LAST MINUTE TIPS

FOR THE 2023 CIVIL LAW BAR EXAMINATION

(By: Prof. Elmer T. Rabuya)

A. PERSONS AND FAMILY RELATIONS

1. If the spouses are both foreigners residing in the Philippines and one of them filed a petition for the
declaration of the nullity of their marriage on the ground of psychological incapacity under Article
36 of the Family Code, may the petition prosper? ANSWER: No, applying the nationality principle
embodied in Article 15 of the Civil Code which states that the status, condition, legal capacity of
persons, as well as his family rights and duties, shall be governed his national law, the Family Code
of the Philippines cannot be applied in determining the validity of the marriage of the parties.
Instead, it is the national law of the spouses which shall govern. [Simundac-Keppel v. Keppel
(2019)]

2. In a case of a mixed marriage between a Filipino citizen and a foreigner, which marriage was
celebrated here in the Philippines, if the foreigner spouse filed a petition for the declaration of the
nullity of the marriage on the ground of psychological incapacity under Article 36 of the Family
Code, may the petition prosper? ANSWER: Yes, applying the principle of lex loci celebrationis
which states that the validity of a contract shall be governed by the law of the place where the
contract is celebrated, the Family Code of the Philippines is applicable in determining the marriage
of the parties considering that the marriage is celebrated in the Philippines. [Ambrose v. Suque-
Ambrose (2021)]

3. A grandchild of the seller filed a criminal action against the buyer for falsification alleging that the
latter allegedly falsified the seller’s signature in the deed of absolute sale. During the pendency of
the criminal action, a child of the seller filed a civil action against the same accused to declare the
same sale as void on the ground that the seller’s signature in the deed of sale was allegedly
falsified. In the civil action, the court ruled in favor of the defendant and declared that the seller’s
signature was genuine. After the finality of the judgment in the civil action, the accused filed a
motion to dismiss the criminal action on the ground of prejudicial question. May the motion be
granted? ANSWER: Yes, the criminal action can be dismissed on the ground of prejudicial
question. The requirement in the Rules of Court that the civil case must be filed ahead of the
criminal is merely directory; what is mandatory is the requirement that the issue in the civil action
must be determinative of whether the criminal action may proceed or not. In this case, considering
that the judgment of the court in the civil case is that the forgery is baseless, the charge of
falsification in the pending criminal action must be similarly resolved. Hence, the criminal action
should be dismissed on the ground of prejudicial question for the latter principle seeks to avoid
conflicting decisions. [People v. Camenforte (2021)]

4. A criminal information was filed against the accused for bigamy. In his defense, the accused
claimed that he did not commit the crime of bigamy because his first marriage is void since it was
celebrated without a valid marriage license. The only proof presented by the accused is a
certification issued by the local civil registrar that the alleged license cannot be found in the records
of the local civil registry which allegedly issued it. The prosecution, for its part, claimed that the
accused committed the crime of bigamy even if his prior marriage is void because he contracted
the subsequent marriage in the absence of a judicial declaration of the absolute nullity of the prior
marriage. Is the contention of the prosecution meritorious? ANSWER: No, pursuant to the ruling of
the Supreme Court in the en banc case of Pulido v. People. According to the Court in Pulido, the
essence of crime of bigamy is the contracting of a subsequent marriage during the subsistence of
a prior valid marriage. Hence, the crime of bigamy can only be committed if the prior marriage is
either valid or voidable. There is no bigamy if the prior marriage is proven to be a void ab initio
marriage; hence, the absolute nullity of the previous marriage is a valid defense in the crime of

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 bigamy regardless of the time when such judicial declaration is obtained. In its Pulido ruling, the
Court clarified that Article 40 of the Family Code did not repeal, amend nor modify Article 349 of
the Revised Penal Code on bigamy. As such, the non-compliance with the requirement of Article
40 of the Family Code simply renders the subsequent marriage void but no criminal liability for
bigamy attaches. [Pulido v. People (2021 en banc case penned by Justice Hernando)]

5. If you were the court in Question No. 4, will you acquit the accused? ANSWER: No, because the
mere presentation of the certification issued by the local civil registrar is not a sufficient proof to
establish the absence of a valid marriage license at the time of the celebration of the first marriage.
According to jurisprudence, if such certification is being offered for the purpose of obtaining an
acquittal in a criminal prosecution for bigamy, the same cannot be accorded presumption of
regularity. Hence, it is not sufficient evidence to prove the absence of a valid marriage license at
the time of the celebration of the marriage for purpose of the criminal prosecution. [Vitangcol v.
People (2016)]

Note: If the same certification is offered as proof in civil case for the declaration of the nullity of the
marriage on the ground of absence of a valid marriage license, it is sufficient and competent proof
to establish the absence of such license. This is because in a civil case, the certification issued by
the local civil registrar can be accorded presumption of regularity in the civil case. [Republic v. CA
and Castro (1994)]

6. Previously, the concept of psychological incapacity in Article 36 of the Family Code was interpreted
as a form of psychological disorder which renders one of the spouses totally unable to comply with
his or her marital obligations. Hence, in the past the existence of such psychological disorder
ordinarily requires the testimony of an expert witness. But in the 2021 en banc ruling in Tan-Andal
v. Andal, the Supreme Court drastically changed the interpretation of the concept of psychological
incapacity. Under the new doctrine, psychological incapacity in Article 36 of the Family Code is no
longer viewed as an illness or a medical condition. According to the Court, it is neither a mental
illness or a psychological illness. Instead, psychological incapacity is now viewed as referring to an
enduring and durable aspect of a person’s personality, called “personality structure,” which
is so dysfunctional that it renders him or her totally unable to comply with his or her marital
obligations. Such personality structure is brought about by some genuine and serious psychic
causes, i.e., the environment that the person grew up with. Since psychological incapacity is no
longer viewed as a form of psychological illness, the testimony of an expert witness is no longer
necessary. Instead, the psychic causes which accounted for the personality structure may now be
testified to by ordinary witnesses. [Tan-Andal v. Andal (2021)]

7. Rose, a Filipino citizen, entered into an arrangement with Oishi, a Japanese national, for the
purpose of facilitating her application for a Japanese visa. In their arrangement, they agreed to
contract a marriage in the Philippines but with an understanding that the marriage contract would
not be registered in the civil registry. They also agreed that their marriage is fake and that they
would not live together as husband and wife. They got married before an authorized solemnizing
officer in the City Hall of Manila but the ceremony consisted of signing the marriage contract in the
presence of the solemnizer. To Rose’s surprise, the marriage contract was registered in the civil
registry which also showed that the marriage license was issued in San Juan City, Metro Manila.
Rose obtained a certification from the local civil registrar of San Juan City that the license appearing
in her marriage contract was not issued and does not appear in the records of the said local civil
registry. Rose thereafter filed a petition for the declaration of nullity of her marriage to Oishi
contending that the marriage is void for the following reasons: (1) it was a simulated marriage
because the parties did not really have the true intention to contract a marriage; (2) that there was
no valid marriage ceremony; and (3) that it was celebrated without a valid marriage license. Rule
on each contention.

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 ANSWER: On the contention that the marriage is void because it was a simulated marriage, the
same is not meritorious. While there is a ruling in Ado-An Morimoto v. Morimoto (2021) that a
marriage may be declared on the ground that it is simulated because the parties did not have the
genuine intent to enter into marital relations, the better rule is that stated in Republic v. Albios
(2013) that so long as the parties had freely given their consent during the marriage ceremony,
their purpose, intent or motive in contracting the marriage do not affect its validity. The Court
emphasized in Albios that there is no law that declares a marriage void if it is entered into for
purposes other than what the Constitution or law declares, such as the acquisition of foreign
citizenship. Therefore, so long as all the essential and formal requisites prescribed by law are
present, and it is not void or voidable under the grounds provided by law, it shall be declared valid.

ANSWER: On the contention that the there was no valid marriage ceremony, the same is not
meritorious. Under the law and jurisprudence, there is a valid marriage ceremony if the bride and
the groom appeared in person before the authorized solemnizing officer and in the latter’s
presence, the parties made their respective personal declaration that they are taking each other as
husband and wife. As to the form of the personal declaration, the law emphasizes that there are no
required formalities in a marriage ceremony. Hence, the fact that the parties merely signed the
marriage contract in the presence of the solemnizer is a valid marriage ceremony in itself. [Article
6, Family Code]

ANSWER: On the contention that the marriage was celebrated without a valid marriage license,
the same is meritorious. According to jurisprudence, a certification of the local civil registrar that
their office had no record of a marriage license is adequate to prove the non-issuance of said
license. This is because such certification enjoys presumption of regularity in the performance of
an official act. In the case at bar, the marriage is void because it was celebrated without a valid
marriage license. [Republic v. CA and Castro (1994); Carino v. Carino (2001); Kho v. Republic
(2016)] [Note: In Ado-An-Morimoto v. Morimoto, the marriage is indeed void because it was
celebrated without a valid marriage license; while in Republic v. Albios, the marriage is valid
because all the requisites were present, including a valid marriage license.

8. The marriage of X to A was declared void on the ground of psychological incapacity. After the
finality of the judgment, X married B (during the effectivity of the Family Code). After the death of
X, his children in the prior marriage and A filed a petition for the declaration of the nullity of X’s
marriage to B on the basis of Article 53 of the Family Code. The petitioners claimed that X married
B without complying with the requirements outlined in Article 52 of the Family Code. Will the petition
prosper? ANSWER: No, because the petitioners do not have the personality to file the petition.
Under AM No. 02-11-10-SC, only the husband or the wife of the marriage to be declared void who
is authorized by law to file the petition for the declaration of the nullity of the marriage. Hence, the
children of X in his prior marriage do not have the personality to file the petition. A is not likewise
authorize to file the petition because she is not the “wife” referred to in the rules considering that
her marriage to X was already declared an absolute nullity in a final judgment. [David v. Calilung
(2021)]

9. The only exception to the rule stated in AM 02-11-10-SC – that only the husband or the wife of the
marriage to be declared void who is authorized to file the petition – is when the ground is bigamy.
If the ground is bigamy, the aggrieved spouse in the prior also has the personality to file a petition
for the declaration of the nullity of the subsequent marriage considering that he or she is the real
aggrieved party in bigamy. [Juliano-Llave v. Republic (2011) and Fujiki v. Marinay (2013)]

10. When Maria became pregnant, she made Pedro believed that he is the child’s father. Thus, when
Maria gave birth to the child, they decided to live together as husband and wife. When the child
was already three years old, Pedro and Maria finally got married. But after the marriage, Pedro
discovered through DNA testing that he is not the actual father of the child. Pedro thereafter filed a

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 petition for the annulment of his marriage to Maria, invoking “fraud” as ground for the petition
pursuant to Article 45(3) of the Family Code, in relation to Article 46(2) thereof. Will the petition
prosper? ANSWER: No, because Maria was not pregnant at the time of the celebration of the
marriage. According to jurisprudence, in order for Article 46(2) of the Family Code to apply, it is
necessary that the following requisites must be satisfied: (1) the wife must have been pregnant by
a man other than her husband at the time of the marriage; and (2) the wife must have fraudulently
concealed the same. In this case, Maria was no longer pregnant at the time of the marriage
considering that the child was already three years old at the time of the marriage. While Maria may
have employed deceit, the last paragraph of Article 46 of the Family Code clearly states that no
other misrepresentation or deceit other than the four instances enumerated in the said article shall
constitute fraud for the purpose of the annulment of a marriage. [Republic v. Villacorta (2021)]

11. During the marriage of Jose and Pilita, the former acquired a parcel of land using his salaries. Pilita,
who simply managed the house, executed a gratuitous waiver of her rights over said property in
favor of Jose. After the waiver, Jose donated the subject property to his grandchild in a prior
marriage, which donation was made without the consent of Pilita. In the following year, the marriage
of Jose and Pilita was declared void by a final judgment on the ground of psychological incapacity.
When Pilita died, the common child of Jose and Pilita filed an action for the declaration of the nullity
of the waiver and the donation. With respect to the waiver, the complainant alleged that the waiver
is void because Article 89 of the Family Code prohibits the waiver of any rights, interests, shares,
effects in absolute community property prior to the liquidation of the property regime. Is the
complainant’s argument meritorious? ANSWER: Yes, the claim that the waiver is void is
meritorious. However, the correct legal basis is not Article 89 of the Family Code but Article 87
thereof. Article 89 is not applicable because the property regime of Jose and Pilita is not absolute
community of property nor conjugal partnership of gains. Instead, the applicable property regime
of a void marriage by reason of psychological property is that which is provided for in Article 147 of
the Family Code. Nevertheless, the waiver made by Pilita in favor of Jose is a void donation
prohibited under Article 87 of the Family Code. The waiver is in the nature of a donation because
it was made gratuitously. Hence, such donation is void because Article 87 prohibits the parties who
are living together as husband and wife without a valid marriage from making a donation to each
other. [Perez v. Perez-Senerpida (2021)]

12. In Question No. 11, the complainant alleged further that the donation of the subject property without
the consent of Pilita is void pursuant to the provisions of Articles 96 and 98 of the Family Code. Is
the contention meritorious? ANSWER: Yes, the contention that the donation is void is meritorious.
However, the correct legal basis is not Articles 96 and 98 of the Family Code but paragraph 3 of
Article 147 thereof. As explained earlier, the applicable property regime during the cohabitation of
Jose and Pilita is that which is provided for in Article 147. Applying Article 147, the subject property
appears to be co-owned by Jose and Pilita because the said law provides that if one contributed in
the form of maintenance of the household or taking care of the family, he or she is deemed to have
jointly contributed to the acquisition of the property thereby giving rise to co-ownership. In the co-
ownership existing under Article 147, the said law prohibits a co-owner from disposing his ideal
share during the cohabitation without the consent of the other co-owner. Since a co-owner is
prohibited from disposing even his ideal share without the consent of the other co-owner,
jurisprudence states that the disposition of the entire property without the consent of the other co-
owner is void. [Perez v. Perez-Senerpida (2021)]

13. Teddy and Cristy got married without a marriage settlement in 1970, which marriage produced
seven children. During their marriage, the couple acquired a parcel of land. In 1989, Cristy died.
There was no settlement of the estate of the deceased nor liquidation of the property of the
terminated marriage. In 1992, Teddy contracted another marriage to Perla. In 1994, Teddy sold the
property of the previous marriage without the consent of his children in the prior marriage and
without the consent of Perla. Is the sale valid?

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 ANSWER: Yes, the sale is valid but only with respect to the share of Teddy in the co-ownership
equivalent to 9/16. Upon the death of Cristy in 1989 and Teddy failed to liquidate the conjugal
partnership of such terminated marriage, an implied co-ownership arose over the subject property
among the seven children of the prior marriage and Teddy, where the children own 7/16 of the
subject property. Hence, when Teddy sold the entire co-owned property without the consent of his
co-owners, the sale is valid only with respect to the share of Teddy but without affecting the shares
of his co-owners who did not give their consent to the sale.

As to his share, Teddy can validly sell the same without the consent of Perla because the property
regime of the second marriage is complete separation of property. According to Article 130 of the
Family Code, when the surviving spouse failed to liquidate the conjugal partnership within one year
from the death of the spouse and he or she contracted a subsequent marriage, the latter marriage
shall be governed by a mandatory regime of complete separation. Thus, in the case at bar, Teddy
brought into the second marriage his share in the subject property as his exclusive property which
he can validly dispose of without need of obtaining the consent of his spouse. [Heirs of Caburnay
v. Heirs of Sison (2020)]

14. Extension of relationship under the new law on adoption (RA 11642 – Domestic Administrative
Adoption and Alternative Child Care Act): Under the new law on adoption, the previous rule that
adoption creates a personal and exclusive relationship only between the adopter and the adoptee
no longer applies because the new law extended the legitimate filiation created by adoption to the
parent of the adopter, the legitimate sibling of the adopter, and the legitimate descendant of
the adopter. [Section 41, RA 11642]

a) The adoptee and the parent of the adopter are now legitimate filiated, as descendant and
ascendant. Hence: (i) they are now obligated to support each other as legitimate descendant-
ascendant; (ii) they are now compulsory and intestate heirs of each other; (iii) as such, the
adoptee may now represent the adopter with respect to the estate of the parent of the
adopter because the adoptee is now capable of succeeding the parent of the adopter;
(iv) they are now prohibited from marrying each other.

b) The adoptee and the legitimate siblings of the adopter are now legitimately filiated, as
nephew/niece and uncle/aunt. Hence: (i) they are now intestate heirs of each other because
they are now collateral relatives; and (ii) they are now prohibited from marrying each other. But
the adoptee is still not related to the children of the legitimate sibling of the adopter. They are
not deemed as first cousins.

c) The adoptee is now legitimately related to the legitimate children of the adopter. They are now
deemed as brothers and/or sisters. Hence: (i) they are now obligated to support each other, as
brothers and sisters; and (ii) they can now inherit from each other as intestate heirs.

d) The adoptee is now legitimately related to another adopted child of the adopter. They are now
deemed as brothers and/or sisters. Hence: (i) they are now obligated to support each other, as
brothers and sisters; and (ii) they can now inherit from each other as intestate heirs.

e) The adoptee is now legitimately related to the legitimate grandchild of the adopter. They are
now uncle/aunt and nephew/niece. Hence: (i) they can now inherit from each other as intestate
heirs; and (ii) they are now prohibited from marrying each other.

f) But the children of the adoptee remain to be strangers to the adopter because the new law on
adoption did not extend the relationship created by adoption to the children of the adoptee. As

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 such, the children of the adoptee cannot represent the latter with respect to the estate of the
adopter because the children of the adoptee are not capable of succeeding the adopter.

15. Other important changes introduced by the new law on adoption:

a) Domestic adoption is no longer a judicial act. Instead, adoption is now an administrative

process within the original and exclusive jurisdiction of the National Authority for Child Care
(NACC). However, the decision of the NACC in the petition for adoption or in the petition for
the declaration of a child as legally available for adoption is appealable to the Court of Appeals
within 10 days from receipt of the order of the NACC.

b) The adopter is now entitled to paternity or maternity benefits which must be availed within one
year from the issuance of the Order of Adoption, except in the case of adult adoption. Adult
adoption refers to the adoption of a child of legal age who, prior to the adoption, has already
been living in the company of the adopter for at least three years prior to reaching the age of
majority. [Section 36, RA 11642]

c) It is now mandatory on the part of the adopter to disclose the adoption to the adoptee before
the latter reaches the age of 13. [Section 19(b), RA 11642]

d) Upon the rescission of the decree/order of adoption and the adoptee is still a minor, the parental
authority of the biological parent is no longer automatically restored. Instead, it is the legal
custody of the NACC which is automatically restored. If the biological parents desire to resume
the exercise of parental authority, a petition to that effect must be filed and must be approved
by the NACC. [Section 53, RA 11642]

16. Juan died leaving several parcels of land in Valenzuela City. Apparently, he was survived only by
collateral relatives and those relatives executed a deed of extrajudicial settlement over Juan’s
properties. However, Mario and his siblings filed an action for the reconveyance of the properties
of Juan claiming that they are the legitimate descendants of the deceased. They claimed that Juan
married a certain Lucia and that their mother, Maria, is the legitimate child of Juan and Lucia. At
the time of the filing of the action for reconveyance, Maria was already dead. Mario and his siblings
offered as evidence the alleged birth certificate of Maria which was signed only by the birth
attendant, a midwife. On the part of the defendants, they claimed that the complainants have no
cause of action because they are not yet declared legal heirs in a separate special proceeding; that
the action filed had already prescribed; and that the alleged birth certificate of Maria is not a
competent proof of her alleged legitimate filiation with the deceased Juan. Rule on the three
arguments propounded by the defendants.

ANSWER: On the issue that there is no cause of action yet to file an action for reconveyance
because the complainants are not yet declared as legal heirs in a separate special proceeding, the
contention is not yet tenable. The Supreme Court already ruled in the en banc case of Treyes v.
Larlar that unless there is a pending special proceeding for the settlement of the decedent's estate
or for the determination of heirship, the compulsory or intestate heirs may already commence an
ordinary civil action to declare the nullity of a deed or instrument, and for recovery of property, or
any other action in the enforcement of their ownership rights acquired by virtue of succession,
without the necessity of a prior and separate judicial declaration of their status as such. [Treyes v.
Larlar (en banc) (2020)]

ANSWER: On the issue of prescription, the contention is meritorious because the action had indeed
prescribed. The action for reconveyance is anchored on the claim that Maria is a legitimate child of
the deceased Juan. Under the law, an action to establish legitimate filiation is required to be filed
during the lifetime of the child except when the child dies during minority or in a state of insanity, in

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 which case the action can be filed by the heirs of the child within five years from the child’s death.
In this case, the action was only filed after the death of the alleged legitimate child of Juan. Hence,
the action has clearly prescribed because there is no showing that the said child had died during
minority or under a state of insanity. In the case at bar, the action can no longer prosper. [Bernardo
v. Fernando (2020)]

ANSWER: On the contention that the birth certificate of Maria is not competent proof of her alleged
legitimate filiation with the deceased Juan, the same is meritorious. The basis of any claim of
legitimate status is the existence of a valid marriage between the alleged parents. In the case at
bar, the existence of such marriage cannot be based on the birth certificate of Maria because
neither of the alleged parents signed her birth certificate. [Angeles v. Maglaya (2005)]

17. Karla had an illicit affair with a married man, Ricky, with whom she had two children, Jan and Avee.
Karla did not initially register the births of the two children in the civil registry to avoid humiliation
and possible criminal charges. When Karla and Ricky ended their relationship, the two minor
children lived in the company of the former. When the first child needed a birth certificate for school
admission, Karla decided to file an application for the late registration of the births of her two
children. The NSO denied her application for delayed registration on the ground that the births of
the two children were already registered in the civil registry. It turned out that Ricky registered the
births of the two children without the knowledge and consent of Karla. Ricky even registered the
children under his surname. Consequently, Karla filed a petition in court for the cancellation of the
birth certificates registered by Ricky. If you were the court, how will you rule on the petition?
ANSWER: If I were the court, I will grant the petition because the birth certificates registered by
Ricky are null and void. Under Section 5 of the Civil Registry Law, it is mandatory that the mother
of an illegitimate child signs the birth certificate of her child in all cases, irrespective of whether the
father recognizes the child as his or not. In the present case, since the registration of the births of
the two illegitimate children were in violation of the mandatory requirement of the law, the said birth
certificates are void. [Barcelote v. Republic (2017)]

18. In Question No. 17, may the minor children be allowed to use the surname of their father, Ricky?
ANSWER: No, because there is no express recognition of paternity made by the father through the
record of birth appearing in the civil register, in any public document or in any private handwritten
instrument. In the case at bar, the birth certificates registered by Ricky may not be considered as
the required express recognition of the children’s filiation by their illegitimate father because they
were not duly registered in accordance with law. In fact, those birth certificates are void and may
not therefore create any right. [Barcelote v. Republic (2017)]

19. When Christian got Jenny pregnant, the two decided to live together as husband and wife. During
their cohabitation, Christian wrote in his own handwriting an entry in his journal admitting his
paternity over the child in Jenny’s womb. However, Christian did not affix his signature in the said
entry. Unfortunately, Christian died prior to the birth of the child. When the local civil registrar
refused to register the child under the surname of the deceased father because the entry in the
journal does not bear the father’s signature, Jenny filed an action for mandamus to compel the said
local civil registrar to register the child under Christian’s surname. In a petition for mandamus,
Christian’s father and siblings testified that the child is indeed Christian’s son. If you were the court,
how will you rule on the petition. ANSWER: I will grant the petition because the unsigned private
handwritten admission of paternity is a competent proof of Christian’s filiation to the child. According
to jurisprudence, if the admission of paternity is made by the illegitimate father in his own
handwriting in a private instrument but he fails to affix his signature thereto, the following rules shall
govern: (a) if the said instrument is the only proof of filiation, the requirement of affixing the father’s
signature thereto should be strictly applied, in which case the instrument is not a competent proof
of the child’s filiation to the alleged father; (b) if there are other proof of filiation and the said
instrument is merely an addition proof, the requirement of affixing the father’s signature can be

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 relaxed and the instrument may not be regarded as a competent proof of filiation that will entitle the
illegitimate child to use the father’s surname. In the case at bar, the testimonies of Christian’s father
and siblings are considered as competent proof of filiation because they are in the nature of
admissions against interest. Considering that there are other proof of filiation aside from the
unsigned private handwritten instrument, the latter evidence may not be considered as competent
proof of the child’s filiation to the deceased illegitimate father. Hence, the child is entitled to use the
father’s surname. [Dela Cruz v. Gracia (2009)]

20. Queenie is the child of Ricky and Renalyn, who are not married to each other and who are living
separately from one another. Since Renalyn is still studying in Manila, Queenie was in the actual
custody of Ricky in Legazpi City, Albay. Upon verbal instructions of Renalyn, the latter’s parents
obtained the custody of Queenie while the child was in school and did not anymore return the child
to Ricky. The incident prompted Ricky to file a petition for habeas corpus with allegations that
Renalyn and the latter’s parents are unfit to exercise parental authority over the minor child, who
was then below seven years of age. The court, without affording Ricky an opportunity to prove his
allegations, issued an order granting the custody of the child to Renalyn citing the provision of the
law that only the mother is granted parental authority over an illegitimate child. Did the court act
correctly? ANSWER: No, the court did not act correctly. While it is true that only the mother is
granted by law parental authority over an illegitimate child, it is possible for the illegitimate father to
exercise substitute parental authority if he is the actual custodian and in case of default of the child’s
mother, maternal grandparents, and brothers and sisters over the age of 21. In the case at bar,
Ricky was the child’s actual custodian prior to the controversy. Therefore, if he will be able to prove
that the child’s mother and maternal grandparents are indeed unfit to have custody over the minor
child, Ricky will be entitled to the child’s custody in the exercise of substitute parental authority.
Thus, the court committed an error when it denied Ricky the opportunity to prove his allegations.
[Masbate v. Relucio (2018)]

PROPERTY and LAND TITLES AND DEEDS

21. Regalian Doctrine and Its Exception: In essence, the Regalian doctrine provides that lands not
appearing to be clearly under private ownership are generally presumed to form part of the public
domain belonging to the State. This general rule admits of a single exception: native title to land.
Claims of private ownership pursuant to native title are presumed to have been held even before
the Spanish conquest. Thus, lands subject of native titles are deemed excluded from the mass of
lands forming part of the public domain. [Republic v. Pasig Rizal Co., Inc. (2022)]

22. Lands Classified as Public Dominion and Lands of Public Domain: While lands of the
public domain under the Constitution pertain to all lands owned or held by the State both in its
public and private capacity, lands forming part of the public dominion under the Civil Code pertain
only to those which are intended for public use, public service, or the development of national
wealth, and excludes patrimonial property. Therefore, property of public dominion and patrimonial
property, as defined by the Civil Code, both fall within the scope of public domain contemplated
under the 1987 Constitution. [Republic v. Pasig Rizal Co., Inc. (2022)]

23. Thus, the classification of alienable and disposable lands of the State in the 2013 Heirs of
Malabanan v. Republic is erroneous. In Malabanan, the Court classified the alienable and
disposable lands of the State into two categories: (1) patrimonial lands of the State, or those
classified as lands of private ownership under Article 425 of the Civil Code, without limitation;
and (2) lands of the public domain, or the public lands as provided by the Constitution, but with the
limitation that the lands must only be agricultural. Such classification is erroneous according to
Pasig Rizal case because the classification treated lands of the public domain and patrimonial
lands as mutually exclusive. The concept of public domain, according to Pasig Rizal, includes both
properties of public dominion and patrimonial properties. [Republic v. Pasig Rizal Co., Inc. (2022)]

8
24. Abandonment of ruling in 2009 case of Heirs of Malabanan v. Republic: In the 2009 Malaban case,
it was held that agricultural lands of the public domain remain to be classified as properties of public
dominion notwithstanding its classification as alienable and disposable. According to Malabanan,
it is only when such alienable and disposable lands are expressly declared by the State to be no
longer intended for public service or for the development of the national wealth that the same is
converted into patrimonial properties. Such declaration shall be in the form of a law duly enacted
by Congress or a Presidential Proclamation in cases where the President is duly authorized by law.

In the 2022 en banc case of Republic v. Pasig Rizal Co., Inc., however, the Supreme Court ruled
once property of public dominion is classified by the State as alienable and disposable land of the
public domain, it immediately becomes part of the patrimonial property of the State because “the
operative act which converts property of public dominion to patrimonial property is its
classification as alienable and disposable land of the public domain.” The classification of
agricultural lands into alienable and disposable lands of the public domain serves as the
manifestation of the State's lack of intent to retain the same for some public use or purpose.
[Republic v. Pasig Rizal Co., Inc. (2022)]

25. Problem: In 1958, the subject parcel of land was declared in the name of Manuel for tax purposes.
Upon the death of Manuel in 1961, his widow (Esperanza) and his children inherited the subject
property and the beneficial ownership thereof in favor of PRCI, a family corporation. In 2010,
Esperanza applied for the registration of the property for and on behalf of PRCI. It was proven
during the land registration proceedings that the applicant and its predecessor-in-interest have
been in open, continuous, exclusive, and notorious possession of the subject property for more
than fifty (50) years. In 2012, the RTC ruled in favor of the application but the Republic, through the
OSG, assailed the decision in its appeal filed with the CA. In 2014, the CA dismissed the appeal of
the Republic. The Republic filed an appeal before the Supreme Court. The Republic contends that
the subject property may not be acquired by way of prescription notwithstanding the declaration
that the same is already alienable and disposable. In this connection, the Republic asserts that
lands of the public domain become patrimonial only when there is an express government
manifestation that the property is no longer retained for public service or the development of
national wealth. On the part of the applicant, it contends that the classification of the Subject
Property as alienable and disposable means that it has become patrimonial property of the State
which may be acquired by prescription. Who is correct?

ANSWER: The applicant is correct. While the Court ruled in the 2009 en banc case of Heirs of
Malaban v. Republic that lands of the public domain become patrimonial only when there is an
express government manifestation that the property is no longer retained for public service or the
development of national wealth, the foregoing ruling has been effectively abandoned in the Court’s
latest en banc ruling in the 2022 case of Republic v. Pasig Rizal Co., Inc. In Pasig Rizal case, it
was held that once property of public dominion is classified by the State as alienable and disposable
land of the public domain, it immediately becomes part of the patrimonial property of the State
because “the operative act which converts property of public dominion to patrimonial
property is its classification as alienable and disposable land of the public domain.”

The foregoing notwithstanding, PRCI is entitled to the registration of the subject property without
invoking prescription but following the new requirements for judicial confirmation of an imperfect
title under Section 14 (1) of the Property Registration Decree, as amended by RA 11573, which
took effect on September 1, 2021. Under the amended requirements, the applicant is entitled to
registration if the following requisites are complied: (i) the land subject of the application is part of
alienable and disposable agricultural lands of the public domain at the time of the filing of the
application for registration and not covered by existing certificates of title or patents; (ii) the
applicant and his predecessor-in-interest have been in open, continuous, exclusive, and notorious

9
 possession and occupation of the land under a bona fide claim of ownership; (iii) the period of
possession and occupation must be for at least 20 years immediately preceding the filing
of the application for confirmation of title, except when prevented by war or force majeure; and
(iv) the area claimed does not exceed 12 hectares. According to Pasig Rizal, the foregoing
requirements can be applied retroactively because RA 11573 is in the nature of a curative law and
it also created new substantive rights. Applying the new requirements introduced by RA 11573, the
applicant PRCI is already entitled to registration because it was able to comply with the
requirements for judicial confirmation of an imperfect title.

26. Requisites for judicial confirmation of imperfect title under Section 14(1) of Property Registration
Decree, as amended by RA 11573: (i) the land subject of the application is part of alienable and
disposable agricultural lands of the public domain at the time of the filing of the application for
registration and not covered by existing certificates of title or patents; (ii) the applicant and his
predecessor-in-interest have been in open, continuous, exclusive, and notorious possession and
occupation of the land under a bona fide claim of ownership; (iii) the period of possession and
occupation must be for at least 20 years immediately preceding the filing of the application
for confirmation of title, except when prevented by war or force majeure; and (iv) the area claimed
does not exceed 12 hectares.

§ Prior to the amendment introduced by RA 11573, the old Section 14(1) requires that the
possession and cultivation must have dated back to June 12, 1945 or earlier.

§ Effect of compliance with the foregoing requisites: Upon compliance with the requisites of
the new Section 14(1), a conclusive presumption that the applicant has performed all the
conditions essential to a government grant arises, and the applicant becomes the owner of
the land by virtue of an imperfect or incomplete title. By legal fiction, the land has already
ceased to be part of the public domain and has become private property by operation of
law (even prior to the registration of the land). Hence, the applicant is entitled, as a matter
of right, to its registration.

27. The amendment introduced by RA 11573 to Section 14(1) of PRD has retroactive effects because
the law is curative and, at the same time, it creates new substantive rights, according to the case
of Republic v. Pasig Rizal Co., Inc. (2022).

§ RA 11573 took effect on September 1, 2021.

§ Sample Problem: Pedro and his predecessor-in-interest had been in possession of an

agricultural land of the public domain with a total area of 10 hectares since 1975. In 2010,
the subject property had been declared alienable and disposable. Is Pedro entitled to a
judicial confirmation of an imperfect title pursuant to Section 14(1) of PRD? ANSWER: Yes,
because Pedro satisfies the requirements under the new Section 14(1) of PRD, as
amended by RA 11573. Pedro and his predecessor-in-interest had been in possession of
the subject property for more than 20 years already and the said property has already been
classified as alienable and disposable agricultural lands of the public domain. Considering
that the amendments introduced by RA 11573 are retroactive in character, the subject
property, had ceased to be part of the lands of the public domain and already became
private property. Hence, Pedro is entitled to its registration.

28. Private corporations cannot acquire lands of the public domain. Section 3 of Article XII of the 1987
Philippine Constitution states that “private corporations or associations may not hold such alienable
lands of the public domain except by lease.”

10
 § Note that a private corporation may not acquire alienable lands of the public domain; but it
may acquire private lands.

§ Sample problem: Pedro and his predecessor-in-interest had been in possession of an

agricultural land of the public domain with a total area of 10 hectares since 1975. In 2010,
the subject property had been declared alienable and disposable. In 2018, Pedro sold the
subject property to ABC Corporation. Can ABC Corporation be entitled to the registration
of the subject property? ANSWER: Yes, because all the requisites of the new Section 14(1)
of the PRD had been satisfied. While ABC Corporation acquired the property in 2018, or
prior to the effectivity of RA 11573, the effects of RA 11573 are nevertheless retroactive.
Applying the retroactivity of RA 11573, what ABC Corporation purchased from Pedro is no
longer part of the alienable lands of the public domain but private property instead. If what
was acquired by a private corporation is already a private property, the objection that a
juridical person is not qualified to apply for judicial confirmation of title under Section 14(1)
of the PRD is technical, rather than substantial, according to the Court in Director of Lands
v. Intermediate Appellate Court and ACME Veneer and Plywood Co., Inc. (1986).

§ Note: If the requisites under the new Section 14(1) are not yet complied when the
corporation purchased the property, what it purchased is actually alienable land of the
public domain. Hence, the prohibition in Section 3 of Article XII of the Constitution applies.
On the other hand, if the requisites under the new Section 14(1) are already complied when
the corporation purchased the property, what it purchased is actually a private land. Hence,
the prohibition no longer applies. In such a case, the corporation is already entitled to the
registration of the property under its name.

29. RA 11573 now prescribes the nature of proof sufficient to establish the status of land as alienable
and disposable. Pursuant to the new law, a duly signed certification by a duly designated DENR
geodetic engineer that the land is part of alienable and disposable agricultural lands of the public
domain is sufficient proof that the land is alienable for purposes of judicial confirmation of imperfect
titles filed under PD 1529. But in the case of Republic v. Pasig Rizal Co., Inc. (2022), the Court
emphasizes that the DENR geodetic engineer must be presented as witness for proper
authentication of the certification so presented; otherwise, such certification has no probative value.

30. In 2020, Corporation X wanted to construct a building on its property. When it applied for a building
permit, it was required by the LGU to provide parking spaces in its proposed construction. As
Corporation X was excavating on the property to lay down the foundation of the parking spaces, it
discovered in April 2000 telephone lines, cables, and manholes underground, which had been
placed there by PLDT. Corporation X filed an action for forcible entry against PLDT sometime in
May 2021. In its defense, PLDT claimed that the alleged invasion of Corporation X’s subsoil is not
a case of forcible entry and, assuming that the action can properly be classified as forcible entry
case, the action had already prescribed. Ruled on PLDT’s contentions.

ANSWER: The first contention is not meritorious. According to jurisprudence, a lawful owner has
the right to fully enjoy possession over his entire property, not only over the land's surface, including
everything underneath and the airspace above it up to a reasonable height. As such, a landowner
is has the right to eject those who unlawfully encroach and build upon any portion of his property,
including the sub-surface. Hence, the existence of PLDT’s cables affected the right of the surface
owner to make use of its right to possess. This can be considered a burden, which may be removed
by forcible entry or unlawful detainer actions. [PLDT v. Citi Appliance MC Corporation (2019)]

31. Chua filed an action for ejectment of extended structures that partly occupied the portion of his
firewall against Barber, his neighbor. The defendant filed a motion to dismiss claiming that the MTC
had no jurisdiction over the subject matter of the case and Barber's person. Barber claimed that

11
 the complaint did not raise the issue of material or physical possession of a property but the removal
of certain structures that encroached upon Chua’s property. As such, according to Barber, the case
is one for specific performance, which is within the RTC's jurisdiction. Is Barber correct?

ANSWER: No, Barber’s contention is not correct. A lawful owner has the right to fully enjoy
possession over his entire property, not only over the land's surface but also over the structures
built thereon, including everything underneath and the airspace above it up to a reasonable height.
As such, a landowner is has the right to eject those who unlawfully encroach and build upon not
only on the lot itself, but as well as on the structures existing on his property. In PLDT v. Citi
Appliance MC Corporation, the Court upheld the remedy of ejectment for dispossession of the
subterranean portion of a titled property, noting that rights over lands are indivisible. The owner of
a parcel of land has rights not only to the land's surface, but also to everything underneath and the
airspace above it up to a reasonable height. By parity of reasoning, an aggrieved owner/possessor
of a property can properly resort to a case for ejectment in order to remove structures affecting his
right to possess the entirety of his property, including his firewall. [Barber v. Chua (2021)]

32. Gutierrez was awarded a free patent and subsequently a certificate of title over a parcel of land.
Since the land was in the actual physical possession of Cullado, Gutierrez filed an accion publiciana
against the Cullado claiming that the latter is merely squatting on the land. In his defense, Cullado
claimed ownership over the subject property which he allegedly acquired by way of acquisitive
prescription. After trial, the court rendered a decision in favor of Cullado ordering Gutierrez to
reconvey the subject property to the former. Is the Court correct?

ANSWER: No, the court is not correct. While the court may rule on the question of ownership in an
accion publiciana case, such adjudication is not a final determination of the issue of ownership.
Instead, such adjudication is only for the purpose of resolving the issue of possession, where the
issue of ownership is inseparably linked to the issue of possession. The adjudication of the issue
of ownership, being provisional, is not a bar to an action between the same parties involving title to
the property. The adjudication, in short, is not conclusive on the issue of ownership. Hence, the
court cannot order the reconveyance of the property in an accion publiciana. [Heirs of Cullado v.
Gutierrez (2019)]

33. In Article 624 of the Civil Code, an easement can be acquired by operation of law if the following
requisites are satisfied: (i) that there exist an apparent sign of servitude between two estates; (ii)
that at the time of the establishment of such sign, the ownership of the two estates resides in one
person; (iii) that the sign of the easement be established by the owner of both estates because the
article will not apply when the easement is established by a person different from the owner; (iv)
that the ownership over the two estates is later on divided, either by alienation or partition; and (v)
that at the time of division of ownership, nothing is stated in the document of alienation or partition
contrary to the easement nor is the sign of the easement removed before the execution of the
document.

§ If all the foregoing requisites are complied, an easement is acquired by operation of law on
the day of the division of ownership.

§ In the past, the Supreme Court has been applying Article 624 to acquisition of easement
of light and view. But in the 2021 case of Fernandez v. Delfin, the Court applied the article
to acquisition of easement of right of way.

§ Sample Problem: The Spouses Fernandez owned five contiguous parcels of land; two of
which are located in front with access to the public highway; while the three parcels are
located at the back. While they were still the owners of the five parcels, they provided for
a right of way in favor of the back properties and they annotated the said right of way in the

12
 titles covering the front properties. They subsequently mortgaged the front properties, the
mortgaged was foreclosed and purchased by the bank at the auction sale. When the
Spouses Fernandez failed to redeem the foreclosed properties, the bank sold the front
properties to Spouses Delfin. Upon acquiring the front properties, the Spouses Delfin
closed the access of the back properties to the public highway and demanded payment of
compensation in order to allow said access. The Spouses Fernandez refused to pay
compensation because they claimed that they are already entitled to an easement of right
of way as annotated on the titles of the front properties. Are the Spouses Fernandez entitled
to an easement of right of way in favor of their back properties without paying
compensation?

ANSWER:

Yes, the Spouses Fernandez already acquired an easement of right of way by operation
of law pursuant to Article 624 of the Civil Code.

According to jurisprudence, an easement is acquired by operation of law if the following

requisites are complied: (i) that there exist an apparent sign of servitude between two
estates; (ii) that at the time of the establishment of such sign, the ownership of the two
estates resides in one person; (iii) that the sign of the easement be established by the
owner of both estates because the article will not apply when the easement is established
by a person different from the owner; (iv) that the ownership over the two estates is later
on divided, either by alienation or partition; and (v) that at the time of division of ownership,
nothing is stated in the document of alienation or partition contrary to the easement nor is
the sign of the easement removed before the execution of the document.

All the foregoing requisites are present. Hence, when the bank acquired the front properties
at the auction sale and nothing is stated contrary to the easement and it was not removed
at that time, the Spouses Fernandez already acquired an easement of right of way by
operation of law.

34. In classifying the properties of the LGUs (provinces, cities or municipalities), those properties are
classified as property of public dominion (or public property) in the following situations: (i) if the said
property is one of those enumerated in paragraph 1 of Article 424 of the Civil Code; OR (ii) even if
it is not one of those enumerated in the said provision, if the property is actually devoted to
governmental or public purposes. On the other hand, it is classified as patrimonial property of the
LGU if: (i) it is not one those enumerated in paragraph 1 of Article 424; AND (ii) it is actually devoted
to proprietary or commercial purposes.

§ If the parcel of land, for example, is property of public dominion of the LGU, Congress has
absolute control over said property and it can be given to another entity without need of
paying the LGU just compensation. This is because the property actually belongs to the
State if it is a property of public dominion and the LGU is merely in possession of such
property in trust for the State. Therefore, Congress may change the administrator of the
said property and such act does not constitute an expropriation that will require payment
of just compensation.

§ Sample Problem: There are two State-run schools in the Province of Bataan, both situated
in parcels of land registered in the name of the Province of Bataan. Congress then enacted
a law where the two schools were integrated into one State college, known as BPSC. The
said law also declared that the parcels of land occupied by the two State-run schools are
now the property of BPSC. The Province of Bataan claimed that it was deprived of the said
parcels of land without payment of just compensation. Is the Province of Bataan correct?

13
 ANSWER:

The contention of the Province of Bataan is not correct because the subject properties are
classified as public properties or properties of public dominion of the Province of Bataan.

Under the law and jurisprudence, if the property of the LGU is actually devoted to some
governmental or public purposes, it is classified as property of public dominion.
Jurisprudence also states that if the property of the LGU is classified as property of public
dominion, Congress has absolute control over said property because the LGU in
possession of such property in trust for the State.

In the given case, since the subject properties are devoted to governmental purposes,
specifically public education, they are classified as public properties. Hence, Congress can
transfer their administration to the BPSC without the need of paying the LGU just
compensation. What transpired is not a case of expropriation but a mere change of
administrator of public properties. [Sangguniang Panlalawigan of Bataan v. Garcia
(2016)]

35. In Article 487 of the Civil Code, one of the co-owners alone has the right to maintain an action for
ejectment, without need of including the other co-owners in the action so long as the action is filed
for the benefit of all the co-owners.

§ The term ejectment in Article 487, according to jurisprudence, includes all kinds of actions
the purpose of which is to recover possession (replevin, accion interdictal, accion
publiciana, accion reivindicatoria).

§ According to jurisprudence, Article 487 can also be availed by a co-owner even against
another co-owner who took exclusive possession of the co-owned property under claim of
exclusive ownership. But in the action for ejectment filed by a co-owner against another
co-owner pursuant to Article 487, the only judgment that can be obtained is for the
recognition of the co-ownership. In the said action, the co-owner defendant cannot be
ordered to vacate the property. The court cannot also order the partition of the property. If
partition is desired, a separate action for partition must be filed.

§ Sample Problem:

When Bernardo De Vera was still alive, he acquired a housing unit from the NHA. After his
death, Virgilio Manzanero, the barangay chairman of the place forcibly ejected the children
and heirs of Bernardo from the said property claiming that he already purchased the
property from the widow of Bernardo. Subsequently, the children of Bernardo filed an
accion reivindicatoria against Manzanero. The RTC dismissed the complaint, ruling that
Manzanero became a co-owner of the subject property and the proper remedy of the
complainants is to file an action for partition. Is the RTC correct?

ANSWER:

The RTC is not correct because a co-owner has the right to file an action for ejectment or
for recovery of possession of the co-owned property pursuant to Article 487 of the Civil
Code.

Pursuant to Article 487 of the Civil Code, a co-owner can file an action for ejectment,
including an accion reivindicatoria, without the need of including the other co-owners in the

14
 action. According to jurisprudence, Article 487 can also be availed by a co-owner as
against another exception. In such action, however, the only judgment that can be obtained
from the court is for the recognition of the co-ownership.

The dismissal of the complaint is not therefore correct because the said action is the proper
venue to determine the existence of a co-ownership, which is a prerequisite prior to the
partition of the property. When the RTC dismissed the complaint, it deprived the
complainants of their right to avail of the remedy under Article 487. The RTC also
preempted the decision of the complainants on the matter of partition because they may
or they may not desire yet to partition the property. [De Vera v. Manzanero (2021)]

36. Article 448, which is the applicable law in industrial accession where both the landowner and the
builder acted in good faith, does not apply in cases already governed by special legislation and by
the contract between the parties.

§ For example, if a condominium unit owner introduced an improvement in the common area,
Article 448 does not apply because the matter is already governed by the Condominium
Act (the specific legislation applicable) and the Master Deed of Restrictions of the
condominium project and the By Laws of the condominium corporation (the contract
between the parties), all of which consider the said construction as illegal and can be
ordered demolished at the expense of the builder.

§ Sample Problem: LMSI acquired a unit located at the roof-deck of Legaspi Towers 200,
called Concession 3. After acquiring the said unit, LMSI constructed another unit on top of
Concession 3. The condominium corporation of Legaspi Towers 200 demanded for the
demolition of the addition structure but LMSI claimed to be a builder in good faith. Is the
contention of LMSI correct?

ANSWER:

No, LMSI cannot claim to be a builder in good faith.

According to jurisprudence, Article 448 of the Civil Code, which governs the rights of a
builder in good faith, does not apply if the situation is already governed by a specific
legislation and by the contract between the parties.

In this case, the act of a condominium unit owner of introducing an improvement in the
common area is already governed by the Condominium Act of the Philippines and by the
contracts between the parties (the master deed of restrictions of the condominium project,
as well as the by-laws of the condominium corporation). The aforesaid law and contracts
prohibit a condominium unit owner from making any improvement outside of his
condominium unit or in the common area. Since the additional structure is an illegal
construction, it can be ordered demolished at the expense of the erring condominium unit
owner. [Leviste Management System, Inc. v. Legaspi Towers 200, Inc., (2018 )]

WILLS & SUCCESSION

37. Can an heir (whether compulsory or intestate) already file an action for the recovery of the property
(ejectment, accion publiciana, accion reivindicatoria) on the basis of his right as an heir even prior
to the probate of the will, declaration of heirship or settlement of the estate?

§ In the en banc case of Treyes v. Larlar (2020), the Court abandoned the rule which
requires a prior determination of heirship in a separate judicial proceeding as a prerequisite

15
 before one can file an ordinary civil action to enforce ownership rights acquired by virtue of
succession. Henceforth, the rule is: “unless there is a pending special proceeding for the
settlement of the decedent's estate or for the determination of heirship, the compulsory or
intestate heirs may commence an ordinary civil action to declare the nullity of a deed or
instrument, and for recovery of property, or any other action in the enforcement of their
ownership rights acquired by virtue of succession, without the necessity of a prior and
separate judicial declaration of their status as such.”

§ But the ruling of the trial court shall only be in relation to the cause of action of the ordinary
civil action, i.e., the nullification of a deed or instrument, and recovery or reconveyance of
property, which ruling is binding only between and among the parties.

38. Recent developments in Succession (involving adoption).

§ The new law on adoption (Sec. 43 of the Domestic Administrative Adoption and Alternative
Child Care Act), now clarifies that the adoptee and the adopters are compulsory heirs of
each other (aside from being legal heirs of each other). Said Section 43 now says that “In
testate and intestate succession, the adopters and the adoptee shall have reciprocal rights
of succession without distinction from legitimate filiations.”

§ The biological parents of the adopted child and the latter can only inherit from each other
by will. They are no longer heirs of each other by operation of law.

§ The adopted child can now inherit from the parents of the adopter by representation (with
respect to the legitime and in intestate succession) because the new law on adoption states
that they are now legitimately filiated (related) to each other. Hence, the adopted child can
now represent the adopter with respect to the estate of the parent of the adopter. For the
same reason, the parent of the adopter can also inherit from the estate of the adopted
child, as an ascendant.

§ The adopted child can now inherit in intestate succession from the natural legitimate
children of the adopter (as a brother or sister) because the new law on adoption states that
they are now legitimately filiated (related) to each other. For the same reason, the natural
legitimate children of the adopter can also inherit in intestate succession from the estate of
the adopted child, as a brother or sister.

§ The adopted child can now inherit in intestate succession from another adopted child of
the adopter (as a brother or sister) because the new law on adoption states that they are
now legitimately filiated (related) to each other. For the same reason, the other adopted
child of the adopter can also inherit in intestate succession from the estate of the adopted
child, as a brother or sister.

§ The adopted child can now inherit in intestate succession from a legitimate grandchild of
the adopter (as an uncle or aunt) because the new law on adoption states that they are
now legitimately filiated (related) to each other. For the same reason, the said grandchild
of the adopter can also inherit in intestate succession from the estate of the adopted child,
as a nephew or niece.

§ The adopted child can now inherit in intestate succession from the legitimate sibling of the
adopter (as a nephew or niece of the latter) because the new law on adoption states that
they are now legitimately filiated (related) to each other. For the same reason, the
legitimate sibling of the adopter can also inherit in intestate succession from the estate of
the adopted child, as an uncle or aunt.

16
 § But the children of the adopted child still cannot inherit from the adopter by representation.
Stated otherwise, the children of the adopted cannot represent the adopted child with
respect to the estate of the adopter. This is because they are still strangers from each other
under the new law on adoption. In the same way, the adopter cannot inherit (by operation
of law) from the estate of the child of the adoptee.

39. Recent developments in Succession (involving the barrier rule).

§ An illegitimate child of someone who is legitimate can now inherit from his grandparent.
There is no more prohibition or barrier pursuant to the ruling of the Supreme Court in the
en banc case of Aquino v. Aquino (2021). Hence, an illegitimate child can represent his
natural parent with respect to the estate of the grandparent, even if the natural parent is a
legitimate child of the grandparent.

§ The Court in Aquino explained that the mention of the grandchildren in Article 982 (giving
the grandchildren the right to represent) does not qualify whether the grandchildren are
legitimate or illegitimate children of the person represented. [But the grandparent cannot
inherit from the illegitimate child because with respect to the illegitimate child as decedent,
only his illegitimate parents are heirs by operation of law.]

§ But the barrier rule still applies between brothers and sisters. The illegitimate child still
cannot inherit (by operation of law) from a brother or sister who is legitimate. The legitimate
brother or sister cannot also inherit (by operation of law) from the illegitimate brother or
sister.

§ Under the Aquino ruling, if the illegitimate child is a child of someone who is legitimate, the
illegitimate child still cannot inherit (by operation of law) from the legitimate collateral blood
relatives of his natural parent. The barrier rule still applies. In the same way, a legitimate
collateral blood relative of the natural parent cannot inherit (by operation of law) from the
illegitimate child.
40. The barrier rule does not apply if the illegitimate child is a child also of an illegitimate person. Under
our laws on succession (Articles 902 and 990), the rights to succession by operation of law of an
illegitimate child are transmissible to his descendants, whether the latter are legitimate or
illegitimate.

§ To illustrate. The heir is an illegitimate child but he predeceased his natural parent. Can he
be represented by his children? Yes, pursuant to Article 902 (with respect to his legitime)
and pursuant to Article 990 (with respect to his share in intestate succession). It does not
matter whether his children are legitimate or illegitimate.

§ But while the illegitimate child can inherit from his grandparent (whether his natural parent
is a legitimate child or illegitimate), the grandparent cannot inherit from the illegitimate child.
There is no reciprocity of successional rights between them. Under the law, if the decedent
is illegitimate child, only his illegitimate parents among the ascendants are his heirs by
operation of law. The other ascendants (including his grandparents) are not his heirs by
operation of law.

41. Sample Problem: X is a legitimate child of G who predeceased the latter. Aside from an illegitimate
child which he acknowledged (in the child’s birth certificate), X also adopted a child of his friend.
May the children of X represent him with respect to the estate of G? ANSWER: Yes, both are
entitled to represent. As to the adopted child, he is entitled to represent the adopter with respect to
the estate of the parent of the adopter because under the new law on adoption (Domestic

17
 Administrative Adoption and Alternative Child Care Act), the legitimate filiation created by adoption
is now extended to the parent of the adopter. Hence, the adopted child is now capable of
succeeding the parent of the adopter as a descendant of the latter. As to the illegitimate child, he
is also entitled to represent his natural parent with respect to the estate of the grandparent pursuant
to the new ruling of the Supreme Court in Aquino v. Aquino. In the Aquino case, the Court ruled
that Article 982 of the Civil Code does not qualify whether the grandchildren referred to in said
provision are legitimate or illegitimate children of the person represented. Hence, the illegitimate
child is now capable of succeeding the grandparent, even if his natural parent is a legitimate child
of the decedent.

42. If the testator is blind, Article 808 requires that the will be read to him twice: once, by one of the
witnesses, and again, by the notary public.

§ According to the Court, Article 808 also applies to an illiterate testator or to a testator who
has a defective eyesight.

§ According to the Court, the rule in Article 808 is subject to the principle of substantial
compliance. The purpose of the provision is to prevent fraud or trickery. Hence, if what
transpired already prevented the commission of fraud or trickery against the blind or
illiterate testator, the will is considered valid under the principle of substantial compliance.

§ In Guia v. Cosico, Jr. (2021), where the testator is illiterate, the will written in Tagalog
dialect was read to her once by the lawyer who drafted the will. The lawyer also explained
to the testator the contents of the will. The reading and explanation were done in the
presence of the three witnesses. After reading and explaining the contents, the lawyer
asked the testator of the latter understood the contents of her will and whether the will was
drafted pursuant to her instructions and wishes, and the testator replied in the affirmative.
Then the testator and the witnesses affixed their signatures. The Supreme Court ruled that
there was substantial compliance with the requirement of Article 808.

§ In the earlier case of Alvarado v. Gaviola (1993), where it was the lawyer who drafted the
will who read the same aloud to the testator (who had defective eyesight) and read them
only once but it was read aloud in the presence of the testator, the three instrumental
witnesses and the notary public and the testator subsequently affirmed that the contents
thereof corresponded with his instructions, the Court likewise held that the requirement of
Article 808 has been sufficiently complied with.

40. Scarlett Johansson, an American citizen but temporarily residing in the Philippines, executed
her will in the Philippines. She designated Ruben, a Filipino citizen, as her executor. Upon her
death, the executor filed a petition for the probate of the will before the RTC of Quezon City.
The RTC dismissed the petition for lack of jurisdiction. The RTC reasoned that being an
American citizen, the testator’s national law must govern and her will must be probated in the
United States of America, and not in the Philippines. Is the court correct?

ANSWER: No, the Philippine law will apply by default. The nationality principle is not applied
when determining the extrinsic validity of an alien's last will and testament. When it comes to
the probate of an alien's will, whether executed here or abroad, the alien's national law may be
pleaded and proved before the probate court. Otherwise, Philippine law will govern by default.
Article 817 of the Civil Code provides an option to the heirs or the executor: to use Philippine
law, or plead and prove foreign law. Thus, it does not remove jurisdiction from the Philippine
court. Consequently, if an alien-decedent duly executes a will in accordance with the forms and
solemnities required by Philippine law, barring any other defect as to the extrinsic validity of the

18
 will, the courts may take cognizance of the petition and allow the probate of the will. [Gaspi v.
Pacis-Trinidad (2020)]

41. Anne Locsin, a former Filipino citizen who became a naturalized American citizen, executed
her will in California where she nominated her Filipino cousin, Victor, as special independent
executor over her assets in the Philippines. The will only had two witnesses; the testator and
her witnesses did not acknowledge the will before the notary public; the will did not state the
total number of its pages; and the witnesses did not sign on all pages. After her death in
California, Victor filed for the probate of the will in the Philippines and prayed that he be
appointed as special administrator of Anne’s estate. Angel, Anne’s sister, opposed the petition.
Victor failed, however, to prove the law of California on formalities required in the execution of
wills. May the will of Anne be allowed in the Philippines?

ANSWER: No, the will of Anne is void. Since Victor failed to prove the law of California, the
doctrine of processual presumption applies. Pursuant to said doctrine, the validity of the will as
to formalities shall be determined by applying Philippine laws. Applying Philippine laws, the will
is clearly void because it failed to comply with the mandatory requirement of at least three
witnesses. In addition, the witnesses did not sign on each and every page of the will; the
attestation clause failed to state the total number of pages; and the testator and the witnesses
did not acknowledge the will before a notary public. [Kucskar v. Sekito, Jr. (2020)]

OBLIGATIONS AND CONTRACTS

42. Source of Obligation: Accion in rem verso (Art. 22, NCC) vs. Solutio Indebiti (Art. 2154, NCC)

a) As to similarities: (1) in both, the plaintiff suffered a loss; (2) in both, the defendant has been
enriched; (3) in both, the enrichment of the defendant is a case of unjust enrichment because
the payment or the delivery to him by the plaintiff is without legal or just cause; (4) in both, there
is an obligation to return what was unduly delivered or paid; (5) in both, the objective is to
prevent unjust enrichment; and (6) in both, the remedy presupposes the absence of a contract
between the parties.

b) As to distinctions: (1) in in rem verso, the source of obligation is law; while in solutio indebiti, it
is quasi-contract; (2) in the first, the prescriptive period of the action for recovery is 10 years
[Art. 1144(2), NCC); while in the second, the prescriptive period is 6 years [Art. 1145(2), NCC];
in the first, mistake in payment is not essential; while in the second, mistake in payment is the
essence of the concept; and (4) if mistake was committed in the payment, in in rem verso, the
mistake is in relation to an interpretation or application of law which is not a doubtful or difficult
provision; while in solutio indebiti, the mistake must be either mistake of fact or a mistake in the
application or interpretation of a doubtful or difficult provision of law.

43. Lessor increased the yearly rentals. Lessee paid the increased rents under protest. Ten years
after, the court declared invalid the increase in rent for failure of lessor to comply with the
required procedures upon a petition filed by the other lessees in the same establishment.
Lessee immediately filed an action to recover the overpayments it made for the past 10 years.
The court ruled that the cause of action is based on solutio indebiti; hence, some amounts may
no longer be recovered because the prescriptive period for recovery is 6 years only. Is the court
correct?

ANSWER: No, the court is not correct. The cause of action for recovery of payment is based
on the violation of the written contract of lease; hence, the prescriptive period is 10 years from
overpayment. The cause of action cannot possibly arise from solutio indebiti because the

19
 requisites of solutio indebiti are the following: (i) payment is by reason of mistake of fact or
mistake in doubtful or difficult provision of law; and (ii) there must be no binding relation
between the parties. Here, the parties are bound by the contract of lease. [Domestic
Petroleum Retailer Corp. v. MIAA (2019)]

44. Involuntary servitude: In Ka Kuen Chua v. Motorlite Marketing Corp. (2017), the Court
clarified that the policy against involuntary servitude applies only to situations where one is in
the service of another, by virtue of an employment contract or by force or compulsion. It cannot
apply in reciprocal contracts such as contracts for a piece of work, lest we run afoul with the
principle of autonomy and obligatory nature of contracts evenly guaranteed under Article III,
Section 10 of the Constitution.

SAMPLE PROBLEM: KKCA agreed to construct a building for MMC on the latter’s property.
However, KKCA no longer wishes to continue with the project because of strained relations
between the parties. MMC filed an action for specific performance against KKCA. For its part,
KKCA claimed that it cannot be compelled to finish the project against its will; otherwise, it will
amount to involuntary servitude. Is KKCA correct?

ANSWER: No, KKCA is not correct. It can be compelled to finish the project because the policy
against involuntary servitude applies only to situations where one is in the service of another,
by virtue of an employment contract or by force or compulsion. It cannot apply in reciprocal
contracts such as contracts for a piece of work, lest we run afoul with the principle of autonomy
and obligatory nature of contracts evenly guaranteed under Article III, Section 10 of the
Constitution.

45. When are courts authorized to fix the period for the parties? (a) General rule: Courts are not
allowed to fix the period for the parties because the same violates the principle of autonomy of
contracts. (b) Exceptions: (1) when the obligation is intended to be with a period but the parties
failed to fix the period; (2) in an obligation with a period, if the fixing of the period is left to the
exclusive will of the debtor; and (3) in reciprocal obligations where one of the parties already
complied but the other failed to comply, the court may refuse to rescind the contract if the court
finds a just cause for the fixing of a period.

§ In the first exception above, the court can only fix the period if the obligation is intended
to be with a period. If the obligation is pure, such as when the obligation is payable on
demand, the court is not authorized to fix any period. According to jurisprudence, an
obligation payable on demand is a pure obligation.

§ In the first exception above, the court can only fix the period if the parties failed to fix
the period. If a period has already been fixed by the parties, such as when the
obligation is to be performed “within a reasonable time,” the parties have already fixe
the period. The only inquiry that can be made by the court is whether such reasonable
time had already lapsed.

§ In the first two exceptions mentioned above, the creditor cannot as yet file an action
demanding performance; otherwise, such action will be premature. The proper remedy
is to file first an action for the fixing of the period. It is only when the court has already
fixed a period and such period has lapsed that the obligation will become demandable.

46. Doctrine of constructive fulfillment of suspensive condition vs. rule on constructive fulfillment of
mixed conditional obligation:

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 a) Doctrine of constructive fulfillment of suspensive condition: The principle is embodied in
Article 1186 of the Civil Code. It applies when: (1) the condition is mixed – partly dependent
upon the debtor’s will and partly dependent upon the will of a third person or upon chance;
(2) the condition is at the same time suspensive; and (3) the debtor intentionally and
actually prevented the fulfillment of the condition. Effect: The entire condition is deemed
constructively fulfilled.

b) Rule on constructive fulfillment of a mixed conditional obligation: The principle is

enunciated in jurisprudence. It applies when: (1) the condition is mixed – partly dependent
upon the debtor’s will and partly dependent upon the will of a third person; (2) the condition
is at the same time suspensive; (3) the debtor did all in his power to comply with the
condition but the same is not fulfilled because of the third person, over whom the debtor
has no control. Effect: The entire condition is deemed constructively fulfilled.
[International Hotel Corp. v. Joaquin, Jr. (2013)]

47. Legal Tender: The legal tender power of coins has been modified in BSP Circular No. 1162,
Series of 2022, as follows:

a) For coins having denominations of “Piso,” they shall be considered legal tender up to a
maximum amount of P2,000.00

b) For coins having denominations of “Sentimo,” they shall be considered legal tender up to
a maximum amount of P200.00

48. Rule on Legal Tender and Checks:

§ The rule on legal tender embodied in Article1249 of the Civil Code is applicable only
when the purpose is to extinguish an obligation to pay debt in money. Example: The
obligation of the buyer in a contract to sell is to pay a price certain in money. Hence,
the rule in Article 1249 is applicable to the obligation of the buyer to pay the purchase
price.

§ On the other hand, once the mortgage is foreclosed, the obligation of the mortgagor to
pay a debt in money is already extinguished. What remains instead is the exercise of
right of redemption. In paying the redemption price, the mortgagor is not paying a debt
in money. Instead, the payment of the redemption price is a consequence or but an
incident of the exercise of the right. As such, the rule on legal tender does not apply.
Instead, jurisprudence states that the tender of the redemption price in the form of a
manager’s check is sufficient to preserve the right. Even if the tender is not accepted,
the right does not expire (instead it is preserve). The remedy of the mortgagor is not
consignation because there is no obligation to be extinguished (no debt due). Instead,
the remedy is simply to compel redemption.

§ If the mortgagor transfers his right to redeem, the same is not novation by substitution
of the person of the debtor. This is because the obligation of the debtor to pay is already
extinguished upon the foreclosure of the mortgage. Instead, such transfer of right is an
assignment of credit which can be made even without the consent of the previous
mortgagee/creditor (who is now the debtor in relation to the exercise of the right of
redemption).

49. In condonation of the obligation, the condonation may either be in the nature of donation or
legacy:

21
 a) It is in the nature of a donation if the creditor intended that such condonation shall become
effective during his lifetime. In such a case, the acceptance must be made also during the
creditor’s lifetime. The condonation can be made either expressly or impliedly. If made
expressly, the condonation must comply with the formalities required in ordinary donations
(embodied in Articles 748 and 749 of the Civil Code); otherwise, the condonation is not
valid.

b) It is in the nature of a legacy if the creditor intended that such condonation shall become
effective only upon his death. In such a case, the acceptance by the debtor can be only be
made upon the death of the creditor. As to formalities, the condonation must be embodied
in the form of a last will and testament to be valid.

50. Novation by substitution of the person of the debtor. In order for the novation to take place,
there must be a clear agreement for the release of the old debtor and his replacement by the
new one.

§ In expromission, where the initiative for the substitution comes from a third person,
there must be an express and clear agreement for the release of the old debtor and
his replacement by the new one between the third person (who will replace the debtor)
and the creditor.

§ In delegacion, where the initiative for the substitution comes from the debtor himself,
there must be an express and clear agreement for the release of the old debtor and
his replacement by the new one between the third person (who will replace the debtor)
and the debtor (old debtor). But as to the consent of the creditor, the same may be
given expressly or impliedly.

§ If the mortgagor and the buyer of the mortgaged property executed a deed of sale with
assumption of mortgage and the creditor was given a copy of the deed and the latter
accepted payments from the buyer, there is no substitution of the person of the debtor
in view of the absence of the creditor’s consent. The creditor’s consent cannot be
inferred from the act of receiving a copy of the deed of sale and from the act of
accepting payments from the buyer because the creditor is allowed, under the law, to
accept payments even from a stranger. On the other hand, if the debtor announced
that he is being replaced by a new debtor and the creditor did not object to the
substitution; instead, the creditor objected only to the proposal of the new debtor on
how the debt is to be repaid, there is already a novation because the creditor impliedly
gave its consent to the substitution.

51. Conventional subrogation vs. assignment of credit: (1) In CS, it is a contract involving three
persons: the debtor, the old creditor and the new creditor – hence, the consent of the debtor is
necessary; in AOC, the contract is between the assignor (creditor) and the assignee (third
person) only – the debtor’s consent is not necessary because he is not a party to the contract;
(2) CS is a form of novation which results in the extinguishment of an old obligation by creating
a new one – meaning the credit that is transferred to the new creditor is no longer the same
obligation of the debtor to his previous creditor; in AOC, it is not a form of novation – hence,
the credit that is transferred to the assignee is the very same obligation of the debtor to the
assignor. (3) In CS, it is possible for the defects of the original obligation to have been cured in
the new obligation; while in AOC, the debtor can interpose against the assignee the same
defenses that he had against the assignor.

52. Rescission as principal remedy (Art. 1191) and as subsidiary remedy (Art. 1381): (1) In Art.
1191, the rescission is applicable only to reciprocal obligations; while in Art. 1381, it applies to

22
 all kinds of obligations, whether reciprocal or not; (2) In Art. 1191, only the contracting parties
can become the injured party entitled to rescind; while in Art. 1381, even a third person can
become an injured party entitled to rescind (such as the creditor who is entitled to rescind the
contract of the debtor with a third person entered for the purpose of defrauding him); (3) in
Art.1191, the rescission is principal remedy; while in Art. 1381, the rescission is a subsidiary
remedy – it cannot be availed if there is another legal remedy available to the injured party; (4)
The 4-year prescriptive period in Article 1389 is applicable only to rescission as a subsidiary
remedy and does not apply to rescission as a principal remedy in Art. 1191. As to the rescission
in Art. 1191, the prescriptive period is either 10 years (for written contracts) or 6 years (for oral
contracts). (5) In Art. 1191, the court has a discretionary power not to grant rescission of there
is a just cause for the fixing of a period; while in Art. 1381, the court has no such discretionary
power.

53. A contract entered into by the grantor in violation of the grantee’s right of first refusal is a
rescissible contract because it is in fraud of creditor under Article 1381(3). If the person with
whom the grantor entered into a contract with acted in bd faith (because he had knowledge of
the existence of the right of first refusal), the contract can be ordered rescinded. But if such
third person acted in good faith (because he had no knowledge of the existence of the right of
first refusal), the contract cannot be rescinded. Instead, the remedy of the grantee is to recover
damages from the grantor.

54. Option vs. Right of First Refusal: Both create an exclusive privilege to enter into a contract with
another person. The grant of exclusive privilege is an option if there is already a definite offer
(the object and the price are already fixed or determined). At the same time, the period for the
exercise of the privilege in option is always a definite period. On the other hand, the grant of
exclusive privilege is a right of first refusal, if only the object of the contemplated contract has
been certain, but the price and other terms and conditions are still be to be firmed up at some
future time. In addition, the period for the exercise of the privilege in right of first refusal can
either be definite or indefinite.

SAMPLE PROBLEM: During the existence of the contract of lease, the lessor wrote a letter to
the lessee telling the latter that “he is given a first priority to buy the leased premises at the
price of P5 Million.” The letter also stated that the decision of the lessee must be conveyed
within 30 days from receipt of the letter. Upon receiving the letter, the lessee wrote a reply
offering to buy the leased premises at the price of P4 Million. The lessor did not reply but he
sold the subject property to another person at the price of P4 Million. The lessee complained
that his right of first refusal was violated. Hence, he filed an action to rescind the sale made by
the lessor. Will the action prosper?

ANSWER: No, because what was granted by the lessor to the lessee is not a right of first
refusal but an option considering that there is already a definite offer and the privilege is to be
exercised within a definite period. In the present case, the option is not, however, binding
between the parties because the lessee did not pay any consideration for the option. In
addition, when the lessee made a counter-offer to buy the property at P4 Million, he rejected
the original offer and made a new offer which was not accepted by the original offeror. Hence,
the lessor has every right to sell the subject property to another person.

55. Statute of Frauds: In relation to transaction affecting real property (including lands), only three
transactions are covered by the Statute of Frauds, as follows: (1) sale of real property; (2) lease
of real property for a period longer than one year; and (3) express trust over a real property. All
other transactions affecting real property are no longer covered by the Statute of Frauds.

23
 § All transactions involving real property do not require any formality for the purpose of
validity, including the sale of a parcel of land, except the sale of a parcel of land through
an agent. Where the agency relates to the sale of a parcel of land, the law requires the
authority of the agent to be in writing; otherwise, the sale by the agent of the said parcel
of land is void pursuant to Article 1874 of the Civil Code.

§ For those transactions affecting real property which do not require any form for validity
and the contract is already enforceable under the Statute of Frauds, the contracting
parties may compel each other to reduce the contract in a public document pursuant
to Article 1387. In order for the foregoing remedy to be availed, the following requisites
must be complied: (1) the contract is already perfected; (2) the contract is valid as to
form; and (3) the contract is enforceable as to form.

56. Three kinds of unenforceable contracts: (1) unauthorized contracts or contracts entered into by
one on behalf of another but without any authority or in excess of authority – but a contract
entered into by an alleged agent for the sale of a parcel of land without any authority from the
principal is not merely unenforceable but void pursuant to Article 1874; (2) contracts which
violate the requirements of the Statute of Frauds; (3) contracts where both the contracting
parties are incapacitated – where only one party is incapacitated, the contract is merely
voidable. An unenforceable contract is a valid contract but it cannot be enforced in court unless
the defect is ratified. If the defect is not ratified, the contract is not obligatory between the
parties. But once the defect is ratified, the contract becomes obligatory.

CONTRACT OF SALE AND LEASE

57. In determining whether the contract is a contract of sale or a contract to sell, the test simple. If
any of the following stipulations is present, the contract is a contract to sell. It is a contract of
sale in the absence of any of the said stipulations. What are those stipulations? The following:
(i) any stipulation in the sale contract reserving the title of the property on the vendor until the
full payment of the purchase price; (ii) any stipulation giving the sellers the right to unilaterally
rescind the contract upon non-payment of the balance of the purchase price within a fixed
period; or (iii) any stipulation where the seller agrees to execute a deed of absolute sale when
the buyer has paid in full the purchase price.

§ In Heirs of Villeza v. Aliangan (2020), it was categorically declared that “the provision
where the seller agrees to execute a deed of absolute sale when the buyer has paid in full
the purchase price has been construed by the Court to signify that the seller has withheld
the transfer of ownership until the purchase price has been paid in full, making the
agreement between the seller and the buyer a contract to sell and not a contract of sale.”

58. Distinctions between contract of sale and contract to sell:

§ In a contract of sale, the seller already consents to transfer ownership over the thing sold.
In a contract to sell, the prospective seller only agrees to sell if the condition is fulfilled,
which is the full payment of the purchase price.

§ In a contract of sale, title to the property passes to the buyer upon delivery of the thing sold.
In contrast, in a contract to sell, ownership does not pass to the prospective buyer until full
payment of the purchase price. The title of the property remains with the prospective seller.

24
 § In a contract of sale, the vendor has lost and cannot recover ownership until and unless
the contract is resolved or rescinded; whereas in a contract to sell, title is retained by the
vendor until the full payment of the price.

§ In a contract of sale, the non-payment of the purchase price is a resolutory condition that
entitles the seller to rescind the sale. In a contract to sell, the payment of the purchase
price is a positive suspensive condition that gives rise to the prospective seller's obligation
to convey title. However, non-payment is not a breach of contract but "an event that
prevents the obligation of the vendor to convey title from becoming effective." If the price
is not paid in full in a contract to sell, the contract would be deemed terminated or cancelled,
and the parties stand "as if the conditional obligation had never existed.”

59. Under Article 1592 of the Civil Code, in a contract of sale involving immovable property, the
law extends to the buyer/vendee the right to effect payment even after expiration of the period
agreed upon for payment, as long as no demand for rescission has been made upon him by
the vendor.

§ But Article 1592 is applicable only to a contract of sale; meaning the right granted to the
buyer to pay even after the expiration of the period agreed upon is applicable only in a
contract of sale of immovable property. It does not apply in a contract to sell.

§ In a contract to sell involving real property payable in installments, the effect of failure to
pay, the effect of failure to pay the installment on time depends on whether the contract is
governed by the Maceda law. If the Maceda law is applicable, the buyer is still entitled to a
grace period. During the grace period, he can still pay the unpaid installment/s. If the
contract is not covered by the Maceda law, the non-payment of the price on the date agreed
upon is an event that prevents the obligation of the seller from coming to existence. In other
words, the contract is deemed cancelled or terminated.

§ Under Article 1592, if the price is not paid within the period agreed upon, the seller must
cancel the contract either by judicial rescission or notice of rescission/cancellation by a
notarial act (extrajudicial). Until the same is done, the buyer can still pay. According to
jurisprudence, even an offer to pay by the buyer can already defeat the seller’s right to
cancel the contract.

§ On the other hand, in a contract to sell covered by the Maceda law, there are requisites to
be followed in cancelling the contract. In a contract to sell real property NOT covered by
the Maceda law, where the contract is deemed cancelled upon non-payment of the price
within the period agreed upon, the seller may treat the contract as cancelled. The only
requirement is that the seller must notify the buyer that he is already treating the contract
as cancelled. Such notice can be verbal or in writing. The notice is for the purpose of
allowing the buyer the opportunity to question the propriety of the seller’s act of treating the
contract as cancelled.

§ Contract to sell over real property payable through installments which are not covered by
the Maceda law: (1) sale of industrial lots; (2) sale of commercial buildings; (3) sale to
tenants; and (4) sale of large tract of lands to real estate developer because the Maceda
law applies only if the immovable purchased is to be used as “residence” of the buyer.

60. MACEDA LAW:

a) If the buyer was able to pay less than 2 years of installment payments:
§ He is entitled only to a grace period, equivalent to a minimum of 60 days.

25
 § After the grace period and the payment is not updated, the seller may already cancel
the contract by giving a notice of cancellation by notarial act. The requirement that the
notice of cancellation be by notarial act is mandatory; otherwise, the contract is not
yet cancelled.
§ If the foregoing requirement is satisfied, the contract is considered cancelled only after
30 days from receipt of the notice by the buyer.

b) If the buyer was able to pay at least 2 years of installment payments:

§ The buyer is entitled to a grace period of 30 days for every year of payments.
§ After the grace period and the payment is not updated, the seller may cancel the
contract upon compliance with two requisites: (1) he issued a notice of cancellation by
notarial act to the buyer; and (2) he paid to the buyer the cash surrender value. If both
requisites are not satisfied, the contract is not considered cancelled.
§ The cash surrender value is at least 50% of the total payments (including reservation
fee, downpayment and installment payments). But if the buyer was able to pay for
more than 5 years, he will be entitled to an additional 5% for every year after 5 years,
but not to exceed 90% of the total payments.
§ If the foregoing requirements are satisfied, the contract is considered cancelled only
after 30 days from receipt of the notice by the buyer.

c) In determining whether the buyer was able to pay AT LEAST 2 years of installments, it is not
only the period or time that the buyer has been paying that needs to be considered. The buyer
must be able to pay the amount or value that he must pay within said 2-year period. For
example, if the installment is payable monthly, the buyer must be able to pay at least 24
monthly installments.

d) The notarial act that is required by the Maceda law according to jurisprudence is not a mere
jurat; but an acknowledgment. A mere jurat does not convert the notice of cancellation into a
notarial act under the Maceda law.

61. Requisites of double sale:

§ In Cheng v. Genato (1998), the Court enumerated the requisites that must concur for
Article 1544 to apply, viz: (i) the two (or more) sales transactions must constitute valid
sales; (ii) the two (or more) sales transactions must pertain to exactly the same subject
matter; (iii) the two (or more) buyers at odds over the rightful ownership of the subject
matter must each represent conflicting interests; and (4) the two (or more) buyers at odds
over the rightful ownership of the subject matter must each have bought from the very
same seller.

§ Article 1544 only applies to instances of double sales, and not where one contract is some
other transaction, such as a contract to sell, even if the latter concurs with a contract of
sale over the same realty. As explained by the Court in Coronel v. Court of Appeals
(1996), “in a contract to sell, there being no previous sale of the property, a third person
buying such property despite the fulfillment of the suspensive condition such as the full
payment of the purchase price, for instance, cannot be deemed a buyer in bad faith and
the prospective buyer cannot seek the relief of reconveyance of the property. There is no
double sale in such case. Title to the property will transfer to the buyer (in the contract of
sale) after registration because there is no defect in the owner-seller's title per se, but the
latter, of course, may be sued for damages by the intending buyer (in the contract to sell).

§ Article 1544 cannot be invoked where the two different contracts of sale are made by two
different persons, one of them not being the owner of the property sold. With respect to

26
 the sale made by the non-owner, the nemo dat non quod habet (one cannot give what he
does not have) rule simply applies. Article 1544 does not likewise apply even if the two
sales were made by the same person, if the second sale was made when such person was
no longer the owner of the property because it had been acquired by the first purchaser in
full dominion. As to the second sale, simply apply the nemo dat non quod habet rule.

62. Rules on double sale of immovable property under Article 1544: The rules concerning double
sale of immovable properties provide for a three-pronged approach in determining ownership,
to wit: (1) to the person acquiring it who in good faith first recorded it in the Registry of Property;
(2) in default thereof, to the person who in good faith was first in possession; and (3) in default
thereof, to the person who presents the oldest title, provided there is good faith.

§ The first buyer is necessarily in good faith because at the time of the purchase, he or she
was the only buyer. As the first buyer was first in time, the law exacts a higher price, i.e.,
prior registration or possession in good faith, on the second buyer to defeat the stronger
right of the first buyer. Consequently, knowledge gained by the first buyer of the second
sale cannot defeat the first buyer’s rights except where the second buyer registers
in good faith the second sale ahead of the first, as provided by Article 1544 of the Civil
Code.

§ On the other hand, the rule exacted by Article 1544 of the Civil Code for the second buyer
to be able to displace the first buyer are: [1] that the second buyer must show that he acted
in good faith (i.e. in ignorance of the first sale and of the first buyers rights) from the time
of acquisition until title is transferred to him by registration or failing registration, by delivery
of possession; and [2] the second buyer must show continuing good faith and innocence
or lack of knowledge of the first sale until his contract ripens into full ownership through
prior registration as provided by law. Thus, knowledge gained by the second buyer of
the first sale defeats his rights even if he is first to register the second sale, since
such knowledge taints his prior registration with bad faith.

69. Important reminders in contract of lease:

§ With respect to the obligation of the lessor "to maintain the lessee in the peaceful and
adequate enjoyment of the lease for the duration of the contract" mentioned in Article 1654
(3), the same is merely a warranty that the lessee shall not be disturbed in his legal, and
not physical, possession of the property. The trespass referred to in Article 1654,
paragraph 3, of the New Civil Code, is legal trespass or perturbacion de mero derecho.
The lessor is not liable for the mere fact of a trespass or trespass in fact (perturbacion
de mero hecho) made by a third person of the leased property. The lessor is not liable for
the mere fact of a trespass or trespass in fact (perturbacion de mero hecho) made by a
third person of the leased property. The lessee shall have a direct action against the
trespasser (for ejectment) and not against the lessor.

§ The lessee cannot assign the lease without the consent of the lessor, unless there is a
stipulation to the contrary. This is because the assignment of a lease by the lessee involves
a transfer of rights and obligations pertaining to the contract; hence, the consent of the
lessor is necessary. On the other hand, the lessee may sublet the thing leased, in whole
or in part, unless expressly prohibited in the contract of lease. This is the rule because in
sublease, the juridical relation between the lessor and lessee is not dissolved. The parties
continue to be bound by the original lease contract.

§ Relationship between lessor and sublessee: (1) General rule: Except only in the instances
specified in the Civil Code, the lessor is a stranger to the contract of lease between the

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 lessee-sublessor and the sublessee. As such, the sublessee has no right or authority to
pay the sublease rentals to the lessor since the rentals are payable to lessee-sublessor.
(2) Exceptions: (i) Article 1652 of the Civil Code permits the lessor to proceed against the
sublessee for rent due from the lessee, but this is only on a subsidiary liability basis.
There must be a judgment cancelling the lessee's principal lease contract or ousting the
lessee from the premises before the sub-lessee becomes subsidiarily liable. (ii) The
sublessee is also 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. Thus, if the
sublessee misuses the property, the lessor may directly bring an action against him (accion
directa) notwithstanding the fact that the sublessee is not a party to the lease contract.

§ Extent of subsidiary liability of sublessee: The sublessee is subsidiarily liable to the lessor
for any rent due from the lessee but he shall not be liable beyond the amount of rent due
from him, in accordance with the terms of the sublease, at the time of the extrajudicial
demand by the lessor. But payments of rent in advance by the sublessee shall be deemed
not to have been made, so far as the lessor’s claim is concerned, unless said payments
were effected in virtue of the custom of the place.

70. Tacita reconduccion (or implied new lease):

§ Requisites: An implied new lease or tacita reconduccion will set in if it is shown that: (i) the
term of the original contract of lease has expired; (ii) the lessor has not given the lessee a
notice to vacate; and (c) the lessee continued enjoying the thing leased for fifteen days
with the acquiescence of the lessor. This acquiescence may be inferred from his failure to
serve a notice to vacate.

§ Period of implied new lease: According to Article 1670, the implied new lease is not for the
period of the original contract, but for the time established in Article 1687. In other words,
the terms of such contract depend on the period that the lessee made the rental payments.
Under Article 1687, if the period for the lease has not been fixed, it is understood to be
from year to year, if the rent agreed upon is annual; from month to month, if it is monthly;
from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily.

§ Terms of the original contract which are revived in the implied new lease: The “other terms
of the original contract” which are revived in the implied new lease under Article 1670 are
only those terms which are germane to the lessee’s right of continued enjoyment of
the property leased, such as the amount of rent, the time it is paid, etc. But with
respect to special agreements which by nature are foreign to the right of occupancy or
enjoyment inherent in a contract of lease, are not deemed revived. Hence, the Court ruled
that implied renewals do not include the option to buy or right of first refusal, as it is not
germane to the lessee's continued use of the property.

CREDIT TRANSACTIONS

71. Contract of loan: Commodatum vs. Mutuum (simple loan): (1) the purpose of commodatum is
continuous use of the thing borrowed until the termination of the contract; while in mutuum, the
purpose is to consume the thing borrowed; (2) the subject matter of commodatum can either
be immovable property or movable property – if the subject matter is movable property, it must
be generally non-consumable; but a consumable can be the object of commodatum if
consumption is not the purpose of the contract but only the display or exhibition of the thing
borrowed (called commodatum ad ostentationem); while in mutuum, the object can only be
movable property, which is either money or other consumable or fungible property; (3) in
commodatum, there is no transfer of ownership; while in mutuum, the borrower becomes the

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 owner of the thing borrowed; (4) in commodatum, the obligation of the borrower is to return the
very same thing borrowed; while in mutuum, the obligation of the borrower is simply to repay
the thing borrowed with its equivalent, both in terms of kind, quality and quantity; (5)
commodatum is always gratuitous; while mutuum is either gratuitous (if there is no agreement
for the payment of interest) or onerous (if there is an agreement for the payment of interest).

72. Two kinds of interest: conventional and compensatory interests.

a) Conventional interest: It is the interest agreed upon by the parties themselves as

distinguished from that prescribed by law. “Monetary interest” is subsumed in the concept
of conventional interest. As explained by the Court, monetary interest is the most common
type of conventional interest. It is the conventional interest in a simple loan of money.
Monetary interest is defined as the compensation fixed by the parties for the use or
forbearance of money.

b) Compensatory interest: It is that imposed by law or by the courts as penalty or indemnity

for damages. Also referred to as penalty interest, indemnity, or moratory interest, it is the
indemnity for damages arising from delay on the part of the debtor in an obligation
consisting in the payment of a sum of money.

c) Requirement in conventional or monetary interest: Article 1956 of the Civil Code, which
refers to monetary interest, specifically mandates that no interest shall be due unless it has
been expressly stipulated in writing. As can be gleaned from the foregoing provision,
payment of conventional or monetary interest is allowed only if: (i) there was an express
stipulation for the payment of interest; and (ii) the agreement for the payment of interest
was reduced in writing. The concurrence of the two conditions is required for the payment
of conventional or monetary interest.

73. Stipulated rate and legal rate:

a) With respect to monetary interest, it is the stipulated rate that generally governs. However,
if the stipulated rate is declared by the court as excessive or unconscionable or the parties
failed to fix the rate, it is the legal rate of interest that will apply.

b) With respect to compensatory interest, the applicable compensatory interest in contracts

consisting in the payment of a sum of money should be determined as follows: (i) If there
is a penal clause that stipulates the penalty or indemnity, then the stipulated penalty or
indemnity shall be applicable; (ii) If there is no penal clause, but there is a stipulation on
conventional or monetary interest, then the conventional or monetary interest shall be
applicable; or (iii) If there is no stipulation on the penalty or on conventional interest, then
the legal interest rate shall be applicable.

c) In the 2019 case of Lara’s Gifts & Decors, Inc. v. Midtown Industrial Sales, Inc., the
Court emphasized that if the rate of interest is stipulated, such stipulated interest shall
apply and not the legal interest, provided the stipulated interest is not excessive and
unconscionable. The stipulated interest shall be applied until full payment of the obligation
because that is the law between the parties. Thus, unless the stipulated interest is
excessive and unconscionable, there is no legal basis for the reduction of the stipulated
interest at any time until full payment of the principal amount. The stipulated interest
remains in force until the obligation is satisfied. The legal interest only applies in the
absence of stipulated interest. This is in accord with Article 2209 of the Civil Code.

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74. Deposit vs. Contract of Lease: The distinction between the contract of lease and deposit is that
in the former, the cause is the enjoyment of the thing; in the latter, it is the safekeeping of the
thing. It has been held that the act of parking a vehicle in a garage, upon payment of a fixed
amount, is a lease. Even in a majority of American cases, it has been ruled that where a
customer simply pays a fee, parks his car in any available space in the lot, locks the car and
takes the key with him, the possession and control of the car, necessary elements in bailment,
do not pass to the parking lot operator, hence, the contractual relationship between the parties
is one of lease.

§ In Mamaril v. The Boy Scouts of the Philippines (2013), where the Spouses Mamaril
(who are jeepney operators) would park their six passenger jeepneys every night at
the Boy Scout of the Philippines’ compound in Malate, Manila, for a fee of P300.00 per
month for each unit, it was held that the contract between the parties was one of lease.

§ On the other hand, in Triple-V v. Filipino Merchants (2005), where De Asis entrusted
the car and its key to Triple-V’s valet attendant when she dined at the latter’s Kamayan
Restaurant in West Avenue and the car was then parked by said valet attendant at the
designated parking area while De Asis was merely issued a parking claim stub, the
Court ruled that the contract entered into was that of deposit and that Triple-V was
constituted as a depositary of the same car.

75. Instances/Kinds of Necessary Deposit: There are four kinds of necessary deposit, namely: (1)
those made in compliance with a legal obligation; (2) those which takes place on the occasion
of any calamity, such as fire, storm, flood, pillage, shipwreck, or other similar events; (3) the
deposit of effects made by travellers in hotels or inns; and (4) the deposit of baggage made by
passengers with common carriers, which baggage remained in the personal custody of the
passenger or in the personal custody of his employees.

§ As to hotel-keepers, they are constituted as depositaries of the personal effects of the

guests provided the following requisites are satisfied: (1) notice was given to the inn-
keeper or hotel-keeper (operator), or to its employees, of the effects brought by the
guest; and (2) the guest take the precautions which the hotel-keeper or its substitute
advised relative to the care and vigilance of his effect. Such responsibility of hotel-
keeper or inn-keeper as depositary likewise extends to the vehicles, animals and
articles which have been introduced or placed in the annexes of the hotel.

§ Extent of liability of hotel-keeper: According to Article 2000 of the Civil Code, the
responsibility of the hotel-keeper or inn-keeper as depositary “shall include the loss of,
or injury to the personal property of the guests caused by the servants or employees
of the keepers of hotels or inns as well as by strangers; but not that which may proceed
from any force majeure.”

§ When hotel-keeper is not liable for the loss of personal effects of the guest: (1) when
the loss is caused by any force majeure; (2) when the loss is due to the acts of the
guest, his family, servants or visitors; and (3) when the loss arise from the character of
the things brought into the hotel. As to number 1, theft or robbery is not considered
force majeure unless it is through the use of arms or through irresistible force. As to
number 2, it is necessary that the hotel-keeper must not be guilty of contributory
negligence.

76. Guarantor and Surety: A guarantor is merely subsidiary liable because he is entitled to the
defense of excussion. The guarantor cannot be compelled to pay the creditor unless the latter
has exhausted all the property of the debtor and resorted to all the legal remedies against the

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 debtor. This is known as the benefit of excussion. On the other hand, the liability of a surety is
direct and primary because he is not entitled to the benefit of excussion.

§ In a suretyship contract, however, the benefit of excussion is not available to the

surety as he is principally liable for the payment of the debt. As the surety insures
the debt itself, he obligates himself to pay the debt if the principal debtor will not pay,
regardless of whether or not the latter is financially capable to fulfill his obligation. Thus,
a creditor can go directly against the surety although the principal debtor is solvent and
is able to pay or no prior demand is made on the principal debtor.

§ Thus, when the guarantor waives or renounces the benefit of excussion in the contract
itself, the contract is transformed into that of suretyship.

§ Distinguished from solidary debtor: (1) in the case of surety, the entire obligation
belongs to someone else; while in the case of a solidary debtor, there is a portion of
the obligation that properly pertains to him; (2) upon payment of the entire obligation,
the surety is entitled to seek reimbursement from the principal debtor for the amount
paid; while in the case of a solidary debtor, he is not entitled to full reimbursement of
the amount he paid but may only claim from his co-debtors the share which
corresponds to each, with the interest for the payment already made.

77. Real Estate Mortgage vs. Antichresis: (1) As to possession of immovable: In both contracts,
the security is an immovable property. It is not an essential requisite of a mortgage that
possession of the mortgaged premises be retained by the mortgagor. In other words, the
mortgagee may or may not be in possession of the immovable property. On the other hand, it
is the essence of the contract of antichresis that the immovable be in the possession of the
antichretic creditor. But to repeat, the mere fact that the possession of the immovable is
transferred to the creditor does not make the contract antichresis; it may remain to be that of
mortgage. (2) Additionally, the fact that the creditor is authorized to receive the fruits of the
immovable does not make the contract antichresis in the absence of an express agreement
that the creditor is required to apply said fruits to the payment of interest, if any, and afterwards
to that of the principal of the credit. In the latter case, the contract is still mortgage. (3) Thus,
what really distinguishes antichresis from mortgage is that in the former the creditor acquires
the right to receive the fruits of the property of his debtor with the obligation to apply them to
the payment of interest, if any is due, and then to the principal of his credit. Without such
express agreement, the contract is that of mortgage and not antichresis. (4) In mortgage, the
law does not require any formality for the purpose of validity or enforceability. The requirement
that it must be embodied in a public document is only for convenience. In antichresis, on the
other hand, it is required that the amount of the principal and interest must be specified in
writing; otherwise, the contract of antichresis is void.

78. Important rules in real estate mortgage:

§ The law prohibits any stipulation forbidding the mortgagor from selling the mortgaged
property. Any such stipulation is void. Hence, any stipulation requiring the consent of
the mortgagee before the mortgagor can validly sell the mortgaged property is also
void because it is a circumvention of the prohibition.

§ The law prohibits a stipulation allowing the automatic appropriation of the collateral
upon the mere default by the debtor. This stipulation is void and is known as pactum
commissorium.

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 § The recording of the mortgage in the registry of property is not a requirement for its
validity. Thus, an unrecorded mortgage is still valid and effective between the
contracting parties. The only effect of such non-recording is that it does not bind thord
persons to the mortgage contract.

§ Effect of defective notarization of REM agreement: The defective notarization of the

REM agreement merely strips it of its public character and reduces it to a private
document. Although Article 1358 of the Civil Code requires that the form of a contract
transmitting or extinguishing real rights over immovable property should be in a public
document, the failure to observe such required form does not render the transaction
invalid. The necessity of a public document for the said contracts is only for
convenience; it is not essential for its validity or enforceability.

§ Effect of defective notarization of donation of immovable property: The defective

notarization of the deed of donation strips it of its public character and reduces it to a
private document. Hence, the donation will become void because the law requires the
donation of a real property and its acceptance to be in a public instrument in order to
be valid.

§ No fraud even if mortgagee reneged on promise not to register the mortgage: In

Paradigm Development Corporation of the Philippines v. BPI (2017), the Court
refused to annul the REMs on the ground of fraud consisting of the mortgagee's
assurances that the REMs already signed by the mortgagor would not be registered.
In upholding the validity of the executed REMs, the Court explained that with or without
the registration of the REMs, as between the parties thereto, the same is valid and the
mortgagor is bound thereby. In addition, it was held that even if the mortgagee
represented that it will not register one of the REMs, the mortgagor cannot disown the
REMs it executed after the mortgagee reneged on its alleged promise.

TORTS AND DAMAGES

79. Vicarious Liability of the State: The liability of the State has two aspects, namely: (1) In its public
or governmental aspects, it can only be liable (vicariously) for the tortious acts of special
agents; and (2) In its private or business aspects (as when it engages in private enterprises),
it becomes liable as an ordinary employer under Article 2180 of the Civil Code.

§ In the exercise of public or governmental functions, the State assumes a limited liability for
the damage caused by the tortious acts or conduct of its special agent. Under the Civil
Code, the State is responsible vicariously when it acts through a special agent; but not
when the damage has been caused by the official to whom the task done properly pertains,
it is only the official who shall be liable pursuant to Article 2176. Under this rule, the State
assumes a limited liability for the damage caused by the tortious acts or conduct of its
special agent.

§ A special agent is defined as one who receives a definite and fixed order or commission,
foreign to the exercise of the duties of his office. The State's agent, if a public official, must
not only be specially commissioned to do a particular task but that such task must be
foreign to said official's usual governmental functions.

§ Sample problem: BPI was defrauded in the amount of P9 Million because of the fraud
perpetuated by some employees of the Central Bank’s clearing house in cahoots with an

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 organized criminal syndicate, done by way of tampering with and pilfering of documents
passing through the clearing house. When Central Bank of the Philippines (now BSP)
credited back only half of the amount and refused to return the balance, BPI filed a
complaint for sum of money against CBP. CBP denied any liability to BPI and demanded
the latter to return the P4.5 million it earlier credited to BPI as the said amount was allegedly
held under a "suspense account" pending the final outcome of the NBI investigation. Is
CBP (or BSP) vicariously liable for the quasi-delict committed by its employees?

ANSWER: CBP is not liable for the quasi-delict committed by its employees in the
performance of governmental functions because they are not special agents.

Under Article 2180 of the Civil Code, the State is vicariously liable for the tortious act
committed in the performance of governmental functions only when it acts through a
special agent.

In the given problem, while the employees of CBP committed the tortious act in the
performance of governmental functions, they are not considered special agents. A special
agent, if he is a public official, must be performing a task or duty foreign to his office. In the
present case, the employees involved were performing duties pertaining to their office. [BPI
v. Central Bank, 2020 case of J. Hernando]

80. Registered Owner Rule: In accordance with the law on compulsory motor vehicle registration,
the Court has consistently ruled that, with respect to the public and third persons, the registered
owner of a motor vehicle is directly and primarily responsible for the consequences of its
operation regardless of who the actual vehicle owner might be. In other words, under the
registered owner rule, the registered owner of a motor vehicle is liable for death or injuries
caused by the operation of the vehicle.

§ The rule is not affected by the unrecorded sale of the motor vehicle. By applying the rule,
it is the registered owner who shall be liable to the public (or injured party). However, the
registered owner can demand reimbursement from the actual operator by way of a third
party complaint or cross claim; otherwise, the latter will be unjustly enriched.
§ If the one who committed the quasi-delict is the employee of the actual operator, applying
the registered owner rule, the registered owner of the motor vehicle is considered as the
employer of the tortfeasor-driver, and is made primarily liable for the tort committed by the
latter under Article 2176, in relation with Article 2180, of the Civil Code; while the actual
employer is considered merely as an agent of such owner.

§ If registered owner is also the employer of the tortfeasor-driver: In a situation where the
employer is also the registered owner of the vehicle which caused the injury, the
appropriate approach in cases where both the registered-owner rule and Article 2180 apply
is that the plaintiff must first establish that the employer is the registered owner of the
vehicle in question. Once the plaintiff successfully proves ownership by the employer, there
arises a disputable presumption that the requirements of Article 2180 have been proven.
As a consequence, the burden of proof shifts to the defendant (employer) to show that no
liability under Article 2180 has arisen. This it can do by presenting proof of any of the
following: first, that it has no employment relationship with the alleged employee; second,
that the employee acted outside the scope of his assigned tasks; or third, that it exercised
the diligence of a good father of a family in the selection and supervision of the employee.
(Caravan Travel and Tours International, Inc. v. Abejar, 2016)

81. Important principles in understanding the concept of quasi-delict:

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 § Quasi-delict under Article 2176, according to jurisprudence, is not limited to cases of
negligence. It also includes intentional or deliberate acts. If committed through negligence,
the quasi-delict may also be referred to as culpa aquiliana. If committed intentionally, it may
also be referred to as “tort.”

§ Quasi-delict is not limited to unlawful acts which are not punishable by law. According to
jurisprudence, it also covers unlawful acts which are criminal in character, whether the
crime was committed intentionally or through negligence. Hence, the same criminal act
may produce two distinct sources of obligations: delict and quasi-delict. But the plaintiff is
prohibited under Article 2177 to recover damages twice from delict and quasi-delict, if
based on the same act.

§ Generally, quasi-delict cannot be the source of obligation if there is a pre-existing

contractual relations between the parties. Ordinarily, the negligence in the performance of
an obligation arising from contract is a case of culpa contractual and not culpa aquiliana.
However, if the reason for the breach of contract is quasi-delict itself (or when the act that
breaks the contract is also a tort), the existence of the contract does not prevent the
recovery of civil liability based on quasi-delict.

82. Temperate or Moderate Damages: Temperate or moderate damages, which are more than
nominal but less than compensatory damages, avail when the court finds that some pecuniary
loss has been suffered but its amount cannot from the nature of the case, be proved with
certainty.

§ But temperate damages may be awarded even in instances where pecuniary loss could
theoretically have been proved with certainty.

§ In the following instances, the award of temperate damages is sanctioned: (i) when the
court finds that some pecuniary loss has been suffered but its amount cannot, from the
nature of the case, be proved with certainty; (ii) when the court finds that some pecuniary
loss has been suffered, but the amount of actual damages was not proven due to the
inadequacy of the evidence presented; and (iii) it is now settled in our jurisprudence that
the court may award temperate damages in lieu of actual damages for loss of earning
capacity where earning capacity is plainly established but no evidence was presented to
support the allegation of the injured party’s actual income.

§ In criminal cases involving the death of a victim, temperate damages may be recovered,
as it cannot be denied that the heirs of the victims suffered pecuniary loss although the
exact amount was not proved. In cases where no evidence of burial and funeral expenses
is presented in the trial court, the Court authorizes the award of temperate damages in the
amount of P50,000.00. Thus, when the actual damages proven by receipts during trial is
less than the sum allowed by the Court as temperate damages (which is now fixed at
P50,000.00), the award of temperate damages in the amount of P50,000.00 in lieu of the
actual damages is justified.

83. Moral Damages:

§ Requisites for grant of moral damages: (i) there is an injury, whether physical, mental or
psychological, clearly sustained by the claimant; (ii) there is a culpable act or omission
factually established; (iii) the wrongful act or omission of the defendant is the proximate
cause of the injury sustained by the claimant; and (iv) the award of damages is predicated
on any of the cases stated in Articles 2219 and 2220 of the Civil Code.

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§ But in Article 2206(3), in case of death arising from the commission of delict or quasi-delict,
it becomes the duty of the court to award moral damages to the claimant in an amount
commensurate with the mental anguish suffered by them. In fact, the amount of moral
damages may be adjudicated even without proof of pecuniary loss, the assessment of the
moral damages being left to the discretion of the court, according to the circumstances of
each case.

§ Who may recover moral damages under Article 2206(3): Only the spouse, legitimate and
illegitimate descendants and ascendants of the deceased may demand moral damages for
mental anguish by reason of the death of the deceased. Brothers and sisters and other
collateral blood relatives are not included among the persons entitled to recover moral
damages for mental anguish by reason of the death of the deceased. The omission from
Article 2206 (3), of the brothers and sisters of the deceased reveals the legislative intent to
exclude them from the recovery of such moral damages. However, if a collateral blood
relative is exercising substitute parental authority over the deceased, he or she is entitled
to recover moral damages under Article 2206(3) by reason of the death of the deceased
because he or she is to be considered as an “ascendant” for the purpose of awarding moral
damages.

§ Recovery of moral damages in breach of contract: (a) General rule: Since breach of
contract is not one of the items enumerated under Article 2219, moral damages, as a
general rule, are not recoverable in actions for damages predicated on breach of contract.
(b) Exceptions: As exceptions, such damages are recoverable in an action for breach of
contract: (i) in cases in which the VEHICULAR mishap results in the death of a passenger,
as provided in Article 1764, in relation to Article 2206(3) of the Civil Code; and (ii) in cases
in which the carrier is guilty of fraud or bad faith, as provided in Article 2220.

§ Right of corporation to moral damages: (a) Rule: A juridical person is generally not entitled
to moral damages because, unlike a natural person, it cannot experience physical suffering
or such sentiments as wounded feelings, serious anxiety, mental anguish or moral shock.
(b) Exceptions: The Court has allowed the grant of moral damages to corporations in the
following: (i) where the corporation has a good reputation that is debased, resulting in its
social humiliation (Simex International (Manila), Incorporated v. CA, 1990); and (ii) in cases
of libel, slander or any other form of defamation under Article 2219(7).

§ Recovery of moral damages for “disrespect to the dead” under Article 309: The Court
explained that the Civil Code provision under Article 309 on showing "disrespect to the
dead" as a ground for the family of the deceased to recover moral and material damages,
being under the title of Funerals, obviously envisions the commission of the disrespect
during the period of mourning over the demise of the deceased or on the occasion of the
funeral of the mortal remains of the deceased. According to the Court in Tabuada v.
Tabuada, the act of fraudulently representing the deceased registered owner in
mortgaging the property did not amount to disrespect to the dead as basis for the recovery
of moral damages, as contemplated under Article 309.

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