SAN BEDA COLLEGE - ALABANG SCHOOL OF LAW

CENTRALIZED BAR OPERATIONS 2022

ACADEMICS COMMITTEE

HANNAH KEZIAH T. MORALES

Chairperson for Academics

ANDREA JOSES P. TAN ADRIAN R. MACASAQUIT

Deputy Deputy

ELOISA FE C. BUÑO
Chairperson for Electronic Data Processing

SUBJECT HEADS

MARY GRACE B. DOMINGUEZ PAMELA A. PAEZ

Civil Law Legal and Judicial Ethics

DAVID GABRIEL V. PALLASIGUE BRIANT ALLEN S. ROSARIO

Criminal Law Mercantile Law

KARLA MARIE V. GABRIEL JOSHUA REED C. LOPEZ

Labor Law Political Law

JUSTINN ANTONIO ALON ALEXANDRE JANUS B. BIDO

Remedial Law Taxation Law

ASSISTANT HEADS

DAVE CHRISTIAN C. UMERAN MARIA ARIELLE SAMANTHA T. ALVAREZ

Civil Law Legal and Judicial Ethics

MAEIA MIKHAELA N. MAYUGA HANNAH MIKAELLA C. YAMIT

Criminal Law Mercantile Law

MIGUEL JULIO RAFAEL SORIANO III JESSICA LAURA C. SY

Labor Law Political Law

LANCE LIZOR A. PUNZALAN JAN EROS NIKE V. CABAUATAN

Remedial Law Taxation Law
 CIVIL LAW TEAM

PAMELA A. PAEZ
ADRIAN R. MACASAQUIT
Subject Heads

MARIA ARIELLE SAMANTHA T. ALVAREZ

LYN CLOUIE UY
Assistant Heads

ARAMAINE P. BALON
LEA CERRUDO
FRANZ DANIELLE F. DELA CRUZ
ADRIANNE MARIAE P. EVANGELISTA
MA VANESSA D. HERNANDEZ
CHRISTINE H. HUAN
ANNIE JECINO
JOSEPH DAVID VICTORINO
ENRIQUE JESUS MA. III. G. LOPEZ
RUTH MAURICIO
MARIE FATIMA F. MENESES
CAMILLE KATE C. MUSNI
ANDREA NICOLE PALLERA
PRECIOUS ANGEL E. PORTUGUEZ
ANGELA SEVILLA
TALE DEL ROSARIO
MARTIN CHARLZ G. TANODRA
ELAIZA USISA
MIKEE CHAN
PAOLO DOLOT
MARGARITA M. IÑIGO
JESSICA MARIE D. ESNARA
JUDY ANNE CABABAN
 ADMINISTRATION

DR. ULPIANO P. SARMIENTO III

Dean

ATTY. CARLO D. BUSMENTE

Vice Dean

ATTY. MA. ELIZA YAMAMOTO-SANTOS

Prefect of Student Affairs

ATTY. ROBEN B. CADUGO JR.

Administrative Officer

ATTY. PAULINO Q. UNGOS III

Adviser

SAN BEDA COLLEGE - ALABANG SCHOOL OF LAW

CENTRALIZED BAR OPERATIONS 2022
EXECUTIVE COMMITTEE

KATHLEEN L. CAPULONG
Over-All-Chairperson

HANNAH KEZIAH T. MORALES ELOISA FE C. BUÑO

Chairperson for Academics Chairperson for Electronic Data Processing

LOUIE ANN S. SOMEROS ROZELLE DIANNE I. MATEO

Chairperson for Operations Chairperson for Secretariat

JOSEPH M. LIBROJO ROLEEN WENDEE N. GUINTO

Chairperson for Academic Operations Chairperson for Bar Matters

JULIUS ROBERT A. JUICO EDWARD JAYSON B. SANTILLAN

Chairperson for Communications Chairperson for Logistics

FEMME ANGELA C. ARMAMENTO JOSHUA REED C. LOPEZ

Chairperson for Finance Chairperson for Recruitment and Membership

ANNA MARIE N. OBESO

Chairperson for Bar Mentoring Program
 NOTICE

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OPERATIONS 2022. It is intended solely for the use of the individuals to which
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is strictly prohibited.

Copyright © 2022
SAN BEDA COLLEGE ALABANG SCHOOL OF LAW
SAN BEDA COLLEGE ALABANG SCHOOL OF LAW CENTRALIZED BAR
OPERATIONS 2022
All Rights Reserved by the Authors.
 CIVIL LAW
NUAS FOR THE 2022 BAR EXAMINATIONS

PRELIMINARY TITLE 2
HUMAN RELATIONS 2
PERSONS AND FAMILY RELATIONS 2
PERSONS 2
USE OF SURNAMES 2
SUBSUBTOPIC 2
FAMILY HOME 3
SUCCESSION 3
GENERAL PROVISIONS ON SUCCESSION 3
SUBSTITUTION OF HEIRS 4
CONDITIONAL TESTAMENTARY DISPOSITIONS AND THOSE WITH A TERM 5
RELATIONSHIP AND RIGHT OF REPRESENTATION 5
RIGHT OF ACCRETION 6
OBLIGATIONS AND CONTRACTS 7
OBLIGATIONS 7
NATURE AND EFFECTS OF OBLIGATIONS 7
GENERAL PROVISIONS ON OBLIGATIONS 7
EXTINGUISHMENT OF OBLIGATIONS 8
CONTRACTS 9
ESSENTIAL REQUISITES OF A CONTRACT 9
UNENFORCEABLE CONTRACTS 11
NATURAL OBLIGATIONS 12
QUASI-CONTRACTS 12
SALES 13
EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN LOST 13
SUBTOPIC 13
BREACH OF CONTRACT 13
REMEDIES 13
ASSIGNMENT OF CREDITS 15
PACTO DE RETRO SALE 16
EQUITABLE MORTGAGE 16
PARTNERSHIP 17
DISSOLUTION AND WINDING UP 17
CREDIT TRANSACTIONS 18
 GUARANTY AND SURETYSHIP 18
ANTICHRESIS 19
CHATTEL MORTGAGE 20
TORTS AND DAMAGES 21
TORTS 21
ELEMENTS 21
LAST CLEAR CHANCE 22
NEGLIGENCE 23
STANDARD OF CARE 23
PRESUMPTIONS OF NEGLIGENCE 24
DAMAGES 25
KINDS OF DAMAGES 25
LAND TITLES AND DEEDS 25
TORRENS SYSTEM; GENERAL PRINCIPLES 25
REGALIAN DOCTRINE 26
ORIGINAL REGISTRATION 27
CERTIFICATE OF TITLE 28
SUBSEQUENT REGISTRATION 28
ADVERSE CLAIM 29
NOTICE OF LIS PENDENS 30
DEALINGS WITH UNREGISTERED LAND 30

PRELIMINARY TITLE
HUMAN RELATIONS
QUESTION. A bride declined to appear on
her wedding day. Instead, she sent a note to
her prospective groom, saying that she
needed to be honest to herself by admitting
that the institution of marriage was not for
her. The bride wrote that she came to this
conclusion after contemplating on the
tweets of the #LabGuru. She also wrote that
to atone for her non-appearance, she would
post a glowing recommendation of the
prospective groom as a partner on her
Facebook, Twitter, Instagram, and TikTok
accounts. The couple had previously dated
for almost eight years. The whole time, the
prospective groom had been loyal and
caring. It was the bride who covered all the
wedding expenses. Heartbroken and
embarrassed, the prospective groom sued
the prospective bride for moral damages,
alleging that she had breached her promise
to marry him. Will the suit prosper? Explain
briefly. (2020/21 Bar Examinations)
SUGGESTED ANSWER:
No, the suit will not prosper.
As held by the Court in Hermosisima v. Court
of Appeals, mere breach of a promise to marry
is not an actionable wrong. Congress
deliberately eliminated from the draft of the
New Civil Code the provisions from the Civil
Code of Spain that would have it so.
Unlike the circumstances in Wassmer v. Velex,
the party who declined to appear on the
supposed wedding day was the same party
who covered all the wedding expenses in this
case. The groom, therefore, cannot sue the
bride for moral damages based solely on the
ground that he had been loyal and caring for
the whole duration of their relationship and
that he was left heartbroken and embarrassed
by the bride’s nonappearance.
In the light of the clear and manifest intent of
our law making body not to sanction actions
for breach of promise to marry, the award of
moral damages is, accordingly, untenable.
───※ ·❆· ※───
PERSONS AND FAMILY RELATIONS
PERSONS
USE OF SURNAMES
QUESTION. May an illegitimate child, upon
adoption by her natural father, use the
surname of her natural mother as her
middle name? (2006 Bar Examinations)
SUGGESTED ANSWER:
Yes. As held by the Court in In Re: Adoption of
Stephanie Nathy Astorga Garcia, there is no
law prohibiting an illegitimate child adopted
by her natural father to use as middle name
her mother’s surname. What is not prohibited
is allowed. Article 365 of the Civil Code
merely provides that "an adopted child shall
bear the surname of the adopter."
Being a legitimate child by virtue of his
adoption, he is entitled to all the rights
provided by law to a legitimate child without
discrimination of any kind, including the right
to bear the surname of his father and mother.
───※ ·❆· ※───
SUBSUBTOPIC
QUESTION. When does a declaration of
absence of a missing person take effect?
a. Immediately from the issuance of
the declaration of absence
2
 b. 3 months after the publication of
the declaration of absence
c. 6 months after the publication of
the declaration of absence
d. 15 days from the issuance of the
declaration of absence (2011 Bar
Examinations)
SUGGESTED ANSWER:
(C) 6 months after the publication of the
declaration of absence.
Article 386 of the New Civil Code states that
the judicial declaration of absence shall not
take effect until six months after its
publication in a newspaper of general
circulation.
───※ ·❆· ※───
FAMILY HOME
QUESTION. On March 30, 2000, Mariano
died intestate and was survived by his wife,
Leonora, and children, Danilo and Carlito.
One of the properties he left was a piece of
land in Alabang where he built his
residential house.
After his burial, Leonora and Mariano’s
children extrajudicially settled his estate.
Thereafter, Leonora and Danilo advised
Carlito of their intention to partition the
property. Carlito opposed invoking Article
159 of the Family Code.
Carlito alleged that since his minor child
Lucas still resides in the premises, the
family home continues until that minor
beneficiary becomes of age.
Is the contention of Carlito tenable? (2014
Bar Examinations)
SUGGESTED ANSWER:
No, Carlito’s contention is untenable.
As held by the Court in Patricio v. Dario III, to
be a beneficiary of the family home, three
requisites must concur: (1) they must be
among the relationships enumerated in Art.
154 of the Family Code; (2) they live in the
family home; and (3) they are dependent for
legal support upon the head of the family.
In this case, although Lucas satisfies the first
and second requisite, he cannot be deemed a
beneficiary of the family home because he
failed to satisfy the third requisite. The
person primarily obliged to give support to
Lucas and to whom he is dependent for legal
support is his father Carlito, not Mariano who
is the head of the family. The partition may
thus validly take place.
───※ ·❆· ※───
SUCCESSION
GENERAL PROVISIONS ON SUCCESSION
QUESTION. QUESTION. Can future
inheritance be the subject of a contract of
sale?
a. No, since it will put the predecessor
at the risk of harm from a tempted
buyer, contrary to public policy.
b. Yes, since the death of the
decedent is certain to occur.
c. No, since the seller owns no
inheritance while his predecessor
lives.
d. Yes, but on the condition that the
amount of the inheritance can only
be ascertained after the obligations
of the estate have been paid. (2010
Bar Question)
3
SUGGESTED ANSWER:
(C) No, since the seller owns no inheritance
while his predecessor lives. Under Article
1347 of the New Civil Code, no contract may
be entered into upon future inheritance
except in cases expressly authorized by law.
This is because before the death of the
decedent, the heirs have only a mere hope or
expectancy to their share in the inheritance.
Therefore, any contract entered into with
respect to future inheritance would have no
object, and consequently, would be
inexistent from the beginning.
───※ ·❆· ※───
SUBSTITUTION OF HEIRS
QUESTION. By virtue of a Codicil appended
to his will, Theodore devised to Divino a
tract of sugar land, with the obligation on
the part of Divino or his heirs to deliver to
Betina a specified volume of sugar per
harvest during Betina’s lifetime. It is also
stated in the Codicil that in the event the
obligation is not fulfilled, Betina should
immediately seize the property from Divino
or latter’s heirs and turn it over to
Theodore’s compulsory heirs. Divino failed
to fulfill the obligation under the Codicil.
Betina brings suit against Divino for the
reversion of the tract of land. (2002 Bar
Examinations)
a. Distinguish between modal
institution and substation of heirs.
(3%)
b. Distinguish between simple and
fideicommissary substitution of
heirs. (2%)
c. Does Betina have a cause of action
against Divino? Explain (5%)
SUGGESTED ANSWER:
a. Modal Institution under Article 882 of
the NCC is an institution of an heir
made for a certain purpose of cause.
In modal institutions, the testator
states the object of the institution,
the purpose or application of the
property left by the testator, or the
charge imposed by the testator upon
the heir (Rabadila v. CA, G.R. No.
112725 (2000)). While in substitution
of heirs under Art. 857 of the NCC is
the appointment of another heir so
that he may enter into the inheritance
in default of the heir originally
instituted.
b. In simple substitution of heirs under
Art. 859 of the NCC, the testator may
designate one or more persons to
substitute the heir or heirs instituted
in case such heir or heirs should die
before him, or should not wish, or
should be incapacitated to accept the
inheritance. The substitute only
inherits if the first heir fails to inherit,
while in fideicommissary substitution
of heirs, under Art.863 of the NCC, the
testator institutes a first heir and
obliged him to preserve and to
transmit to a second heir, the whole or
part of the inheritance. Both the heirs
inherit.
c. Yes, Betina have a cause of action
against Divino. In a modal institution,
the testator states (1) the object of
the institution, (2) the purpose or
application of the property left by the
testator, or (3) the charge imposed by
the testator upon the heir. In this case
it involves a testamentary disposition
subject to a mode and the will itself
provides for the consequence if the
mode is not complied with. Therefore,
to enforce the mode, the will
4
 expressly gives Betina the right to
compel the return of the property to
the heirs of Theodore.
───※ ·❆· ※───
CONDITIONAL TESTAMENTARY
DISPOSITIONS AND THOSE WITH A TERM
QUESTION. Crispin died testate and was
survived by Alex and Josine, his children
from his first wife; Rene and Ruby, his
children from his second wife; and Allan,
Bea, and Cheska, his children from his third
wife.
One important provision in his will reads as
follows:
"Ang lupa at bahay sa Lungsod ng Maynila ay
ililipat at ilalagay sa pangalan nila Alex at
Rene hindi bilang pamana ko sa kanila kundi
upang pamahalaan at pangalagaan lamang
nila at nang ang sinuman sa aking mga anak,
sampu ng aking mga apo at kaapuapuhan ko
sa habang panahon, ay may tutuluyan kung
magnanais na mag-aral sa Maynila o sa
kalapit na mga lungsod."
Is the provision valid? (4%) (2014 Bar
Examinations)
SUGGESTED ANSWER:
No, the provision is not valid. According to
Article 870 of the New Civil Code, the
dispositions of the testator declaring all or
part of the estate inalienable for more than
twenty years are void. In the case at bar, the
transfer of the lot to Alex and Rene for
administrative purposes is valid as they could
be considered as devisees. However, the
provision imposing the indivision of the
property “habang panahon” is invalid because
the declaration of all or part of the estate
inalienable for more than twenty years is
void. Hence, the provision is invalid for being
inalienable for more than twenty years.
───※ ·❆· ※───
RELATIONSHIP AND RIGHT OF
REPRESENTATION
QUESTION. For the purpose of this question,
assume all formalities and procedural
requirements have been complied with.
In 1970, Ramon and Dessa got married. Prior
to their marriage, Ramon had a child, Anna.
In 1971 and 1972, Ramon and Dessa legally
adopted Cherry and Michelle respectively.
In 1973, Dessa died while giving birth to
Larry. Anna had a child, Lia. Anna never
married. Cherry, on the other hand, legally
adopted Shelly. Larry had twins, Hans and
Gretel, with his girlfriend, Fiona. In 2005,
Anna, Larry and Cherry died in a car
accident. In 2007, Ramon died.
Who may inherit from Ramon and who may
not? Give your reason briefly. (2007 Bar
Examinations)
SUGGESTED ANSWER:
Only Lia may inherit from Ramon. Under
Article 990 of the New Civil Code, hereditary
rights of an illegitimate children shall be
transmitted upon their death to their
descendants, who shall inherit by right of
representation from their deceased
grandparent. In the case at bar, assuming that
Anna is an illegitimate child, Lia will inherit
from Ramon in representation of her mom,
Anna. However, If Anna is a legitimate child,
Lia may not inherit.
Michelle may not inherit. Under the New Civil
Code, husband and wife were allowed to
adopt separately or not jointly with the other
spouse. In the case at bar, the problem
expressly provides for the word
5
“respectively” which means that Michelle was
adopted only by Dessa. Thus, Michelle is not
related to Ramon and she may not inherit
from him.
Shelly may not inherit because Shelly is just
an adopted child of Cherry. In the case of
Teotico vs. Del Val, it was held that adoption
creates a personal legal relation only between
the adopting parent and the adopted child.
Further, in representation, the representative
must not only be a legal heir of the person he
is representing but also of the decedent from
whom the represented person is supposed to
inherit. In the case at bar, while Shelly is a
legal heir of Cherry by virtue of adoption, she
is not a legal heir of Ramon. Thus, she cannot
inherit from Ramon in representation of
Cherry.
Hans and Gretel are barred from inheriting
from Ramon. Article 992 of the NCC provides
that an illegitimate child has no right to
inherit ab intestato from the legitimate
children and relatives of his father or mother;
nor shall such children or relatives inherit in
the same manner from the illegitimate child.
Hence, in the case at bar, since Larry is a
legitimate child of Ramon, and Hans and
Gretel are the illegitimate children of Larry,
they have no right to inherit ab intestato from
Ramon.
Lastly, Dessa, Ana, Larry and Cherry will also
not inherit from Ramon. Under Article 1025 of
the NCC, the law requires that one must be
alive to be capacitated to inherit. In the case
at bar, since Dessa, Ana, Larry and Cherry
predeceased Ramon, they cannot inherit from
him.
───※ ·❆· ※───
RIGHT OF ACCRETION
QUESTION. Lucio executed a simple deed of
donation of P50 million on time deposit with
a bank in favor of A, B, C, D, and
E, without indicating the share of each
donee. All the donees accepted the
donation in writing. A, one of the
donees, died. Will B, C, D, and E get A’s
share in the money?
a. Yes, accretion will automatically
apply to the joint-donees in equal
shares.
b. Yes, since the donor’s intention is
to give the whole of P50 million to
the joint donees in equal shares.
c. No, A’s share will revert to the
donor because accretion applies
only if the joint-donees are spouses.
d. No, A’s share goes to his heirs since
the donation did not provide for
reversion to donor. (2010 Bar
Examinations)
SUGGESTED ANSWER:
(d) No, A’s share goes to his heirs since the
donation did not provide for reversion to
donor. According to Article 753 of the New
Civil Code, when a donation is made to several
persons jointly, it is understood to be in equal
shares, and there shall be no right of
accretion among them, unless the donor has
otherwise provided. In the present case, Lucio
made a donation to A, B, C, D and E jointly
and even upon the death of A, no right of
accretion shall accrue to the benefit of the
remaining donees, absent any stipulation
from the donor himself. Therefore, A’s share
goes to his heirs and not to, B, C, D and E.
───※ ·❆· ※───
6

OBLIGATIONS AND CONTRACTS
OBLIGATIONS
NATURE AND EFFECTS OF OBLIGATIONS
QUESTION. Contracts take effect only
between the parties or their assigns and
heirs, except where the rights and
obligations arising from the contract are not
transmissible by their nature, by
stipulation, or by provision of law. In the
latter case, the assigns or the heirs are not
bound by the contracts. This is known as the
principle of;
a. Relativity of contracts.
b. Freedom to stipulate.
c. Mutuality of contracts.
d. Obligatory force of contracts."
(2011 Bar Examinations)
SUGGESTED ANSWER:
A) Relativity of Contracts.
───※ ·❆· ※───
QUESTION. Zeny and Nolan were best
friends for a long time already. Zeny
borrowed ₱10,000.00 from Nolan,
evidenced by a promissory note whereby
Zeny promised to pay the loan ""once his
means permit."" Two months later, they had
a quarrel that broke their long-standing
friendship. Nolan seeks your advice on how
to collect from Zeny despite the tenor of the
promissory note. What will your advice be?
Explain your answer. (2017 Bar
Examinations)
SUGGESTED ANSWER:
I will advise Nolan to file an action first to fix
the term or period because the fulfillment of
the obligation cannot be demanded until the
court has fixed the period for compliance and
such period has arrived. Prior to that, any
action to compel performance would be
premature. According to Article 1180 of the
Civil Code, when a debtor binds himself when
his means allow it, the obligation is deemed
to be one with a period, but the period is fixed
by the court. In such a case, the court has the
authority to set the period because the
duration is solely determined by the debtor's
will. Any action filed prior to the expiration of
the court-determined period would be
premature.
───※ ·❆· ※───
GENERAL PROVISIONS ON OBLIGATIONS
QUESTION. Marvin offered to construct the
house of Carlos for a very reasonable price
of P900,000.00, giving the latter 10 days
within which to accept or reject the offer.
On the fifth day, before Carlos could make
up his mind, Marvin withdrew his offer.
(2005 Bar Examinations)
a. What is the effect of the withdrawal
of Marvin's offer? (2%)
b. Will your answer be the same if
Carlos paid Marvin P10,000.00 as
consideration for that option?
Explain. (2%)
c. Supposing that Carlos accepted the
offer before Marvin could
communicate his withdrawal
thereof? Discuss the legal
consequences. (2%)
SUGGESTED ANSWER:
a. The withdrawal of Marvin's offer will
cause the offer to cease in law. Hence,
7
 even if subsequently accepted, there
could be no concurrence of the offer
and the acceptance. In the absence of
concurrence of offer and acceptance,
there can be no consent. (Laudico v.
Arias Rodriguez, G.R. No. 16530,
March 31, 1922) Without consent,
there is no perfected contract for the
construction of the house of Carlos.
(Salonga v. Farrales, G.R. No. L-47088,
July 10, 1981) Article 1318 of the Civil
Code provides that there can be no
contract unless the following
requisites concur: (1) consent of the
parties; (2) object certain which is the
subject matter of the contract; and (3)
cause of the obligation.
b. My answer will not be the same if
Carlos paid Marvin P10,000.00 because
an option contract was perfected.
Thus, if Marvin withdrew the offer
prior to the expiration of the 10-day
period, he breached the option
contract. (Article 1324, Civil Code)
c. A contract to construct the house of
Carlos is perfected. Contracts are
perfected by mere consent manifested
by the meeting of the offer and the
acceptance upon the thing and the
cause which are to constitute the
contract. (Gomez v. Court of Appeals,
G.R. No. 120747, September 21, 2000)
───※ ·❆· ※───
EXTINGUISHMENT OF OBLIGATIONS
QUESTION. J.C. Construction (J.C.) bought
steel bars from Matibay Steel Industries
(MSI) which is owned by Buddy Batungbacal.
J.C. failed to pay the purchased materials
worth P500,000.00 on due date. J.C.
persuaded its client Amoroso with whom it
had receivables to pay its obligation to MSI.
Amoroso agreed and paid MSI the amount of
P50,000.00. After two (2) other payments,
Amoroso stopped making further payments.
Buddy filed a complaint for collection of the
balance of the obligation and damages
against J.C. J.C. denied any liability
claiming that its obligation was extinguished
by reason of novation which took place
when MSI accepted partial payments from
Amoroso on its behalf. (2014 Bar
Examinations)
Was the obligation of J.C. Construction to
MSI extinguished by novation? Why? (4%)
SUGGESTED ANSWER:
No, the obligation of JC was nor extinguished
by Novation. Novation, according to the law,
novation may either be objective or
subjective. SUbjective novation takes place
by the substitution of debtor or subrogation of
a third person to the rights of the creditor.
Novation by substituting a new debtor may
take place even without the knowledge or
against the will of the original debtor but not
without the consent of the creditor. Novation
must be expressed and it cannot be implied
and there shall be an agreement that the old
obligation is extinguished. In this case, the it
does not appear that the MSI had agreed to
release JC from the obligation. Therefore, the
obligation of JC has not yet been
extinguished.
───※ ·❆· ※───
QUESTION. Jerico, the project owner,
entered into a Construction Contract with
Ivan for the latter to construct his house.
Jojo executed a Surety undertaking to
guarantee the performance of the work by
Ivan. Jerico and Ivan later entered into a
Memorandum of Agreement (MOA) revising
the work schedule of Ivan and the
subcontractors. The MOA stated that all the
8
stipulations of the original contract not in
conflict with said agreement shall remain
valid and legally effective. Jojo filed a suit
to declare him relieved of his undertaking
as a result of the MOA because of the change
in the work schedule. Jerico claims there is
no novation of the Construction Contract.
Decide the case and explain. (5%) (2016 Bar
Examinations)
SUGGESTED ANSWER:
I will decide in favor of Jerico as there is no
novation of the Construc- tion Contract.
Novation is never presumed, and may only
take place when the following are present: (1)
a previous valid obligation; (2) the agreement
of all the parties to the new contract; (3) the
extinguishment of the old contract; and (4)
validity of the new one. There must be
consent of all the parties to the substitution,
resulting in the extinction of the old
obligation and the creation of a new valid
one. In this case, the revision of the work
schedule of Ivan and the subcontractors is not
shown to be so substantial as to extinguish the
old contract, and there was also no
irreconcilable incompatibility between the
old and new obligations. It has also been held
in jurisprudence that a surety may only be
relieved of his undertaking if there is a
material change in the principal contract and
such would make the obligation of the surety
onerous. The principal contract subject of the
surety agreement still exists, and Jojo is still
bound as a surety.
───※ ·❆· ※───
CONTRACTS
ESSENTIAL REQUISITES OF A CONTRACT
QUESTION. Sergio is the registered owner of
a 500-square meter land. His friend,
Marcelo, who has long been interested in
the property, succeeded in persuading
Sergio to sell it to him. On June 2, 2012,
they agreed on the purchase price of
P600,000 and that Sergio would give
Marcelo up to June30, 2012 within which to
raise the amount. Marcelo, in a light tone
usual between them, said that they should
seal their agreement through a case of Jack
Daniels Black and P5,000 "pulutan" money
which he immediately handed to Sergio and
which the latter accepted. The friends then
sat down and drank the first bottle from the
case of bourbon.
On June 15, 2013, Sergio learned of another
buyer, Roberto, who was offering P800,000
in ready cash for the land. When Roberto
confirmed that he could pay in cash as soon
as Sergio could get the documentation
ready, Sergio decided to withdraw his offer
to Marcelo, hoping to just explain matters
to his friend. Marcelo, however, objected
when the withdrawal was communicated to
him, taking the position that they have a
firm and binding agreement that Sergio
cannot simply walk away from because he
has an option to buy that is duly supported
by a duly accepted valuable consideration.
(2018 Bar Examinations)
a. (a) Does Marcelo have a cause of
action against Sergio? (5%)
b. (b) Can Sergio claim that whatever
they might have agreed upon cannot
be enforced because any agreement
relating to the sale of real property
must be supported by evidence in
writing and they never reduced
their agreement to writing? (3%)
SUGGESTED ANSWER:
a. Yes, Marcelo has a cause of action
against Sergio. As a rule, an offer can
be withdrawn at any time before
acceptance by communicating such
withdrawal (Art. 1324) except when
the option is founded upon a
consideration as something paid or
9
 promised. In this case, although there
was no separate consideration for the
option, the offer had already been
accepted and thus, it resulted into a
perfected contract of sale between
Marcelo and Sergio. Sale being a
consensual contract is perfected by
mere consent.
b. No, Sergio cannot claim that the
agreement cannot be enforced
because it was not reduced into
writing. Contracts shall be obligatory,
in whatever form they may have been
entered into, provided all the
essential requisites for their validity
are present. (Art. 1356) In fact when
the law requires a document or other
special form, as in the acts and
enumerated by law, the contracting
parties may compel each other to
observe that form, once the contract
has been perfected, and this right may
be exercised simultaneously with the
action upon the contract. (Art. 1357)
Even an oral sale of a parcel of land is
valid between the parties (Campillo
vs. CA 129 SCRA 513; Zaide v. CA 163
SCRA 71)
───※ ·❆· ※───
QUESTION. Lito obtained a loan of
P1,000,000 from Ferdie, payable within one
year. To secure payment, Lito executed a
chattel mortgage on a Toyota Avanza and a
real estate mortgage on a 200-square meter
piece of property. (2013 Bar Examinations)
a. Would it be legally significant - from
the point of view of validity and
enforceability - if the loan and the
mortgages were in public or private
instruments? (6%)
b. Lito's failure to pay led to the extra-
judicial foreclosure of the
mortgaged real property. Within a
year from foreclosure, Lito
tendered a manager's check to
Ferdie to redeem the property.
Ferdie refused to accept payment
on the ground that he wanted
payment in cash: the check does not
qualify as legal tender and does not
include the interest payment. Is
Ferdie's refusal justified? (4%)
SUGGESTED ANSWER:
a. With respect to the loan, the same is
both valid and enforceable regardless
of whether it is in a private or public
document because as a rule, contracts
shall be obligatory in whatever form
they may have been entered into
provided all the essential requisites
for their validity are present. A loan is
a contract which the law does not
require to be in a particular form in
order that it may be valid or
enforceable. However, with regard to
the chattel mortgage, since the law
(Act 1508) requires an affidavit of
good faith stating that the chattel
mortgage is supposed to stand as
security for the loan, it is submitted
that for validity of the chattel
mortgage, it must be in a public
document. A real estate mortgage
under the provisions of Article 2125
requires that in order that a mortgage
may be validly constituted that the
document in which it appears must be
recorded. If it is not recorded, the
mortgage is nevertheless valid and
binding between the parties. Hence,
for validity both chattel and real
estate mortgages must be in a public
document. But for purposes of
enforceability, it is submitted that the
form of the contract whether in a
public or private document would be
immaterial. (Mobil Oil vs. Diocares 29
SCRA 656).
10

b. Ferdie’s refusal to accept the check on
the ground that it does not qualify as
legal tender is correct because a
check, whether a manager's check or
ordinary check, is not legal tender,
and an offer of a check in payment of
a debt is not a valid tender of payment
and may be refused receipt by the
obligee or creditor. (Philippine Airlines
vs. CA and Amelia Tan – January 30,
1990) Mere delivery of checks does not
discharge the obligation under a
judgment. The obligation is not
extinguished and remains suspended
until the payment by commercial
document is actually realized (Art.
1249, Civil Code, par. 3). Also,
redemption within the period allowed
by law is not a matter of intent but a
question of payment or valid tender of
full redemption price within the said
period. Whether the redemption is
being made under Act 3135 or under
the General Banking Law, the
mortgagor or his assignee is required
to tender payment to make said
redemption valid. (Heirs
Quisumbing vs. PNB and SLDC –G.R.
No. 178242 January 20, 2009)
───※ ·❆· ※───
UNENFORCEABLE CONTRACTS
QUESTION. Briefly explain whether the
following contracts are valid, rescissible,
unenforceable, or void (2017 Bar
Examinations):
a. A contract of sale between Lana and
Andy wherein 16-year old Lana
agreed to sell her grand piano for
₱5,000.-00. (2%)
b. A contract of lease of the Philippine
Sea entered by and between Mitoy
and Elsa. (2%)
c. A sale entered by Barri and Garri,
both minors, which their parents
later ratified. (2%)
d. Jenny's sale of her car to Celestine
in order to evade attachment by
Jenny's creditors. (2%)
SUGGESTED ANSWER:
a. The contract of sale is voidable,
because Lana is a minor, and is thus
incapable of giving consent to a
contract.
b. The contract of sale's void, because its
object, the Philippine Sea, Is outside
the commerce of men.
ALTERNATIVE ANSWER:
The contract of sale is void as it is
prohibited by a treaty, which is
considered binding law in the
Philippines.
of
[Note: Under Article 137 of the
UNCLOS, the Philippine Seals governed
by the following mandates:
xxx
No State or natural or juridical person
shall appropriate any part thereof.
xxx].
c. The contract is valid and may not be
annulled by either party due to the
ratification by the parents of Barni and
Garri, if done while both were still
minors. Ratification extinguishes the
action to annul a voidable contract, or
an unenforceable contract, as in this
case were both parties were minors
and may be done by the parents, as
11
 guardians of the minor children
(Article 1407, NCC).
d. The contract is rescissible because it is
In fraud of creditors (Article 1381,
NCC).
───※ ·❆· ※───
NATURAL OBLIGATIONS
QUESTION. A natural obligation under the
New Civil Code of the Philippines is one
which _______? (2011 Bar Examinations)
SUGGESTED ANSWER:
cannot be judicially enforced but authorizes
the obligee to retain the obligor’s payment or
performance.
───※ ·❆· ※───
QUESTION. Sara borrowed P50,000.00 from
Julia and orally promised to pay it within six
months. When Sara tried to pay her debt on
the 8th month, Julia demanded the
payment of interest of 12o/o per annum
because of Sara's delay in payment. Sara
paid her debt and the interest claimed by
Julia. After rethinking, Sara demanded back
from Julia the amount she had paid as
interest. Julia claims she has no obligation
to return the interest paid by Sara because
it was a natural obligation which Sara
voluntarily performed and can no longer
recover. Do you agree? Explain. (4%) (2015
Bar Examinations)
SUGGESTED ANSWER:
No, the case is not one of a natural obligation
because even if the contract of loan is verbal,
the delay of Julia made her liable for interest
upon demand by Sara. This is not a case of a
natural obligation but a civil obligation to pay
interest by way of damages by reason of
delay. (Article 1956; Article 1169; Article
2209 Civil Code)
───※ ·❆· ※───
QUESTION. Distinguish civil and natural
obligations. (2%)
SUGGESTED ANSWER:
A civil obligation is based on positive law
which gives a right of action to compel their
performance in case of breach. A natural
obligation is based on equity and natural law
and cannot be enforced by court action but
after voluntary fulfillment by the obligor,
they authorize the retention of what may
have been delivered or rendered by reason
thereof. (Article 1423, Civil Code)
───※ ·❆· ※───
QUASI-CONTRACTS
QUESTION. DPO went to a store to buy a
pack of cigarettes worth P225.00 only. He
gave the vendor, RRA, a P500-peso bill. The
vendor gave him the pack plus P375.00
change. Was there a discount, an oversight,
or an error in the amount given? What would
be DPO’s duty, if any, in case of an excess
in the amount of change given by the
vendor? How is this situational relationship
between DPO and RRA denominated?
Explain. (5%) (2004 Bar Examinations)
SUGGESTED ANSWER:
There was an error in the amount of change
given by RRA. This is a case of solutio indebiti
in that DPO received something that is not due
him. He has the obligation to return the
P100.00; otherwise, he will unjustly enrich
himself at the expense of RRA. (Art. 2154,
Civil Code)
───※ ·❆· ※───
12
 SALES
EFFECTS OF THE CONTRACT WHEN THE
THING SOLD HAS BEEN LOST
QUESTION. A leased his house to B with a
condition that the leased premises shall be
used for residential purposes only. B
subleased the house to C who used it as a
warehouse for fabrics. Upon learning this, A
demanded that C stop using the house as a
warehouse, but C ignored the demand, A
then filed an action for ejectment against C,
who raised the defense that there is no
privity of contract between him and A, and
that he has not been remiss in the payment
of rent. Will the action prosper? (2000 Bar
Examinations)
SUGGESTED ANSWER:
Yes, the action will prosper. Under Article
1651 of the Civil Code, the sublessee is bound
to the lessor for all acts which refer to the use
and preservation of the thing leased in the
manner stipulated between the lessor and the
lessee.
───※ ·❆· ※───
SUBTOPIC
QUESTION. A buyer ordered 5,000 apples
from the seller at P20 per apple. The seller
delivered 6,000 apples. What are the rights
and obligations of the buyer? (2011 Bar
Examinations)
SUGGESTED ANSWER:
Pursuant to Art. 1582 of the Civil Code which
provides that the vendee is bound to accept
delivery and to pay the price of the thing sold
at the time and place stipulated in the
contract, the buyer can accept all 6,000
apples and pay the seller at P20 per apple.
───※ ·❆· ※───
BREACH OF CONTRACT
REMEDIES
QUESTION. Sonny Inc., (SI) purchased
several heavy machineries from Single
Equipment Philippines, Inc. (SEP) for PhP 10
million, payable in 36 monthly installments.
A chattel mortgage was constituted on the
same machineries as security for the
amount. As additional security, the
President of SI, Stan Smith, mortgaged his
personal house and lot. SI failed to pay the
16th and succeeding monthly installments.
SEP then commenced a collection suit
against SI, and in the course of the
proceedings, a writ of attachment was
issued against SI’s properties, including the
mortgaged machineries. The attached
properties were subsequently sold at public
action, but the proceeds thereof were
insufficient to satisfy the judgment credit.
a. Can SEP legally recover the
deficiency?
b. Instead of collecting the deficiency,
can SEP commence extrajudicial
proceedings to foreclose the
mortgage on Stan’s house and lot in
order to recover the deficiency?
(2018 Bar Examinations)
SUGGESTED ANSWER:
a. Yes, SEP can legally recover the
deficiency. Article 1484 of the Civil
Code provides that in a contract of
sale of personal property the price of
which is payable in installments, the
vendor may exercise any of the
following remedies: (1) exact
fulfillment of the obligation, should
the vendee fail to pay; (2) cancel the
13
 sale, should the vendee’s failure to
pay cover two or more installments;
(3) foreclose the chattel mortgage in
the thing sold, if one has been
constituted, should the vendee’s
failure to pay cover two or more
installments and that in such case, he
shall have no further action against
the purchaser to recover any unpaid
balance of the price. Any agreement
to the contrary shall be void. In this
case, SEP chose the first remedy which
is to exact fulfillment of the
obligation, should the vendee fail to
pay and not the third remedy which is
to foreclose the chattel mortgage over
the equipment. Thus, the prohibition
against further collection incorporated
in the third remedy does not apply.
Therefore, SEP can legally recover the
deficiency.
b. Yes, SEP can commence extrajudicial
proceedings to foreclose the mortgage
on Stan’s house and lot in order to
recover the deficiency. The Supreme
Court held in the case of Cruz v.
Filipinas Investment & Finance
Corporation that what is prohibited to
do is to extrajudicially foreclose the
mortgage after it has extrajudicially
foreclosed the chattel mortgage on
the machineries sold because if such is
allowed, then the protection provided
by Article 1848 of the Civil Code would
be indirectly subverted and the public
policy would be overturned. In this
case, SEP chose the first remedy
provided under Article 1484 of the
Civil Code and not the third remedy
which is to foreclose the mortgage
over the machineries. Therefore, SEP
can commence extrajudicial
proceedings to foreclose the mortgage
on Stan’s house and lot in order to
recover the deficiency.
───※ ·❆· ※───
QUESTION. Peter and Paul entered into a
Contract to Sell whereby Peter, the lot
owner, agreed to sell to Paul his lot on
November 6, 2016 for the price of
P1,000,000.00 to be paid at the residence
of Peter in Makati City at 1:00 p.m. If the
full price is paid in cash at the specified time
and place, then Peter will execute a Deed
of Absolute Sale and deliver the title to
Paul.
On November 6, 2016, Paul did not show up
and was not heard from that date on. In
view of the nonperformance by Paul of his
obligation, Peter sent a letter to Paul that
he is expressly and extra-judicially
declaring the Contract to Sell rescinded and
of no legal and binding effect. Peter further
stated that failure on the part of Paul to
contest the rescission within thirty (30)
days from the receipt of the said letter shall
mean that the latter has agreed to the
rescission.
Paul did not reply to this letter for five (5)
years. Thus, Peter decided to sell his lot to
Henry in 2021. After hearing that Henry
bought the lot, Paul now questions the sale
of the lot to Henry and files a complaint for
nullification of the sale.
a. Is the exercise by Peter of his power
to rescind extra-judicially the
Contract to Sell the proper and legal
way of rescinding the said contract?
b. In case Paul made a down payment
pursuant to a stipulation in the
Contract to Sell, what is the legal
remedy of Peter? (2016 Bar
Examinations)
SUGGESTED ANSWER:
14
 a. As a general rule. The power to rescind
an obligation must be invoked
judicially and cannot be exercised
solely on a party’s own judgment that
the other has committed a breach of
the obligation. This is so because
rescission of a contract will not be
permitted for a slight or casual
breach, but only for such substantial
and fundamental violations as would
defeat the very object of the parties
in making the agreement. However,
rescission is a remedy for breach is
applicable only to an obligation which
is extant. Be it noted that the contract
between the parties is a contract to
sell and not a contract of sale and in a
contract to sell, there is a reservation
of ownership on the part of the seller
and his obligation to convey title will
only arise upon full payment of the
purchase price. Nonetheless, Peter
may validly cancel the contract to sell.
b. If Paul made a down payment, Peter
may still cancel the contract because
it is a contract to sell, the seller does
not yet agree to transfer ownership to
the buyer. The nonpayment of the
price in a contract to sell is not a
breach for which the remedy of
rescission may be availed of, but
rather it is considered as a failure to
comply with a positive suspensive
condition which will prevent the
obligation of the seller to convey title
from acquiring obligatory force.
───※ ·❆· ※───
QUESTION. When is rescission by the buyer
not allowed? (2011 bar Examinations)
SUGGESTED ANSWER:
It is not allowed in the following instances:
a. If the buyer accepted the goods
knowing the breach of warranty
without protest
b. If he fails to notify the seller within a
reasonable time of his election to
rescind; or
c. If he fails to return or offer to return
the goods in substantially as good
condition as they were in at the time
of the transfer of ownership to him
───※ ·❆· ※───
QUESTION. X sold a parcel of land to Y on 01
January 2002, payment and delivery to be
made on 01 February 2002. It was
stipulated that if payment were not to be
made by Y on 01 February 2002, the sale
between the parties would automatically be
rescinded. Y failed to pay on 01 February
2002, but offered to pay three days later,
which payment X refused to accept,
claiming that their contract of sale had
already been rescinded. Is X’s contention
correct? Why? (2003 Bar Examinations)
SUGGESTED ANSWER:
No, X is not correct. In the sale of immovable
property, even though it may have been
stipulated, as in this case, that upon failure
to pay the price at the time agreed upon the
rescission of the contract shall of right take
place, the vendee may pay, even after the
expiration of the period, as long as no demand
for rescission of the contract has been made
upon him either judicially or by a notarial act
(Article 1592, New Civil code). Since no
demand for rescission was made on Y, either
judicially or by a notarial act, X cannot refuse
to accept the payment offered by Y three (3)
days after the expiration of the period.
───※ ·❆· ※───
ASSIGNMENT OF CREDITS
15

PACTO DE RETRO SALE
QUESTION. In a true pacto de retro sale, the
title and ownership of the property sold are
immediately vested in the vendee a retro
subject only to the resolutory condition of
repurchase by the vendor a retro within the
stipulated period. This is known as:
a. equitable mortgage.
b. conventional redemption.
c. legal redemption.
d. equity of redemption.
(2011 Bar Examinations)
SUGGESTED ANSWER:
(B) conventional redemption.
───※ ·❆· ※───
QUESTION. On March 13, 2008, Ariel
entered into a Deed of Absolute Sale (DAS)
with Noel where the former sold his titled
lot in Quezon City with an area of three
hundred (300) square meters to the latter
for the price of P300,000.00. The prevailing
market value of the lot was P3,000.00 per
square meter. On March 20, 2008, they
executed another "Agreement To Buy
Back/Redeem Property" where Ariel was
given an option to repurchase the property
on or before March 20, 2010 for the same
price. Ariel, however, remained in actual
possession of the lot. Since Noel did not pay
the taxes, Ariel paid the real property taxes
to avoid a delinquency sale. On March 21,
2010, Ariel sent a letter to Noel, attaching
thereto a manager's check for P300,000.00
manifesting that he is redeeming the
property. Noel rejected the redemption
claiming that the DAS was a true and valid
sale representing the true intent of the
parties. Ariel filed a suit for the nullification
of the DAS or the reformation of said
agreement to that of a Loan with Real Estate
Mortgage. He claims the DAS and the
redemption agreement constitute an
equitable mortgage. Noel however claims it
is a valid sale with pacto de retro and Ariel
clearly failed to redeem the property. As
the RTC judge, decide the case with
reasons. (2016 Bar Examinations)
SUGGESTED ANSWER:
l will decide in favor of Ariel and allow the
reformation of the agreement. The DAS and
the redemption agreement constitute an
equitable mortgage and Ariel may ask for the
reformation of the agreement to that of a
Loan with Real Estate Mortgage as allowed by
Article 1605 of the Civil Code. The
circumstances dearly show that the
agreement is an equitable mortgage, such as
the: a), price of the lot was inadequate since
it was only sold at P300, 000 when the
prevailing market value of such was P900,
000; b). the vendor, Ariel, remained in actual
possession of the property after the purported
sale; and c). Ariel was the one who paid the
real property taxes. Under the circumstances,
a presumption arises under Article 1602 NCC
that what was really executed was an
equitable mortgage. Moreover, Article 1603
NCC provides that in case of doubt, a contract
purporting to be a sale with right to
repurchase shall be construed as an equitable
mortgage.
───※ ·❆· ※───
EQUITABLE MORTGAGE
QUESTION. On July 14, 2004, Pedro
executed in favor of Juan a Deed of
Absolute Sale over a parcel of land covered
by TCT No. 6245. It appears in the Deed of
Sale that Pedro received from Juan
P120,000.00 as purchase price. However,
Pedro retained the owner's duplicate of said
title. Thereafter, Juan, as lessor, and
Pedro, as lessee, executed a contract of
lease over the property for a period of one
16
(1) year with a monthly rental of Pl,000.00. transaction shall secure the
Pedro, as lessee, was also obligated to pay payment of a debt or the
the realty taxes on the property during the performance of any other
period of lease. obligation.

Subsequently, Pedro filed a complaint In any of the foregoing cases, any money,
against Juan for the reformation of the fruits, or other benefit to be received by the
Deed of Absolute Sale, alleging that the vendee as rent or otherwise shall be
transaction covered by the deed was an considered as interest which shall be subject
equitable mortgage. In his verified answer to the usury laws.
to the complaint, Juan alleged that the
property was sold to him under the Deed of Article 1604 also states that the provisions of
Absolute Sale, and interposed Article 1602 shall also apply to a contract
counterclaims to recover possession of the purporting to be an absolute sale.
property and to compel Pedro to turn over
to him the owner's duplicate of title. For Articles 1602 and 1604 to apply, two
Resolve the case with reasons. (2005 Bar requisites must concur:
Examinations) (1) the parties entered into a contract
denominated as a contract of sale;
SUGGESTED ANSWER: and
The complaint of Pedro against Juan should be
(2) their intention was to secure an
dismissed. The instances when a contract,
existing debt by way of mortgage.
regardless of its nomenclature, may be
(Heirs of Balite v. Lim, G.R. No.
presumed to be an equitable mortgage are
152168, December 10, 2004)
enumerated in Article 1602 of the Civil Code
which states that the contract shall be
In the given case, although Pedro retained
presumed to be an equitable mortgage, in any
possession of the property as lessee after the
of the following cases:
execution of the Deed of Sale, there is no
(1) When the price of a sale with right showing that the intention of the parties was
to repurchase is unusually to secure an existing debt by way of
inadequate: mortgage. Hence, the complaint of Pedro
(2) When the vendor remains in should be dismissed.
possession as lessee or otherwise;
(3) When upon or after the expiration ───※ ·❆· ※───
of the right to repurchase another
instrument extending the period of
redemption or granting a new
period is executed;
(4) When the purchaser retains for PARTNERSHIP
himself a part of the purchase
price;
DISSOLUTION AND WINDING UP
(5) When the vendor binds himself to
pay the taxes on the thing sold;
(6) In any other case where it may be
fairly inferred that the real QUESTION. X and Y are partners in a shop
intention of the parties is that the offering portrait painting. Y provided the

17
capital and the marketing while X was the
portrait artist. They accepted the
P50,000.00 payment of Kyla to do her
portrait but X passed away without being
able to do it. Can Kyla demand that Y deliver
the portrait she had paid for because she
was dealing with the business establishment
and not with the artist personally? Why or
why not? (3%) (2015 Bar Examinations)
SUGGESTED ANSWER:
No. Kyla cannot demand that Y deliver the
portrait. Under the civil code, dissolution is
caused by the death of any partner and in
obligations to do, the debtor shall be released
when the prestation becomes legally or
physically impossible without the debtor’s
fault.
In the case at bar, death of X has the effect
of dissolving the partnership. further, while
the obligation was contracted by the
partnership, it was X who was supposed to
create the portrait for Kyla. Since X died
before creating the portrait, the obligation
can no longer be complied with because of
impossibility of performance.
Therefore, Kyla cannot demand that Y deliver
the portrait.
───※ ·❆· ※───
QUESTION. In this jurisdiction, is a joint
venture (i.e., a group of corporations
contributing resources for a specific project
and sharing the profits therefrom)
considered a partnership? (3%) (2015 Bar
Examinations)
SUGGESTED ANSWER:
Yes. Under Philippine law, a joint venture is
understood to mean an organization formed
for some temporary purpose and it is often
characterized being similar from a to do so, whereas, in suretyship, the
partnership since its elements are similar
which are: community of interest in business,
sharing of profits, and losses, and a mutual
right of control.
Joint ventures are usually resorted to by
corporations - domestic or foreign-based -
which are not allowed to form partnerships or
become partners in a partnership. Only
individual, natural persons are permitted to
form partnerships.
───※ ·❆· ※───
CREDIT TRANSACTIONS
GUARANTY AND SURETYSHIP
QUESTION. What is the difference between
“guaranty” and “suretyship”? (2010 Bar
Examinations)
SUGGESTED ANSWER:
The differences between guaranty and
suretyship are as follows:
a. The liability of the guarantor is only
secondary, whereas, in suretyship, it is
primary;
b. In guaranty, the guarantor is entitled
to the benefit of excussion, whereas,
the surety is not entitled to the
benefit of excussion;
c. The guarantor’s undertaking is to pay
if the principal debtor cannot pay,
whereas, in suretyship, the
undertaking of the surety is to pay if
the principal debtor does not pay;
d. The guarantor insures the solvency of
the principal debtor, whereas, the
surety insures the debt;
e. Liability in guaranty depends upon an
independent agreement to pay the
obligations of the principal if he fails
surety assumes liability as a regular
party; and
18
 f. In guaranty, the creditor may not
proceed against the guarantor directly
because his liability is subsidiarily;
whereas, in a suretyship, the creditor
may proceed against the surety
without prior action against the
principal debtor because the surety’s
SUGGESTED ANSWER:
liability is solidarily with the principal
debtor.
───※ ·❆· ※───
QUESTION. Kevin signed a loan agreement
with ABC Bank. To secure payment, Kevin
requested his girlfriend Rosella to execute a
document entitled "Continuing Guaranty
Agreement" whereby she expressly agreed
to be solidarily liable for the obligation of
Kevin.
Can ABC Bank proceed directly against
Rosella upon Kevin's default even without
proceeding against Kevin first? Explain your
answer. (2017 Bar Examinations)
SUGGESTED ANSWER:
Yes, the ABC Bank can proceed directly
against Rosella upon Kevin’s default even
without proceeding against Kevin. Paragraph
2 of Article 2047 of the Civil Code provides
that if a person binds himself solidarily with
the principal debtor, in such case, the
contract is called a suretyship. In a contract
of suretyship, the liability of the surety is
direct, primary and absolute. In this case,
Rosella is considered to be a surety after she
bound herself to be solidarily liable for the
obligation of Kevin. Such being the case, the
creditor ABC Bank can go directly against
Rosella being the surety although Kevin, the
principal debtor, is solvent and is able to pay
or no prior demand is made upon him.
───※ ·❆· ※───
ANTICHRESIS
QUESTION.
a. Distinguish antichresis from
usufruct.
b. Distinguish commodatum from
mutuum. (2017 Bar Examinations)
a. Under Art. 2132 of the New Civil Code,
by the contract of antichresis the
creditor acquires the right to receive
the fruits of an immovable of his
debtor, with the obligation to apply
them to the payment of the interest,
if owing, and thereafter to the
principal of his credit.
Usufruct, according to Art. 562 of the
New Civil Code, gives a right to enjoy
the property of another with the
obligation of preserving its form and
substance, unless the title constituting
it or the law otherwise provides.
b. Commodatum is a loan for use or
temporary possession. In
Commodatum, the object borrowed is
usually a non-consumable thing the
ownership of which is not transferred
to the borrower who incurs the
obligation to return the very thing to
the lender. Commodatum is
essentially gratuitous, the borrower
must return the same thing loaned.
Mutuum is a loan for consumption. In
Mutuum, the object borrowed must be
money or a consumable thing. The
ownership of which is transferred to
the borrower who incurs the obligation
to return the same consumable to the
lender in an equal amount, and of the
same kind and quality. The purpose of
mutuum is for the borrower to own the
thing loaned and use and consume it.
A mutuum may be gratuitous or it may
19
 be onerous, that is, with stipulation to
pay interest.
───※ ·❆· ※───
CHATTEL MORTGAGE
QUESTION. Lito obtained a loan of
P1,000,000 from Ferdie, payable within one
year. To secure payment, Lito executed a
chattel mortgage on a Toyota Avanza and a
real estate mortgage on a 200-square meter
piece of property.
a. Would it be legally significant - from
the point of view of validity and
enforceability - if the loan and the
mortgages were in public or private
instruments? (6%)
b. Lito's failure to pay led to the extra-
judicial foreclosure of the
mortgaged real property. Within a
year from foreclosure, Lito
tendered a manager's check to
Ferdie to redeem the property.
Ferdie refused to accept payment
on the ground that he wanted
payment in cash: the check does not
qualify as legal tender and does not
include the interest payment. Is
Ferdie's refusal justified? (4%) (2013
Bar Examinations)
SUGGESTED ANSWER:
a. No, it is not legally significant from the
point of view of validity and
enforceability. With respect to the
loan, the same is both valid and
enforceable regardless of whether it is
in a private or public document
because as a rule, contracts shall be
obligatory in whatever form they may
have been entered into provided all
the essential requisites for their
validity are present. However, with
regard to the chattel mortgage, since
the law requires an affidavit of good
faith stating that the chattel mortgage
is supposed to stand as security for the
loan, it is submitted that for validity of
the chattel mortgage, it must be in a
public document. A real estate
mortgage under the provisions of
Article 2125 requires that in order that
a mortgage may be validly constituted
that the document in which it appears
must be recorded. If it is not recorded,
the mortgage is nevertheless valid and
binding between the parties. Hence,
for validity both chattel and real
estate mortgages must be in a public
document. Hence, for validity both
chattel and real estate mortgages
must be in a public document. But for
purposes of enforceability, it is
submitted that the form of the
contract whether in a public or private
document would be immaterial.
(Mobil Oil vs. Diocares 29 SCRA 656).
b. Yes, Fredie’s refusal is justified as
provided in Section 63 of Republic Act
No. 265, as amended (Central Bank
Act) Legal character Checks
representing deposit money do not
have legal tender power and their
acceptance in the payment of debts,
both public and private, is at the
option of the creditor: Provided,
however, that a check which has been
cleared and credited to the account of
the creditor shall be equivalent to a
delivery to the creditor of cash in an
amount equal to the amount credited
to his account. Mere delivery of checks
does not discharge the obligation
under a judgment. The obligation is
not extinguished and remains
suspended until the payment by
commercial document is actually
realized.
20
 a. The source of Mr. X’s obligation to Mrs.
───※ ·❆· ※───
TORTS AND DAMAGES
TORTS
ELEMENTS
QUESTION. In January 2018, Mrs. A, a
married woman on her sixth (6th) month of
pregnancy, was crossing a street when she
was suddenly hit by a car being recklessly
driven by Mr. X. As a result, Mrs. A sustained
serious injuries and further, suffered an
unintentional abortion. Mrs. A was
hospitalized for two (2) months, during
which she incurred ₱400,000.00 in medical
fees. Her expenses were all duly
substantiated by official receipts. During
the two (2)-month period of her
confinement, she was unable to report for
work and earn any salary, which was
established at the rate of ₱50,000.00 per
month. Mrs. A then filed a civil case for
damages against Mr. X.
a. Based on the case filed by Mrs. A,
what is the source of Mr. X's
obligation to her as a result of his
acts? Explain.
b. Yes, Mrs. A can claim actual
b. May Mrs. A claim actual damages
from Mr. X? If so, how much can
Mrs. A claim? Explain.
c. May Mrs. A claim damages on behalf
of her unborn baby? Explain.
d. What must Mrs. A prove if she wants
to recover moral damages from Mr.
X? (2019 Bar Examinations)
SUGGESTED ANSWER:
A is Quasi-Delict. There are four (4)
elements that must concur in order for
Quasi-Delict to become the source of
the obligation:
(1) There must have been damage to
the plaintiff;
(2) The defendant is guilty of the act
or omission;
(3) There is a causal connection
between the negligence of the
defendant and the damage
sustained by the plaintiff; and
(4) There is no pre-existing contract
between the plaintiff and the
defendant.
In this case, Mrs. A sustained
damage from Mr. X’s negligence,
there being a causal connection
between Mr. X’s reckless driving
and Mrs. A’s serious injuries and
unintentional abortion.
Furthermore, there is no pre-
existing contract between Mr. X
and Mrs. A. Therefore, all the
elements of a Quasi-Delict are
attendant in this case.
damages.Art. 2199 of the New Civil
Code provides that except as provided
by law or by stipulation, one is entitled
to actual or compensatory damages
only for such pecuniary loss suffered
by him as he has duly proved. In this
case, Mrs. A was able to present
official receipts as proof of the Php
400,000.00 spent on medical fees.
Art. 2200 of the New Civil Code also
provides that indemnification for
damages shall comprehend not only
21
 the value of the loss suffered, but also
that of the profits which the obligee
failed to obtain. Mrs. A’s monthly
salary was established to be Php
50,000.00 per month. Given that she
was rendered unable to work for two
months, she was prevented from
earning Php 100,000.00 worth of
salary.
Applying both Art. 2199 and Art. 2200
from the New Civil Code, Mrs. A can
claim the aggregate of Php 400,000
and Php 100,000.00, which is Php
500,000.00 worth of actual damages.
c. No, Mrs. A cannot claim damages on
behalf of her unborn baby. Birth
determines personality. The Court has
held that an action for pecuniary
damages on account of personal injury
or death pertains primarily to the one
injured, and if no action for such
damages could be instituted on behalf
of the unborn child on account of the
injuries it received, no such right of
action could derivatively accrue to its
parents or heirs.
ALTERNATIVE ANSWER TO ITEM C.:
Yes, Mrs. A can claim damages on
behalf of her unborn baby. The Court
has held that a conceived child,
although yet unborn, is given by law
provisional personality of its own for
all purposes favorable to it, as
explicitly provided in Art. 40 of the
New Civil Code, which includes being
a recipient of donations under Art. 742
of the New Civil Code, as well as
support. A claim for damages in favor
of the unborn should also prosper.
d. Mrs. A must prove the following:
(1) that she suffered physical injuries;
(2) that Mr. X committed a culpable
act or omission;
(3) that the wrongful act or omission
of Mr. X is the proximate cause of
the damages she sustained; and
(4) that X’s act or omission is either a
criminal offense resulting to
physical injuries or a quasi-delict
causing physical injuries.
(Mendoza v. Gomez, G.R. No.
160110. June 18, 2014)
───※ ·❆· ※───
LAST CLEAR CHANCE
QUESTION. Explain the following concepts
and doctrines and give an example of each:
a. Concept of trust de son tort
(constructive trust) (5%)
b. Doctrine of discovered peril (last
clear chance) (5%) (2007 Bar
Examinations)
SUGGESTED ANSWER:
a. Concept of trust de son tort
(Constructive Trust)
A constructive trust is a trust
NOT created by any word or phrase,
either expressly or impliedly, evincing
a direct intention to create a trust, but
is one that arises in order to satisfy the
demands of justice. It does not come
about by agreement or intention but
mainly operation of law and construed
as a trust against one who, by fraud,
duress or abuse of confidence, obtains
or holds the legal right to property
which he ought not, in equity and good
22
 conscience, to hold (Heirs of Lorenzo
Yap v. CA, 371 Phil 523, 1991). The
following are examples of constructive
trust: 1. Art. 1456 NCC which provides:
"If property is acquired through
mistake or fraud, the person obtaining
it is, by force of law, considered a
trustee of an implied trust for the
benefit of the person for whom the
property comes." 2. Art 1451 NCC
which provides: "When land passes by
succession through any person and he
causes the legal title to be put in the
name of another, a trust is established
by implication of law for the benefit of
the true owner." 3. Art 1454 NCC which
provides: "If an absolute conveyance
of property is made in order to secure
the performance of an obligation of
the grantor toward the grantee, a
trust by virtue of law is established. If
the fulfillment of the obligation is
offered by the grantor when it
becomes due, he may demand the
reconveyance of the property to him."
4. Art 1455 NCC which provides: "When
any trustee, guardian or any person
holding a fiduciary relationship uses
trust funds for the purchase of
property and causes conveyance to be
made to him or to third person, a trust
is established by operation of law in
favor of the person to whom the funds
belong."
b. Doctrine of Discovered Peril (Last
Clear Chance)
The doctrine of last clear
chance provides that the negligence of
the plaintiff does not preclude a
recovery for the negligence of the
defendant where it appears that the
defendant, by exercising reasonable
care and prudence, might have
avoided the injurious consequences to
the plaintiff notwithstanding the
plaintiff’s negligence.
For example, the driver of a
jeep who zigzagged before colliding
with a truck that has crossed the
bridge is considered liable because at
the time of the collision, the truck was
at full stop. The driver of the jeep did
not reduce its speed, instead, it
continued, until it collided with the
truck. Although both were negligent,
it was the driver of the jeep who is
liable as it has the last clear chance of
avoiding the accident.
───※ ·❆· ※───
NEGLIGENCE
STANDARD OF CARE
QUESTION. Tony bought a Ford Expedition
from a car dealer in Muntinlupa City. As
payment, Tony issued a check drawn against
his current account with Premium Bank.
Since he has a good reputation the car
dealer allowed him to immediately drive
home the vehicle merely on his assurance
that his check is sufficiently funded. When
the car dealer deposited the check, it was
dishonored on the ground of "Account
Closed". After an investigation, it was found
that an employee of the bank misplaced
Tony's account ledger. Thus, the bank
erroneously assumed that his account no
longer exists. Later, it turned out that
Tony's account has more than sufficient
funds to cover the check. The dealer
however, immediately filed an action for
recovery of possession of the vehicle against
Tony for which he was terribly humiliated
and embarrassed. Does Tony have a cause
of action against Premium Bank? Explain.
(5%) (2006 Bar Examinations)
23
SUGGESTED ANSWER:
Yes, according to Article 2176 of the Civil
Code, whoever by act or omission causes
damage to another, there being fault or
negligence, is obliged to pay for the damage
done. In this case, even though Tony and
Premium Bank had a contractual relationship,
an action for quasi-delict may still prosper.
The Supreme Court has often ruled that the
act that breaks the contract may also be a
tort. There is a fiduciary relationship between
the bank and the depositor, requiring the
bank to manage the depositor’s accounts with
the utmost care. Tony’s credit rating was
negatively impacted by the dishonor of the
check; therefore, he is entitled to damages.
───※ ·❆· ※───
PRESUMPTIONS OF NEGLIGENCE
QUESTION. Dr. Jack, a surgeon, holds clinic
at the St. Vincent's Hospital and pays rent to
the hospital. The fees of Dr. Jack are paid
directly to him by the patient or through the
cashier of the hospital. The hospital publicly
displays in the lobby the names and
specializations of the doctors associated or
accredited by it, including that of Dr. Jack.
Marta engaged the services of Dr. Jack
because of recurring stomach pain. It was
diagnosed that she is suffering from cancer
and had to be operated on. Before the
operation, she was asked to sign a "consent
for hospital care," which reads:
"Permission is hereby given to the medical,
nursing and laboratory staff of the St.
Vincent's Hospital to perform such
procedures and to administer such
medications and treatments as may be
deemed necessary or advisable by the
physicians of this hospital for and during the
confinement."
After the surgery, the attending nurses
reported that two (2) sponges were missing.
Later, Marta died due to complications
brought about by the sponges that were left
in her stomach. The husband of Marta sued
the hospital and Dr. Jack for damages
arising from negligence in the medical
procedure. The hospital raised the defense
that Dr. Jack is not its employee as it did not
hire Dr. Jack nor pay him any salary or
compensation. It has absolutely no control
over the medical services and treatment
being provided by Dr. Jack. Dr. Jack even
signed an agreement that he holds the
hospital free and harmless from any liability
arising from his medical practice in the
hospital.
Is St. Vincent's Hospital liable for the
negligence of Dr. Jack? Explain your
answer. (5%) (2016 Bar Examinations)
SUGGESTED ANSWER:
Yes, St. Vincent’s Hospital is liable to Dr.
Jack’s negligence. According to jurisprudence
(Professional Services v Agana), The hospital
shall be liable under the principle of
ostensible agency for negligence of Dr. Jack
and, pro hac vice under the principle of
corporate negligence for its failure to perform
its duties as a hospital.
While there was insufficient information that
St. Vincent's Hospital exercised or wielded
control over the means and details of Dr.
Jack's application of his skills in Maria's
treatment, there is ample evidence that St.
Vincent's Hospital represented itself to the
patient, Marta, by claiming that Dr. Jack was
its agent (principle of ostensible agency). The
following two factors determine apparent
authority: (1) the hospital's implied
manifestation to the patient, leading the
latter to believe that the doctor was the
hospital's agent; and (2) the patient's reliance
on the hospital and the doctor's conduct,
which consisted of ordinary care and
24
prudence. The corporate negligence charged
against St. Vincent's Hospital is distinct from
the medical malpractice charged against Dr.
Jack. In relation to the patient, the hospital's
duties are distinct from those of the doctor-
consultant practicing within its premises;
hence, St. Vincent's Hospital's failure to
execute its duty as a hospital corporation
resulted in a direct liability to Marta separate
from Dr. Jack's.
───※ ·❆· ※───
DAMAGES
KINDS OF DAMAGES
QUESTION. DT and MT were prominent
members of the frequent travelers’ club of
FX Airlines. In Hongkong, the couple were
assigned seats in Business Class for which
they had bought tickets. On checking in,
however, they were told they were
upgraded by computer to First Class for the
flight to Manila because the Business
Section was overbooked.
Both refused to transfer despite better
seats, food, beverage and other services in
First Class. They said they had guests in
Business Class they should attend to. They
felt humiliated, embarrassed and vexed,
however, when the stewardess allegedly
threatened to offload them if they did not
avail of the upgrade. Thus they gave in, but
during the transfer of luggage DT suffered
pain in his arm and wrist. After arrival in
Manila, they demanded an apology from
FX’s management as well as indemnity
payment. When none was forthcoming, they
sued the airline for a million pesos in
damages.
Is the airline liable for actual and moral
damages? Why or why not? Explain briefly.
(5%) (2004 Bar Examinations)
SUGGESTED ANSWER:
Yes, DT and MT are entitled to actual damages
only for such pecuniary losses suffered by
them as a result of such breach. In the case of
Cathay Pacific vs. Spouses Vasquez, 399 SCRA
207, 2003 “There is also no basis to award
moral damages for such breach of contract
because the facts of the problem do not show
bad faith or fraud on the part of the airline.”
]2003].) However, they may recover moral
damages if the cause of action is based on
Article 21 of the Civil Code for the humiliation
and embarrassment they felt when the
stewardess threatened to offload them if they
did not avail of the upgrade.
───※ ·❆· ※───
LAND TITLES AND DEEDS
TORRENS SYSTEM; GENERAL PRINCIPLES
QUESTION. Mr. and Mrs. Roman and Mr. and
Mrs. Cruz filed an application for
registration of a parcel of land which after
due proceedings was granted by the RTC
acting as a land registration court. However,
before the decree of registration could be
issued, the spouses Roman and the spouses
Cruz sold the lot to Juan. In the notarized
deed of sale, the sellers expressly
undertook to submit the deed of sale to the
land registration court so that the title to
the property would be directly issued in
Juan's name.
a. Is such a stipulation valid? (2%)
b. Distinguish a direct attack from a
collateral attack on a title. (2%)
25
 c. If the title in Item XX.A is issued in
the names of the original sellers,
would a motion filed by Juan in the
same case to correct or amend the
title in order to reflect his name as
owner be considered a collateral
attack? (2%) (2015 Bar
Examinations)
SUGGESTED ANSWER:
a. Yes, such stipulation is valid.
Article 1434 of the Civil Code states
that when a person who is not the
owner of a thing sells or alienates and
delivers it, and later the seller or
grantor acquires title thereto, such
title passes by operation of law to the
buyer or grantee.
Since Juan already bought the parcel
of land from spouses Roman and the
spouses Cruz, by operation of law the
title of the land has passed to Juan
who is the buyer. This is true, even if
the purchase was done before the
issuance of the decree of registration.
Hence, the stipulation in the deed of
sale stating that the spouses Roman
and Cruz shall submit the deed of sale
to the land registration court so that
the title to the property would be
directly issued in Juan's name is valid.
b. A direct attack against a judgment is
made through an action or proceeding
the main object of which is to annul,
set aside, or enjoin the enforcement
of such judgment, if not yet carried
into effect; or, if the property has
been disposed of, the aggrieved party
may sue for recovery.
A collateral attack is made when, in
another action to obtain a different
relief, an attack on the judgment is
made as an incident in said action. (Co
v. CA., G.R. No. 93687. May 6, 199.)
c. No, it will not be considered as a
collateral attack.
A collateral attack is made when, in
another action to obtain a different
relief, an attack on the judgment is
made as an incident in said action.
In the case at bar, Juan is not
attacking the title but merely invoking
his right as transferee to amend the
title in order for it to be named under
him as the owner of the parcel of land.
Hence it does not involve collateral
attack on the title.
───※ ·❆· ※───
REGALIAN DOCTRINE
QUESTION. Regina has been leasing
foreshore land from the Bureau of Fisheries
and Aquatic Resources for the past 15 years.
Recently, she learned that Jorge was able to
obtain a free patent from the Bureau of
Agriculture, covering the same land, on the
basis of a certification by the District
Forester that the same is already "alienable
and disposable". Moreover, Jorge had
already registered the patent with the
Register of Deeds of the province, and he
was issued an Original Certificate of Title for
the same. Regina filed an action for
annulment of Jorge's title on the ground
that it was obtained fraudulently. Will the
action prosper? (2%) (2001 Bar
Examinations)
26

SUGGESTED ANSWER:
An action for the annulment of Jorge's Original
Certificate of Title will prosper on the
following grounds:
(1) Under Chapter IX of C. A, No. 141,
otherwise known as the Public
Land Act, foreshore lands are
disposable for residential,
commercial, industrial, or similar
productive purposes, and only by
lease when not needed by the
government for public service.
(2) If the land is suited or actually
used for fishpond or aquaculture
purposes, it comes under the
Jurisdiction of the Bureau of
Fisheries and Aquatic Resources
(BFAR) and can only be acquired by
lease. (P.D. 705)
(3) Free Patent is a mode of
concession under Section 41,
Chapter VII of the Public Land Act,
which is applicable only for
agricultural lands.
(4) The certificate of the district
forester that the land is already
"alienable and disposable" simply
means that the land is no longer
needed for forest purposes, but
the Bureau of Lands could no
longer dispose of it by free patent
because it is already covered by a
lease contract between BFAR and
Regina. That contract must be
respected.
(5) The free patent of Jorge is highly
irregular and void ab initio, not
only because the Bureau has no
statutory authority to issue a free
patent over a foreshore area, but
also because of the false
statements made in his sworn
application that he has occupied
and cultivated the land since July
4, 1945, as required by the free
patent law.
───※ ·❆· ※───
ORIGINAL REGISTRATION
QUESTION. On March 27, 1980, Cornelio
filed an application for land registration
involving a parcel of agricultural land that
he had bought from Isaac identified as Lot
No. 2716 with an area of one (1) hectare.
During the trial, Cornelio Maimed that he
and his predecessors-in-interest had been in
open, continuous, uninterrupted, public
and adverse possession and occupation of
the land for more than thirty (30) years. He
likewise introduced in evidence a
certification dated February 12, 1981 citing
a presidential declaration to the effect that
on June 14, 1980, agricultural lands of the
public domain, including the subject matter
of the application, were declared alienable
and disposable agricultural land.
a. If you are the judge, will you grant
the application for land registration
of Cornelio?
b. Can Cornelio acquire said
agricultural land through acquisitive
prescription, whether ordinary or
extraordinary? (4%) (2014 Bar
Examinations)
SUGGESTED ANSWER:
a. No, I will not grant the application. To
be entitled to registration of the
parcel of land, the applicant must
show that the land being applied for is
27
 alienable. In this case, at the time of
the filing of the application, the land
has not yet been declared alienable by
the state.
b. Yes. Cornelio can acquire the land by
acquisitive prescription only after it
was declared part of alienable land by
the state by possession for the
required number of years for ordinary
prescription, ten (10) years possession
in good faith with just title or
extraordinary prescription by
possession for thirty (30) years without
need of any other condition.
───※ ·❆· ※───
CERTIFICATE OF TITLE
QUESTION. Joven and Juliana are the
owners of a 30-hectare plantation in
Cotabato, covered by a title. One day, a
group of armed men forcibly entered their
house and, at gunpoint, forced them to sign
a Deed of Absolute Sale in favor of Romeo.
Romeo got the title from them and they
were ejected from the house and
threatened not to come back or else they
will be killed. The spouses went to Manila
and resided there for more than 35 years.
They never went back to Cotabato for fear
of their lives. Word came to them that
peace and order have been restored in their
former place of residence and they decided
to reclaim their land for the benefit of their
grandchildren. Joven and Juliana filed a suit
for reconveyance of their property. This
was opposed by the grandson of Romeo to
whom the title was eventually transferred,
on the ground of laches and prescription.
Decide the case and rule on the defenses of
laches and prescription. Explain your
answer. (5%) (2016 Bar Examinations)
SUGGESTED ANSWER:
The right of the registered owners, Joven and
Juliana, to file suit to recover their property,
is not barred by prescription. Under Section
47 of P.D. No. 1529, no title to registered land
in derogation of the title of the registered
owner shall be acquired by prescription or
adverse possession.
Proof of possession by the owner in an action
for reconveyance is immaterial and
inconsequential. The right to recover
possession is equally imprescriptible since
possession is a mere consequence of
ownership (Republic v. Mendoza, 627 SCRA
443 [2010]).
The right of Joven and Juliana to recover is
not barred by laches, either. Laches deals
with unreasonable delay in filing the action.
The owner’s delay, if any, cannot be
construed as deliberate and intentional. They
were simply coerced out of Cotabato and
threatened with death if they returned, and,
thus, could not have filed them. Hence, Joven
and Juliana could still file suit to recover their
property.
───※ ·❆· ※───
SUBSEQUENT REGISTRATION
QUESTION. Bedrock Land & Property
Development Corp. is a development
company engaged in developing and selling
subdivisions, condominium units and
industrial estates. In order to replenish its
inventories, it embarked on an aggressive
land banking program. It employed "scouts"
who roam all over the Philippines to look for
and conduct investigations on prospective
sites for acquisition and development,
whether developed, semi-developed or raw
land. The management of Bedrock asks you
as the company counsel to prepare a manual
containing a summary of the pertinent laws
28
and regulations relating to land registration
and acquisition of title to land. The manual
should include the following items:
a. What is the governing law?
b. What properties are not registrable?
Supply this information. (2017 Bar
Examinations)
SUGGESTED ANSWER:
a. The governing law varies and is
dependent on the kind of transaction,
regarding land acquisition. Bedrock
Land & Property Development Corp.
will decide to take up on. The laws
that may govern are the following:
(1) P.D. No. 1529 or the Property
Registration Decree)
(2) Public Land Law
(3) The Civil Code of the Philippines
(4) Act No. 2259 or the Cadastral Act)
(5) Section 194 of the Administrative
Code as amended
(6) P.D. No. 1073
(7) Article XII of the 1987 Constitution
(8) P.D. No. 957
(9) R.A. 4276
(10) Real Property Tax Code
b. The following are properties not
registrable under the Torrens System:
(1) inalienable lands of the public
domain; and
(2) those prohibited under the
Constitution such as national
parks, mineral lands, forest or
timber lands and agricultural lands
not classified as alienable and
disposable.
───※ ·❆· ※───
ADVERSE CLAIM
QUESTION. Macario bought a titled lot from
Ramon, he got the title and took possession
of the lot. Since Macario did not have the
money to pay the taxes, fees and
registration expenses, he was not able to
register the Deed of Absolute Sale. Upon
advice, he merely executed an Affidavit of
Adverse Claim and had it annotated at the
back of the title. A few years after, he
received a Notice of Levy on Attachment
and Writ of Execution in favor of Alex. The
notice, writ and certificate of sale were
annotated at the back of the title still in
Ramon's name. Alex contends that since the
Affidavit of Adverse Claim is effective only
for 30 days from the date of its registration,
then its validity has expired. Macario posits
that the annotation of his adverse claim is
notice to the whole world of his purchase of
the lot in question. Who has the superior
right over the disputed property - Macario
or Alex? Explain. (5%) (2016 Bar
Examinations)
SUGGESTED ANSWER:
Macario has the superior right over the
property.
The Court held that the adverse claim does
not ipso facto lose its validity since an
independent action is still necessary to render
it ineffective. Until then, the adverse claim
shall continue as a prior lien on the property.
(Sajonas v. Court of Appeals, 258 SCRA 79.)
Macario is preferred since the registration of
his adverse claim was made ahead of the
notice of levy and writ of execution in favor
of Alex. Macario’s adverse claim, coupled
with the fact that he was in possession of the
disputed property, are circumstances which
should have put Alex on constructive notice
that the property being offered to him had
already been sold to another.
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Hence, Macario has the superior right over the
property.
───※ ·❆· ※───
NOTICE OF LIS PENDENS
QUESTION. Mario sold his house and lot to
Carmen for P1 million payable in five (5)
equal annual installments. The sale was
registered and the title was issued in
Carmen's name. Carmen failed to pay the
last three installments and Mario filed an
action for collection, damages and
attorney’s fees against her. Upon filing of
the complaint, he caused a notice of lis
pendens to be annotated on Carmen's title.
Is the notice of lis pendens proper or not?
Why? (5%) (2001 Bar Examinations)
SUGGESTED ANSWER:
No, the notice of lis pendens is not proper.
The annotation of a lis pendens can only be
done in cases involving recovery of possession
of real property, or to quiet title or to
remove cloud thereon, or for partition or any
other proceeding affecting title to the land or
the use or occupation thereof.
In the case at bar, the notice of lis pendens is
for the case filed by Mario for collection,
damages, and attorney’s fees against Carmen.
The action filed does not fall to any of the
circumstances where an annotation of a lis
pendens can be done.
Hence, the notice of lis pendens is not proper.
───※ ·❆· ※───
DEALINGS WITH UNREGISTERED LAND
QUESTION. In 1970, the spouses Juan and
Juana de la Cruz, then Filipinos, bought the
parcel of unregistered land in the
Philippines on which they built a house
which became their residence. In 1986,
they migrated to Canada and became
Canadian citizens. Thereafter, in 1990,
they applied, opposed by the Republic, for
the registration of the aforesaid land in
their names. Should the application of the
spouses de la Cruz be granted over the
Republic’s opposition? Why? (2003 Bar
Examinations)
SUGGESTED ANSWER:
Yes, the application of spouses de la Cruz
should be granted.
The constitutional prohibition of prohibiting
aliens from owning private lands in the
Philippines is not applicable in the case at
hand.
Here, spouses de la Cruz bought the said
parcel of land while they’re still Filipino
citizens although the title was imperfect. The
application for registration is a mere
confirmation of the imperfect title which the
spouses have already acquired before they
became Canadian citizens. (Republic v. CA,
235 SCRA 567)
Therefore, the application for the registration
of the aforesaid land should be granted.
───※ ·❆· ※───
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