Civil Law Review

1. Attachment in Registration
Documents to accompany the application [from Regulations in Ordinary Land Registration
Cases]
(1) Tracing-cloth plan duly approved by the Director of Lands, together with two blueprint
or photographic copies thereof;
(2) Three copies of the corresponding technical descriptions;
(3) Three copies of the surveyors certificate;
(4) All original muniments of title in the possession of the applicant which prove his rights,
to the title he prays for or to the land he claims; and
(5) Certificate in quadruplicate of the city or provincial treasurer of the assessed value of
the land, at its last assessment for taxation, or, in the absence thereof, that of the next
preceding year. However, in case the land has not been assessed, the application may be
accompanied with an affidavit in quadruplicate of the fair market value of the land,
signed by three disinterested persons.

2. Effect of Novation

Novation
Extinguishment of an obligation by the substitution or change of the obligation by a
subsequent one which extinguishes or modifies the first either by changing the object
or principal conditions, or by substituting the person of the debtor, or by subrogating a
third person in the rights of the creditor.
Unlike other modes of extinguishment, it is a juridical act of dual functionit extinguishes
an obligation, and at the same time, it creates a new one in lieu of the old. It operates as a
relative, not an absolute, extinction.

EFFECTS
In General
Oldobligationisextinguishedandreplacedbythenewonestipulated.

IfOriginalObligationisVoid
Novationisvoidiftheoriginalobligationwasvoid,EXCEPTwhenannulmentmaybe
claimedonlybythedebtor,orwhenratificationvalidatesactsthatarevoidable[Art.1298]
1.Originalobligationisvoid:Nonovation.
2.Originalobligationvoidable:Effectiveifcontractisratifiedbeforenovation.

IfNewObligationisVoid
Newobligationisvoid,theoldobligationsubsists,UNLESSthepartiesintendedthatthe
formerrelationsshallbeextinguishedinanyevent[Art.1297]
1.Newobligationvoid:Nonovation
2.Newobligationvoidable:Novationiseffective

3.RuleonPactumCommissorium
Apactumcommissoriumisastipulationenablingthemortgageetoacquire
ownershipofthemortgagedpropertieswithoutneedofforeclosureproceedings
whichisanullitybeingcontrarytotheprovisionsofArticle2088oftheCivil
Code.Theinclusionofsuchstipulationinthedeedshowstheintentionto
mortgageratherthantosell.[Legaspiv.SpousesOng,2005]

Apactumcommissoriumiscontrarytothenatureofatruepactoderetrosale
sinceownershipofthepropertysoldisimmediatelytransferredtothevendeea
retrouponexecutionofthesale,subjectonlytotherepurchaseofavendora
retrowithinthestipulatedperiod.

Effects

. (1) Bothdebtsareextinguishedtotheconcurrentamount,eventhough
thecreditorsanddebtorsarenotawareofthecompensation.

. (2) Accessoryobligationsarealsoextinguished.

Debtorclaimingitsbenefitsmustprovecompensation;onceproven,effects
retroactfromthemomentwhentherequisitesconcurred.

COMPENSATION
Compensation:Offsettingoftwoobligationswhicharereciprocally
extinguishediftheyareofthesamevalue,orextinguishedtotheconcurrent
amountifofdifferentvalues.

Art.1273.Renunciationoftheprincipaldebtshallextinguishtheaccessory
obligations,butremissionofthelatterleavestheprincipalobligationinforce.

Requisites[Art.1279]

. (1) Eachobligorisboundprincipally,andatthesametimeaprincipal
creditoroftheother

. (2) Bothdebtsmustconsistinasumofmoney,orifthethingsdueare
fungible,ofthesamekind&quality
Note:Thetermconsumable iserroneouslyusedinArt1279.The
appropriatetermisfungible.

. (3) Bothdebtsaredue
 . (4) Debtsareliquidatedanddemandable

. (5) Theremustbenoretentionorcontroversyovereitherofthedebts,
commencedbythirdpersonsandcommunicatedinduetimetothedebtor

. (6) Compensationisnotprohibitedbylaw

TowarranttheapplicationofsetoffunderArticle1278oftheCivilCode,the
debtorsadmissionofhisobligationmustbeclearandcategoricalandnotone
whichmerelyarisebyinferenceorimplicationfromthecustomaryexecutionof
officialdocumentsinassumingtheresponsibilitiesofapredecessor[Bangko
SentralvCOA,2006].

4.