not the stipulation. (Art. 2228, NCC)
agreed by the parties to the contract and payable to
the innocent party in case of breach by the other. f) EXEMPLARY OR CORRECTIVE DAMAGES
(Pineda, 2009)
Exemplary or Corrective Damages (2003, 2005,
Liquidated damages are those that the parties agree 2009 BAR)
to be paid in case of a breach. Under Philippine laws,
they are in the nature of penalties. They are Exemplary damages or corrective damages are
attached to the obligation in order to ensure imposed, by way of example or correction for the
performance. As a precondition to such award, public good, in addition to the moral, temperate,
however, there must be proof of the fact of delay in liquidated or compensatory damages. (Art. 2229,
the performance of the obligation. (Suatengco v. NCC)
Reyes, G.R. No. 162729, 17 Dec. 2008)
2023 GOLDEN NOTES
NOTE: They are also known as “punitive” or 3. The act must be accompanied by bad faith or
“vindictive” damages. done in wanton, fraudulent, oppressive or
malevolent manner. (Mendoza v. Sps. Gomez,
Nature of exemplary damages G.R. No. 160110, 18 June 2014)
Exemplary damages are mere accessories to other Cases were exemplary damages are no
forms of damages except nominal damages. They recoverable
are mere additions which may or may not be
granted at all depending upon the necessity of 1. The victim is guilty of contributory
setting an example for public good as a form of negligence;
deterrent to the repetition of the same act by 2. Claimant was not entitled to moral
anyone. (Pineda, 2009) damages; or
3. Defendant acted in good faith.
Rationale behind exemplary damages
Award in Crime, Quasi-Delict, Contracts and
The rationale behind exemplary damages is to Quasi-contracts
provide an example or correction for the public
good and not to enrich the victim. (Rana v. Wong, AWARD IN
AWARD IN
G.R. No. 192861, 30 June 2014) AWARD IN CONTRACTS
QUASI-
CRIME AND QUASI-
DELICT
Cases where exemplary damages may be CONTRACTS
imposed as accessory damages May be
awarded if the
May be
GR: Exemplary damages cannot be recovered as a defendant is
granted if the
matter of right. (Art. 2233, NCC) found to have
An defendant
acted in a
aggravating acted with
XPN: They can be imposed in the following cases: wanton,
circumstance, gross
fraudulent,
whether negligence.
1. Criminal offense – when the crime was reckless,
ordinary or (BPI
committed with one or more aggravating oppressive, or
qualifying. Investment
circumstances (Art. 2230, NCC); malevolent
(People v. Corp. v. D.G.
manner.
Dadulla, G. R. Carreon
2. Quasi-delicts – when the defendant acted with (Pilipinas
No. 172321, Commercial
gross negligence (Art. 2231, NCC); and Makro, Inc. v.
09 Feb. 2011) Corp., G.R. No.
Coco Charcoal
126524, 29
3. Contracts and Quasi-contracts – when Phils., Inc., G.R.
Nov. 2001)
defendant acted in wanton, fraudulent, No. 196419, 04
reckless, oppressive, or malevolent manner. Oct. 2017)
(Art. 2232, NCC)
NOTE: In quasi-contracts, award of exemplary
Requirements for an award of exemplary damages is discretionary. (Ong Bun v. Bank of the
damages Phil. Islands, G.R. No. 212362, 14 Mar. 2018)
1. The claimant’s right to exemplary damages has Q: Meralco was contracted to supply electricity
been established; to Marvex Industrial Corporation (Marvex)
under an Agreement for Sale of Electric Energy.
2. Their determination depends upon the amount It installed metering devices at Marvex's
of compensatory damages that may be awarded premises. Marvex was billed according to the
to the claimant; and monthly electric consumption recorded in its
CIVIL LAW
meter. Meralco service inspectors inspected Moral damages are also not proper, in line with
Marvex's electric metering facilities and found Manila Electric Company v. T.E.A.M. Electronics
that the main meter terminal and cover seals Corporation (G.R. No. 131723, 13 Dec. 2007): “As a
had been tampered with. During a second rule, a corporation is not entitled to moral damages
inspection, Meralco found that the metering because, not being a natural person, it cannot
devices were tampered with again. experience physical suffering or sentiments like
Subsequently, Meralco assessed Marvex a wounded feelings, serious anxiety, mental anguish
differential billing. Meralco sent demand letters and moral shock.
and disconnected Marvex's electric service
when it did not pay. Nordec, the new owner of Here, the records are bereft of evidence that would
Marvex, sued Meralco for damages with prayer show that Nordec's name or reputation suffered due
for preliminary mandatory injunction. It alleged to the disconnection of its electric supply. Moreover,
that Meralco's service inspectors conducted the contrary to Nordec's claim, it cannot be awarded
inspections without its consent or approval. temperate or moderate damages under Art. 2224 of
the NCC. When the court finds that a party fails to
Following the inspections, Meralco's inspectors prove the fact of pecuniary loss, and not just the
gave an unnamed Nordec employee a Power amount of this loss, then Art. 2224 does not apply.
Field Order that did not mention the alleged
defects in the metering devices. Nordec further Here, the CA found that Meralco's disconnection had
claimed that the parties exchanged letters on a "domino effect" on Nordec's business, but that
the alleged unregistered electric bill, and that it Nordec did not offer actual proof of its losses.
requested a recomputation, which Meralco Nordec even admitted in its petition for review that
denied in its letter. However, Meralco asked there was an "oversight" on its part in "adducing
Nordec to show the basis for its recomputation proof of the accurate amount of damages it
request, to which Nordec complied in its letter. sustained" due to Meralco's acts. No pecuniary loss
Meralco required Nordec to pay P371,919.58 for has been established in this case, apart from the
the unregistered electricity bill. Nordec then claim in Nordec's complaint that the "serious
informed Meralco of the pending resolution of anxiety" of the disconnection had caused Nordec's
the recomputation. Nordec claimed that Meralco president to cancel business appointments,
then disconnected its service without prior purchase orders, and fail to fulfill contractual
notice, resulting to loss of income and obligations, among others.
cancellation of other business opportunities.
In this instance, nominal damages may be awarded.
Is Nordec Philippines is entitled to actual, Nominal damages are awarded to vindicate the
temperate, moral or exemplary damages, violation of a right suffered by a party, in an amount
attorney's fees, and legal interest? considered by the courts reasonable under the
circumstances. Meralco's negligence in not
A: NO. Art. 2234 of the NCC requires proof of providing Nordec sufficient notice of disconnection
entitlement to moral, temperate or compensatory of its electric supply, especially when there was an
damages before exemplary damages may be ongoing dispute between them concerning the
awarded. Exemplary damages, which cannot be recomputation of the electricity bill to be paid,
recovered as a matter of right, may not be awarded violated Nordec's rights. Because of this, Nordec is
if no moral, temperate, or compensatory damages entitled to nominal damages in the amount of
have been granted. Since exemplary damages P30,000.00. (Manila Electric Company v. Nordec
cannot be awarded, the award of attorney's fees Philippines And/Or Marvex Industrial Corp., G.R.
should likewise be deleted. 196020, 18 Apr. 2018)
2023 GOLDEN NOTES
Ordinary and Special Damages Application of the Prohibition on Double

Recovery Rule
a. Ordinary damages are those generally
breach of a typical contract. Civil liability coexists with criminal responsibility.
In negligence cases, the offended party, or his heirs,
b. Special damages are those which exist has the option between an action for enforcement of
because of special circumstances and for civil liability based on culpa criminal under Art. 100
which a debtor in good faith can be held of the RPC, and an action for recovery of damages
liable if he had been previously informed of based on Art. 2177 of the NCC.
such circumstances.
The action for enforcement of civil liability based on
2. WHEN DAMAGES MAY BE RECOVERED culpa criminal Sec. 1 of Rule 111 of the ROC deems
simultaneously instituted with the criminal action,
unless expressly waived or reserved for a separate
Extent of recovery of damages
application by the offended party. Art. 2177 of the
NCC, however precludes recovery of damages twice
1. Recovery completely barred - When the
for the same negligent act or omission. (Padua v.
plaintiff’s own negligence was the
Robles, G.R. No. L-40486, 29 Aug.1975)
immediate and proximate cause of his
injury, he cannot recover damages; (Art.
NOTE: What is barred by law is the double recovery
2179, NCC)
of damages, not the remedies.
NOTE: Where, in conjunction with the

occurrence, he (plaintiff) contributes only
to his own injury, he may recover the L. DAMAGES IN CASE OF DEATH
amount that the defendant responsible for
the event should pay for such injury, less a
sum deemed a suitable equivalent for his Damages that can be recovered in case of death
own imprudence. (David Taylor v. The
Manila Electric Railroad and Light 1. Moral damages;
Company, G.R. No. L-4977, 22 Mar. 1910) 2. Exemplary damages;
3. Attorney's fees and expenses for litigation;
2. Mitigated damages – If the plaintiff’s 4. Indemnity for death;
negligence was only contributory, the 5. Indemnity for loss of earning capacity;
immediate and proximate cause of the 6. Interest in proper cases.
injury being the defendants lack of due
care, he may recover damages, but the Rules when crimes and quasi-delict have caused
courts shall mitigate the damages to be death
awarded. (Art. 2179, NCC)
The amount of damages for death caused by a crime
Prohibition against Double Recovery (2003, or quasi-delict shall be at least P75,000.00, even
2006 BAR) though there may have been mitigating
circumstances. In addition:
Responsibility for fault or negligence under quasi-
delict is entirely separate and distinct from the civil 1. The defendant shall be liable for the loss of the
liability arising from negligence under the Penal earning capacity of the deceased, and the
Code. But the plaintiff cannot recover damages indemnity shall be paid to the heirs of the latter;
twice for the same act or omission of the defendant. such indemnity shall in every case be assessed
(Art. 2177, NCC) and awarded by the court, unless the deceased
CIVIL LAW
on account of permanent physical disability not NOTE: The test, with respect to foreseeability, is not
caused by the defendant, had no earning the balance of probabilities, but the existence, in the
capacity at the time of his death; situation in hand, of some real likelihood of some
damage and the likelihood is of such appreciable
2. If the deceased was obliged to give support weight and moment to induce, or which reasonably
according to the provisions of Art. 291 of the should induce, action to avoid it on the part of a
NCC, the recipient who is not an heir called to person or a reasonably prudent mind.
the decedent's inheritance by the law of testate
or intestate succession, may demand support Rules in graduation of damages in crimes
from the person causing the death, for a period
not exceeding five years, the exact duration to In crimes, the damages to be adjudicated may be
be fixed by the court; and respectively increased or lessened according to the
aggravating or mitigating circumstances. (Art. 2204,
3. The spouse, legitimate and illegitimate NCC)
descendants and ascendants of the deceased
may demand moral damages for mental Reduction of damages in quasi-delict cases
anguish by reason of the death of the deceased.
(Art. 2206, NCC) In quasi-delict, the contributory negligence of the
plaintiff shall reduce the damages he may recover.
NOTE: Under Art. 2206 of the NCC, the amount of (Art. 2214, NCC)
damages for death caused by a crime or quasi-delict
is P3,000.00. At present, however, civil indemnity Reduction of damages in contracts, quasi-
for death has been increased to P75,000.00 The contracts and quasi-delicts
same amount is awarded as moral damages and
exemplary damages, regardless of the number of The court can equitably mitigate the damages in
qualifying aggravating circumstances present. contracts, quasi-contracts and quasi-delicts in the
(People v. Roa, G.R. No. 225599, 22 Mar. 2017) following instances other than in Art. 2214:
The plaintiff is entitled to the amount that he spent 1. That the plaintiff himself has contravened the
during the wake and funeral of the deceased. terms of the contract;
However, it has been ruled that expenses after the
burial are not compensable. 2. That the plaintiff has derived some benefit as
a result of the contract;
Rules in graduation of damages in torts cases
3. In cases where exemplary damages are to be
Generally, the degree of care required is graduated awarded, that the defendant acted upon the
according to the danger a person or property advice of counsel;
attendant upon the activity which the actor pursues
or the instrumentality he uses. The greater the 4. That the loss would have resulted in any
danger the greater the degree of care required. event; and
(Keppel Cebu Shipyard v. Pioneer Insurance, G.R. Nos.
180880-81, 25 Sept. 2009). 5. That since the filing of the action, the
defendant has done his best to lessen the
However, foreseeability is not the same as plaintiff’s loss or injury. (Art. 2215, NCC)
probability. Even if there is lesser degree of
probability that damage will result, the damage may Liquidated damages, whether intended as an
still be considered foreseeable. indemnity or a penalty, shall be equitably reduced if
they are iniquitous or unconscionable. (Art. 2227,
NCC)
2023 GOLDEN NOTES
NOTE: There may be a compromise upon the civil

liability arising from an offense; but such
compromise shall not extinguish the public action
for the imposition of the legal penalty. (Art. 2034,
NCC)
M. DUTY OF INJURED PARTY
The injured party is obligated to undertake

measures that will alleviate and not aggravate his
condition after the infliction of the injury or
nuisance.
Doctrine of Avoidable Consequences
The party suffering loss or injury must exercise the

diligence of a good father of the family to minimize
the damages resulting from the act or omission. (Art.
2203, NCC)
CIVIL LAW
Moral, Exemplary, Nominal, Temperate, Actual, and Liquidated Damages, Distinguished
ACTUAL/
MORAL NOMINAL
COMPENSATORY
As to the purpose
Awarded only to enable the

injured party to obtain means,
Vindicating or recognizing the
diversion or amusement that will
Actual or compensatory damages injured party’s right to a property
alleviate the moral suffering he
simply make good or replace the that has been violated or invaded.
has undergone, by reason of
loss caused by the wrong. (Tan v. Bantegui, G.R. No. 154027,
defendants’ culpable action.
24 Oct. 2005)
(Philippine Airlines v. CA, G.R. No.
L-82619, 15 Sept 1993)
As to the manner of determination

Claimant must produce
No proof of pecuniary loss is
competent proof or the best
necessary. The assessment is left
evidence obtainable such as
to the discretion of the court in
receipts to justify an award
view of the circumstances of each
therefore. Actual or
case. However, there must be
compensatory damages cannot be
proof that the defendant caused
presumed but must be proved
physical suffering, mental
with reasonable certainty. (People
anguish, moral shock, etc.
v. Ereo, G.R. No. 124706, 22 Feb.
(Mahinay v. Velasquez, G.R. No.
2000)
152753, 13 Jan. 2004)
GR: Actual damages must be

GR: Factual basis must be alleged.
substantiated by documentary No proof of pecuniary loss is
Aside from the need for the
evidence, such as receipts to necessary. Proof that a legal right
claimant to satisfactorily prove
prove expenses incurred as a has been violated is what is only
the existence of the factual basis of
result of the death of the victim or required. It is awarded in the
the damages, it is also necessary
the physical injuries sustained by absence of proof of actual
to prove its causal relation to the
the victim. (Philippine Hawk damages.
defendant’s act. (People v. Manero,
Corporation v. Lee, G.R. No.
G.R. Nos. 86883-85, 29 Jan. 1993)
166869, 16 Feb. 2010)
XPN: Criminal cases. Moral

XPN: Damages for loss of earning
damages may be awarded to the
capacity may be awarded despite
victim in criminal proceedings in
the absence of documentary
such amount as the court deems
evidence when:
just without need for pleading or
proof of the basis thereof. (People
1. the deceased is self-employed
v. Paredes, G.R. No. 127569, 30 July
and earning less than the
1998)
minimum wage under
current labor laws, in which
2023 GOLDEN NOTES
case, judicial notice may be The amount of P50,000 is usually

taken of the fact that in the awarded by the Court in case of
deceased's line of work no the occurrence of death.
documentary evidence is
available; or
2. the deceased is employed as a

daily wage worker earning
less than the minimum wage
under current labor laws.
(Ibid.)
As to whether special or ordinary

Ordinary Special Special
EXEMPLARY/
TEMPERATE LIQUIDATED
CORRECTIVE
As to the purpose
Exemplary or corrective damages

Temperate damages may be
are intended to serve as a deterrent
recovered when the court finds
Liquidated damages are frequently to serious wrong doings, and as a
that some pecuniary loss has been
agreed upon by the parties, either vindication of undue sufferings and
suffered but its amount cannot,
by way of penalty or in order to wanton invasion of the rights of an
from the nature of the case, be
avoid controversy on the amount of injured party or a punishment for
proved with certainty. (Imperial v.
damages. those guilty of outrageous conduct.
Heirs of Bayaban, G.R. No. 197626,
(People v. Orilla, G.R. Nos. 148939-
03 Oct. 2018)
40, 13 Feb. 2004)
As to the manner of determination

No proof of pecuniary loss is necessary.
necessary. When the court is
convinced that there has been a 1. That the claimant is entitled
pecuniary loss, the judge is to moral, temperate or
empowered to calculate moderate compensatory damages (Art.
necessary. If intended as a penalty
damages rather than let the 2243, NCC; B. F. Metal v.
in obligations with a penal clause,
complainant suffer without Lomotan, G.R. No. 170813, 16
proof of actual damages suffered by
redress. (GSIS v. Labung-Deang, G.R. Apr. 2008); and
the creditor is not necessary in
No. 135644, 17 Sep. 2001)
order that the penalty may be
2. That the crime was
demanded. (Art. 1228, NCC)
Must be reasonable under the committed with one or more
circumstances. (Imperial v. Heirs of aggravating circumstances
Bayaban, G.R. No. 197626, 03 Oct. (Art. 2230, NCC), or the
2018) quasi-delict was committed
with gross negligence (Art.
CIVIL LAW
2231, NCC), or in contracts

and quasi-contracts the act
must be accompanied by bad
faith or done in wanton,
fraudulent, oppressive or
malevolent manner. (Art.
2232, NCC)
As to whether special or ordinary
Special Special Special
2023 GOLDEN NOTES

2023 Civil Law Golden Notes

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2023 Civil Law Golden Notes

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FACULTY OF CIVIL LAW (1734)

2023 GOLDEN NOTES

Address: Academics Committee

Tel. No: (02) 8731-4027

Released in the Philippines, 2023.

ACADEMIC YEAR 2022-2023

JUSTINE RENEE GERVACIO CHAIRPERSON

ATTY. AL CONRAD B. ESPALDON

ACADEMICS COMMITTEE 2023

RON-SOPHIA NICOLE C. ANTONIO CRIMINAL LAW

HERLENE MAE D. CALILUNG LABOR LAW AND SOCIAL LEGISLATION

POLITICAL LAW AND

LEGAL AND JUDICIAL ETHICS WITH

HANNAH JOY C. IBARRA COMMERCIAL LAW

JEDIDIAH R. PADUA CIVIL LAW

PAULINNE STEPHANY G. SANTIAGO TAXATION LAW

DIANNE MICAH ANGELA D. YUMANG REMEDIAL LAW

PAULA ANDREA F. PEÑAFLOR COVER DESIGN ARTIST

CIVIL LAW COMMITTEE 2023

CIVIL LAW SUBJECT HEAD

AILEEN ALEXABELLE M. DE LEON ASST. HEAD, PERSONS AND FAMILY RELATIONS

CIVIL LAW ASSISTANT SUBJECT HEADS

FACULTY OF CIVIL LAW

ATTY. ARTHUR B. CAPILI

ATTY. ELGIN MICHAEL C. PEREZ

JUDGE PHILIP A. AGUINALDO

LENY G. GADIANA, R.G.C.

OUR DEEPEST APPRECIATION TO OUR

THE RISK OF USE OF THIS BAR

PERSONS AND FAMILY RELATIONS

II. MARRIAGE ...................................................................................................................................................................... 33

PROPERTY OWNERSHIP, AND ITS MODIFICATIONS

II. BUNDLE OF RIGHTS ................................................................................................................................................... 177

III. DIFFERENT MODES OF ACQUIRING OWNERSHIP ............................................................................................ 291

IV. LAND TITLES AND DEEDS ....................................................................................................................................... 318

V. WILLS AND SUCCESSION ........................................................................................................................................... 384

OBLIGATIONS AND CONTRACTS

II. CONTRACTS ................................................................................................................................................................. 544

II. LEASE............................................................................................................................................................................. 630

III. AGENCY........................................................................................................................................................................ 653

IV. CREDIT TRANSACTIONS .......................................................................................................................................... 679

V. COMPROMISE .............................................................................................................................................................. 747

VI. QUASI-CONTRACTS................................................................................................................................................... 749

VII. TORTS AND DAMAGES ........................................................................................................................................... 757

LEGEND RPC - Revised Penal Code

a. Fifteenth (15th) day - If the law declares that Where to publish

4. Interpretative regulations regulating only the

A: NO. R.A. No. 8792 (Electronic Commerce Act of

Laws covered As to nature of mistake

A: YES. Although the reliance of Judge Pamonag on

Q: Cheong Boo, a native of China, died intestate

5. Remedial /procedural; 22 of the RPC that “penal laws shall have a

Q: Belen Mejares was adjudged guilty of the

Requisites of a valid waiver

1. Waiving party must actually have the right he is

4. Waiver must not be contrary to law, public

5. General conviction that the practice is the proper

Application of customs in civil cases

Necessity of proving customs 1. Year – 12 calendar months. (Sec. 31, Chapter

Illustration: One calendar month from 31 Dec.

A: NO. In Reagan, et. al. v. Commissioner of Internal

be construed as a limitation upon the rights of the 3. Penal Code

Conflict of laws Lex Nationalii

Elements of Conflict of laws